SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP ADVISER FUNDS
INC.
----------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP CASH RESERVE
INC.
---------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP EQUITY FUNDS I
INC.
------------------------------------ --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP EQUITY FUNDS II
INC.
------------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP EQUITY FUNDS III
INC.
-------------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP EQUITY FUNDS IV
INC.
------------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP EQUITY FUNDS V
INC.
------------------------------------ --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP FOUNDATION FUNDS
-------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS
INC.
-------------------------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP GOVERNMENT FUND
INC.
------------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP INCOME FUNDS
INC.
---------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS
INC.
--------------------------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP PREMIUM FUND, INC.
---------------------------------STATE TAX-FREE INCOME TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
------------------------------------------TAX FEE FUND
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP TAX-FREETAX FEE MONEY FUND
INC.
----------------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE GROUP TAX-FREE FUND, INC.
----------------------------------POOLED TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
3.
------------------------------------------------------------
3) Filing Party:__________________________________________________________
4.
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
[X](Amendment No. _________________)
Filed by the Registrant [ ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE POOLED TRUST, INC.
---------------------------VOYAGEUR INSURED FUNDS
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1.1) Amount Previously Paid:________________________________________________
2.
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:__________________________
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. _________________)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
VOYAGEUR INTERMEDIATE TAX-FREE FUNDS
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:__________________________________________________________
------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. _________________)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
VOYAGEUR INVESTMENT TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:____________________________________________________________
------------------------------------------------------------
LOGO
January 8, 1998UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. _________________)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
VOYAGEUR MUTUAL FUNDS
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. _________________)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
VOYAGEUR MUTUAL FUNDS II
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. _________________)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
VOYAGEUR MUTUAL FUNDS III
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. _________________)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
VOYAGEUR TAX-FREE FUNDS
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------
Delaware Investments (sm)
A member of Lincoln Financial Group (R)
PROXY MATERIALS
Delaware Group Adviser Funds Delaware Group State Tax-Free Income Trust
Delaware Group Cash Reserve Delaware Group Tax Fee Fund
Delaware Group Equity Funds I Delaware Group Tax Fee Money Fund
Delaware Group Equity Funds II Delaware Pooled Trust
Delaware Group Equity Funds III Voyageur Insured Funds
Delaware Group Equity Funds IV Voyageur Intermediate Tax Free Funds
Delaware Group Equity Funds V Voyageur Investment Trust
Delaware Group Foundation Funds Voyageur Mutual Funds
Delaware Group Global & International Funds Voyageur Mutual Funds II
Delaware Group Government Fund Voyageur Mutual Funds III
Delaware Group Income Funds Voyageur Tax Free Funds
Delaware Group Limited-Term Funds
Dear Shareholder:
I am writing to let you know that a meeting of shareholders of the Delaware
Investments mutual funds mentioned above (the "Trusts") will be held on March
15, 2005. The purpose of the meeting is to vote on several important proposals
that affect the Trusts and each of their separate series (each, a "Fund" and,
collectively, the "Funds") and your investment in them. As a shareholder, you
have the opportunity to voice your opinion on the matters that affect your
Funds. This package contains information about the proposals and the materials
to use when voting by mail, telephone or through the Internet.
Please read the enclosed materials and cast your vote on the proxy card(s).
PLEASE VOTE YOUR SHARES PROMPTLY. YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
All of the proposals have been carefully reviewed by the respective Boards of
Trustees. The Trustees, most of whom are not affiliated with Delaware
Investments, are responsible for protecting your interests as a shareholder. The
Trustees believe these proposals are in the best interests of shareholders. They
recommend that you vote FOR each proposal.
The following Q&A is provided to assist you in understanding the proposals. Each
of the proposals is described in greater detail in the enclosed Proxy
Statement/Prospectus.
VOTING IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED. To cast your vote,
simply complete the proxy card(s) enclosed in this package. Be sure to sign the
card(s) before mailing it in the postage-paid envelope. You may also vote your
shares by touch-tone telephone or through the Internet. Simply call the
toll-free number or visit the web site indicated on your proxy card(s), enter
the control number found on the card(s), and follow the recorded or online
instructions.
If you have any questions before you vote, please call Delaware Investments at
1-800-[______________]. We'll be glad to help you get your vote in quickly.
Thank you for your participation in this important initiative.
Sincerely,
_______________________
Jude T. Driscoll
Chairman and Chief Executive Officer
IMPORTANT INFORMATION TO HELP YOU UNDERSTAND
AND VOTE ON THE PROPOSALS
Below is a brief overview of the proposals to be voted upon. Your vote is
important. Please read the full text of the enclosed Proxy Statement, which you
should retain for future reference. If you need another copy of the Proxy
Statement/Prospectus, please call Delaware Investments at
1-800-[______________].
We appreciate you placing your trust in Delaware Investments and we look forward
to helping you achieve your financial goals.
WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?
You may be asked to vote on the following proposals:
1. To Elect a Board of Trustees;
2. To Approve the use of a "Manager of Managers" structure; and
3. To Approve a Plan of Redomestication--applies only to the Delaware
Tax-Free Florida Insured Fund, the Delaware Tax-Free Missouri Insured
Fund and the Delaware Tax-Free Oregon Insured Fund.
PROPOSAL 1: TO ELECT A Joint MeetingBOARD OF TRUSTEES
- ----------
WHAT ROLE DOES THE BOARD PLAY?
The Trustees serve as the Funds' shareholders' representatives. Members of Shareholdersthe
Boards of certainTrustees (the "Board" or the "Boards") are fiduciaries and have an
obligation to serve the best interests of shareholders, including approving
policy changes. In addition, the Trustees review each Fund's performance,
oversee Fund activities and review contractual arrangements with companies that
provide services to the Fund.
WHAT IS THE SIZE OF EACH BOARD AND WHAT DOES IT DO?
Except for Voyageur Insured Funds, Voyageur Intermediate Tax-Free Funds,
Voyageur Investment Trust, Voyageur Mutual Funds, Voyageur Mutual Funds II,
Voyageur Mutual Funds III, and Voyageur Tax-Free Funds (collectively, the
"Voyageur Funds"), the Board of each Trust consists of eight individuals. The
Board for each of the Voyageur Funds currently consists of six individuals. Each
Board's purpose is to ensure that the shareholders' best interests are protected
in the operation of each Fund.
WHAT IS THE AFFILIATION OF THE BOARD AND DELAWARE INVESTMENTS?
Except for the Voyageur Funds, each Board has seven "non-interested" Trustees
and one "interested" Trustee. Each Board for the Voyageur Funds has six
"non-interested" Trustees and no "interested" Trustees. Trustees are determined
to be "interested" by virtue of, among other things, their affiliation with
various entities under common control with Delaware Investments. For all of the
Trusts, there are nine nominees, including one nominee who would be deemed to be
an "interested" Trustee. Of the remaining eight nominees, four of those persons
current serve as "non-interested" Trustees on the Boards of the Voyageur Funds
and five of those persons currently serve as "non-interested" Trustees on the
Boards of the remaining Trusts.
ARE BOARD MEMBERS PAID?
"Interested" Trustees are compensated by Delaware Investments and do not receive
any compensation from the Funds. Non-interested Trustees have no affiliation
with Delaware Investments and are compensated by each individual Fund. Each
non-interested Trustee receives a fee for his or her service on the Board and,
if applicable, for his or her service on a committee of the Board. You can find
the compensation table, which details these fees, in the Proxy Statement.
PROPOSAL 2: TO APPROVE THE USE OF THE "MANAGER OF MANAGERS" STRUCTURE
- ----------
WHAT IS THE "MANAGER OF MANAGERS" STRUCTURE?
The proposed "Manager of Managers" structure would permit Delaware Management
Company ("DMC"), as the Funds' investment manager, to appoint and replace
subadvisers, enter into subadvisory agreements, and amend and terminate
subadvisory agreements on behalf of a Fund without shareholder approval (as is
currently required).
WHY AM I BEING ASKED TO VOTE ON THE "MANAGER OF MANAGERS" STRUCTURE AT THIS
TIME?
The employment of the "Manager of Managers" Structure is contingent upon either
(i) exemptive relief from the U.S. Securities and Exchange Commission (the
"SEC"), or (ii) the adoption of a rule by the SEC authorizing the employment of
a "Manager of Managers" Structure. In either case, a Fund must obtain
shareholder approval before it may implement the Manager of Managers Structure.
Because a meeting of shareholders is needed to elect Trustees and to vote on
other matters, the Boards determined to seek shareholder approval of the
"Manager of Managers" structure at the shareholders' meeting to avoid additional
meeting and proxy solicitation costs in the future.
IF IT IS IMPLEMENTED, HOW WILL SHAREHOLDERS BENEFIT FROM THE "MANAGER OF
MANAGERS" STRUCTURE?
The "Manager of Managers" structure is intended to enable the Funds to operate
with greater efficiency by allowing DMC to employ subadvisers best suited to the
needs of the Funds without incurring the expense and delays associated with
obtaining shareholder approval of subadvisers or subadvisory agreements. In
particular, the Boards believe that the employment of the "Manager of Managers"
structure will: (1) enable the Boards to act more quickly and with less expense
to a Fund in order to appoint an initial or a new subadviser when DMC and the
Board believe that such appointment would be in the best interests of that
Fund's shareholders; and (2) help the Funds to enhance performance by permitting
DMC to allocate and reallocate a Fund's assets among itself and one or more
subadvisers when DMC and the Board believe that it would be in the best
interests of that Fund's shareholders.
PROPOSAL 3: TO APPROVE A PLAN OF REDOMESTICATION (APPLIES ONLY TO THE DELAWARE
TAX-FREE CALIFORNIA INSURED FUND AND THE DELAWARE TAX-FREE FLORIDA FUND)
WHAT REDOMESTICATION IS THE BOARD PROPOSING?
This proposed change calls for the reorganization of Voyageur Investment Trust
from a Massachusetts business trust into a newly formed Delaware statutory
trust. This proposed reorganization is referred to as the "Redomestication," and
more information can be found in the Proxy Statement/Prospectus.
WHY IS THE BOARD OF VOYAGEUR INVESTMENT TRUST RECOMMENDING APPROVAL OF THE
REDOMESTICATION?
With the exception of Voyageur Investment Trust, all of the registered, open-end
management investment companies within the Delaware Investments Family of Funds
are Delaware statutory trusts. The lack of uniformity among the laws applicable
to the mutual funds within the Delaware Investments familyFamily of fundsFunds poses
administrative complications and costs that can be eliminated through the
Redomestication.
In addition, Delaware statutory trusts provide somewhat greater flexibility to
respond quickly to changes in market or regulatory conditions. This enhanced
flexibility had caused a number of major fund complexes, including the Delaware
Investments Family of Funds, to adopt this form of organization in recent years.
Accordingly, the Board of Voyageur Investment Trust believes that it is being held in Philadelphia on March 17, 1999. We askthe
best interests of the shareholders to approve the Redomestication.
HOW WILL THE REDOMESTICATION CHANGE A SHAREHOLDER'S INVESTMENT IN A SERIES OF
VOYAGEUR INVESTMENT TRUST?
The series of Voyageur Investment Trust and the corresponding series of the
newly formed Delaware statutory trust have the same investment goals, policies
and restrictions. For all practical purposes, a shareholder's investment in
Voyageur Investment Trust would not change as a result of the Redomestication.
COMMON QUESTIONS AND GENERAL INFORMATION
HAVE THE BOARDS OF TRUSTEES APPROVED EACH PROPOSAL?
Yes. The Boards of Trustees have unanimously approved all of the proposals and
recommend that you takevote to approve them.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled be entitled to one vote for each full share
and a fractional vote for each fractional share of each Fund that you own on the
time to reviewrecord date. The record date is December 10, 2004.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy statementcard(s)
and provide us with your
vote on the important issues affecting your fund.
The enclosed proxy statement describes seven separate proposals that affect some
or all of the funds. In addition to the election of Board members and
ratification of the selection of auditors, the proposals include a change in the
designation of investment objectives from "fundamental" to "non-fundamental",
approval of new, standardized investment management agreements which contain fee
increases, fee decreases or potential fee decreases, and approval of new,
standardized sub-advisory agreements. Also, new standardized "fundamental"
investment restrictions are proposed for the funds and the current restrictions
are proposed to be redesignated as "non-fundamental". The proposed changes will
allow the Boards to modify the objectives and "non-fundamental" restrictions in
the future without the delay and expense of holding a shareholder meeting.
Finally, shareholders are asked to approve management's proposal to reorganize
the funds into Delaware business trusts to take advantage of various advantages
under Delaware law.
We realize that this proxy statement will take time to review, but your vote is
very important. Please familiarize yourself with the proposals presented and
mark, sign and return your proxy card (or cards)mailing it in the enclosed postage-paid envelope. You may also call toll-free to vote by
touch-tone telephone orby calling the toll-free number printed on your proxy
card(s) and following the recorded instructions. In addition, you may also vote
usingthrough the Internet. The insert accompanying this proxy statement describesInternet by visiting www.delawareinvestments.com and following the
on-line instructions. If you need any assistance, or have any questions
regarding the proposals or how
to vote using these methods.
If we do not receive your completed proxy card(s) after several weeks, you may
be contacted by our proxy solicitor, Shareholder Communications Corporation, who
will remind you to vote your shares, and will review with youplease call Delaware at
1-800-[______________].
HOW DO I SIGN THE PROXY CARD?
Individual Accounts: Shareholders should sign exactly as their
names appear on the various ways in
which you can register your vote.
Thank you for taking this matter seriously and participating in this important
process.
Sincerely,
LOGO
Jeffrey J. Nick, Chariman, President and
Chief Executive Officer
QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT
We encourage youaccount registration shown on
the card.
Joint Accounts: Either owner may sign, but the name of the person
signing should conform exactly to read the attached proxy statement in full; however, the
following are some typical questions that shareholders might have regarding this
proxy statement.
Q: WHY IS DELAWARE INVESTMENTS SENDING ME THIS PROXY STATEMENT?
Investment companies are required to obtain shareholders' votes for certain
types of action. As a shareholder, you have a right to vote on certain major
policy decisions, such as those included here.
Q: WHAT ARE THE ISSUES CONTAINED IN THIS PROXY STATEMENT?
There are seven different proposals presented here and they are outlinedname shown in
the Notice at the beginningregistration.
All Other Accounts: The person signing must indicate his or her
capacity. For example, if Ms. Ann B. Collins serves
as a trustee for a trust account or other type of
the proxy statement. The Notice describes which
proposals apply to which funds.
Q:entity, she should sign, "Ann B. Collins, Trustee."
HOW WOULD THE BROAD-BASED PROPOSALS AFFECT ME AS A FUND SHAREHOLDER?
o Changing the designation of a fund's investment objective from
"fundamental" to "non-fundamental" would allow a Fund's Board of Directors,
without additional shareholder approval, to make future adjustments to
the investment objective to give greater flexibility to respond to market,
regulatory or industry changes. Approval of this change would not alter any
fund's current investment objective.
o Adopting a standardized list of "fundamental" investment restrictions
across all funds would help provide operational efficiencies and make it
easier to monitor compliance with these restrictions.
o Converting all existing investment restrictions to "non-fundamental" would
allow a fund's Board of Directors to analyze and approve changes to the
fund's existing investment restrictions, without additional shareholder
approval, to further the goal of standardization of investment
restrictions.
o Approval of the proposed fee increases, fee decreases or fee breakpoints
for certain funds would ensure management fee levels that will enable those
funds to continue to receive high quality investment management services.
o Approval of new standardized investment management agreements for each fund
(and standardized sub-advisory agreements where applicable) would help
provide operational efficiencies.
o The restructuring of funds from their current form of organization into
Delaware business trusts would provide both consistency across the Delaware
Investments fund family and flexibility of fund operations.
Q: HOW DO THE BOARD MEMBERS FOR MY FUND RECOMMEND THATCAN I VOTE?
The Board members for all the funds recommend that you vote in favor of, or FOR,
all of the proposals described above.
Q: WHOM DO I CALL FORFIND MORE INFORMATION ON HOW TO PLACE MY VOTE?
PleaseTHE PROPOSALS?
You should read the Proxy Statement/Prospectus that provides details regarding
the Proposals. If you have any questions, please call your fund at 1-800-523-1918 or call Shareholder Communications at
1-800-858-0073 for additional information on how to place your vote.
PLEASE VOTE
YOUR VOTE IS IMPORTANT1-800-[______________].
LOGO
1818 Market Street
Philadelphia, PA 19103
Combined Proxy Statement and
Notice of Joint Annual/Special Meeting of Shareholders
to be Held on March 17, 1999
To the Shareholders of:
Delaware Group Adviser Funds, Inc.
New Pacific Fund
Overseas Equity Fund
U.S. Growth Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc.
Delaware Balanced Fund (formerly Delaware Fund)
Devon Fund
Delaware Group Equity Funds II, Inc.
Blue Chip Fund
Decatur Income Fund
Decatur Total Return Fund
Diversified Value Fund
Social Awareness Fund
Delaware Group Equity Funds III, Inc.
Trend Fund
Delaware Group Equity Funds IV, Inc.
Capital Appreciation Fund
DelCap Fund
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund
Retirement Income Fund
Delaware Group Foundation Funds
Balanced Portfolio
Growth Portfolio
Income Portfolio
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund
Global Equity Fund (formerly Global Assets Fund)
Global Bond Fund
Global Opportunities Fund (formerly Global Equity Fund)
International Equity Fund
International Small Cap Fund
Delaware Group Government Fund, Inc.
U.S. Government Fund
Delaware Group Income Funds, Inc.
Corporate Bond Fund
Delchester Fund
Extended Duration Bond Fund
High-Yield Opportunities Fund
Strategic Income Fund
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series
Decatur Total Return Series
Delaware Series
DelCap Series
Delchester Series
Devon Series
Emerging Markets Series
Global Bond Series
International Equity Series
REIT Series
Small Cap Value Series
Social Awareness Series
Strategic Income Series
Trend Series
Delaware Group State Tax-Free Income Trust
Tax-Free New Jersey Fund
Tax-Free Ohio Fund
Tax-Free Pennsylvania Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Pooled Trust, Inc.
The Real Estate Investment Trust Portfolio
This is your official Notice that a Joint Annual/Special Meeting of
Shareholders of each open-end registered investment company within the Delaware
Investments family listed in bold faced type above (each a "Company") will be
held on Wednesday, March 17, 1999 at 10:00 a.m. at the Union League, 140 South
Broad Street, Philadelphia, Pennsylvania. Each separate fund within a Company
may be referred to as a "Fund." The purpose of the meeting is to consider and
act upon the following Proposals and Sub-Proposals that apply either to
particular Companies or Funds, and to transact any other business that properly
comes before the meeting and any adjournments thereof.
Proposal One: To Elect a Board of Directors or Trustees for the Company
Proposal One applies to all Companies.
Proposal Two: To Approve the Redesignation of the Fund's Investment Objective
from Fundamental to Non-Fundamental
Proposal Two applies to all Funds except the following, because the
following Funds' investment objectives are already non-fundamental:
Delaware Group Equity Funds II, Inc.
Blue Chip Fund
Decatur Total Return Fund
Diversified Value Fund
Social Awareness Fund
Delaware Group Equity Funds III, Inc.
Capital Appreciation Fund
Delaware Group Equity Funds V, Inc.
Retirement Income Fund
Delaware Group Foundation Funds
Balanced Portfolio
Growth Portfolio
Income Portfolio
Delaware Group Income Funds, Inc.
Corporate Bond Fund
Extended Duration Bond Fund
High-Yield Opportunities Fund
Delaware Group Premium Fund, Inc.
REIT Series
Proposal Three: To Approve Standardized Fundamental Investment Restrictions for
the Fund (Includes Seven Sub-Proposals)
3A: Industry Concentration
3B: Borrowing Money and Issuing Senior Securities
3C: Underwriting of Securities
3D: Investing in Real Estate
3E: Investing in Commodities
3F: Making Loans
3G: Redesignation of all Current Fundamental Investment
Restrictions as Non-Fundamental
Proposal Three applies to all Funds except the following, because the
following Funds already have the proposed standardized restrictions:
Delaware Group Equity Funds II, Inc.
Diversified Value Fund
Delaware Group Income Funds, Inc.
Corporate Bond Fund
Extended Duration Bond Fund
Proposal Four: To Approve a New Investment Management Agreement for the Fund
Proposal Four applies to all Funds except the Diversified Value Fund
(of Delaware Group Equity Funds II, Inc.), which already adopted a
standardized Investment Management Agreement.
Proposal Five: To Approve a New Sub-Advisory Agreement for the Fund
Proposal Five only applies to the following Funds:
Delaware Group Adviser Funds, Inc.
New Pacific Fund
Overseas Equity Fund
U.S. Growth Fund
Delaware Group Equity Funds II, Inc.
Blue Chip Fund
Social Awareness Fund
Delaware Group Global & International
Funds, Inc.
Global Equity Fund (formerly Global Assets Fund)
Global Opportunities Fund (formerly Global Equity Fund)
Delaware Group Income Funds, Inc.
Strategic Income Funds, Inc.
Delaware Group Premium Fund, Inc.
REIT Series
Social Awareness Series
Strategic Income Series
Delaware Pooled Trust, Inc.
The Real Estate Investment Trust Portfolio
Proposal Six: To Ratify the Selection of Ernst & Young LLP as Independent
Auditors for the Company
Proposal Six applies to all Companies.
Proposal Seven: To Approve the Restructuring of the Company from its Current
Form of Organization into a Delaware Business Trust
Proposal Seven applies to all Companies except Delaware Group
Foundation Funds, and its Balanced, Growth and Income Portfolios,
because that Company is already organized as a Delaware business trust.
Please note that a separate vote is required for each Proposal or Sub-Proposal
that applies to your Company or Fund. Please vote your Proxy promptly to avoid
the need for further mailings. Your vote is important.
LOGO
Jeffrey J. Nick
Chairman, President and Chief Executive Officer
TABLE OF CONTENTS
Page
----
NOTICE OF JOINT ANNUAL/SPECIAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
Proposal One: To Elect a Board of Directors or Trustees for the Company 2
Proposal Two: To Approve the Redesignation of the Fund's Investment Objective from 6
Fundamental to Non-Fundamental
Proposal Three: To Approve Standardized Fundamental Investment Restrictions for the 7
Fund (Includes Seven Sub-Proposals)
3A: Industry Concentration 8
3B: Borrowing Money and Issuing Senior Securities 9
3C: Underwriting of Securities 10
3D: Investing in Real Estate 10
3E: Investing in Commodities 10
3F: Making Loans 11
3G: Redesignation of all Current Fundamental Investment Restrictions 11
as Non-Fundamental
Proposal Four: To Approve a New Investment Management Agreement for the Fund 12
Proposal Five: To Approve a New Sub-Advisory Agreement for the Fund 18
Proposal Six: To Ratify the Selection of Ernst & Young LLP as Independent Auditors
for the Company 21
Proposal Seven: To Approve the Restructuring of the Company from its Current Form of 21
Organization Into a Delaware Business Trust
EXHIBITS
Exhibit A: Outstanding Shares as of Record Date A-1
Exhibit B: Shareholders Owning 5% or More of a Fund as of October 31, 1998 B-1
Exhibit C: Years That Directors or Trustees First Took Office C-1
Exhibit D: Executive Officers of the Companies D-1
Exhibit E: Shareholdings by Directors or Trustees and Nominees in the Delaware
Investments Funds as of October 31, 1998 E-1
Exhibit F: Lists of Current Fundamental Investment Restrictions F-1
Exhibit G: Information Relating to Investment Management and
Sub-Advisory Agreements G-1
Exhibit H: Actual and Hypothetical Expense Tables H-1
Exhibit I: Similar Funds Managed by Investment Managers and Sub-Advisors I-1
Exhibit J: Form of Investment Management Agreement J-1
Exhibit K: Form of Sub-Advisory Agreement K-1
Exhibit L: Form of Agreement and Plan of Reorganization L-1
Exhibit M: Differences in Legal Structures M-1
LOGO
1818 Market Street
Philadelphia, PA 19103
1-800-523-1918
PROXY STATEMENT
JOINT ANNUAL/SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 17, 199915, 2005
To the Shareholders of:
Delaware Group Adviser Funds Delaware Group State Tax-Free Income Trust
Delaware Group Cash Reserve Delaware Group Tax Fee Fund
Delaware Group Equity Funds I Delaware Group Tax Fee Money Fund
Delaware Group Equity Funds II Delaware Pooled Trust
Delaware Group Equity Funds III Voyageur Insured Funds
Delaware Group Equity Funds IV Voyageur Intermediate Tax Free Funds
Delaware Group Equity Funds V Voyageur Investment Trust
Delaware Group Foundation Funds Voyageur Mutual Funds
Delaware Group Global & International Funds Voyageur Mutual Funds II
Delaware Group Government Fund Voyageur Mutual Funds III
Delaware Group Income Funds Voyageur Tax Free Funds
Delaware Group Limited-Term Funds
NOTICE IS HEREBY GIVEN that a Joint Meeting Information.(the "Meeting") of
Shareholders of certain open-end registered investment companies within the
Delaware Investments Family of Funds listed above (each, a "Trust") will be held
at the offices of Delaware Investments located at 2001 Market Street, 2nd Floor
Auditorium, Philadelphia, PA 19103, on March 15, 2005 at 4:00 p.m., Eastern
time. The Meeting is being called for the following reasons:
1. To elect a Board of DirectorsTrustees for each of the Trusts. The
nominees for election to the Boards of Trustees are:
Thomas L. Bennett Ann R. Leven
Jude T. Driscoll Thomas F. Madison
John A. Fry Janet L. Yeomans
Anthony D. Knerr J. Richard Zecher
Lucinda S. Landreth
2. To approve the use of a "manager of managers" structure
whereby the investment manager will be able to hire and
replace subadvisers without shareholder approval.
3. For shareholders of the Delaware Tax-Free Florida Insured
Fund, the Delaware Tax-Free Missouri Insured Fund and the
Delaware Tax-Free Oregon Insured Fund, to approve the
redomestication of Voyageur Investment Trust from a
Massachusetts business trust to a Delaware statutory trust.
4. To vote upon any other business as may properly come before
the Meeting or any adjournment thereof.
1
Shareholders of record of the Trusts as of the close of business on
December 10, 2004 are entitled to notice of, and to vote at, the Meeting or any
adjournment thereof. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE
YOUR SHARES BY RETURNING THE PROXY CARD BY MAIL IN THE ENCLOSED POSTAGE-PAID
ENVELOPE PROVIDED, OR BY VOTING BY TELEPHONE OR OVER THE INTERNET. YOUR VOTE IS
IMPORTANT.
By Order of the Boards of Trustees,
(hereafterRichelle S. Maestro
Secretary
December [27], 2004
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE
OF FURTHER MAILINGS, PLEASE MARK YOUR PROXY CARD, SIGN IT, AND RETURN IT IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU PREFER, YOU MAY INSTEAD VOTE BY TELEPHONE OR THE INTERNET. YOU MAY REVOKE
YOUR PROXY AT ANY TIME AT OR BEFORE THE MEETING OR VOTE IN PERSON IF YOU ATTEND
THE MEETING, AS PROVIDED IN THE ATTACHED PROXY STATEMENT.
MANY SHAREHOLDERS HOLD SHARES IN MORE THAN ONE TRUST AND WILL RECEIVE
PROXY CARDS AND/OR PROXY MATERIAL FOR EACH TRUST OWNED. PLEASE SIGN AND PROMPTLY
RETURN EACH PROXY CARD IN THE SELF-ADDRESSED ENVELOPE REGARDLESS OF THE NUMBER
OF SHARES OWNED.
2
PROXY STATEMENT
TABLE OF CONTENTS
PAGE
WHAT ARE SHAREHOLDERS BEING ASKED TO VOTE ON?......................................................................
PROPOSAL ONE: TO ELECT A BOARD OF TRUSTEES...............................................................
Who are the Nominees for Trustee?................................................................
Board, Shareholder and Committee Meetings........................................................
Board Compensation...............................................................................
Officers.........................................................................................
Required Vote....................................................................................
PROPOSAL 2: TO APPROVE A MANAGER OF MANAGERS STRUCTURE...................................................
Why Am I Being Asked To Vote On this Proposal?...................................................
How does This Proposal Affect My Right To Vote on
Subadvisory Agreements?..........................................................................
What Are the Conditions of the Order and the Rule?...............................................
What Are The Benefits To The Funds?..............................................................
What Did the Boards Consider in Reviewing This Proposal?.........................................
What vote is required to approve Proposal 2? ....................................................
PROPOSAL 3 - APPROVAL OF AN AGREEMENT AND PLAN OF REDOMESTICATION
THAT PROVIDES FOR THE REORGANIZATION OF VOYAGEUR INVESTMENT
TRUST FROM A MASSACHUSETTS BUSINESS TRUST TO A DELAWARE
STATUTORY TRUST .................................................................................
Why am I being asked vote on the Redomestication?................................................
What will the Redomestication mean for the series of the Voyageur Investment
Trust and for you?..........................................................................
Why are the Trustees recommending approval of the Agreement
and the Redomestication?....................................................................
What are the advantages of a Delaware statutory trust?...........................................
How do the Massachusetts business trust law and Voyageur Investment
Trust's governing documents compare to the Delaware statutory trust
Law and the DE Trust's governing documents?.................................................
What are the procedures and consequences of the Redomestication?.................................
What effect will the Redomestication have on the current Investment
Advisory Agreement?.........................................................................
What effect will the Redomestication have on the shareholder servicing
agreements and distribution plans?..........................................................
What is the effect of shareholder approval of the Agreement?.....................................
What is the capitalization and structure of the DE Trust?........................................
Are there any tax consequences for shareholders?.................................................
What if I choose to sell my shares at any time?..................................................
What is the effect of my voting "For" the Agreement?.............................................
What is necessary to approve the Agreement?......................................................
-i-
INDEPENDENT AUDITORS............................................................
VOTING INFORMATION..............................................................
PRINCIPAL HOLDERS OF SHARES.....................................................
MORE INFORMATION ABOUT THE TRUSTS...............................................
COMMUNICATIONS TO THE BOARD OF TRUSTEES.........................................
EXHIBITS:
EXHIBIT A - AGGREGATE TRUSTEE COMPENSATION FROM EACH TRUST
EXHIBIT B - EXECUTIVE OFFICERS OF THE TRUSTS
EXHIBIT C - FORM OF AGREEMENT AND PLAN OF REDOMESTICATION BETWEEN
VOYAGEUR INVESTMENT TRUST AND DELAWARE INVESTMENTS
MUNICIPAL TRUST
EXHIBIT D - A COMPARISON OF GOVERNING DOCUMENTS AND STATE LAW
EXHIBIT E - AUDIT FEE INFORMATION
EXHIBIT F - OUTSTANDING SHARES AS OF DECEMBER 10, 2004
EXHIBIT G - PRINCIPAL HOLDERS OF SHARES AS OF DECEMBER 10, 2004
ii
PROXY STATEMENT
DATED DECEMBER [27], 2004
Delaware Group Adviser Funds Delaware Group State Tax-Free Income Trust
Delaware Group Cash Reserve Delaware Group Tax Fee Fund
Delaware Group Equity Funds I Delaware Group Tax Fee Money Fund
Delaware Group Equity Funds II Delaware Pooled Trust
Delaware Group Equity Funds III Voyageur Insured Funds
Delaware Group Equity Funds IV Voyageur Intermediate Tax Free Funds
Delaware Group Equity Funds V Voyageur Investment Trust
Delaware Group Foundation Funds Voyageur Mutual Funds
Delaware Group Global & International Funds Voyageur Mutual Funds II
Delaware Group Government Fund Voyageur Mutual Funds III
Delaware Group Income Funds Voyageur Tax Free Funds
Delaware Group Limited-Term Funds
This Proxy Statement solicits proxies to be voted at a Joint Meeting of
Shareholders (the "Meeting") of certain registered open-end management
investment companies within the Delaware Investments Family of Funds listed
above (each, a "Trust" and collectively, the "Trusts"). Each of the separate
funds within a Trust is referred to as a "Fund" and all of the funds are
collectively referred to as the "Funds." The Meeting has been called by the
Board of Trustees (each, a "Board of Directors"and collectively, the "Boards") of the Trusts
to vote on the following proposals (each of which is described more fully
below):
(1) To elect a Board of Trustees;
(2) To approve the use of a "manager of managers" structure; and
(3) For Delaware Tax-Free Florida Insured Fund, Delaware Tax-Free
Missouri Insured Fund and Delaware Tax-Free Oregon Insured
Fund only, to approve an Agreement and Plan of
Redomestication.
The principal offices of the Trusts are located at 2005 Market Street,
Philadelphia, PA 19103. You can reach the offices of the Trusts by telephone by
calling 1-800-523-1918.
The Meeting will be held at the offices of Delaware Investments located
at 2001 Market Street, 2nd Floor Auditorium, Philadelphia, PA 19103, on March
15, 2005 at 4:00 p.m., Eastern time. The Boards of the Trusts are soliciting
these proxies. This Proxy Statement will first be sent to shareholders on or
about January[7], 2005.
WHAT ARE SHAREHOLDERS BEING ASKED TO VOTE ON?
1
Not all of the three proposals described in this Proxy Statement affect
all Funds. Specifically, not all shareholders will be voting on Proposal 3. The
table below indicates which Fund's shareholders will be voting on the proposals
described in this Proxy Statement.
PROPOSAL SUMMARY FUND WHOSE SHAREHOLDERS ARE ENTITLED TO VOTE
- -------------------------------------------------------- ----------------------------------------------------------
1. To Elect Trustees Each Trust (voting separately by Trust)
2. To approve the use of a manager of managers Each Fund (voting separately by Fund)
structure whereby Delaware Management Company, as the
investment manager, will be able to hire and replace
subadvisers without shareholder approval.
3. To approve the redomestication of Voyageur Delaware Tax-Free Florida Insured Fund, Delaware
Investment Trust from a Massachusetts business trust Tax-Free Missouri Insured Fund and Delaware Tax-Free
to a newly formed Delaware statutory trust. Oregon Insured Fund (voting together with all of the
other series of Voyageur Investment Trust)
PROPOSAL 1: TO ELECT A BOARD OF TRUSTEES
You are being asked to elect a Board of Trustees.
WHO ARE THE NOMINEES FOR TRUSTEE? The nominees for Trustee are: Thomas
L. Bennett, Jude T. Driscoll, John A. Fry, Anthony D. Knerr, Lucinda S.
Landreth, Ann R. Leven, Thomas F. Madison, Janet L. Yeomans, and J. Richard
Zecher. Each of the nominees (except for Messrs. Bennett, Driscoll, Fry and
Zecher and Ms. Landreth) presently is a Trustee of each open-endTrust. Messrs. Driscoll
and Fry each presently serve as a Trustee for each Trust except for Voyageur
Insured Funds, Voyageur Intermediate Tax-Free Funds, Voyageur Investment Trust,
Voyageur Mutual Funds, Voyageur Mutual Funds II, Voyageur Mutual Funds III, and
Voyageur Tax-Free Funds (collectively, the "Voyageur Funds").
Mr. Fry, who is standing for election by shareholders for the first
time, Messrs. Bennett and Zecher, and Ms. Landreth were identified by
independent executive search firms retained by the Trust's Nominating and
Corporate Governance Committee (the "Nominating Committee"). The executive
search firms identified individuals for consideration by the Nominating
Committee based on the criteria described below. At the direction of the
Nominating Committee, the executive search firm further evaluated and developed
detailed background information for the individuals that the Nominating
Committee identified as potential candidates for nominees. After reviewing this
information, the Nominating Committee selected the nominees for recommendation
to the Board. The Nominating Committee's process for evaluating nominees is
described under "Board, Shareholder and Committee Meetings" below. Among the
nominees standing for election, only Mr. Driscoll would be deemed to be an
"Interested Trustee." The remaining nominees would be deemed to be "Independent
Trustees;" i.e., Trustees who are not "interested persons" of the Trust, as that
term is defined under the Investment Company Act of 1940, as amended (the "1940
Act").
If elected, these persons will serve as Trustees until their successors
are duly elected and qualified or until their earlier resignation, death or
retirement. Each nominee is currently available and has consented to be named in
this Proxy Statement and to serve if elected. It is not expected that any
nominee will withdraw or become unavailable for election, but in such a case,
the power given by you in the Proxy Card may be used by the persons named as
proxies to vote for a substitute nominee or nominees as recommended by the
current Board. The following table provides certain background information for
each nominee, including the number of Funds and of all other registered
investment companies in the Delaware Investments Family of Funds (the "Fund
Complex") that the nominee oversees or will oversee.
2
NUMBER OF
PORTFOLIOS
IN
LENGTH OF FUND
POSITION(S) TIME SERVED PRINCIPAL COMPLEX
HELD WITH AS A TRUSTEE OCCUPATION(S) DURING OVERSEEN BY OTHER DIRECTORSHIPS
NAME, ADDRESS AND AGE THE TRUSTS OF THE TRUSTS PAST 5 YEARS TRUSTEE HELD BY NOMINEE
- ----------------------- ---------------- -------------- ------------------------ -------------- ---------------------
NOMINEE FOR INTERESTED TRUSTEE
Jude T. Driscoll(1) Chairman, 4 years - CEO, Delaware 92 None
2005 Market Street President and Executive Investments (since
Philadelphia, PA 19103 Chief Officer 2003). Since August
41 Executive 2000, Mr. Driscoll has
Officer and 1 year - served in various
Trustee Trustee executive capacities
at different times at
Delaware Investments(2)
Senior Vice President,
Research and Trading -
Conseco Capital
Management, Inc. (June
1998 - July 2000)
NOMINEES FOR INDEPENDENT TRUSTEE
Thomas L. Bennett Nominee Not Manager - Tower One 84 None
2005 Market Street Applicable LLC (June 1999 -
Philadelphia, Pa 19103 Present)
57 (Wireless
Communications)
Manager - Tower Bridge
Telecom LLC (June 2001
- Present)
(Wireless
Communications)
Managing Director -
Morgan Stanley & Co.
Incorporated (1996 -
March 2004). Since
January 1984, Mr.
Bennett has served in
various management and
executive capacities
at different times at
Miller, Anderson &
Sherred, LLP and its
successor, Morgan
Stanley & Co.
Incorporated
3
John A. Fry Trustee 3 years President - Franklin & 92 Director -
2005 Market Street Marshall College (June Community Health
Philadelphia, PA 19103 2002 - Present) Systems
44
Executive Vice
President - University
of Pennsylvania (April
1995 - June 2002)
Anthony D. Knerr Trustee 11 years Founder/Managing 92 None
2005 Market Street Director - Anthony
Philadelphia, PA 19103 Knerr & Associates
65 (1990 - Present)
(Strategic Counseling)
Lucinda S. Landreth Nominee Not Chief Investment 84 None
2005 Market Street Applicable Officer - Assurant,
Philadelphia, PA Inc. (June 2002 to
19103 December 2004)
52 (Insurance Company)
Chief Investment
Officer - Fortis, Inc.
(September 1997 to May
2001)
(Financial Services)
Ann R. Leven Trustee 15 years Treasurer/Chief Fiscal 92 Director - Systemax
2005 Market Street Officer - National Inc.
Philadelphia, PA 19103 Gallery of Art
63 (1994 - 1999) Director and Audit
Committee
Chairperson - Andy
Warhol Foundation
Thomas E. Madison Trustee 10 years President/Chief 92 Director - Banner
2005 Market Street Executive Officer - Health
Philadelphia, PA 19103 MLM Partners, Inc.
68 (January 1993 - Director and Audit
Present) (Small Committee Member -
Business Investing and CenterPoint Energy
Counseling)
Director and Audit
Committee Member -
Digitial River Inc.
Director and Audit
Committee Member-
Rimage Corporation
Director - Valmont
Industries, Inc.
Janet L. Yeomans Trustee 5 years Vice President/Mergers 92 None
2005 Market Street & Acquisitions - 3M
Philadelphia, PA 19103 Corporation (January
56 2003 - Present)
Ms. Yeomans has held
various management
positions at 3M
Corporation since 1983.
4
J. Richard Zecher, Nominee Not Vice Chairman - 84 Director and Audit
Ph.D. Applicable Investor Analytics, LLC Committee Member -
2005 Market Street (May 1999 to Present) OXiGENE, Inc.
Philadelphia, PA
19103 Founder/Principal -
64 Sutton Asset
Management (September
1998 to Present)
(1) Mr. Driscoll would be considered to be an "Interested Trustee" because he
is an executive officer of the Trusts' investment manager. Mr. Driscoll
acquired shares of common stock of Lincoln National Corporation ("LNC"),
of which the Trusts' investment manager is a wholly-owned subsidiary, in
the ordinary course of business during 2003, but those transactions
involved less than 1% of the outstanding shares of common stock of LNC.
(2) Delaware Investments is the marketing name for Delaware Management
Holdings, Inc. and its subsidiaries, including the Trust's investment
manager, principal underwriter/distributor and administrator.
The following table shows each nominee's ownership of shares of
investment companies within the Fund Complex as of October 31, 2004.
- ----------------------------------------------------------------------------------------------------------------
AGGREGATE DOLLAR
RANGE OF EQUITY
DOLLAR RANGE OF SECURITIES IN ALL
SHARES OF BENEFICIAL REGISTERED
INTEREST OF THE INVESTMENT COMPANIES
FUNDS BENEFICIALLY OVERSEEN BY TRUSTEE
NAME OF NOMINEE FUND NAME OWNED IN THE FUND COMPLEX
- ----------------------- ------------------------------------------ ---------------------- ----------------------
INTERESTED NOMINEE
- ----------------------- ------------------------------------------ ---------------------- ----------------------
Jude T. Driscoll Delaware Trend Fund Class A $10,001-$50,000 Over $100,000
- ----------------------- ------------------------------------------ ----------------------
Delaware US Government Fund Class A $50,001-$100,000
- ----------------------- ------------------------------------------ ----------------------
Delaware Emerging Markets Fund Class A $1-$10,000
- ----------------------- ------------------------------------------ ----------------------
Delaware Small Cap Value Fund Class A $10,001-$50,000
- ----------------------- ------------------------------------------ ----------------------
Delaware International Value Equity Fund
Class A $50,001-$100,000
- ----------------------- ------------------------------------------ ----------------------
Delaware Trend Fund Institutional Class $1-$10,000
- ----------------------- ------------------------------------------ ----------------------
Delaware Delchester Fund Institutional
Class $1-$10,000
- ----------------------- ------------------------------------------ ----------------------
Delaware Large Cap Value Fund
Institutional Class $10,001-$50,000
- ----------------------- ------------------------------------------ ----------------------
Delaware REIT Fund Class A $10,001-$50,000
- ----------------------- ------------------------------------------ ----------------------
Delaware Value Fund Class A $50,001-$100,000
- ----------------------- ------------------------------------------ ----------------------
Delaware Extended Duration Bond Fund
Class A $10,001-$50,000
- ----------------------- ------------------------------------------ ----------------------
Delaware TAP Aggressive Class A $50,001-$100,000
- ----------------------- ------------------------------------------ ----------------------
Delaware TAP Aggressive Class A $50,001-$100,000
- -----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
INDEPENDENT NOMINEES
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Thomas L. Bennett None None None
- ----------------------- ------------------------------------------ ----------------------- ---------------------
John A. Fry Delaware TAP Aggressive-Age, 4-6yrs. $50,001-$100,000 Over $100,000
Class A
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware TAP Aggressive-Age, 7-9yrs. $50,001-$100,000
Class A
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware TAP Aggressive-Age, 13-15yrs. $50,001-$100,000
Class A
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Anthony D. Knerr Delaware Trend Fund Class A $10,001-$50,000 $10,001 - $50,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware Small Cap Value Fund Class A $1-$10,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware Select Growth Fund Class A $10,001-$50,000
- ----------------------------------------------------------------------------------------------------------------
5
- ----------------------------------------------------------------------------------------------------------------
Lucinda S. Landreth None None None
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Ann R. Leven Delaware Large Cap Value Fund Class A $50,001-$100,000 Over $100,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware Trend Fund Class A $50,001-$100,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware Small Cap Value Fund Class A $50,001-$100,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware Dividend Income Fund Class A $10,001-$50,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware Select Growth Fund Class A $10,001-$50,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Thomas F. Madison Delaware Large Cap Value Fund Class A $1-$10,000 $10,001 - $50,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware Balanced Fund Class A $1-$10,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware International Value Equity Fund
Class A $1-$10,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware REIT Fund Class A $1-$10,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware Select Growth Fund Class A $1-$10,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Janet A. Yeomans Delaware Trend Fund Class A $1-$10,000 $10,001 - $50,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware Emerging Market Fund Class A $10,001-$50,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
Delaware International Value Equity Fund
Class A $10,001-$50,000
- ----------------------- ------------------------------------------ ----------------------- ---------------------
J. Richard Zecher None None None
- ----------------------------------------------------------------------------------------------------------------
BOARD, SHAREHOLDER AND COMMITTEE MEETINGS. During its last fiscal year,
each Trust held five Board meetings. Each of the currently serving Trustees
attended at least 75% of those Board meetings and at least 75% of committee
meetings held within the last fiscal year by a committee on which the Trustee
serves as a member.
Each Trust has an Audit Committee for the purpose of meeting, at least
annually, with the Trust's officers and independent auditors to oversee the
quality of financial reporting and the internal controls of such Trust, and for
such other purposes as the Board of the Trust may from time to time direct. The
Audit Committee of each Trust consists of the following three Trustees appointed
by such Trust's Board: Ann R. Leven, Chairperson; Thomas F. Madison; and Janet
L. Yeomans, each of whom is an "Independent Trustee." Members of the Audit
Committee serve for three years or until their successors have been appointed
and qualified. During each Trust's last fiscal year, the Audit Committee held
five meetings.
The Nominating Committee is currently comprised of Anthony D. Knerr,
Chairperson; John H. Durham (who is retiring and therefore not standing for
re-election); and John A. Fry (except for the Voyageur Funds), each of whom is
an Independent Trustee. The Nominating Committee recommends nominees for (i)
Independent Trustees for consideration by the incumbent Independent Trustees of
each Trust, and (ii) Interested Trustees for consideration by the full Board of
each Trust. The Nominating Committee for each Trust held seven meetings during
such Trust's last fiscal year.
The Board of Trustees of each Trust has adopted a formal charter for
their Nominating Committee setting forth such Committee's responsibilities. A
current copy of the Nominating Committee's charter is available on the Trusts'
website at www.delawareinvestments.com.
The Nominating Committee will consider shareholder recommendations for
nomination to the Board of a Trust only in the event that there is a vacancy on
the Board of Trustees. Shareholders who wish to submit recommendations for
nominations to the Board to fill a vacancy must submit their recommendations in
writing to Anthony D. Knerr, Chairman of the Nominating Committee, c/o the
applicable Trust at 2005 Market Street, Philadelphia, Pennsylvania 19103.
Shareholders should include appropriate information on the background and
qualifications of any person recommended to the Nominating Committee (e.g., a
resume), as well as the candidate's contact information and a written consent
from the candidate to serve if nominated and elected. Shareholder
recommendations for nominations to the Board will be accepted on an ongoing
basis and such recommendations will be kept on file for consideration when there
is a vacancy on the Board.
6
The Nominating Committee generally identifies candidates for Board
membership through personal and business contacts of Trustees and shareholders.
In addition, the Nominating Committee may use a search firm to identify
candidates for a Board, if deemed necessary and appropriate to use such a firm.
The Nominating Committee's process for evaluating a candidate generally includes
a review of the candidate's background and experience, a check of the
candidate's references and other due diligence and, when appropriate, interviews
with Nominating Committee members. In evaluating a candidate, the Nominating
Committee will also consider whether the candidate, if elected, would be an
Independent Trustee.
The Nominating Committee has not established any specific minimum
requirements that candidates must meet in order to be recommended by the
Nominating Committee for nomination for election to the Boards. Rather, the
Nominating Committee seeks candidates who, in its judgment, will serve the best
interests of the Trusts' long-term shareholders and whose background will
complement the experience, skills and diversity of the other Trustees and add to
the overall effectiveness of the Boards.
BOARD COMPENSATION. Each Independent Trustee receives compensation from
each of the Trusts of which he/she is a member of the Board. Interested Trustees
are compensated by Delaware Management Company, the Funds' investment manager
("DMC"), and do not receive compensation from the Trusts. Each Independent
Trustee currently receives a total annual retainer of $70,000 for serving as a
Trustee of all 32 registered investment companies within the Fund Complex, plus
a $5,000 per day fee for Board meetings attended (normally four regular
meetings, three of which are two-day meetings). The Coordinating Trustee for the
Trusts receives an additional annual retainer totaling $25,000. The chairperson
of the Audit Committee receives an additional annual retainer of $10,000 and the
chairperson of the Nominating Committee receives an annual retainer of $1,500.
Each member of the Audit Committee receives an additional fee of $2,500 for each
Audit Committee meeting attended, and each member of the Nominating Committee
receives an additional fee of $1,700 for each Nominating Committee meeting
attended. Prior to August 2004, the Trustees' fees were allocated equally per
each of the investment companies in the Fund Complex, and the Trustees'
retainers were allocated ratably among the investment companies in the Fund
Complex based on net assets. After August 2004, the Trustees' fees and retainers
were allocated ratably among the investment companies in the Fund Complex based
on relative net assets.
Under the terms of the Trusts' retirement plan for the Independent
Trustees, each Independent Trustee who, at the time of his or her retirement
from all Boards of Trustees in the Fund Complex, has attained the age of 70 and
has served on the Boards of Trustees for at least five continuous years, is
entitled to receive payments from the Fund Complex for a period of time equal to
the lesser of the number of years that the person served as a Trustee or the
remainder of the person's life. The annual amount of such payments will be equal
to the amount of the annual retainer that is paid to the Independent Trustees of
the Fund Complex at the time of the person's retirement. If an eligible
Independent Trustee of a Trust had retired as of October 31, 2004, he or she
would have been entitled to annual payments in the amount of $70,000 from the
Fund Complex, borne pro rata by the registered investment companies therein
based on their relative net assets. The following table identifies the amount
each Trustee received from each Trust and from the Fund Complex as a whole
during the 12 months ended October 31, 2004, as well as the estimated annual
benefits upon retirement.
7
Pension or
Retirement
Aggregate Benefits Accrued Estimated Total Compensation From Fund
Compensation from as Part of Trust Annual Benefits Complex for the 12 months
Trustee(1) each Trust Expenses Upon Retirement ended October 31, 2004
- ------------------------- ------------------- ------------------ ----------------- -----------------------------
JUDE T. DRISCOLL None None None None
WALTER P. BABICH(2) See Exhibit A None $70,000 $110,870
JOHN H. DURHAM(2) See Exhibit A None $70,000 $101,930
JOHN A. FRY(3) See Exhibit A None $70,000 $ 91,458
ANTHONY D. KNERR See Exhibit A None $70,000 $109,345
ANN R. LEVEN See Exhibit A None $70,000 $115,870
THOMAS E. MADISON See Exhibit A None $70,000 $109,620
JANET L. YEOMANS See Exhibit A None $70,000 $109,620
(1) Compensation information for Messrs. Bennett and Zecher and Ms. Landreth is
not applicable because such nominees were not members of the Boards of the
Trusts or any other investment company in the Fund Complex for the 12-month
period ended on October 31, 2004.
(2) Messrs. Babich and Durham have announced their intention to retire from the
Boards effective as of the date of the Meeting and therefore are not standing
for re-election.
(3) Mr. Fry received $8,827 in profession services fees, in addition to his
Trustee compensation, for the 12-month period ended on October 31, 2004. Such
fees were paid by the Voyageur Funds.
OFFICERS. The Board of Trustees and the senior management of a Trust
appoint officers each year, and from time to time as necessary. The following
individuals are executive officers of the Trusts: Jude T. Driscoll, Joseph H.
Hastings, Richelle S. Maestro and Michael P. Bishof. Exhibit B includes
biographical information and the past business experience of such officers,
except for Mr. Driscoll, whose information is set forth above along with the
other nominees. Exhibit B also identifies which of these executive officers are
also officers of DMC. The above officers of the Trusts own shares of common
stock and/or options to purchase shares of common stock of LNC, the ultimate
parent of DMC. They are considered to be "interested persons" of the Trusts
under the 1940 Act.
REQUIRED VOTE. Provided that "Quorum" requirements (as defined below)
have been satisfied, the Trustees for a Trust shall be elected by a plurality of
the votes cast by shareholders of all Funds of the Trust voting together.
"Quorum" means: (i) for all Trusts other than Voyageur Investment Trust,
one-third percent (33 1/3%) of the shares entitled to vote at the Meeting are
present in person or represented by proxy at the Meeting; or (ii) for Voyageur
Investment Trust, ten percent (10%) of the shares entitled to vote at the
Meeting are present in person or represented by proxy at the Meeting.
8
THE BOARDS OF TRUSTEES UNANIMOUSLY
RECOMMEND THAT YOU VOTE "FOR"
ALL NOMINEES FOR TRUSTEE
PROPOSAL 2: TO APPROVE A MANAGER OF MANAGERS STRUCTURE
WHY AM I BEING ASKED TO VOTE ON THIS PROPOSAL?
The Manager of Managers Structure (as defined below) is intended to
enable the Funds to operate with greater efficiency by allowing DMC to employ
subadvisers best suited to the needs of the Funds without incurring the expense
and delays associated with obtaining shareholder approval of subadvisers or
subadvisory agreements. Ordinarily, federal law requires shareholders of a
mutual fund to approve a new subadvisory agreement among a mutual fund, its
investment manager and a subadviser before such subadvisory agreement may become
effective. Specifically, Section 15 of the 1940 Act makes it unlawful for any
person to act as an investment adviser (including as a subadviser) to a mutual
fund, except pursuant to a written contract that has been approved by
shareholders. Section 15 also requires that an investment advisory agreement
(including a subadvisory agreement) provide that it will terminate automatically
upon its "assignment," which, under the 1940 Act, generally includes the
transfer of an advisory agreement itself or the transfer of control of the
investment adviser through the transfer of a controlling block of the investment
adviser's outstanding voting securities.
To comply with Section 15 of the 1940 Act, a Fund must obtain
shareholder approval of a subadvisory agreement in order to employ one or more
subadvisers, replace an existing subadviser, materially change the terms of a
subadvisory agreement, or continue the employment of an existing subadviser when
that subadviser's subadvisory agreement terminates because of an "assignment."
Pursuant to the current Investment Management Agreements between the
Trusts and DMC (collectively, the "Investment Management Agreement"), DMC,
subject to the supervision of the Boards and approval of shareholders, serves as
each Fund's investment manager. As such, DMC is responsible for, among other
things, managing the assets of each Fund and making decisions with respect to
purchases and sales of securities on behalf of the Funds. DMC is permitted under
the Investment Management Agreement, at its own expense, to select and contract
with one or more subadvisers to perform some or all of the services for a Fund
for which DMC is responsible under such Agreement(1). If DMC delegates
investment advisory duties to a subadviser, DMC remains responsible for all
advisory services furnished by the subadviser. Before DMC may engage a
subadviser for a Fund, shareholders of the Fund must approve the agreement with
such subadviser.
- --------
(1) DMC currently has entered into subadvisory agreements with Delaware
International Advisers Ltd. ("DIAL") with respect to the following Funds: The
Emerging Markets Portfolio, The Global Fixed Income Portfolio, The International
Equity Portfolio, The International Fixed Income Portfolio, and The Labor Select
International Equity Portfolio, five separate series of Delaware Pooled Trust,
and Delaware Emerging Markets Fund, Delaware International Small Cap Value Fund
and Delaware International Value Equity Fund, three separate series of Delaware
Group Global & International Funds (collectively, the "DIAL Funds"). Prior to
September 2004, DIAL was a part of Delaware Investments. However, in September
2004, DIAL was acquired by a company owned by DIAL's management and others.
9
The proposed "manager of managers" structure, however, would permit
DMC, as the Funds' investment manager, to appoint and replace subadvisers, enter
into subadvisory agreements, and amend and terminate subadvisory agreements on
behalf of a Fund without shareholder approval (the "Manager of Managers
Structure"). The employment of the Manager of Managers Structure on behalf of a
Fund, however, is contingent upon either (i) the Trusts' and DMC's receipt of
exemptive relief from the U.S. Securities and Exchange Commission (the "SEC"),
or (ii) the adoption of a rule by the SEC authorizing the employment of a
Manager of Managers Structure. In either case, a Fund must obtain shareholder
approval before it may implement the Manager of Managers Structure. Because a
meeting of shareholders is needed to elect a Board for each Trust and to vote on
other matters, the Boards determined to seek shareholder approval of the Manager
of Managers Structure at the Meeting to avoid additional meeting and proxy
solicitation costs in the future. There can be no assurance that exemptive
relief will be granted by the SEC or that a rule authorizing the employment of a
Manager of Managers structure will be adopted by the SEC.
Adoption and use by a Fund of the Manager of Mangers Structure would
only enable DMC to hire and replace a subadviser (or materially amend a
subadvisory agreement) without shareholder approval. The Manager of Managers
Structure would not: (i) permit investment management fees paid by a Fund to be
increased without shareholder approval; or (ii) change DMC's responsibilities to
a Fund, including DMC's responsibility for all advisory services furnished by a
subadviser.
At their August 18-19, 2004 Boards of Trustees meetings, the Boards of
the Trusts, including a majority of the Independent Trustees, generally approved
the use of the Manager of Managers Structure, subject to shareholder approval
and action by the SEC as described above. As noted above, the Manager of
Managers Structure is intended to enable the Funds to operate with greater
efficiency and without incurring the expense and delays associated with
obtaining shareholder approval of subadvisers or subadvisory agreements. While
DMC and the Boards do not currently expect to use the Manager of Managers
Structure after receipt of necessary SEC approval (by order or rule) by hiring
one or more subadvisers to manage all or a portion of a Fund's portfolio (or
replacing DIAL as a subadviser for one or more of the DIAL Funds), DMC and the
Boards do intend to make use of such structure in the future in the event they
believe that doing so would likely enhance Fund performance by introducing a
different investment style or focus. The Boards determined to seek shareholder
approval of the Manager of Managers Structure in connection with the Meeting,
which was otherwise required to be held, to avoid additional meeting and proxy
solicitation costs in the future.
DMC and the Boards believe that the employment of the Manager of
Managers Structure will: (1) enable the Boards to act more quickly and with less
expense to a Fund in order to appoint an initial or a new subadviser when DMC
and the Board believe that such appointment would be in the best interests of
that Fund's shareholders; and (2) help the Funds to enhance performance by
permitting DMC to allocate and reallocate a Fund's assets among itself and one
or more subadvisers when DMC and the Board believe that it would be in the best
interests of that Fund's shareholders-- for example, to engage a subadviser with
a different investment style if deemed appropriate by DMC and the Board.
10
Based on the above, the Boards are hereby soliciting shareholder
approval of the employment of the Manager of Managers Structure with respect to
each Fund.
HOW DOES THIS PROPOSAL AFFECT MY RIGHT TO VOTE ON SUBADVISORY AGREEMENTS?
If Proposal 2 is approved, DMC in the future would be permitted to
appoint and replace subadvisers (including DIAL) for a Fund and to enter into,
and approve amendments to subadvisory agreements without first obtaining
shareholder approval. The employment of the Manager of Managers Structure is
contingent upon the receipt by the Trusts and DMC of exemptive relief from the
SEC and/or the adoption of a rule by the SEC authorizing the employment of the
Manager of Managers Structure. In all cases, however, (i) the applicable Board,
including a majority of the Independent Trustees, must approve new or amended
subadvisory agreements; (ii) shareholder approval would not be necessary; (iii)
DMC's responsibilities to a Fund would remain unchanged; and (iv) there would be
no increase in investment management fees paid by a Fund without further
shareholder approval. Until receipt of exemptive relief from the SEC and/or the
adoption of an SEC rule authorizing the employment of a Manager of Managers
Structure, DMC will only enter into new or amended subadvisory agreements with
shareholder approval, to the extent required by law.
Subadvisory agreements with subadvisers that are affiliated with DMC
("Affiliated Subadvisers"), if any, generally would remain subject to the
shareholder approval requirement. The Trusts and DMC may in the future seek SEC
exemptive relief or rely on relief obtained by an affiliate, or rely on any
further SEC rule or interpretation, which would permit DMC to enter into new or
materially modify subadvisory agreements with Affiliated Subadvisers without
shareholder approval. Therefore, under Proposal 2, we are seeking shareholder
approval to apply the Manager of Managers Structure to Affiliated Subadvisers,
subject to necessary regulatory relief.
If Proposal 2 is not approved by a Fund's shareholders, then DMC would
only enter into new or amended subadvisory agreements with shareholder approval,
causing delay and expense in making a change deemed beneficial to that Fund and
its shareholders by that Fund's Board.
WHAT ARE THE CONDITIONS OF THE ORDER AND THE RULE?
The Trusts and DMC expect to file an exemptive application with the SEC
in the near future requesting an order permitting DMC to employ a Manager of
Managers Structure with respect to the mutual funds for which DMC serves as
investment manager, including the Funds (the "Order"). On October 23, 2003, the
SEC proposed Rule 15a-5 under the 1940 Act that, if adopted as proposed, would
permit the Trusts and DMC to employ a Manager of Managers Structure with respect
to the Funds without obtaining the Order (the "Proposed Rule"), provided that
shareholders of a Fund approve the Manager of Managers Structure prior to
implementation. To date, the Proposed Rule has not been adopted. In connection
with seeking shareholder approval of Proposal 1, you are also being asked to
approve Proposal 2 and permit the implementation of the Manager of Managers
Structure for your Fund contingent upon the receipt by the Trusts and DMC of the
Order or the adoption of the Proposed Rule, whichever is earlier. There is no
assurance that exemptive relief will be granted or that the Proposed Rule will
be adopted.
11
The Order would grant a Fund relief from Section 15(a) of the 1940 Act
and certain rules under the 1940 Act so that the Trusts and DMC may employ the
Manager of Managers Structure with respect to a Fund, subject to certain
conditions, including the approval of this Proposal 2 by the Fund's
shareholders. Neither a Fund nor DMC would rely on the Order unless all such
conditions have been met. Upon finalization of the Proposed Rule, it is expected
that the Order will expire and that a Fund using the Manager of Managers
Structure will comply with the then final rule's requirements. The ultimate
conditions that would be included in the final rule are expected to be similar
to those included in the Order, but the conditions could differ to some extent
from the conditions imposed under the Rule. The conditions for relief that will
be in the application for the Order are expected to be substantially similar to
those customarily included in similar applications filed by other investment
company complexes and approved by the SEC. Such conditions are as follows:
(1) DMC will provide, pursuant to the Investment Management Agreement,
general management services to a Fund, including overall supervisory
responsibility of the general management and investment of the Fund's assets
and, subject to review and approval of the appropriate Board, will (i) set the
Fund's overall investment strategies, (ii) evaluate, select and recommend
subadvisers to manage all or a portion of the Fund's assets, (iii) allocate and,
when appropriate, reallocate the Fund's assets among one or more subadvisers,
(iv) monitor and evaluate subadviser performance, and (v) implement procedures
reasonably designed to ensure that subadvisers comply with the Fund's investment
objective, policies and restrictions;
(2) Before a Fund may rely on the Order, the operation of the Fund
pursuant to a Manager of Managers Structure will be approved by a majority of
the Fund's outstanding voting shares as defined in the 1940 Act;
(3) The prospectus for the Fund will disclose the existence, substance
and effect of the Order. In addition, the Fund will hold itself out to the
public as employing the Manager of Managers Structure. The prospectus will
prominently disclose that DMC has ultimate responsibility, subject to oversight
by the Board, to oversee the subadvisers and recommend their hiring,
termination, and replacement;
(4) Within 90 days of the hiring of any new subadviser, the Fund will
furnish its shareholders with an information statement containing all
information about the new subadviser, including, as applicable, aggregate fees
paid to DMC and Affiliated Subadvisers and aggregate fees paid to non-affiliated
subadvisers. The information statement provided by the Fund will include all
information required by Regulation 14C, Schedule 14C and Item 22 of Schedule 14A
under the Securities Exchange Act of 1934, as amended (except as modified by the
Order to permit the aggregate fee disclosure previously described);
12
(5) No trustee or officer of the applicable Trust nor director or
officer of DMC will own directly or indirectly (other than through a pooled
investment vehicle that is not controlled by such person) any interest in a
subadviser except for (i) ownership of interests in DMC or any entity that
controls, is controlled by, or is under common control, with DMC; or (ii)
ownership of less than 1% of the outstanding securities of any class of equity
or debt of a publicly traded company that is either a subadviser or an entity
that controls, is controlled by or is under common control with a subadviser;
(6) At all times, a majority of the Board will be Independent Trustees,
and the nomination of new or additional Independent Trustees will be placed
within the discretion of the then-existing Independent Trustees;
(7) Whenever a subadviser change is proposed for the Fund with an
Affiliated Subadviser, the Board, including a majority of the Independent
Trustees, will make a separate finding, reflected in the applicable Board
minutes, that such change is in the best interests of the Fund and its
shareholders and does not involve a conflict of interest from which DMC or the
Affiliated Subadviser derives an inappropriate advantage;
(8) As applicable, the Fund will disclose in its registration statement
the aggregate fee disclosure referenced in condition four above;
(9) Independent counsel knowledgeable about the 1940 Act and the duties
of Independent Trustees will be engaged to represent the applicable Trust's
Independent Trustees. The selection of such counsel will be placed within the
discretion of the Independent Trustees;
(10) DMC will provide the Board, no less frequently than quarterly,
with information about DMC's profitability on a per-Fund basis. This information
will reflect the impact on profitability of the hiring or termination of any
subadviser during the applicable quarter;
(11) Whenever a subadviser is hired or terminated, DMC will provide the
Board with information showing the expected impact on DMC's profitability;
(12) DMC and a Fund will not enter into a subadvisory agreement with
any Affiliated Subadviser without such agreement, including the compensation to
be paid thereunder, being approved by the shareholders of the Fund;(2) and
(13) The Order will expire on the effective date of the Proposed Rule,
if adopted.
WHAT ARE THE BENEFITS TO THE FUNDS?
The Board believes that it is in the best interests of each Fund's
shareholders to allow DMC the maximum flexibility to appoint, supervise and
replace subadvisers (including DIAL) and to amend subadvisory agreements without
incurring the expense and potential delay of seeking specific shareholder
approval. The process of seeking shareholder approval is administratively
expensive to a Fund and may cause delays in executing changes that the Board and
DMC have determined are necessary or desirable. These costs are often borne
entirely by the Fund. If shareholders approve the policy authorizing a Manager
of Managers Structure for a Fund, the Board would be able to act more quickly
and with less expense to the Fund to appoint a subadviser, when the Board and
DMC believe that the appointment would be in the best interests of the Fund and
its shareholders.
- -----------
(2) As discussed above, however, you are being asked to approve the Manager of
Managers Structure with respect to Affiliated Subadvisers as well as subadvisers
who are not affiliated with DMC, subject to receipt of further regulatory
approval either through an SEC rule or exemptive relief.
13
Although shareholder approval of new subadvisory agreements and
amendments to existing subadvisory agreements is not required under the proposed
Manager of Managers Structure, the Board, including a majority of the
Independent Trustees, would continue to oversee the subadviser selection process
to help ensure that shareholders' interests are protected whenever DMC would
seek to select a subadviser or modify a subadvisory agreement. Specifically, the
Board, including a majority of the Independent Trustees, would still be required
to evaluate and approve all subadvisory agreements as well as any modification
to an existing subadvisory agreement. In reviewing new subadvisory agreements or
modifications to existing subadvisory agreements, the Board will analyze all
factors that it considers to be relevant to its determination, including the
nature, quality and scope of services to be provided by the subadviser, the
investment performance of the assets managed by the subadviser in the particular
style for which a subadviser is sought, as well as the subadviser's compliance
with Federal securities laws and regulations.
WHAT DID THE BOARDS CONSIDER IN REVIEWING THIS PROPOSAL?
In determining that the Manager of Managers Structure was in the best
interests of Fund shareholders, the Boards, including a majority of the
Independent Trustees, considered the factors below, and such other factors and
information they deemed relevant, prior to approving and recommending the
approval of the Manager of Managers Structure:
(1) A Manager of Managers Structure will enable DMC to employ
subadvisers with varying investment styles or investment focuses to help enhance
performance by expanding the securities in which a Fund may invest;
(2) A Manager of Managers Structure will enable DMC to promptly
reallocate Fund assets among itself and one or more subadvisers in response to
varying market conditions;
(3) A Manager of Managers Structure will enable the Board to act more
quickly, with less expense to a Fund, in appointing new subadvisers when the
Board and DMC believe that such appointment would be in the best interests of
Fund shareholders;
(4) DMC would be directly responsible for (i) establishing procedures
to monitor a subadviser's compliance with the Fund's investment objectives and
policies, (ii) analyzing the performance of the subadviser and (iii)
recommending allocations and reallocations of Fund assets among itself and one
or more subadvisers; and
(5) No subadviser could be appointed, removed or replaced without Board
approval and involvement.
14
Further, the Independent Trustees were advised by independent legal
counsel with respect to these matters.
WHAT VOTE IS NECESSARY TO APPROVE PROPOSAL NO. 2?
Each Fund will vote separately on Proposal 2. Accordingly, Proposal 2
will be approved with respect to a Fund only if shareholders of that Fund
approve Proposal 2. Such approval requires Quorum requirements to be satisfied
and the affirmative vote of the lesser of: (i) a majority of the outstanding
shares of the Fund, or (ii) 67% or more of the shares present at such meeting of
shareholders at which the holders of more than 50% of the outstanding shares are
present or represented by proxy at the Meeting ("Majority Vote").
THE BOARDS RECOMMEND THAT YOU VOTE
"FOR" PROPOSAL 2
PROPOSAL 3 -- APPROVAL OF AN AGREEMENT AND PLAN OF REDOMESTICATION THAT PROVIDES
FOR THE REORGANIZATION OF VOYAGEUR INVESTMENT TRUST FROM A MASSACHUSETTS
BUSINESS TRUST TO A DELAWARE STATUTORY TRUST (DELAWARE TAX-FREE FLORIDA INSURED
FUND, DELAWARE TAX-FREE MISSOURI INSURED FUND AND DELAWARE TAX-FREE OREGON
INSURED FUND ONLY)
The Trustees of Voyageur Investment Trust unanimously recommend that
shareholders of the Delaware Tax-Free Florida Insured Fund, the Delaware
Tax-Free Missouri Fund and Delaware Tax-Free Oregon Fund approve an Agreement
and Plan of Redomestication (the "Agreement"), substantially in the form
attached to this Proxy Statement as Exhibit C, which would change the state of
organization of Voyageur Investment Trust. This proposed change calls for the
reorganization of Voyageur Investment Trust from a Massachusetts business trust
into a newly formed Delaware statutory trust. This proposed reorganization is
referred to throughout this Proxy Statement as the "Redomestication." To
implement the Redomestication, the Trustees of Voyageur Investment Trust have
approved the Agreement, which contemplates the continuation of the current
business of Voyageur Investment Trust in the form of a new Delaware statutory
trust, named "Delaware Investments Municipal Trust" (the "DE Trust"). As of the
effective date of the Redomestication, the DE Trust will have series (each a "DE
Fund" and, together, the "DE Funds") that correspond to each of the then current
series of Voyageur Investment Trust (each an "MA Fund" and, together, the "MA
Funds"). Each DE Fund will have the same name as its corresponding MA Fund.
WHY AM I BEING ASKED TO VOTE ON THE REDOMESTICATION?
The Board of Trustees of Voyageur Investment Trust (the "VIT Board") is
submitting the Redomestication to the vote of shareholders of all the MA Funds
in Voyageur Investment Trust.
15
WHAT WILL THE REDOMESTICATION MEAN FOR THE SERIES OF VOYAGEUR INVESTMENT TRUST
AND FOR YOU?
If the Agreement is approved by shareholders and the Redomestication is
implemented, the DE Funds would have the same investment goals, policies, and
restrictions as their corresponding MA Funds. The Board, including any persons
elected under Proposal 1, and officers of the DE Trust would be the same as
those of Voyageur Investment Trust, and would operate the DE Trust and the DE
Funds in the same manner as these persons previously operated Voyageur
Investment Trust and the MA Funds except as otherwise described below. Thus, on
the effective date of the Redomestication, you would hold an interest in the
applicable DE Fund that is equivalent to your then interest in the corresponding
MA Fund. For all practical purposes, a shareholder's investment in Voyageur
Investment Trust and the MA Funds would not change.
WHY ARE THE TRUSTEES RECOMMENDING APPROVAL OF THE AGREEMENT AND THE
REDOMESTICATION?
Most of the funds within the Delaware Investments family listed onFamily of Funds are
series of Delaware statutory trusts. Voyageur Investment Trust, however, is
organized as a Massachusetts business trust. The lack of uniformity among the
accompanying Notice (eachlaws applicable to the various Delaware Investments Funds poses administrative
complications and costs that the VIT Board desires to eliminate. Consequently,
the VIT Board proposes that Voyageur Investment Trust be redomesticated to
Delaware.
The VIT Board desires to achieve administrative economies, such as
eliminating, frequent filings within the Commonwealth of Massachusetts, which
are expected to result from the Redomestication. Delaware statutory trusts
provide much greater flexibility for a "Company") is soliciting your proxyfund to be voted at the Joint Annual/Special
Meeting of Shareholdersrespond quickly to be held on Wednesday, March 17, 1999 at 10:00 a.m. at
the Union League, 140 South Broad Street, Philadelphia, Pennsylvaniachanges in
market or any
adjournments of the meeting (hereafter, the "Meeting").
Purpose of Meeting. The purpose of the Meeting is to considerregulatory conditions. This enhanced flexibility had caused a number
of Proposalsmajor fund complexes, including the Delaware Investments Family of Funds, to
adopt this form of organization in recent years. The MA Funds are also expected
to benefit from the administrative economies that will result from having
uniform organizational documents and Sub-Proposalsuniform state reporting and filing
obligations. Accordingly, the VIT Board believes that either applyit is in the best
interests of the shareholders to particular Companies,approve the Agreement.
WHAT ARE THE ADVANTAGES OF A DELAWARE STATUTORY TRUST?
Investment companies formed as Delaware statutory trusts have certain
advantages over investment companies organized as Massachusetts business trusts.
Under Delaware law, investment companies are able to simplify their operations
by reducing administrative burdens. For example, Delaware law allows greater
flexibility in drafting and amending an investment company's governing
documents, which can result in greater efficiencies of operation and savings for
an investment company and its shareholders. Delaware law does not require that
the Declaration of Trust and any amendments to the Declaration of Trust be filed
with the State of Delaware, while Massachusetts law requires that the
Declaration of Trust and any amendments to the Declaration of Trust be filed
with the Commonwealth of Massachusetts and the clerk of the city in
Massachusetts in which the fund has a usual place of business. Voyageur
Investment Trust's Declaration of Trust thus requires that any instrument,
including VIT Board resolutions, that establishes or designates any series shall
be treated as an amendment to individual fundsthe Declaration of Trust, which must therefore be
filed in Massachusetts. Such filings are not required by the DE Trust's
Declaration of Trust. The simpler Delaware procedures allow the DE Trust to file
a one-page Certificate of Trust with the State of Delaware, which rarely needs
to be amended. In addition, Massachusetts law requires certain types of trusts,
such as Voyageur Investment Trust, to file an Annual Report of Voluntary
Associations and Trusts, whereas Delaware law does not impose such an annual
filing requirement with respect to Delaware statutory trusts. Another advantage
of Delaware statutory trusts is greater certainty regarding limiting the
liability of shareholders for obligations of the trust or its trustees and
regarding limiting the liability of one series for obligations of other series
within the Companies (eachtrust.
16
Furthermore, as described below, in Delaware there is a
"Fund"). The Proposals and
Sub-Proposals, as well as the Companies or Funds to which they apply, are listedwell-established body of legal precedent in the accompanying Notice.area of corporate law that may
be relevant in deciding issues pertaining to the DE Trust. This could benefit
the DE Trust and its shareholders by, for example, making litigation involving
the interpretation of provisions in the DE Trust's governing documents less
likely or, if litigation should be initiated, less burdensome or expensive.
HOW DO THE MASSACHUSETTS BUSINESS TRUST LAW AND VOYAGEUR INVESTMENT TRUST'S
GOVERNING DOCUMENTS COMPARE TO THE DELAWARE STATUTORY TRUST LAW AND THE DE
TRUST'S GOVERNING DOCUMENTS?
The Boardfollowing summary compares certain rights and characteristics of
Directors for each Fund urges youVoyageur Investment Trust and its shares to the DE Trust and its shares. The
summary is qualified in its entirety by the more complete signcomparisons of
Massachusetts business trust law and returnDelaware statutory trust law, and a
comparison of the Proxy Card (or Cards) included withrelevant provisions of the governing documents of Voyageur
Investment Trust and the DE Trust, attached as Exhibit D to this Proxy
Statement, or use onewhich is entitled "A COMPARISON OF GOVERNING DOCUMENTS AND STATE
LAW."
Reorganizing Voyageur Investment Trust from a Massachusetts business
trust to a Delaware statutory trust is expected to provide several benefits to
Voyageur Investment Trust and its shareholders. The operations of a Delaware
statutory trust formed under the Delaware Act are governed by a declaration of
trust and by-laws. The DE Trust's Agreement and Declaration of Trust
("Declaration of Trust") and By-Laws streamline some of the provisions in
Voyageur Investment Trust's current Declaration of Trust and By-Laws, and, thus,
should lead to enhanced flexibility in management and administration as compared
to Voyageur Investment Trust's current operation as a Massachusetts business
trust. As a Delaware statutory trust, the DE Trust may be able to adapt more
quickly and cost effectively to new developments in the mutual fund industry and
the financial markets.
Funds formed as Delaware statutory trusts under the Delaware Statutory
Trust Act (the "Delaware Act") are granted a significant amount of operational
flexibility, resulting in efficiencies of operation that may translate into
savings for a fund, such as the DE Trust, and the fund's shareholders. For
example, the Delaware Act authorizes trust management to take various actions
without requiring shareholder approval if permitted by the governing instrument,
such as fund mergers or the sale of all or substantially all of the assets of a
trust, or a series thereof (see discussion below). Additionally, unlike
Massachusetts business trust law, the Delaware Act permits any amendment to the
statutory trust's governing instrument without the need for a state or city
filing, which can reduce administrative burdens and costs.
17
Moreover, to the extent provisions in the DE Trust's Declaration of
Trust and By-Laws are addressed by rules and principles established under
Delaware corporate law and the laws governing other Delaware business entities
(such as limited partnerships and limited liability companies), the Delaware
courts may look to such other laws to help interpret provisions of the DE
Trust's Declaration of Trust and By-Laws. Applying this body of law to the
operation of the DE Trust should prove beneficial because these laws are
extensively developed and business-oriented. In addition, Delaware's Chancery
Court is dedicated to business law matters, which means that the judges tend to
be more specialized in the nuances of the law that will be applied to the DE
Trust. These legal advantages tend to make more certain the resolution of legal
controversies and help to reduce legal costs resulting from uncertainty in the
law.
Shares of the DE Trust and Voyageur Investment Trust each have one vote
per full share and a proportionate fractional vote for each fractional share.
Both the DE Trust and Voyageur Investment Trust provide for noncumulative voting
methodsin the election of their Trustees. Like Voyageur Investment Trust, the DE Trust
is not required by its governing instrument to hold annual shareholder meetings.
For both Voyageur Investment Trust and the DE Trust, shareholder meetings may be
called at any time by the Board, by the chairperson of the Board or by the
president of the Trust or DE Trust for the purpose of taking action upon any
matter deemed by the Board to be necessary or desirable. In addition, a meeting
of the shareholders of the DE Trust for the purpose of electing one or more
trustees may be called, to the extent provided by the 1940 Act and the rules and
regulations thereunder, by the DE Trust shareholders. Voyageur Investment Trust
and the DE Trust each provide certain rights to its shareholders to inspect a
fund's books and records.
While shareholders of the DE Trust will have similar distribution and
voting rights as they currently have as shareholders of Voyageur Investment
Trust, there are certain differences. The organizational structures differ in
record date parameters for determining shareholders entitled to notice, to vote,
and to a distribution. Under the DE Trust's Declaration of Trust, all or
substantially all of the DE Trust's assets may be sold to another fund or trust
without shareholder approval unless required by the 1940 Act. Both the DE Trust
and Voyageur Investment Trust and any series thereof may be liquidated or
dissolved, in each case by the Trustees without shareholder approval.
Massachusetts business trust law does not specifically provide that the
shareholders of Voyageur Investment Trust are not subject to any personal
liability for any claims against, or liabilities of, Voyageur Investment Trust
solely by reason of being or having been a shareholder of Voyageur Investment
Trust or that the liabilities of one series are not enforceable against another
series of that trust. Under the Delaware Act, shareholders of the DE Trust will
be entitled to the same limitation of personal liability as is extended to
shareholders of a private corporation organized for profit under the General
Corporation Law of the State of Delaware. In addition the Delaware Act permits
the DE Trust to limit the enforceability of the liabilities of one DE Fund
solely to the assets of that DE Fund.
18
WHAT ARE THE PROCEDURES AND CONSEQUENCES OF THE REDOMESTICATION?
Immediately upon completion of the proposed Redomestication, the DE
Trust will continue the business of Voyageur Investment Trust, and each DE Fund:
(i) will have the same investment goals, policies and restrictions as those of
its corresponding MA Fund existing on the date of the Redomestication; (ii) will
hold the same portfolio of securities previously held by such corresponding MA
Fund; and (iii) will be operated under substantially identical overall
management, investment management, distribution, and administrative arrangements
as those of its corresponding MA Fund. As the successor to Voyageur Investment
Trust's operations, the DE Trust will adopt Voyageur Investment Trust's
registration statement under the federal securities laws with amendments to show
the new Delaware statutory trust structure.
The DE Trust was created solely for the purpose of becoming the
successor organization to, and carrying on the business of, Voyageur Investment
Trust. To accomplish the Redomestication, the Agreement provides that Voyageur
Investment Trust, on behalf of each MA Fund, will transfer all of its portfolio
securities, any other assets and its liabilities to the DE Trust, on behalf of
each corresponding DE Fund. In exchange for these assets and liabilities, the DE
Trust will issue shares of each DE Fund to Voyageur Investment Trust, which will
then distribute those shares pro rata to shareholders of the corresponding MA
Fund. Through this procedure, you will receive exactly the same number, class
and dollar amount of shares of each DE Fund as you held in the corresponding MA
Fund immediately prior to the Redomestication. You will retain the right to any
declared, but undistributed, dividends or other distributions payable on the
shares of an MA Fund that you may have had as of the effective date of the
Redomestication. As soon as practicable after the date of the Redomestication,
Voyageur Investment Trust will be dissolved and will cease its existence.
The Trustees may terminate the Agreement and abandon the
Redomestication at any time prior to the effective date of the Redomestication
if the Trustees determine that proceeding with the Redomestication is
inadvisable. If the Redomestication is not approved by shareholders of Voyageur
Investment Trust, or if the Trustees abandon the Redomestication, Voyageur
Investment Trust will continue to operate as a Massachusetts business trust. If
the Redomestication is approved by shareholders, it is expected to be completed
in the first half of 2005.
WHAT EFFECT WILL THE REDOMESTICATION HAVE ON THE CURRENT INVESTMENT ADVISORY
AGREEMENT?
As a result of the Redomestication, the DE Trust will be subject to an
investment advisory agreement between the DE Trust and DMC on behalf of each of
the DE Funds that will be identical in all material respects to the current
investment advisory agreement between DMC and Voyageur Investment Trust on
behalf of each of the MA Funds.
19
WHAT EFFECT WILL THE REDOMESTICATION HAVE ON THE SHAREHOLDER SERVICING
AGREEMENTS AND DISTRIBUTION PLANS?
The DE Trust, on behalf of the DE Funds, will enter into agreements
with Delaware Service Company, Inc. ("DSC") for fund accounting, transfer
agency, dividend disbursing and shareholder services that are substantially
identical to the agreements currently in place for Voyageur Investment Trust
with DSC. Delaware Distributors, L.P. ("DDLP"), will serve as the distributor
for the shares of the DE Funds under a separate underwriting agreement that is
substantially identical to the underwriting agreement currently in effect for
Voyageur Investment Trust with DDLP.
As of the effective date of the Redomestication, each DE Fund will have
a distribution plan under Rule 12b-1 of the 1940 Act relating to the
distribution of that DE Fund's classes of shares, which is identical in all
material respects to the distribution plan currently in place for the
corresponding classes of shares of the corresponding MA Fund. It is anticipated
that there will be no material change to the distribution plan as a result of
the Redomestication.
WHAT IS THE EFFECT OF SHAREHOLDER APPROVAL OF THE AGREEMENT?
Under the 1940 Act, the shareholders of a mutual fund must elect
trustees and approve the initial investment advisory agreement(s) for the fund.
In addition, if a mutual fund wants to operate under a manager of managers
structure (as described more fully above under Proposal 2), shareholders must
also approve the use of such structure. Theoretically, if the Agreement is
approved by shareholders and Voyageur Investment Trust is reorganized to a
Delaware statutory trust, the shareholders would need to vote on these three
items for the DE Trust.
The DE Trust and the DE Funds must obtain shareholder approval of these
items in order to comply with the 1940 Act and to operate in the same manner
they do currently after the Redomestication. The Trustees, however, have
determined that it is in the best interests of the shareholders to avoid the
considerable expense of another shareholder meeting to obtain these approvals
after the Redomestication. The Trustees, therefore, have determined that by
approving the Agreement you are also approving, for purposes of the 1940 Act:
(1) the election of the Trustees of Voyageur Investment Trust who are in office
at the time of the Redomestication (including the Trustees elected under
Proposal 1) as trustees of the DE Trust; (2) new investment advisory agreements
between the DE Trust and DMC on behalf of each DE Fund, which are identical in
all material respects to the investment advisory agreements currently in place
for the MA Funds; and (3) the manager of managers structure for a DE Fund, as
described in Proposal 2, but only in the insert accompanying this Proxy Statement,event that such Proposal has been
approved by shareholders of the corresponding MA Fund.
Prior to the Redomestication, if the Agreement is approved by
shareholders of Voyageur Investment Trust, the officers will cause Voyageur
Investment Trust, as the sole shareholder of the DE Trust and each DE Fund, to
vote its shares FOR the matters specified above (or, with respect to the use of
the manager of managers structure, in the same manner as shareholders of the
particular MA Fund have voted on Proposal 2). This action will enable the DE
Trust to satisfy the requirements of the 1940 Act without involving the time and
expense of another shareholder meeting.
20
WHAT IS THE CAPITALIZATION AND STRUCTURE OF THE DE TRUST?
The DE Trust was formed as a Delaware statutory trust on September 30,
2004 pursuant to the Delaware Act. As of the effective date of the
Redomestication, the DE Trust will have separate series, each of which will
correspond to the similarly named series of Voyageur Investment Trust, each with
an unlimited number of shares of beneficial interest without par value
authorized. The shares of each DE Fund will be allocated into classes to
correspond to the current classes of shares of the corresponding MA Fund.
As of the effective date of the Redomestication, like the existing
shares you hold, outstanding shares of the DE Trust will be fully paid,
nonassessable (e.g., you will not owe any further money to Voyageur Investment
Trust to own your shares), and have no preemptive or subscription rights (e.g.,
no special rights to purchase shares in advance of other investors). The DE
Trust will also have the same fiscal year as Voyageur Investment Trust.
ARE THERE ANY TAX CONSEQUENCES FOR SHAREHOLDERS?
The Redomestication is designed to be "tax-free" for federal income tax
purposes so that you will not experience a taxable gain or loss when the
Redomestication is completed. Generally, the basis and holding period of your
shares in a DE Fund will be the same as the basis and holding period of your
shares in the corresponding MA Fund. Consummation of the Redomestication is
subject to receipt of a legal opinion from the law firm of Stradley Ronon
Stevens & Young, LLP, counsel to the DE Trust and Voyageur Investment Trust,
that, under the Internal Revenue Code of 1986, as amended, the Redomestication
will not give rise to the recognition of income, gain, or loss for federal
income tax purposes to Voyageur Investment Trust, the MA Funds, the DE Trust, or
the DE Funds, or to their shareholders.
WHAT IF I CHOOSE TO SELL MY SHARES AT ANY TIME?
A request to sell MA Fund shares that is received and processed prior
to the effective date of the Redomestication will be treated as a redemption of
shares of that MA Fund. A request to sell shares that is received and processed
after the effective date of the Redomestication will be treated as a request for
the redemption of the same number of shares of the corresponding DE Fund.
WHAT IS THE EFFECT OF MY VOTING "FOR" THE AGREEMENT?
By voting "FOR" the Agreement, and if the Redomestication is approved
and completed, you will become a shareholder of a mutual fund organized as a
Delaware statutory trust, with trustees, investment advisory agreements, a
distribution plan, and other service arrangements that are substantially
identical to those currently in place for your corresponding MA Fund or Funds.
In addition, if the Redomestication is approved and completed, you will have the
same exchange and conversion rights that you have currently, including counting
the time you held shares of an MA Fund for purposes of calculating any
redemption fee or contingent deferred sales charges on shares you receive of the
corresponding DE Fund.
21
WHAT IS NECESSARY TO APPROVE THE AGREEMENT?
Assuming a Quorum is present, the approval of the Agreement requires an
affirmative Majority Vote of the outstanding shares of the series of the Trust.
THE VIT BOARD OF TRUSTEES RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL 3.
INDEPENDENT AUDITORS
The firm of Ernst & Young LLP has been selected as the independent
auditors for each of the Trusts for their current fiscal year. The Audit
Committee must approve all audit and non-audit services provided by Ernst &
Young LLP relating to the operations or financial reporting of the Trusts. The
Audit Committee reviews any audit or non-audit services to be provided by Ernst
& Young LLP to determine whether they are appropriate and permissible under
applicable law.
The Audit Committee has adopted policies and procedures to provide a
framework for the Audit Committee's consideration of non-audit services by Ernst
& Young LLP. These policies and procedures require that any non-audit service to
be provided by Ernst & Young LLP to a Trust, DMC or any entity controlling,
controlled by or under common control with DMC that relate directly to the
operations and financial reporting of a Trust are subject to pre-approval by the
Audit Committee or the Chairperson of the Audit Committee before such service is
provided.
Representatives of Ernst & Young LLP are not you intendexpected to be present at
the Meeting, but will have the opportunity to make a statement if they wish, and
will be available should any matter arise requiring Ernst & Young LLP's
presence.
AUDIT FEES. The aggregate fees billed by Ernst & Young LLP in
connection with the annual audit of each Trust's financial statements and for
services normally provided by the independent auditors in connection with
statutory and regulatory filings or engagements for the last two fiscal years
(ended on or before October 31, 2004) for the Trusts are set forth in Exhibit E
hereto.
AUDIT-RELATED FEES. There were no fees billed by Ernst & Young LLP for
assurance and other services reasonably related to the performance of the audit
of each Trust's financial statements and not reported above under "Audit Fees"
for the last two fiscal years (ended on or before October 31, 2004).
The aggregate fees billed by Ernst & Young LLP for assurance and other
services relating to the performance of the audit of the financial statements of
DMC and other service providers under common control with DMC that relate
directly to the operations or financial reporting of a Trust for the twelve
month periods ended October 31, 2004 and 2003 are set forth in Exhibit E. These
audit-related services were as follows: issuance of reports concerning transfer
agent's system of internal accounting control pursuant to Rule 17Ad-13 of the
Securities Exchange Act; issuance of agreed upon procedures reports to the
Fund's Board in connection with the annual transfer agent and fund accounting
service agent contract renewals and the pass-through of internal legal cost
relating to the operations of the Trusts; and preparation of Report on Controls
Placed in Operation and Tests of Operating Effectiveness Relating to the
Retirement Plan Services Division ("SAS 70 Report"). None of these services were
approved by the Audit Committee pursuant to the de minimis exception from the
pre-approval requirement of Regulation S-X.
22
TAX FEES. The aggregate fees billed by Ernst & Young LLP for tax
compliance, tax advice and tax planning (together "tax-related services")
provided to the Trusts for the last two fiscal years (ended on or before October
31, 2004) are set forth in Exhibit E. None of these services were approved by
the Audit Committee pursuant to the de minimis exception from the pre-approval
requirement of Regulation S-X. These tax-related services were as follows:
review of income tax returns and annual excise distribution calculations.
There were no fees billed by Ernst & Young LLP for tax-related services
provided to DMC and other service providers under common control with DMC that
relate directly to the operations or financial reporting of a Trust for the
twelve month periods ended October 31, 2004 and 2003.
ALL OTHER FEES. There were no fees billed by Ernst & Young LLP for
products and services other than those set forth above for the Trusts' last two
fiscal years.
There were no fees for products and services other than those set forth
above billed by Ernst & Young LLP to DMC and other service providers under
common control with DMC and that relate directly to the operations or financial
reporting of the Trusts.
AGGREGATE NON-AUDIT FEES TO THE TRUSTS, DMC AND SERVICE PROVIDER
AFFILIATES. The aggregate non-audit fees billed by Ernst & Young LLP for
services rendered to the Trusts for their last two fiscal years and to DMC and
other service providers under common control with DMC for the twelve month
periods ended October 31, 2004 and 2003, are set forth in Exhibit E hereto.
In connection with its selection of the independent auditors, the Audit
Committee has considered Ernst & Young LLP's provision of non-audit services to
DMC and other service providers under common control with the DMC that were not
required to be pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X.
The Audit Committee has determined that the independent auditors' provision of
these services is compatible with maintaining the auditors' independence.
23
VOTING INFORMATION
HOW WILL THE SHAREHOLDER VOTING BE HANDLED?
Only shareholders of record of the Trusts at the close of business on
December 10, 2004 (the "Record Date") will be entitled to notice of and to vote
at the Meeting, and will be entitled to one vote for each full share and a
fractional vote for each fractional share that they hold. If sufficient votes to
approve a Proposal on behalf of Trust or a Fund are not received by the date of
the Meeting, the Meeting with respect to that Proposal may be adjourned to
permit further solicitations of proxies. The holders of a majority of shares of
Trust or a Fund entitled to vote on a Proposal at the Meeting and present in
person or by proxy (whether or not sufficient to constitute a Quorum) may
adjourn the Meeting as to that Trust or Fund for that Proposal. The Meeting as
to one or more Trusts or Funds may also be adjourned by the Chairperson of the
Meeting. Any adjournment may be with respect to one or more Proposals for a
Trust or Fund, but not necessarily for all Proposals for all Trusts or Funds. It
is importantanticipated that the persons named as proxies on the enclosed proxy cards
will use the authority granted to them to vote on adjournment in their
discretion.
Abstentions and broker non-votes will be included for purposes of
determining whether a Quorum is present at the Meeting for a particular matter,
and will have the same effect as a vote "against" Proposals 2 and 3, but will
have no affect with respect to Proposal 1, which is the election of Trustees.
Broker non-votes are proxies from brokers or nominees indicating that such
persons have not received voting instructions from the beneficial owner or other
person entitled to vote shares on a particular matter with respect to which the
brokers or nominees do not have discretionary power.
HOW DO I ENSURE MY VOTE IS ACCURATELY RECORDED?
You may attend the Meeting and vote in person. You may also vote by
completing, signing and returning the enclosed proxy card(s) in the enclosed
postage paid envelope, or by telephone or through the Internet. If you return
the signed Proxy Card(s) or use one of the other voting methods described
in the insert accompanying this Proxy Statement, promptly to help assure a
quorum for the Meeting.
General Voting Information. The persons designated on the Proxy Card as proxies
will vote your shares as you instruct on each Proxy Card. If your signed Proxy
Cardproxy card(s) or vote by telephone or through Internet, your votes
will be officially cast at the Meeting by the persons appointed as proxies. A
proxy card is, returned without anyin essence, a ballot. If you simply sign and date the proxy
card(s) but give no voting instructions, your shares will be voted "FOR" eachin favor of
the nominees for election as Director or Trustee and "FOR" each
other Proposal or Sub-Proposal concerning your Company or Fund. The persons
designated as proxies will also be authorizedProposals on which you are entitled to vote and in their discretion onaccordance with the views
of management upon any otherunexpected matters which maythat come before the Meeting. If you sign and return a Proxy
Card, you may still attendMeeting or
adjournment of the Meeting to vote your shares in person.Meeting. If your shares are held of record by a broker-dealer
and you wish to vote in person at the Meeting, you should obtain a Legal Proxy
from your broker of record and present it at the Meeting.
YouMAY I REVOKE MY PROXY?
Shareholders may also revoke yourtheir proxy at any time before it is voted by
sending a written notice to the Meeting: (i)applicable Trust expressly revoking their proxy,
by notifying Delaware Investmentssigning and forwarding to the applicable Trust a later-dated proxy, or by
attending the Meeting and voting in writing; (ii) by submitting a
later signed Proxy Card; or (iii) by votingperson. If your shares are held in person at the Meeting.
Each shareholder may cast one vote for each full share andname
of your broker, you will have to make arrangements with your broker to revoke a
partial vote for
each partial sharepreviously executed proxy.
24
WHAT OTHER MATTERS WILL BE VOTED UPON AT THE MEETING?
The Boards of a Fund or Company that they own on the record date, which
is December 21, 1998. Exhibit A showsTrusts do not intend to bring any matters before the
number of shares of each Fund and
Company that were outstanding onMeeting with respect to the record date and Exhibit B lists the
shareholders who own 5% or more of each Fund. It is expected thatFunds other than those described in this Proxy
Statement andStatement. The Boards are not aware of any other matters to be brought before
the accompanying Proxy Card(s)Meeting with respect to the Funds by others. If any other matter legally
comes before the Meeting, proxies for which discretion has been granted will be
mailed tovoted in accordance with the views of management.
WHO IS ENTITLED TO VOTE?
Only shareholders of record on or about January 8,1999.the Record Date will be entitled to vote
at the Meeting. The outstanding shares of the Trusts and the Funds thereof
entitled to vote as of the Record Date are set forth in Exhibit F.
WHAT OTHER SOLICITATIONS WILL BE MADE?
This proxy solicitation is being made largelyby the Boards of the Trusts for
use at the Meeting. The cost of this proxy solicitation will be shared as set
forth below. In addition to solicitation by mail, solicitations also may be made
by advertisement, telephone, telegram, facsimile transmission or other
electronic media, or personal contacts. The Trusts will request broker-dealer
firms, custodians, nominees and fiduciaries to forward proxy materials to the
beneficial owners of the shares of record. The Trusts may reimburse
broker-dealer firms, custodians, nominees and fiduciaries for their reasonable
expenses incurred in connection with such proxy solicitation. In addition to
solicitations by mail, officers and employees of each Trust, without extra pay,
may conduct additional solicitations by telephone, telecopy and personal
interviews. The Trusts have engaged Georgeson Shareholder Communications, Inc.
("Georgeson") to solicit proxies from brokers, banks, other institutional
holders and individual shareholders at an anticipated cost of approximately
$425,000 to $770,000, including out of pocket expenses, which will be borne as
described below. Fees and expenses may be greater depending on the effort
necessary to obtain shareholder votes. The Trusts' have also agreed to indemnify
Georgeson against certain liabilities and expenses, including liabilities under
the federal securities laws. The Trust expects that the solicitations will be
primarily by mail, but also may also be madeinclude telephone, telecopy or oral
solicitations. If a Trust does not receive your proxy card by officers or employeesa certain time,
you may receive a telephone call from Georgeson asking you to vote.
WHO WILL PAY THE EXPENSES OF THE PROPOSALS?
The costs of the Companiesof Proposals, including the costs of soliciting
proxies, will be borne by one or their investment managersmore of the Trusts, as described below.
With respect to Proposal 1, the election of Trustees of the Trusts, the
Trusts will bear the expenses equally in connection with the election of such
nominees.
With respect to Proposal 2, the Trusts will bear the expenses equally
in connection with seeking shareholder approval for use of the Manager of
Managers Structure.
With respect to Proposal 3, because the Redomestication will benefit
Voyageur Investment Trust and its shareholders, the VIT Board has authorized
that the expenses incurred in the Redomestication, including the estimated costs
associated with soliciting proxies with respect to this Proposal, shall be paid
by Voyageur Investment Trust (and therefore indirectly by shareholders), whether
or affiliates, through telephone, facsimile, oralnot the Redomestication is approved by shareholders.
25
HOW DO I SUBMIT A SHAREHOLDER PROPOSAL?
None of the Trusts are required to, and they do not intend to, hold
regular annual shareholders' meetings. A shareholder wishing to submit a
proposal for consideration for inclusion in a proxy statement for the next
shareholders' meeting should send his or other communications.
Shareholders may provideher written proposal to the offices of
the appropriate Trust, directed to the attention of its Secretary, at the
address of its principal executive office printed on the first page of this
Proxy Statement, so that it is received within a reasonable time before any such
meeting. The inclusion and/or presentation of any such proposal is subject to
the applicable requirements of the proxy instructionsrules under the 1934 Act. Submission of
a proposal by returning their Proxy Card by
maila shareholder does not guarantee that the proposal will be
included in the Trust's proxy statement or faxpresented at the meeting.
PRINCIPAL HOLDERS OF SHARES
On the Record Date, the officers and may also communicate proxy instructions throughTrustees of each Trust, as a
group, owned less than 1% of the Internetoutstanding voting shares of any Fund, or by telephone via touch-tone voting. Delaware Management Company ("DMC") and
Delaware International Advisers Ltd. ("DIAL"),class
thereof, of the Trusts.
To the best knowledge of the Trusts, as of the Record Date, no person,
except as set forth in the table at Exhibit G, owned of record 5% or more of the
outstanding shares of any class of any Fund of the Trusts. Except as noted in
Exhibit F, the Trusts have no knowledge of beneficial ownership.
MORE INFORMATION ABOUT THE TRUSTS
Investment Manager. As described further above, DMC, 2005 Market
Street, Philadelphia, Pennsylvania 19103, serves as the investment managersmanager for
each of the Funds.
Administration, Transfer Agency and Fund Accounting Services. Delaware
Service Company, Inc. ("DSC"), 2005 Market Street, Philadelphia, Pennsylvania
19103, an affiliate of DMC, acts as the administrator, shareholder servicing,
dividend disbursing and transfer agent for each Fund, and for other mutual funds
in the Delaware Investments Family of Funds. DSC also provides fund accounting
services to each Fund. Those services include performing all functions related
to calculating each Fund's net asset value and providing all financial reporting
services, regulatory compliance testing and other related accounting services.
For its transfer agency, shareholder services, fund accounting and
administration services, DSC is paid fees by each Fund according to fee
schedules that are the same for each retail Fund in the Delaware Investments
Family of Funds. These fees are charged to each Fund, including the Acquiring
and Acquired Funds, on a pro rata basis.
Distribution Services. Pursuant to underwriting agreements relating to
each of the Funds, Delaware Distributors, L.P. (the "Distributor"), 2005 Market
Street, Philadelphia, Pennsylvania 19103, serves as the national distributor for
the Funds. The Distributor pays the expenses of the promotion and distribution
of the Funds' shares, except for payments by the Funds on behalf of themselvesClass A
Shares, Class B Shares and the Companies, have engaged Shareholder
Communications Corporation ("SCC") to assist in the solicitation.Class C Shares under their respective 12b-1 Plans.
The estimated
cost of engaging SCC, which will be shared by DMC, DIAL and the Companies,Distributor is set forth below:
Range
-----
Delaware Group Adviser Funds, Inc.............................$_____ to $_____
Delaware Group Cash Reserve, Inc..............................$_____ to $_____
Delaware Group Equity Funds I, Inc............................$_____ to $_____
Delaware Group Equity Funds II, Inc...........................$_____ to $_____
Delaware Group Equity Funds III, Inc..........................$_____ to $_____
Delaware Group Equity Funds IV, Inc...........................$_____ to $_____
Delaware Group Equity Funds V, Inc............................$_____ to $_____
Delaware Group Foundation Funds...............................$_____ to $_____
Delaware Group Global & International Funds, Inc..............$_____ to $_____
Delaware Group Government Fund, Inc...........................$_____ to $_____
Delaware Group Income Funds, Inc..............................$_____ to $_____
Delaware Group Limited-Term Government Funds, Inc.............$_____ to $_____
Delaware Group Premium Fund, Inc..............................$_____ to $_____
Delaware Group State Tax-Free Income Trust ...................$_____ to $_____
Delaware Group Tax-Free Money Fund, Inc.......................$_____ to $_____
Delaware Group Tax-Free Fund, Inc.............................$_____ to $_____
Delaware Pooled Trust, Inc....................................$_____ to $_____
Votes Required to Approve each Proposal or Sub-Proposal. Three Proposals within
this Proxy Statement affect all shareholders of a Company as a whole, regardless
of whether or not the Company consists of a number of individual Funds. These
Proposals are the election of Directors, the ratification of the selection of
the independent auditors and the reorganization of the Company from its current
structure to a Delaware business trust. All shareholders of a Company vote
together on these Proposals. The remaining Proposals or Sub-Proposals contained
in this Proxy Statement only affect particular Funds and, therefore, only
shareholders of those Funds are permitted to vote on those Proposals or
Sub-Proposals. The amount of votes of a Company or Fund that are needed to
approve the different Proposals or Sub-Proposals varies. The voting requirements
are described within each Proposal or Sub-Proposal.
Delaware Pooled Trust, Inc. ("Pooled Trust") is comprised of The Real Estate
Investment Trust Portfolio and several other funds. With regard to the Proposals
that apply to all Pooled Trust funds, shareholders of those other funds have
received a separate proxy statement relating to the same Proposals and their
votes will be combined with shareholders of The Real Estate Investment Trust
Portfolio.
Abstentions and broker non-votes will be included for purposes of determining
whether a quorum is present at the Meeting. They will be treated as votes
present at the Meeting, but will not be treated as votes cast. They therefore
would have no effect on Proposals which require a plurality or majority of votes
cast for approval, but would have the same effect as a vote "AGAINST" on
Proposals requiring a majority of votes present or a majority of outstanding
voting securities for approval. (These different voting standards are explained
in the various Proposals.) DMC or DIAL will reimburse banks, brokers or dealers
for their reasonable expenses in forwarding soliciting materials to
shareholders.
Each Fund's most recent Annual Report and Semi-Annual Report to Shareholders
were previously mailed to shareholders. Copies of these reports are available
upon request, without charge, by writing or calling the Funds at the address and
telephone number shown on the top of the previous page of the Proxy Statement.
Proposal One: To Elect a Board of Directors or Trustees for the Company
This Proposal applies to all Companies.
You are being asked to vote to elect each of the following nominees to the Board
of Directors or Trustees for your Company (hereafter referred to as "Board of
Directors"). The nominees are: Jeffrey J. Nick, Walter P. Babich, John H.
Durham, Anthony D. Knerr, Ann R. Leven, Thomas F. Madison, Charles E. Peck,
Wayne A. Stork and Jan R. Yeomans. With the exception of Jan R. Yeomans, each
nominee is currently a member of the Board of Directors for each Company. If
elected, these persons will serve as Directors until the next Annual or Special
Meeting of Shareholders called for the purpose of electing Directors, and/or
until their successors have been elected and qualify for office. It is not
expected that any nominee will withdraw or become unavailable for election, but
in such a case, the power given by you in the Proxy Card may be used to vote for
a substitute nominee or nominees as recommended by the existing Boards of
Directors.
Directors and Nominees. Presented below is information about the age, position
with the Companies, principal occupation and past business experience of each
current Director/Trustee and nominee. Exhibit C lists the year in which each
individual became a Director of each Company.
- ---------------
* This nominee is considered to be an "interested person" of each Company, as
that term is defined in the Investment Company Act of 1940, as amended,
because he is affiliated with the investment manager and distributor of the
Companies.
2
Jeffrey J. Nick* (45), Chairman, President, Chief Executive Officer and Director
and/or Trustee of each of the 34 investment companies in the Delaware
Investments family; President and Directorindirect, wholly owned subsidiary of Delaware Management
Holdings, Inc. and an affiliate of DMC.
26
Pursuant to a contractual arrangement with the Distributor, Lincoln
Financial Distributors, Inc. ("LFD"), 1997 to present; President, Chief Executive Officer and Director of
Lincoln National Investment Companies, Inc., 1996 to present; Director of
Delaware International Advisers Ltd., 1998 to present; Director of Vantage
Global Advisors, Inc., 1996 to present; Director of Lynch & Mayer Inc.
(investment adviser), 1997 to present; Managing Director of Lincoln National UK
plc, 1992-1996; Senior Vice President of Lincoln National Corporation2001 Market Street, Philadelphia,
Pennsylvania 19103, is primarily responsible for corporate planningpromoting the sale of Fund
shares through broker/dealers, financial advisors and development, 1989-1992.
Walter P. Babich (71), Director and/or Trustee of eachother financial
intermediaries. LFD is also an affiliate of the 34 investment
companies in the Delaware Investments family; Board Chairman of Citadel
Constructors, Inc. (commercial building construction), 1988 to present; Partner
of I&L Investors, 1988-1991; Partner of Irwin & Leighton Partnership (building
construction), 1986-1988.
John H. Durham (61), Director and/or Trustee of 19 investment companies in the
Delaware Investments family. Consultant to Delaware Investments, 1991-1997;
Partner of Complete Care Services, 1995 to present; Chairman of the Board of
each investment company in the Delaware Investments family from 1986 to 1991;
Director Emeritus from 1995 through 1998, at which time he was reappointed to
the Boards; President of each company from 1977 to 1990;Distributor and Chief Executive
Officer of each company from 1984 to 1990. Prior to 1992, with respect to
Delaware Management Holdings, Inc., Delaware Management Company, Delaware
Distributors, Inc. and Delaware Service Company, Inc., Mr. Durham served as a
director and in various executive capacities at different times within the
Delaware Investments organization.
Anthony D. Knerr (59), Director and/or Trustee of each of the 34 investment
companies in the Delaware Investments family; Founder and Managing Director,
Anthony Knerr & Associates (strategic consulting company to major non-profit
institutions and organizations), 1991 to present; Founder and Chairman of the
Publishing Group, Inc. 1988-1990; Executive Vice President/Finance and Treasurer
of Columbia University, 1982-1988; Lecturer of English at Columbia University,
1987-1989.
Ann R. Leven (57), Director and/or Trustee of each of the 34 investment
companies in the Delaware Investments family; Treasurer, National Gallery of
Art, 1994 to present; Director of four investment companies sponsored by Acquila
Management Corporation, 1985 to February, 1998; Deputy Treasurer of the National
Gallery of Art, 1990 to 1994; Treasurer and Chief Fiscal Officer of the
Smithsonian Institution, 1984-1990; Adjunct Professor at Columbia Business
School, 1975-1992.
W. Thacher Longstreth** (77), Director and/or Trustee of each of the 34
investment companies in the Delaware Investments family; Philadelphia City
Councilman, 1984 to present; Consultant20 , Packard Press, 1988 to present;
Senior Partner, MLW Associates (business consulting), 1983 to present; Director,
Healthcare Services Group, 1983 to present; Director Emeritus, Tasty Baking
Company, 1991 to present; Director, MicroLeague Micromedia, Inc. (computer game
publisher), 1996 to present; Director, Tasty Baking Company, 1968-1991; Vice
Chairman, The Winchell Company (financial printing), 1983-1988.
- ---------------
* This nominee is considered to be an "interested person" of each Company, as
that term is defined in the Investment Company Act of 1940, as amended,
because he is affiliated with the investment manager and distributor of the
Companies.
Thomas F. Madison (62), Director and/or Trustee of each of the 34 investment
companies in the Delaware Investments family; President and Chief Executive
Officer of MLM Partners, Inc., 1993 to present; Chairman of the Board of
Communications Holdings, Inc., 1996 to present; Vice Chairman--Office of the CEO
of The Minnesota Mutual Life Insurance Company, February to September, 1994;
Director of Valmont Industries (irrigation systems and steel manufacturing),
1987 to present; Director of Eltrax Systems, Inc. (data communications
integration), 1993 to present; Director of Minnegasco, Span Link Communications
(software), 1995 to present; Director of ACI Telecentrics (outbound
telemarketing and telecommunications), 1997 to present; Director of Aon Risk
Services, 1996 to present; Director of Digital River, 1997 to present.
Charles E. Peck (72), Director and/or Trustee of each of the 34 investment
companies in the Delaware Investments family; Retired; Secretary/Treasurer,
Enterprise Homes, Inc., 1992 to present; Chairman and Chief Executive Officer of
The Ryland Group, Inc., 1981 to 1990.
Wayne A. Stork* (61), Director and/or Trustee of each of the 34 investment
companies in the Delaware Investments family and Delaware Capital Management,
Inc.; Chairman, President, Chief Executive Officer and Director of DMH Corp.,
Delaware Distributors, Inc. and Founders Holdings, Inc.; Chairman, President,
Chief Executive Officer, Chief Investment Officer and Director/Trustee of
Delaware Management Company, Inc. and Delaware Management Business Trust;
Chairman, President, Chief Executive Officer and Chief Investment Officer of
Delaware Management Company (a series of Delaware Management Business Trust);
Chairman, Chief Executive Officer and Chief Investment Officer of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Chairman,
Chief Executive Officer and Director of Delaware International Advisers Ltd.,
Delaware International Holdings Ltd. and Delaware Management Holdings, Inc.;
President and Chief Executive Officer of Delvoy, Inc.; Chairman of Delaware
Distributors, L.P.; Director of Delaware Service Company, Inc. and Retirement
Financial Services, Inc. During the past five years, Mr. Stork has served in
various executive capacities at different times within the Delaware Investments
organization.
- ---------------
* This nominee is considered to be an "interested person" of each Company, as
that term is defined in the Investment Company Act of 1940, as amended,
because he is affiliated with the investment manager and distributor of the
Companies.
** This Director is retiring from service on the Board of Directors for each
Company on ____, and, therefore, is not a nominee.
3
Jan R. Yeomans (50), Vice President and Treasurer of the 3M Corporation, 1994 to
Present; Director of Benefit Funds and Financial Markets for the 3M Corporation,
1987-1994; Manager of Benefit Fund Investments for the 3M Corporation,
1985-1987; Manager of Pension Funds for the 3M Corporation, 1983-1985;
Consultant - Investment Technology Group of Chase Econometrics, 1982-1983;
Consultant for Data Resources, 1980-1982; Programmer for the Federal Reserve
Bank of Chicago, 1970-1974.
Board and Committee Meetings. During the twelve months ended October 31, 1998,
each Company held [(Delaware to advise:) _________] Board meetings.
Each Board of Directors has an Audit Committee for the purpose of meeting, at
least annually, with the Company's independent auditors and officers to oversee
the quality of financial reporting and the internal controls of the Company, and
for such purposes as the Board of Directors may from time to time direct. The
Audit Committee of each Company consists of the following four Directors
appointed by the Board, all of whom are considered to be independent because
they are not "interested persons" as defined in the Investment Company Act of
1940, as amended (the "1940 Act"): Ann R. Leven, Chairperson, Walter P. Babich,
Anthony D. Knerr and Thomas F. Madison. Members of the Audit Committee serve for
three years or until their successors have been appointed and qualified. The
Audit Committee held [(Delaware to advise:) ________] meetings for each Company
during the twelve months ended October 31, 1998.
Each Board of Directors also has a Nominating Committee, which meets for the
purpose of proposing nominees to serve as Directors. Nominees are considered by
the full Board of Directors for each Fund and, when appropriate, by shareholders
at annual or special shareholder meetings. The Nominating Committee of each
Company consists of the following three Directors appointed by the Boards, two
of whom are considered to be independent Directors: Wayne A. Stork, Anthony D.
Knerr and W. Thacher Longstreth. [(Please confirm:) This Committee met once
during the past year for the purpose of determining the proposed list of
nominees for this Meeting.] The selection and nomination of the independent
Director nominees is committed to the discretion of the present independent
Directors. Each Nominating Committee will consider suggestions for Board of
Directors nominations from shareholders.DMC.
COMMUNICATIONS TO THE BOARDS OF TRUSTEES
Shareholders who wish to suggest
candidates for nominationcommunicate to the full Boards of DirectorsTrustees may
address correspondence to [Walter P. Babich], Coordinating Trustee for the
Trusts, c/o the applicable Trust at 2005 Market Street, Philadelphia,
Pennsylvania, 19103. Shareholders may also send correspondence to the
Coordinating Trustee or any future annual
meeting should identifyindividual Trustee c/o the candidate and furnish a written statementapplicable Trust at 2005
Market Street, Philadelphia, Pennsylvania 19103. Without opening any such
correspondence, Trust management will promptly forward all such correspondence
to the intended recipient(s).
27
EXHIBITS TO COMBINED
PROXY STATEMENT
EXHIBITS
Exhibit A - Aggregate Trustee Compensation from each Trust
Exhibit B - Executive Officers of the person's qualifications to the Nominating Committee at the principal executive
officesTrusts
Exhibit C - Form of the Companies.
Board Compensation. Each independent Director receives compensation from each
CompanyAgreement and Plan of which he/she is a member of the Board of Directors. The interested
Directors are compensated by the investment managerRedomestication between Voyageur
Investment Trust and do not receive
compensation from the Companies. Each independent Director (other than John H.
Durham) currently receives a total annual retainer fee of $38,500 for serving as
a Director for all 34 Companies within the Delaware Investments family, plus
$3,145 for each setMunicipal Trust
Exhibit D - A Comparison of Board meetings attended (seven regular meetings). John H.
Durham currently receives a total annual retainer fee of $31,000 for serving as
a Director for 19 Companies within the Delaware Investments family, plus
$1,757.50 for each set of Board meetings attended. Members of theGoverning Documents and State Law
Exhibit E - Audit Committee currently receive additional annual compensation of $5,000 from all
Companies, in the aggregate, with the exception of the chairperson, who receives
$6,000.
Under the terms of each Company's retirement plan for Directors, each
independent Director who, at the time of his or her retirement from the Board of
Directors, has attained the age of 70 and served on the Board of Directors for
at least five continuous years, is entitled to receive payments from the Company
for a period of time equal to the lesser of the number of years that such person
served as a Director or the remainder of such person's life. The annual amount
of such payments will be equal to the amount of the annual retainer that is paid
to Directors of the Company at the time of such person's retirement. If an
eligible Director of each Company within the Delaware Investments family had
retiredFee Information
Exhibit F - Outstanding Shares as of OctoberDecember 31, 1998, he or she would have been entitled to annual
payments in an amount equal to the annual retainer fee noted in the previous
paragraph. The following table identifies the amount each Director received from
each Company during its last fiscal year.
42004
Exhibit G - Principal Holders of Shares as of December 1, 2004
EXHIBIT A
AGGREGATE TRUSTEE COMPENSATION FROM EACH TRUST
Wayne-----------------------------------------------------------------------------
TURSTEES(1)
- --------------------------------------------------------------------------------------------------------------------------------
WALTER P. JOHN H. JOHN A. Jeffrey J. Walter P. John H. AnthonyANTHONY ANN R. THOMAS E. JANET L.
TRUST BABICH(2) DURHAM(2) FRY(3) D. Ann R. W. Thacher Thomas F. Charles E.
Company Name Stork Nick Babich Durham(1) Knerr Leven Longstreth Madison(2) Peck
------------- ----- ---- ------ -------- ----- -----KNERR LEVEN MADISON YEOMANS
- -------------------------------------------------- ---------- --------- -------------- ---------- ---------- ---------- ---------- ------------
Delaware Group Adviser Funds Inc. None None $ N/A2,717 $ 2,524 $ 2,720 $ 2,746 $ 2,919 $ 2,775 $ 2,775
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Cash Reserve Inc. None None $ N/A3,588 $ 3,299 $ 3,495 $ 3,532 $ 3,740 $ 3,537 $ 3,537
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Equity Funds I Inc. None None $ N/A2,318 $ 2,135 $ 2,331 $ 2,353 $ 2,534 $ 2,416 $ 2,416
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Equity Funds II Inc. None None $ N/A9,450 $ 8,602 $ 8,798 $ 8,907 $ 9,280 $ 8,679 $ 8,679
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Equity Funds III Inc. None None $ N/A9,476 $ 8,606 $ 8,802 $ 8,912 $ 9,297 $ 8,692 $ 8,692
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Equity Funds IV Inc. None None N/A $ 3,610 $ 3,313 $ 3,510 $ 3,547 $ 3,758 $ 3,553 $ 3,553
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Equity Funds V Inc. None None $ N/A3,410 $ 3,147 $ 3,343 $ 3,377 $ 3,572 $ 3,381 $ 3,381
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Foundation Funds None None $ N/A1,455 $ 1,364 $ 1,560 $ 1,571 $ 1,721 $ 1,663 $ 1,663
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Global & International Funds Inc. None None $ N/A3,766 $ 3,478 $ 3,675 $ 3,713 $ 3,912 $ 3,697 $ 3,697
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Government Fund Inc. None None $ N/A1,643 $ 1,530 $ 1,727 $ 1,740 $ 1,897 $ 1,826 $ 1,826
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Income Funds Inc. None None $ N/A4,431 $ 4,061 $ 4,257 $ 4,304 $ 4,535 $ 4,274 $ 4,274
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Limited-Term Government Funds Inc. None None $ N/A2,487 $ 2,294 $ 2,491 $ 2,514 $ 2,695 $ Delaware Group Premium Fund,
Inc. None None2,567 $ N/A $ $ $ $ $2,567
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group State Tax-Free Income Trust None None $ N/A4,030 $ 3,692 $ 3,889 $ 3,931 $ 4,155 $ 3,921 $ 3,921
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Tax-Free Fund $ 4,017 $ 3,684 $ 3,881 $ 3,923 $ 4,144 $ 3,911 $ 3,911
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Group Tax-Free Money Fund Inc. None None $ N/A719 $ 698 $ 895 $ 896 $ 1,025 $ Delaware Group Tax-Free Fund,
Inc. None None1,016 $ N/A $ $ $ $ $1,016
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Delaware Pooled Trust Inc. None None$14,876 $13,595 $13,791 $13,963 $14,432 $13,464 $13,464
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Voyageur Insured Funds $ N/A2,730 $ 2,516 None(3) $ 2,739 $ 2,925 $ 2,780 $ Total Compensation From All
Companies in the Delaware
Investments Family for the 12
months ended October 31, 1998 None None2,780
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Voyageur Intermediate Tax Free Funds $ 942 $ 900 None(3) $ 1,101 $ 1,236 $ 1,212 $ 1,212
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Voyageur Investment Trust $ 1,907 $ 1,771 None(3) $ 1,984 $ 2,148 $ 2,058 $ 2,058
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------
(1) Mr. Durham re-joined the Boards of Directors of most of the Companies in the
Delaware Investments family on April 16, 1998.
(2) Mr. Madison joined the Boards of Directors of the Companies on May 1, 1997.
Officers. Each Board of Directors and the senior management of the Companies
appoint officers each year, and from time to time as necessary. The following
individuals are executive officers of one or more of the Companies: Wayne A.
Stork, Jeffrey J. Nick, David K. Downes, Richard G. Unruh, Paul E. Suckow,
Michael P. Bishof, George M. Chamberlain, Jr., Joseph H. Hastings, Patrick P.
Coyne, Mitchell L. Conery, Paul A. Matlack, Gary A. Reed, Babak Zenouzi, Gerald
T. Nichols, Christopher S. Beck, George H. Burwell, Robert L. Arnold, Gerald S.
Frey, Roger A. Early, John B. Fields, Paul Grillo, Cynthia L. Isom, Frank X.
Morris, James F. Stanley and Paul Dokas. Exhibit D includes biographical
information and the past business experience of such officers, except for Mr.
Stork and Mr. Nick, whose information is set forth above along with the other
Directors and nominees. The Exhibit also identifies which officers are also
officers of DMC or DIAL. The above officers of the Companies own shares of
common stock and/or options to purchase shares of common stock of Lincoln
National Corporation ("LNC"), the ultimate parent of DMC and DIAL.
While in the employ of Oppenheimer Management Corporation, Mr. Paul E. Suckow
was the subject of an Administrative Proceeding brought by the U.S. Securities
and Exchange Commission ("SEC"). As a result of this proceeding, Mr. Suckow was
found to have violated Section 34(b) of the 1940 Act by failing properly to
disclose material facts in certain books and records by order of the SEC dated
December 1, 1992. Mr. Suckow was suspended from the business for 120 days.
Management's Ownership of the Funds. Attached to this Proxy Statement as Exhibit
E is a list of the Directors' and nominees' shareholdings of the various Funds
within the Delaware Investments family on an individual basis. Exhibit A lists
the aggregate holdings by all of the Directors, nominees and executive officers
as a group.
Required Vote. With the exception of Delaware Group Adviser Funds, Inc., each
Director of a Company shall be elected by a plurality of votes cast by
shareholders of the Company, regardless of the votes of individual Funds within
the Company. This means that the nominees receiving the largest number of votes
will be elected to fill the available Board positions. For Delaware Group
Adviser Funds, Inc., each Director shall be elected by a majority of votes cast
by shareholders of the Company, regardless of the votes of individual Funds
within the Company.
Proposal Two: To Approve the Redesignation of the Fund's Investment Objective
from Fundamental to Non-Fundamental
5
This Proposal applies all Funds except the following, because the following
Funds' investment objectives are already designated as non-fundamental:
Delaware Group Equity Funds II, Inc.
Blue Chip Fund
Decatur Total Return Fund
Diversified Value Fund
Social Awareness Fund
Delaware Group Equity Funds III, Inc.
Capital Appreciation Fund
Delaware Group Equity Funds V, Inc.
Retirement Income Fund
Delaware Group Foundation Funds
Balanced Portfolio
Growth Portfolio
Income Portfolio
Delaware Group Income Funds, Inc.
Corporate Bond Fund
Extended Duration Bond Fund
High-Yield Opportunities Fund
Delaware Group Premium Fund, Inc.
REIT Series
The investment objective of each Fund to which this Proposal applies, like many
of the older Delaware Investments Funds, is designated as "fundamental," which
means that any changes, even those not resulting in significant changes in the
way a fund is managed or the risks to which it is subject, require shareholder
approval. Under the 1940 Act, a Fund's investment objective is not required to
be fundamental. However, many investment companies have elected to classify
their investment objectives as fundamental. This practice arose largely as a
result of comments provided by state securities regulators in their review of
Fund registration statements during the state registration process, as well as
because of historical drafting conventions.
In light of the enactment of National Securities Markets Improvement Act of
1996, which eliminated state securities administrative review of investment
company registration statements, and in order to provide the Boards of Directors
with enhanced flexibility to respond to market, industry or regulatory changes,
the Directors have approved the redesignation from fundamental to
non-fundamental of each Fund's investment objective. A non-fundamental
investment objective may be changed at any time by the Directors without the
delay and expense of soliciting proxies and holding a shareholder meeting.
For a complete description of the investment objective of your Fund, please
consult your Fund's prospectus. The redesignation from fundamental to
non-fundamental will not alter any Fund's current investment objective. If this
Proposal is approved, however, Fund management intends to request that the
Directors consider a number of modifications to the language used to describe
certain Funds' investment objectives. The requested modifications are designed
to modernize and standardize the expression of such investment objectives, but
if these modifications are implemented, neither the principal investment design
nor the day-to-day management of the Funds would be materially altered. If at
any time in the future, the Directors approve a change in a Fund's
non-fundamental investment objective, either in connection with the currently
anticipated modernization and standardization or otherwise, shareholders will be
given notice of the change prior to its implementation.
Required Vote. Approval of this proposal for a Fund requires the vote of a
"majority of the outstanding voting securities" of the Fund, which means the
vote of: (i) more than 50% of the outstanding voting securities of the Fund; or
(ii) 67% or more of the voting securities of the Fund present at a meeting, if
the holders of more than 50% of the outstanding voting securities are present or
represented by proxy, whichever is less. If the redesignation of any Fund's
investment objective from fundamental to non-fundamental is not approved by
shareholders of a particular Fund, that Fund's investment objective will remain
fundamental and shareholder approval (and its attendant costs and delays) will
continue to be required prior to any change in investment objective.
At meetings of the Directors held in July and September, 1998, the Directors
considered the enhanced management flexibility to respond to market, industry or
regulatory changes that would accrue to the Board of Directors if each relevant
Fund's fundamental investment objective were redesignated as non-fundamental and
the Board unanimously approved the proposed change.
The Board of Directors unanimously recommends that you vote FOR the
redesignation of the investment objective of your Fund as non-fundamental.
6
Proposal Three: To Approve Standardized Fundamental Investment Restrictions for
the Fund (This Proposal involves separate votes on Sub-Proposals 3A through 3G)
This Proposal applies to all Funds except the following, which already are
subject to the proposed standardized investment restrictions:
Delaware Group Equity Funds II, Inc.
Diversified Value Fund
Delaware Group Income Funds, Inc.
Corporate Bond Fund
Extended Duration Bond Fund
Proposal Overview
Each Fund is subject to investment restrictions which establish percentage and
other limits that govern the Fund's investment activities. Under the 1940 Act,
investment restrictions relating to certain activities are required to be
"fundamental," which means that any changes require shareholder approval. Funds,
in their descretion, are permitted to deem other restrictions fundamental, and
they may also adopt "non-fundamental" restrictions, which can be changed by the
Board of Directors without shareholder approval. Of course, any change in a
Fund's investment restrictions, whether fundamental or not, would be approved by
the Board and reflected in the Fund's prospectus or other offering documents.
Unlike investment objectives and policies, which are often different for each
Fund, investment restrictions for Funds tend to be the same or similar, because
they are based on legal or regulatory requirements that apply to all Funds. Over
the years, however, as new Funds were created or added to the Delaware
Investments family, investment restrictions relating to the same activities were
expressed in a variety of different ways. Many older Funds are subject to
investment restrictions that were adopted in response to regulatory, business or
industry conditions that no longer exist. In addition, a number of Funds adopted
fundamental restrictions in response to state laws and regulations that no
longer apply because they were preempted by the National Securities Markets
Improvement Act of 1996. As a result, a number of fundamental restrictions are
no longer required to be fundamental, and some previously required restrictions
are no longer required at all.
The Directors, together with Fund management and the investment managers and
sub-advisers, have analyzed the current fundamental investment restrictions of
each Fund, and have concluded that six new standardized fundamental investment
restrictions should be adopted for each Fund. The proposed investment
restrictions relate only to activities that are required under the 1940 Act to
be the subject of fundamental policies and restrictions. Management believes
that a modern, standardized list of restrictions will enhance the ability of the
Funds to achieve their objectives because the Funds will have greater investment
management flexibility to respond to changes in market, industry or regulatory
conditions. In addition, standardized restrictions are expected to enable the
Funds to operate more efficiently and to more easily monitor compliance with
investment restrictions.
Each Fund currently has fundamental investment restrictions that govern the same
activities covered by the proposed fundamental investment restrictions, and a
number of Funds currently have other fundamental investment restrictions
governing additional activities. Management is recommending that all current
fundamental investment restrictions of each Fund be re-classified as
non-fundamental, at the same time that the six new standardized fundamental
investment restrictions are adopted for each Fund. If the current fundamental
restrictions are made non-fundamental, the Directors would be able to modify or
eliminate the current restrictions without the costs or delays associated with a
shareholder vote.
The proposed changes will not affect any Fund's investment objective and will
not change the way any Fund is currently being managed or operated, since all
current investment restrictions will remain in place as non-fundamental
restrictions. If, as proposed, the current fundamental investment restrictions
are reclassified as non-fundamental, management intends in the future to
recommend that the Board of Directors approve certain modifications designed to
result in a more modern and standardized list of investment restrictions for the
various Delaware Investments Funds. The recommendations by management will
likely involve the modification or elimination of current restrictions. The
Board of Directors for each Fund will determine separately whether elimination
or modification of a common investment restriction is appropriate for that Fund.
The fundamental investment restrictions are generally found in each Fund's
Statement of Additional Information ("SAI"). Accordingly, if shareholders
approve the proposed fundamental investment restrictions for each Fund, then
Fund management will update each Fund's SAI to reflect the standardized
investment restrictions.
7
The fundamental investment restrictions for the Delaware Group State Tax-Free
Income Trust, a Pennsylvania common law trust, are found both in the Fund's SAI
and its Procedural Guidelines (the functional equivalent of Bylaws for a
corporation). Funds are not required to have fundamental investment restrictions
in their Procedural Guidelines or Bylaws. Therefore, in addition to
standardizing the fundamental investment restrictions for Delaware Group State
Tax-Free Income Trust, management also proposes to amend that Fund's Procedural
Guidelines to remove the fundamental investment restrictions from that document.
Hence, any shareholder of that Fund who votes to adopt the standardized
fundamental investment restrictions will simultaneously be voting to remove the
investment restrictions from the Fund's Procedural Guidelines.
The six new proposed fundamental investment restrictions are described below
within the relevant Sub-Proposals. In addition, Exhibit F contains a list of the
current fundamental investment restrictions for each Fund which are proposed to
be reclassified as non-fundamental. Unless all of the Sub-Proposals are approved
by shareholders of a particular Fund, none of the Sub-Proposals will be adopted
for that Fund.
Required Vote. Approval of each Sub-Proposal for a Fund requires the vote of a
"majority of the outstanding voting securities" of the Fund, which means the
vote of: (i) more than 50% of the outstanding voting securities of the Fund; or
(ii) 67% or more of the voting securities of the Fund present at a meeting, if
the holders of more than 50% of the outstanding voting securities are present or
represented by proxy, whichever is less. With regard to the Delaware Group State
Tax-Free Income Trust, the same vote that is required to standardize the
fundamental investment restrictions is also sufficient to amend the Fund's
Procedural Guidelines.
The Directors of each Fund have voted to adopt each of the proposed standardized
fundamental investment restrictions for the Funds, as well as to approve the
reclassification of the existing fundamental investment restrictions as
non-fundamental, and unanimously recommend that you vote FOR each Sub-Proposal
3A through 3G for your Fund.
Sub-Proposal 3A: To adopt a new fundamental investment restriction concerning
the concentration of the Fund's investments in the same industry.
Under the 1940 Act, a fund's policy of concentrating its investments in
securities of companies in the same industry must be fundamental. A mutual fund
concentrates its investments, for purposes of the SEC, if it invests more than
25% of its "net" assets (exclusive of cash, U.S. government securities and
tax-exempt securities) in a particular industry or group of industries. Having
the concentration policy apply to "net" assets represents a recent change by the
SEC staff from its previous concentration standard which applied to 25% of a
fund's "total" assets. The change would slightly reduce a fund's ability to
concentrate, since the "net" assets figure is lower than "total" assets of a
fund because liabilities are subtracted.
Most Funds currently have a fundamental investment restriction prohibiting them
from concentrating their investments in the same industry. There are, however,
numerous variations in the way that the investment restriction is described in
the Funds' offering documents. In addition, most restrictions define
concentration in terms of a percentage of "total assets," rather than in
accordance with the new "net assets" standard.
The Board of Directors recommends that the shareholders of each Fund approve the
standardized fundamental investment restriction set forth below. In approving
the proposed investment restriction and concluding that it would recommend the
investment restriction to Fund shareholders, the Directors considered that the
proposed investment restriction will standardize the concentration restriction
for the Funds and is intended to provide flexibility for Funds to respond to
changes in the SEC staff's position on concentration of investments or to other
relevant legal, regulatory or market developments without the delay or expense
of a shareholder vote.
Adoption of the proposed fundamental restriction will not materially affect the
way the Funds are currently managed or operated because the existing
concentration restrictions will remain in place as non-fundamental policies
unless and until a Fund's Board of Directors modifies such policies in the
future.
Proposed Concentration Restriction: The Fund will not make investments
that will result in the concentration (as that term may be defined in
the 1940 Act, any rule or order thereunder, or SEC staff interpretation
thereof) of its investments in the securities of issuers primarily
engaged in the same industry, provided that this restriction does not
limit the Fund from investing in obligations issued or guaranteed by
the U.S. government, its agencies or instrumentalities, or in
tax-exempt securities or certificates of deposit.
Each Fund's Board of Directors has also approved a related non-fundamental
policy, which will be adopted for each Fund if the new fundamental restriction
is approved and which provides that, in applying the concentration restriction:
(i) utility companies will be divided according to their services, for example,
gas, gas transmission, electric and telephone will each be considered a separate
industry; (ii) financial service companies will be classified according to the
end users of their services, for example, automobile finance, bank finance and
diversified finance will each be considered a separate industry; and (iii) asset
backed securities will be classified according to the underlying assets securing
such securities. This non-fundamental policy is intended to keep the
concentration restriction from unnecessarily limiting a Fund's investments.
8
Sub-Proposal 3B: To adopt a new fundamental investment restriction concerning
borrowing money and issuing senior securities.
Introduction to Sub-Proposal. The 1940 Act imposes certain limits on investment
companies with respect to borrowing money and issuing senior securities. A
"senior security" is defined as an obligation of a fund with respect to its
earnings or assets that takes precedence over the claims of the fund's
shareholders with respect to the same earnings or assets. The 1940 Act generally
prohibits funds from issuing senior securities, in order to limit their ability
to use leveraging. In general, a fund uses leveraging when it enters into
securities transactions with borrowed money or money to which it has only a
temporary entitlement.
The limitations on borrowing and issuing senior securities are generally
designed to protect shareholders and their investments by restricting a fund's
ability to subject its assets to any claims of creditors or senior security
holders who would be entitled to dividends or rights on liquidation of the fund
that take precedence over the rights of shareholders. Borrowing money and
issuing senior securities are related activities under the 1940 Act in that, if
a fund fails to adhere to the restrictions applicable to borrowing, the fund
will be considered to have issued an impermissible senior security. Under the
1940 Act, a fund's investment restrictions relating to borrowing and senior
securities must be fundamental.
The current investment restrictions concerning borrowing and senior securities
vary considerably from Fund to Fund and are set forth in Exhibit F. Shareholders
of each Fund are being asked to approve the following new standardized
fundamental restriction that covers both borrowing and senior securities and
which is designed to reflect all current regulatory requirements.
Proposed Borrowing and Senior Securities Restriction: The Fund may not
borrow money or issue senior securities, except as the 1940 Act, any
rule or order thereunder, or SEC staff interpretation thereof, may
permit.
Senior Securities. SEC staff interpretations under the 1940 Act allow open-end
funds to engage in a number of types of transactions which might be considered
to raise "senior securities" or "leveraging" concerns, so long as the funds meet
certain collateral requirements set by the SEC staff. These collateral
requirements are designed to protect shareholders. For example, some of the
transactions that may raise senior security concerns include short sales,
certain options and futures transactions, reverse repurchase agreements and
securities transactions that obligate the fund to pay money at a future date
(these transactions may be referred to collectively as "Leveraging-Type
Transactions"). Funds that engage in Leveraging-Type Transactions must set aside
money or securities or engage in certain offsetting securities transactions, to
meet the SEC staff's collateralization requirements. Consistent with SEC staff
positions, the senior security restrictions for Funds formed by Delaware
Investments in recent years specifically permit the Funds to engage in
Leveraging -Type transactions. Most of the older Funds, however, have
fundamental restrictions that simply prohibit Funds from issuing senior
securities, except for notes to banks.
Borrowing. Under the 1940 Act, an open-end fund is permitted to borrow up to 5%
of its total assets for temporary purposes from any person so long as the
borrowing is privately arranged, and to also borrow from banks, provided that if
such bank borrowings exceed 5%, the fund must have assets totaling at least 300%
of the borrowing when the amount of the borrowing is added to the fund's other
assets. The effect of this latter provision is to allow an open-end fund to
borrow from banks amounts up to one-third (33 1/3%)) of its total assets
(including the amount borrowed). Open-end funds typically borrow money to meet
redemptions to avoid being forced to sell portfolio securities before they would
have otherwise been sold. This technique allows open-end funds greater
flexibility to buy and sell portfolio securities for investment or tax
considerations, rather than for cash flow considerations.
The borrowing restrictions for Funds formed by Delaware Investments in recent
years permit borrowing to the extent allowed under the 1940 Act, while other
Funds limit borrowings to 10% or 5% of assets, rather than the 33 1/3% allowed
by law. Further, a number of older Funds only permit borrowing "as a temporary
measure for extraordinary purposes" and others provide that the Fund may not
borrow for leveraging purposes or purchase securities while borrowings are
outstanding.
Effects of the Proposed Investment Restrictions. Since the proposed investment
restriction would provide greater flexibility for such Funds to engage in
borrowing and to engage in Leveraging-Type Transactions, the Funds may be
subject to additional costs and risks. For example, the costs of borrowing can
reduce a Fund's total return. Further, upon engaging in Leveraging-Type
Transactions, such Funds could experience increased risks due to the effects of
leveraging. The SEC staff's collateralization requirements are designed to
address such risks.
9
Board Recommendation. The Board of Directors recommends that the shareholders of
each Fund approve the proposed fundamental investment restriction for each Fund.
The proposed investment restriction will establish a standardized borrowing and
senior securities restriction which is written to provide flexibility for Funds
to respond to changes in legal, regulatory or market developments. Adoption of
the new restriction, however, will not affect the way such Funds are currently
managed or operated because the existing restrictions will remain as
non-fundamental policies unless and until a Fund's Board of Directors modifies
these policies in the future.
Sub-Proposal 3C: To adopt a new fundamental investment restriction concerning
underwriting.
Each Fund is currently subject to a fundamental investment restriction
prohibiting it from acting as an underwriter of the securities of other issuers.
Under the 1940 Act, a Fund's policy or restriction relating to underwriting must
be fundamental. A person or company is generally considered an underwriter under
the federal securities laws if it participates in the public distribution of
securities of other issuers, usually by purchasing the securities from the
issuer and re-selling the securities to the public. Underwriters are subject to
stringent regulatory requirements and often are exposed to substantial
liability. Thus, virtually all mutual funds operate in a manner that allows them
to avoid acting as underwriters.
From time to time, a mutual fund may purchase a security for investment purposes
which it later sells or re-distributes to institutional investors or others
under circumstances where the Fund could possibly be considered to be an
underwriter under the technical definition of underwriter contained in the
securities laws. The current underwriting restriction for most Funds
specifically permits such re-sales. Management, consistent with SEC staff
interpretations, believes that the Funds legally would not be regulated as
underwriters in these circumstances.
The Board of Directors recommends that the shareholders of each Fund approve the
standardized fundamental investment restriction regarding underwriting set forth
below. The proposed restriction is substantially similar to the current
restriction for most Funds. The new restriction is proposed for each Fund
because it will help to achieve the goal of standardization of the language of
the investment restrictions among all Funds. Adoption of the proposed
restriction will not affect the way the Funds are currently managed or operated.
Proposed Underwriting Restriction: The Fund may not underwrite the
securities of other issuers, except that the Fund may engage in
transactions involving the acquisition, disposition or resale of its
portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.
Sub-Proposal 3D: To adopt a new fundamental investment restriction concerning
investments in real estate.
Most of the Funds currently have a fundamental investment restriction
prohibiting the purchase or sale of real estate. The Real Estate Investment
Trust Portfolio of Pooled Trust and the REIT Series of Delaware Group Premium
Fund, Inc., however, may own real estate directly as a result of a default on
securities it owns. Most Funds' restrictions allow the Funds to invest in
companies that deal in real estate, or to invest in securities that are secured
by real estate. Under the 1940 Act, a Fund's policy or restrictions regarding
investment in real estate must be fundamental.
The Board of Directors recommends that the shareholders of each Fund approve the
fundamental investment restriction concerning real estate set forth below. The
proposed investment restriction is designed to standardize the language of the
real estate restriction among the various Funds. The proposed investment
restriction will permit Funds to purchase securities whose payments of interest
or principal are secured by mortgages or other rights to real estate in the
event of default. The investment restriction will also enable the Funds to
invest in companies within the real estate industry, provided such investments
are consistent with the Fund's investment objectives and policies. Adoption of
the proposed restriction will not affect the way the Funds are managed or
operated because the current restrictions will remain as non-fundamental
policies unless and until a Fund's Board of Directors modifies them in the
future.
Proposed Real Estate Restriction: The Fund may not purchase or sell
real estate unless acquired as a result of ownership of securities or
other instruments and provided that this restriction does not prevent
the Fund from investing in issuers which invest, deal, or otherwise
engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests
therein.
Sub-Proposal 3E: To adopt a new fundamental investment restriction concerning
investments in commodities.
Most of the Funds are currently subject to fundamental restrictions prohibiting
the purchase or sale of commodities or commodity contracts. Under the 1940 Act,
policies and restrictions regarding commodities must be fundamental. The most
common types of commodities are physical commodities such as wheat, cotton, rice
and corn. However, under federal law, futures contracts are considered to be
commodities and, therefore, financial futures contracts, such as futures
contracts related to currencies, stock indices or interest rates are considered
to be commodities. If a Fund buys a financial futures contract, it obtains the
right to receive (or, if the Fund sells the contract, the Fund is obligated to
pay) the cash difference between the contract price for an underlying asset or
index and the future market price, if the market price is higher. If the future
price is lower, the Fund is obligated to pay (or, if the Fund sold the contract,
the Fund is entitled to receive) the amount of the decrease. Funds often desire
to invest in financial futures contracts and options related to such contracts
for hedging or other investment reasons.
10
The Board of Directors recommends that the shareholders of each Fund approve the
fundamental investment restriction concerning commodities set forth below for
each Fund. The proposed restriction would standardize the language of the
restriction among the various Funds and provide appropriate flexibility for the
Funds to invest in financial futures contracts and related options. As proposed,
the restriction is broad enough to permit investment in financial futures
instruments for either investment or hedging purposes, and, thus is broader than
many Funds' current restrictions. Using financial futures instruments can
involve substantial risks, and will be utilized only if the investment manager
determines that such investments are advisable and such practices are later
affirmatively authorized by the Board. Adoption of the restriction will not
affect the way the Funds are currently managed or operated because the existing
commodities restrictions will remain as non-fundamental policies unless and
until a Fund's Board of Directors modifies the policies in the future.
Proposed Commodities Restriction: The Fund may not purchase or sell
physical commodities, unless acquired as a result of ownership of
securities or other instruments and provided that this restriction does
not prevent the Fund from engaging in transactions involving futures
contracts and options thereon or investing in securities that are
secured by physical commodities.
Sub-Proposal 3F: To adopt a new fundamental investment restriction concerning
lending by the Fund.
Most of the Funds are currently subject to a fundamental investment restriction
limiting their ability to make loans. In order to ensure that the Funds may
invest in certain debt securities or repurchase agreements, which could be
characterized as the making of loans, most current fundamental restrictions
specifically permit such investments. In addition, a number of the Funds'
lending restrictions explicitly permit Funds to lend their portfolio securities
to broker-dealers or institutional investors. Securities lending is a practice
that has become common in the mutual fund industry and involves the temporary
loan of portfolio securities to parties who use the securities for the
settlement of securities transactions. The collateral delivered to a Fund in
connection with such a transaction is then invested to provide the Fund with
additional income.
The Board of Directors recommends that the shareholders of each Fund approve the
standardized fundamental investment restriction concerning lending described
below for each Fund. The proposed restriction prohibits loans by the Funds
except in the circumstances described above and, in some cases, would provide
more flexibility than the current lending restriction because of the authority
to engage in securities lending. Although securities lending involves certain
risks if the borrower fails to return the securities, management believes that
increased flexibility to engage in securities lending does not materially
increase the risk to which the Funds are currently subject. Also, the adoption
of the restriction will not affect the way the Funds are currently managed or
operated, because the existing lending restrictions will remain in place as
non-fundamental policies unless and until a Fund's Board of Directors modifies
such policies in the future.
Proposed Lending Restriction: The Fund may not make loans, provided
that this restriction does not prevent the Fund from purchasing debt
obligations, entering into repurchase agreements, loaning its assets to
broker/dealers or institutional investors and investing in loans,
including assignments and participation interests.
Sub-Proposal 3G: To redesignate all current fundamental investment restrictions
as non-fundamental.
Each Fund currently is subject to its own list of fundamental investment
restrictions. Exhibit F lists the current fundamental investment restrictions of
each Fund. Most of the Funds are also subject to certain non-fundamental
investment restrictions. As described in the previous Sub-Proposals, most Funds
have a fundamental investment restriction governing concentration, borrowing and
senior securities, underwriting, real estate, commodities and lending. Many of
the Funds, especially the older Funds, have additional fundamental investment
restrictions governing activities that are no longer required to be subject to
fundamental investment restrictions.
The Directors and Fund management recognize that many of the current fundamental
investment restrictions cover the same activities as the proposed, standardized
fundamental investment restrictions so that there will be overlapping
restrictions. However, rather than asking shareholders for approval to eliminate
the current restrictions at this time in favor of the new standardized
restrictions, the Board of Directors is recommending that all current
fundamental restrictions be redesignated as non-fundamental. After the current
investment restrictions are made non-fundamental, Fund management and the
Directors will analyze and evaluate each Fund's investment restrictions on an
individual basis while considering the particular investment objective and
policies of the Fund. Over time, the Funds' investment restrictions can be
standardized, if appropriate. With the exception of a Fund's classification as a
diversified fund for purposes of the 1940 Act, the proposed redesignation of the
current investment restrictions as non-fundamental will provide the Directors
with the authority and ability to make such changes without being required to
seek an additional shareholder vote.
11
The conversion of investment restrictions to non-fundamental will provide
management of the Funds with the flexibility to respond to industry changes and
also to take advantage of unique pricing and distribution structures that have
developed over the past ten years. For example, eliminating certain fundamental
restrictions and converting them to non-fundamental would permit the Funds to
operate in a "master-feeder" structure at some point in the future should
management determine that such a structure were appropriate.
In a "master-feeder" structure, investors purchase shares of one or more feeder
funds which, in turn, invest all of their assets in corresponding master funds
which have identical investment objectives, policies and restrictions as the
feeder funds. The assets are collectively managed at the master fund level and
the different feeder funds can have varying distribution and expense structures.
The principal advantage of the master-feeder structure is the consolidation of
investment management of multiple identical investment pools into one investment
pool. The structure is also sufficiently flexible to permit offshore feeder
funds' assets to be managed at the master fund level.
By making the investment restrictions non-fundamental, management will have the
flexibility to ensure that the investment restrictions of a Fund will not limit
the Fund's ability to operate in a master-feeder structure. Before any existing
Fund would convert to a master-feeder structure, shareholders would be notified
of such a change and the prospectus of the particular Fund would be amended to
disclose the ability to operate in a master-feeder structure.
Proposal Four: To Approve a New Investment Management Agreement for the Fund
This Proposal applies to all Funds except the Diversified Value Fund (of
Delaware Group Equity Funds II, Inc.), which has already adopted an Investment
Management Agreement which conforms to the standardized form being proposed for
the other funds.
Proposal Overview
Shareholders of most of the Funds are being asked to approve a new Investment
Management Agreement with either Delaware Management Company (previously defined
as "DMC") or Delaware International Advisers Ltd. (previously defined as
"DIAL"), one of which currently manages each Fund. The New Investment Management
Agreements will reflect one or more of the following changes, all of which are
explained in further detail below.
o Management fee increase or management fee decrease, together with the
addition or restructuring of fee "breakpoints," which reduce fee rates
as Fund assets grow.
o Potential management fee decrease due to the introduction or
restructuring of breakpoints which would result in lower fees as Fund
assets grow.
o Elimination of a provision concerning shareholder approval of amendments.
o Elimination of a provision concerning a Fund trading desk.
o Addition of a provision concerning the use of a sub-adviser.
To determine which proposed changes apply to your Fund, please check the table
at the end of this Proposal.
Required Vote. Approval of this Proposal for a Fund requires the vote of a
"majority of the outstanding voting securities" of the Fund, which means the
vote of: (i) more than 50% of the outstanding voting securities of the Fund; or
(ii) 67% or more of the voting securities of the Fund present at a meeting, if
the holders of more than 50% of the outstanding voting securities are present or
represented by proxy, whichever is less.
If shareholders approve the new Agreements, any modified management fees will
take effect on [(Delaware to advise:) ____________], or at a later date if the
Meeting is postponed or adjourned. If a new Agreement is not approved for a
particular Fund, the current Agreement will continue in effect.
The Board of Directors for each Fund has unanimously approved the proposed
Agreements and recommends that you vote FOR the new Investment Management
Agreement for your Fund.
12
Proposed Changes in Management Fees
Purpose of Management Fees. Each Fund has hired either DMC or DIAL to serve as
its investment manager. Under the current Investment Management Agreements, the
portfolio management team for each Fund regularly decides which securities or
instruments to buy or sell for the Fund and the investment manager directly or
indirectly arranges for the placement and execution of orders for the purchase
or sale of such securities and instruments. The investment manager is also
responsible for each Fund's regulatory compliance and general administrative
operations and provides regular reports to the Board of Directors. The
management fees paid by a Fund are used by its investment manager to pay for the
personnel, equipment, office space and facilities that are needed to manage the
assets of the Fund and to administer its affairs.
Reasons for Proposed Changes in Management Fees. At the request of the Boards,
management recently undertook a complete review of the level and structure of
the management fees for each Fund within the Delaware Investments family. The
extensive review process was performed with the guidance of an outside
consultant to help ensure the accuracy of the results and conclusions. The
process involved the comparison of each Fund with its own universe of
"competing" funds, which were identified based on investment objective, asset
type and distribution channel. Once competing funds were identified, management
compared fee rates at various asset sizes to evaluate both fee rates and
breakpoint structures. Management's goal was to establish a consistent fee
structure for the various Delaware Investments Funds that would be competitive
with funds with a similar investment objective and size in the current
marketplace.
Management believes that a competitive management fee structure is needed to
ensure that Delaware Investments will continue to be able to deliver Funds with
competitive expense ratios and provide the increased investment opportunities
and service options that are now available to shareholders. Also, in recent
years, management has noticed increased competition for talented investment and
service professionals along with growing expenses in order to recruit and retain
such personnel. By establishing fee levels at competitive market rates,
management believes it can continue to attract talented professionals and
support high-quality, long-term investment management and shareholder services
to help maintain solid investment performance.
Description of Proposed Changes in Management Fees. As a result of its analysis,
Fund management has identified a number of different management fee pricing
levels to be established for the Funds in the Delaware Investments family, each
reflecting the dynamics and complexity of managing the assets of particular
categories of Funds based on asset type (such as equity or fixed-income),
sub-divisions within asset type (such as "insured" or "non-insured" fixed-income
securities) and geography (such as domestic or international). In addition, Fund
management identified a standardized schedule of breakpoints for Funds at each
of the management fee level categories, so that management fees will be reduced
if a Fund's assets grow to certain levels, in order to allow the Funds to
benefit from economies of scale. The meetings described in this Proxy Statement
are part of a series of shareholder meetings to be held at which the
standardized management fee pricing levels and schedules of breakpoints will be
put into place for many of the Delaware Investments Funds.
The chart included in Exhibit G shows the current and proposed management fee
rates for each Fund and the dollar amounts paid to the investment manager and
its affiliates during the last fiscal year. If a management fee increase is
proposed, the chart shows the dollar amount that the Fund would have paid to DMC
or DIAL if the proposed management fees had been in effect. The chart also shows
whether DMC or DIAL has waived any management fees and the effect that such
waivers would have had on the amounts paid under the proposed Agreement. In
addition, in order to demonstrate the effect that the proposed management fee
changes are expected to have on the overall expenses of the Funds, Exhibit H
contains a Fee Table for each Fund for which a management fee increase is
proposed, showing the actual expense levels under the current management fees
and the projected expense levels following implementation of the proposed
management fees.
Board Consideration of Proposed Management Agreement Changes. In considering the
proposed management fee changes, the Directors reviewed extensive materials
concerning the methodology used by management to identify competitive peer
groups for comparison and to develop proposed management fee pricing and
breakpoint levels for the various categories of Funds. The Directors reviewed
separate reports for each Fund containing detailed comparative management fee
and expense information of each Fund and other funds in the relevant peer group,
as well as expense ratio comparisons with relevant mutual fund indices. The
Directors assessed how the management fee changes would position each Fund
within its peer group. The Directors also reviewed and considered performance
and ranking data for each Fund along with other comparative funds within the
investment objective category, as well as a performance comparison to a relevant
securities index for each Fund. In addition to the expense and performance
information, the Directors reviewed the investment manager's historical
profitability with respect to each Fund and the anticipated effects of any
management fee changes.
The Directors also considered the reasons presented by management with respect
to each proposed management fee change, including the anticipated impact of
management fee increases or decreases on shareholders of the Funds. In support
of fee increases for particular Funds, the Directors considered various factors
including the enhanced service options and investment opportunities that are
made available to shareholders, the growing expense associated with recruiting
and retaining qualified investment and service professionals in an increasingly
competitive industry and the importance of supporting quality, long-term service
by investment managers to help achieve solid investment performance.
13
Following consideration of all of the information and factors discussed above,
the Directors for each Fund, including all of the independent Directors,
unanimously approved the proposed management fee changes.
Other Proposed Changes to Investment Management Agreements
In addition to modifications to the management fee structure, certain other
changes to the Investment Management Agreements are proposed, one or more of
which may apply to a particular Fund. The proposed changes are designed to
eliminate provisions that appear in certain older Funds' Agreements and to
standardize the form of Agreement among all Funds within the Delaware
Investments family. Please refer to the table below to determine whether the
changes are proposed for your Fund's Agreement.
Shareholder Approval of Amendments to Investment Management Agreements. Under
the 1940 Act, shareholder approval is normally required before any fund
investment management agreement can be materially amended. The purpose of this
requirement is to allow shareholders to make decisions concerning provisions of
an investment management agreement that could affect their investment.
Funds are, however, permitted to amend such agreements without shareholder
approval if the change involves a decrease in management fee rates or a
potential decrease due to the introduction or restructuring of breakpoints. In
such cases, the SEC staff believes that mutual funds should not be required to
experience the delay and costs of seeking shareholder approval, since
shareholders are generally assumed to be in favor of management fee decreases.
Certain current Investment Management Agreements require shareholder approval of
any amendment to the Agreement, regardless of whether shareholder approval would
be required under federal law. Management proposes to change the Agreements to
permit amendments without shareholder approval in appropriate circumstances like
those described above.
Elimination of Fund Trading Desk. In order for the Funds to buy and sell
securities, written instructions must be provided to brokers or dealers who
execute portfolio transactions. Although most investment management agreements
in the mutual fund industry provide that the investment manager is responsible
for selecting brokers or dealers to effect such transactions, the Agreements for
certain Funds provide that the Funds' employees are responsible for providing
instructions to brokers or dealers relating to the execution of portfolio
transactions. As a result, these Funds maintain a Fund trading desk staffed by
Fund personnel. Management currently believes that the investment manager or
sub-adviser should be responsible for placing portfolio transactions rather than
Fund employees and has concluded that the Agreements should be modified
accordingly.
Authority to Use Sub-Advisers. As the investment management industry has grown
increasingly specialized, it has become increasingly common for mutual funds
whose portfolios include investments in a particular specialized asset class to
utilize the services of sub-investment advisers ("sub-advisers") with particular
expertise in managing the asset class. Typically, such sub-advisory arrangements
are established with contracts between the investment manager and the
sub-adviser, with the investment manager retaining supervision over the
portfolio. For example, DMC utilizes sub-advisers in managing Funds that engage
in socially conscious investing and that invest primarily in foreign securities
or real estate investment trusts.
The Investment Management Agreement for certain Funds do not contain a provision
authorizing the use of a sub-adviser. Therefore, Fund management is proposing
that the new Agreements for these Funds contain the sub-adviser provision, in
order to standardize the Agreement with the other Delaware Investments Funds and
authorize the use of sub-advisers if the Board desires to approve the use of a
sub-adviser in the future. Any future use of a sub-adviser would also require
approval by shareholders.
Miscellaneous Changes. In addition to the changes discussed above, there are
certain miscellaneous changes designed to standardize the form of Agreement
among all Delaware Investments Funds. First, the Agreements for the Funds will
reflect non-material language and structural changes to conform to the standard
Delaware Investments model Agreement. Second, each new Agreement will contain a
provision permitting the names "Delaware," "Delaware Investments" or "Delaware
Group" to be used by other Funds, series or classes, whether already existing or
to be created in the future, which are, or may be, sponsored or advised by DMC
or DIAL. The first Delaware Investments Fund to use the word "Delaware" in its
name was the Delaware Balanced Fund (formerly Delaware Fund) series of Delaware
Group Equity Funds I, Inc., which was originally established in 1938. DMC
understands that the Delaware Balanced Fund may have a claim to the use of the
name "Delaware." Without reaching any conclusion as to such claim, each
Agreement will recognize the ability of multiple Funds to use the words
described above in their names.
14
Summary of Changes to Investment Management Agreements
The following table lists all of the Funds for which new Investment Management
Agreements are proposed, as well as the types of changes that are proposed for
each Agreement.
Elimination
of
Shareholder Elimination Authority
Approval for of Fund to Use
Company/Fund Name Management Fee Change Amendments Trading Desk Sub-Adviser
----------------- --------------------- ------------ ------------ -----------
Delaware Group Adviser Funds, Inc.
New Pacific Fund 0.05% increase/add breakpoints
Overseas Equity Fund 0.15% decrease/add breakpoints
U.S. Growth Fund 0.05% decrease/add breakpoints
Delaware Group Cash Reserve, Inc. 0.075% decrease/change breakpoints(1,2) X X
Delaware Group Equity Funds I, Inc.
Delaware Balanced Fund (formerly
Delaware Fund) 0.125% increase/change breakpoints(1,3) X X X
Devon Fund 0.05% increase/change breakpoints X X X
Delaware Group Equity Funds II, Inc.
Blue Chip Fund Potential decrease due to change in
breakpoints
Decatur Income Fund 0.075% increase/change breakpoints(1,4) X X X
Decatur Total Return Fund 0.05% increase/change breakpoints(1,5) X X X
Social Awareness Fund Potential decrease due to change in
breakpoints
Delaware Group Equity Funds III, Inc.
Trend Fund 0.05% decrease/add breakpoints(1,6) X X X
Delaware Group Equity Funds IV, Inc.
Capital Appreciation Fund Potential decrease due to change in
breakpoints X X
DelCap Fund 0.05% decrease/add breakpoints(1,6) X X X
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund Potential decrease due to addition of
breakpoints(1) X X X
Retirement Income Fund Potential decrease due to change in
breakpoints X X
Delaware Group Foundation Funds
Balanced Portfolio None X
Growth Portfolio None X
Income Portfolio None X
Delaware Group Global & International
Funds, Inc.
Emerging Markets Fund Potential decrease due to addition of
breakpoints X
Global Equity Fund (formerly
Global Assets Fund) 0.10% increase/add breakpoints(1) X X
- ---------------
(1) The current management agreement provides that the fees paid by the Fund
will be reduced by the amount of the independent director fees. The proposed
agreement does not provide for such a reduction. This change increases the
amount paid by the fund, but has virtually no impact on reportable expenses.
(2) Under the proposed management agreement, the initial management fee rate for
the Fund is 0.05% lower than the initial management fee rate under the
current agreement; however, the breakpoints have changed so that the
applicable fee rate at the current asset size will result in an actual fee
decrease of 0.075%.
(3) Under the proposed management agreement, the initial management fee rate for
the Fund is 0.05% higher than the initial management fee rate under the
current agreement; however, the breakpoints have changed so that the
applicable management fee rate at the current asset size will result in an
actual fee increase of 0.125%, with the exception of independent
directors'/trustees' fees (see footnote 1).
(4) Under the proposed management agreement, the initial management fee rate for
the fund is 0.05% higher than the initial management fee rate under the
current agreement; however, the breakpoints have changed so that the
applicable management fee rate at the current asset size will result in an
actual fee increase of 0.075%, with the exception of independent
directors'/trustees' fees (see footnote 1).
(5) Under the proposed management agreement, the initial management fee rate for
the fund is 0.05% higher than the initial management fee rate under the
current agreement; however, at the Fund's current asset level, the
applicable management fee rate under the proposed agreement is equal to the
applicable management fee rate under the current agreement, with the
exception of independent directors'/trustees' fees (see footnote 1).
(6) The current management agreement provides that the Fund will pay a flat
management fee while the proposed agreement introduces a breakpoint
structure. The initial management fee rate under the proposed agreement is
equal to the management fee rate under the current agreement; however, at
the Fund's current asset level, the applicable management fee rate is 0.05%
lower than the rate under the current agreement, with the exception of
independent directors'/trustees' fees (see footnote 1).
15A-1
Elimination
of
Shareholder Elimination Authority
Approval for of Fund to Use
Company/Fund Name Management Fee Change Amendments Trading Desk Sub-Adviser
----------------- --------------------- ------------ ------------ -----------
Global Bond Fund Potential decrease due to addition of
breakpoints(1) X X
Global Opportunities Fund
(formerly Global Equity Fund) 0.05% increase/add breakpoints
International Equity Fund 0.10% increase/add breakpoints(1) X X
International Small Cap Fund Potential decrease due to addition of
breakpoints X
Delaware Group Government Fund, Inc.
U.S. Government Fund 0.05% decrease/add breakpoints(1) X X X
Delaware Group Income Funds, Inc.
Corporate Bond Fund
Delchester Fund 0.05% increase/change breakpoints(1,2) X X X
Extended Duration Bond Fund
High-Yield Opportunities Fund Potential decrease due to change in
breakpoints X X
Strategic Income Fund Potential decrease due to change in
breakpoints X
Delaware Group Limited-Term
Government Funds, Inc.
Limited-Term Government Fund Potential decrease due to addition of
breakpoints(1) X X
Delaware Group Premium Fund, Inc.
Capital Reserves Series 0.10% decrease/add breakpoints(1) X X X
Cash Reserve Series 0.05% decrease/add breakpoints(1) X X X
Convertible Securities Series Potential decrease due to addition of
breakpoints X
Decatur Total Return Series 0.05% increase/add breakpoints(1) X X X
Delaware Series 0.05% increase/add breakpoints(1) X X X
DelCap Series Potential decrease due to addition of
breakpoints(1) X X X
Delchester Series 0.05% increase/add breakpoints(1) X X X
Devon Series 0.05% increase/add breakpoints X
Emerging Markets Series Potential decrease due to addition of
breakpoints X
Global Bond Series Potential decrease due to addition of
breakpoints X
International Equity Series 0.10% increase/add breakpoints(1) X X
REIT Series
Small Cap Value Series Potential decrease due to addition of
breakpoints X X X
Social Awareness Series Potential decrease due to addition of
breakpoints X
Strategic Income Series Potential decrease due to addition of
breakpoints X
Trend Series Potential decrease due to addition of
breakpoints X X X
Delaware Group State Tax-Free Income
Trust
Tax-Free New Jersey Fund Potential decrease due to change in
breakpoints X X
Tax-Free Ohio Fund Potential decrease due to change in
breakpoints X X
Tax-Free Pennsylvania Fund 0.05% decrease/change breakpoints(1) X X X
Delaware Group Tax-Free Money Fund,
Inc. 0.05% decrease/add breakpoints(1) X X X
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund 0.10% decrease/add breakpoints(1) X X
- ---------------
(1) The current management agreement provides that the fees paid by the Fund
will be reduced by the amount of the independent director fees. The proposed
agreement does not provide for such a reduction. This change increases the
amount paid by the Fund, but has virtually no impact on reportable expenses.
(2) Under the proposed management agreement, the initial management fee rate for
the Fund is 0.05% higher than the initial management fee rate under the
current agreement; however, at the Fund's current asset level, the
applicable management fee rate under the proposed agreement is equal to the
applicable management fee rate under the current agreement, with the
exception of independent directors'/trustees' fees (see footnote 1).
16
Tax-Free USA Fund 0.075% decrease/change breakpoints(1,2) X X X
Tax-Free USA Intermediate Fund Potential decrease due to addition of
breakpoints(1) X X X
Delaware Pooled Trust, Inc.
The Real Estate Investment Trust Potential decrease due to addition of
Portfolio breakpoints X X
- ---------------
(1) The current management agreement provides that the fees paid by the Fund
will be reduced by the amount of the independent director fees. The proposed
agreement does not provide for such a reduction. This change increases the
amount paid by the Fund, but has virtually no impact on reportable expenses.
(2) Under the proposed management agreement, the initial management fee rate for
the Fund is 0.05% lower than the initial management fee rate under the
current agreement; however, the breakpoints have changed so that the
applicable fee rate at the current asset size will result in an actual
decrease of 0.075%, with the exception of independent directors'/trustees'
fees (see footnote 1).
17
Information About the Investment Managers
DMC serves as investment manager for many of the Funds that are participating in
this meeting. DMC is registered as an investment adviser under the Investment
Advisers Act of 1940 (the "Advisers Act") and, together with its predecessors,
has been managing funds within the Delaware Investments family since 1938. DMC
is located at One Commerce Square, Philadelphia, Pennsylvania 19103.
DIAL serves as investment manager for some of the Funds that are participating
in this meeting and as sub-adviser for others. DIAL is a United Kingdom
affiliate of DMC, is an investment adviser registered in the United States under
the Advisers Act and is a member of the Investment Management Regulatory
Organisation (IMRO) in the United Kingdom. Since 1990, DIAL has managed the
overseas assets of the Funds within the Delaware Investments family. DIAL is
located at Third Floor, 80 Cheapside, London, England EC2V 6EE.
On November 1, 1998, DMC was managing approximately $15.8 billion in assets in
various open-end and closed-end mutual fund accounts. DIAL was managing
approximately $10.5 billion in institutional or separately managed accounts
(approximately $8.5 billion) and mutual fund accounts (approximately $2 billion)
on the same date. Other affiliates of DMC and DIAL were managing additional
institutional and separate account assets in the amount of $17.3 billion on that
date.
Both DMC and DIAL are indirect, wholly owned subsidiaries of Lincoln National
Corporation, also known as Lincoln Financial Group. Lincoln National
Corporation, with headquarters in Fort Wayne, Indiana, is a diversified
organization involved in many aspects of the financial services industry,
including insurance and investment management.
DMC and DIAL also provide investment management or sub-advisory services to
other Funds within the Delaware Investments family which have investment
objectives that are similar to those of the Funds to which this Proxy Statement
applies. For the names of such other Funds, together with the current (and
proposed, in some cases) management or sub-advisory fee rates for such Funds,
see Exhibit I.
DMC is a series of Delaware Management Business Trust. The Trustees who operate
the business and their principal occupations (which are positions with DMC) are
as follows: Wayne A. Stork, Chairman, President, Chief Executive Officer and
Chief Investment Officer; Richard G. Unruh, Jr., Executive Vice President; David
K. Downes, Executive Vice President, Chief Operating Officer and Chief Financial
Officer; and George M. Chamberlain, Jr., Senior Vice President and Secretary;
and John B. Fields, Vice President/Senior Portfolio Manager.
Wayne A. Stork is the Chairman, Chief Executive Officer and a Director of DIAL.
David G. Tilles is the Managing Director, Chief Investment Officer and a
Director of DIAL. In addition to Mr. Stork and Mr. Tilles, the present directors
of DIAL and their principal occupations (unless noted in the paragraph above
relating to DMC) are as follows: Jeffrey J. Nick, President of Delaware
Management Holdings, Inc. and President and Chief Executive Officer of each of
the Companies comprising the Delaware Investments family of funds; G. Roger H.
Kitson, Vice Chairman of DIAL; Richard G. Unruh; David K. Downes; Richard J.
Flannery, Executive Vice President and General Counsel of DMC; George M.
Chamberlain, Jr.; John C. E. Campbell, Executive Vice President of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Hamish O.
Parker, Director of DIAL; Timothy W. Sanderson, Chief Investment Officer,
Equities of DIAL; Clive A. Gillmore, Regional Research Director of DIAL; Ian G.
Sims, Deputy Managing Director/Chief Investment Officer/Global Fixed Income of
DIAL; George E. Deming, Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); John
Emberson, Company Secretary and Finance Director of DIAL; Nigel G. May, Regional
Research Director of DIAL; Elizabeth A. Desmond, Regional Research Director of
DIAL.
Other Information Relevant to Approval of
Investment Management Agreements
The form of proposed Investment Management Agreement for the Funds is attached
as Exhibit J. Each Current and Proposed Agreement has an initial term of two
years and provides that it will thereafter continue in effect from year to year
only if such continuation is specifically approved at least annually with
respect to each Fund by (i) a vote of a majority of the Board of Directors, or
(ii) a vote of a majority of the outstanding voting securities of the Fund, and
(iii) in either case, separately by a majority of the Directors who are not
"interested persons" (as defined in the 1940 Act). Each current and proposed
Agreement may be terminated without penalty by (i) the Fund, by a vote of a
majority of the Board of Directors, or (ii) by a vote of a majority of the
outstanding voting securities of a Fund, or (iii) by DMC or DIAL, as relevant,
at any time on 60 days' written notice. Each Agreement will also terminate
automatically upon its "assignment," as that term is defined in the 1940 Act.
18
Under each of the current and proposed Agreements, best efforts are used to
obtain the best available price and most favorable execution for portfolio
transactions. Orders may be placed with brokers or dealers who provide brokerage
and research services to the investment manager or their advisory clients. To
the extent consistent with the requirements of the rules of the SEC and the
National Association of Securities Dealers, Inc., these orders may be placed
with brokers who sell shares of the Funds. The services provided may include
advice, either directly or through publications or writings, as to the value of
securities, the advisability of investing in, purchasing or selling securities,
and the availability of securities or purchasers or sellers of securities;
furnishing of analyses and reports concerning issuers, securities or industries;
providing information on economic factors and trends; assisting in determining
portfolio strategy; providing computer software and hardware used in security
analyses; and providing portfolio performance evaluation and technical market
analyses. Such services are used by the investment manager in connection with
their investment decision-making process with respect to one or more Funds or
accounts that they manage, and need not be used exclusively with respect to the
Fund or account generating the brokerage.
As provided in the Securities Exchange Act of 1934 and the current and proposed
Agreements, higher commissions are permitted to be paid to broker/dealers who
provide brokerage and research services than to broker/dealers who do not
provide such services, if such higher commissions are deemed reasonable in
relation to the value of the brokerage and research services provided. In some
instances, services provided constitute in some part brokerage and research
services used in connection with the investment decision-making process and
constitute in some part services used in connection with administrative or other
functions not related to the investment decision-making process. In such cases,
the investment manager will make a good faith allocation of brokerage and
research services and will pay out of their own resources for services used by
them in connection with administrative or other functions not related to the
investment decision-making process.
The current and proposed Agreements provide that, in the absence of willful
misfeasance, bad faith, gross negligence or a reckless disregard to the
performance of its duties to a Fund, the investment manager or sub-adviser shall
not be liable to the Fund or any shareholder of the Fund for any action or
omission in the course of, or in connection with, rendering services under a
current or proposed Agreement, or for any losses that may be sustained in the
purchase, holding or sale of any security or otherwise.
Other Agreements with the Funds
Each Company is currently party to a Distribution Agreement relating to the
Funds with Delaware Distributors, L.P. (the "Distributor"), an affiliate of DMC
and DIAL. The Distributor's principal address is 1818 Market Street,
Philadelphia, PA 19103. Pursuant to the Distribution Agreement, the Distributor
provides underwriting, distribution and marketing services to the Funds. The
Agreement includes references to distribution plans adopted pursuant to Rule
12b-1 under the 1940 Act. The Companies are also parties to a Shareholders
Services Agreement and a Fund Accounting Agreement with Delaware Service
Company, Inc. ("DSC"), an affiliate of DMC and DIAL, pursuant to which DSC
provides fund accounting, shareholder servicing, dividend disbursing and
transfer agency services. Exhibit G to this Proxy Statement lists the amount of
any payments made to the Distributor pursuant to Rule 12b-1 Plans and to DSC
pursuant to service agreements, for each Fund's most recently completed fiscal
year.
Proposal Five: To Approve a New Sub-Advisory Agreement for the Fund
This Proposal only applies to the following Funds:
Delaware Group Adviser Funds, Inc. Delaware Group Income Funds, Inc.
New Pacific Fund Strategic Income Fund
Overseas Equity Fund Delaware Group Premium Fund, Inc.
U.S. Growth Fund REIT Series
Delaware Group Equity Funds II, Inc. Social Awareness Series
Blue Chip Fund Strategic Income Series
Social Awareness Fund Delaware Pooled Trust, Inc.
Delaware Group Global & International Fund, Inc. The Real Estate Investment Trust Portfolio
Global Equity Fund (formerly Global Assets Fund)
Global Opportunities Fund (formerly Global Equity Fund)
Shareholders of each of the Funds listed above are being asked to approve a new
Sub-Advisory Agreement with their Fund's existing sub-adviser. Exhibit G to this
Proxy Statement lists the current sub-adviser for each Fund, along with the
sub-advisory fee rates and other information about the current sub-advisory
agreements. New Agreements are required at this time because the existing
Agreements will terminate if new Investment Management Agreements are approved
as described in Proposal Four.
19
The proposed Sub-Advisory Agreements do not contain any changes in sub-advisory
fee rates and are largely identical to the current Sub-Advisory Agreements.
There are a number of minor changes in language in the form of the Agreement,
which are designed to result in a single, standardized Agreement among all
Delaware Investments Funds that utilize sub-advisers.
One new provision is proposed for Funds which have Sub-Advisory Agreements that
provide for the calculation of the sub-advisory fees based on a percentage of
assets of the Fund. The new provision would require the sub-adviser to share in
any fee waiver or expense limitation arrangement entered into by the Fund's
investment manager. This provision does not affect the amounts to be paid by the
Fund, but the sub-adviser may receive less, depending on management fee waivers
or expense limitations.
Required Vote. Approval of this Proposal for a Fund requires the vote of a
"majority of the outstanding voting securities" of the Fund, which means the
vote of: (i) more than 50% of the outstanding voting securities of the Fund; or
(ii) 67% or more of the voting securities of the Fund present at a meeting, if
the holders of more than 50% of the outstanding voting securities are present or
represented by proxy, whichever is less.
The proposed Sub-Advisory Agreement for any Fund will not take effect until
shareholders approve a new Investment Management Agreement for the Fund.
[(Delaware to confirm:)] If a proposed Sub-Advisory Agreement is not approved
for a Fund, the investment manager will take responsibility for all aspects of
investment management until such time as a new sub-advisory arrangement is
approved by the Board and by shareholders.
The Board of Directors for each Fund has unanimously approved the proposed
Sub-Advisory Agreements and recommends that you vote FOR the new Sub-Advisory
Agreement for your Fund.
Information About the Sub-Advisers
DMC and DIAL. Both DMC and DIAL serve in a sub-adviser capacity for certain
Funds within the Delaware Investments family. The background of each firm, along
with the professionals responsible for operating each business, are described
above in connection with the proposed new Investment Management Agreements.
Please refer to the prior Proposal for that information.
AIB Govett, Inc. AIB Govett is the sub-adviser for the New Pacific Fund of
Delaware Group Adviser Funds, Inc. The firm is registered as an investment
adviser under the Advisers Act and, together with its predecessor firm, has been
providing advisory services to the New Pacific Fund since May 4, 1996. AIB
Govett is located at 250 Montgomery Street, Suite 1200, San Francisco, CA 94104.
On November 30, 1998, AIB Govett was managing approximately $13.9 billion in
assets for various investment trusts, investment companies and pension funds.
The names and fee rates for other similar funds managed or sub-advised by AIB
Govett are set forth in Exhibit I.
AIB Govett is a wholly-owned subsidiary of AIB Asset Management Holdings
Limited, which is itself a majority owned subsidiary of Allied Irish Banks plc.
Keith Mitchell is the President and Managing Director of AIB Govett. John
Murray, Kevin Pakenham, Brian Lee, Eileen Fitzpatrick and Maurice Harte each
serve as Joint Chief Investment Officers and Directors of AIB Govett and Colin
Kreidwolf is the firm's Chief Financial/Operating Officer.
Lynch & Mayer, Inc. ("L&M"). L&M serves as sub-adviser for the U.S. Growth Fund
of Delaware Group Adviser Funds, Inc. L&M is registered as an investment adviser
under the Advisers Act and has served as the sub-adviser to the U.S. Growth Fund
since October 27, 1997. L&M is located at 520 Madison Avenue, New York, New York
10022.
On November 30, 1998, L&M was managing approximately $4.2 billion in assets for
various pension funds, foundations, endowments, trusts, high net worth
individuals and investment companies.
L&M is an indirect, wholly-owned subsidiary of Lincoln National Corporation and
an affiliate of DMC and DIAL. Edward J. Petner serves as L&M's Chief Executive
Officer and also as a Portfolio Manager and member of the Board of Directors. In
addition to Mr. Petner, the present directors of L&M and their principal
occupations are as follows: Robert R. Coby, Chief Operating Officer; David K.
Downes, Chief Operating Officer; Dennis P. Lynch, Portfolio Manager; and Jeffrey
J. Nick, Chief Executive Officer. David K. Downes also serves as the Executive
Vice President, Chief Operating Officer and Chief Financial Officer of the U.S.
Growth Fund. Jeffrey J. Nick serves as President, Chief Executive Officer and
Director of the U.S. Growth Fund.
Vantage Global Advisors, Inc. ("VGA"). VGA serves as sub-adviser for the Blue
Chip Fund of Delaware Group Equity Funds II, Inc., the Strategic Income Fund of
Delaware Group Income Funds, Inc. and the Strategic Income Series of Delaware
Group Premium Fund, Inc. The firm is registered as an investment adviser under
the Advisers Act. VGA is located at 630 Fifth Avenue, New York, New York 10111.
20
On November 30, 1998, VGA was managing $8.8 billion in assets for pension plans,
endowments, insurance and commingled products and investment companies. VGA is
an indirect, wholly-owned subsidiary of Lincoln National Corporation and an
affiliate of DMC and DIAL. T. Scott Wittman is the President, Chief Executive
Officer and a Director of VGA. In addition to T. Scott Wittman, the present
directors of VGA and their principal occupations are as follows: Jeffrey Nick,
President and Chief Executive Officer of Delaware Management Holdings; Bruce
Barton, President and Chief Executive Officer of Delaware Distributors, LLP; Tom
McMeekin, Chief Investment Officer, Lincoln Investment Management; and Dennis
Blume, Senior Vice President, Lincoln Investment Management. In addition to
serving on the Board of Directors for VGA, Jeffrey Nick is also the President,
Chief Executive Officer and Director of each of the Blue Chip Fund, the
Strategic Income Fund and the Strategic Income Series.
Lincoln Investment Management, Inc.("LIM"). LIM serves as sub-adviser for the
Real Estate Investment Trust Portfolio of Delaware Pooled Trust, Inc and the
REIT Series of Delaware Group Premium Fund, Inc. LIM is registered as an
investment adviser under the Advisers Act and is located at 200 E. Berry Street,
Fort Wayne, Indiana 46802.
LIM's primary activity is institutional fixed-income investment management and
consulting. Such activity includes fixed-income portfolios, private placements,
real estate debt and equity and asset/liability management. On November 30,
1998, LIM was managing approximately $40,966,661,373 in assets.
LIM is a wholly owned subsidiary of Lincoln National Corporation and an
affiliate of DMC and DIAL. H. Thomas McMeekin serves as President, Chief
Investment Officer and a Board Member of LIM. In addition to Mr. McMeekin, the
present directors of LIM and their principal occupations are as follows: J.
Michael Keeter, Vice President and General Counsel; and Steven R. Brody, Vice
President.
Other Information Relevant to Approval of
Sub-Advisory Agreements
The form of proposed Sub-Advisory Agreement for the Funds is attached as Exhibit
K. Each Current and Proposed Agreement has an initial term of two years and
provides that it will thereafter continue in effect from year to year only if
such continuation is specifically approved at least annually with respect to
each Fund by (i) a vote of a majority of the Board of Directors, or (ii) a vote
of a majority of the outstanding voting securities of the Fund, and (iii) in
either case, separately by a majority of the Directors who are not "interested
persons" (as defined in the 1940 Act). Each current and proposed Agreement may
be terminated without penalty by (i) the Fund, by a vote of a majority of the
Board of Directors, or (ii) by a vote of a majority of the outstanding voting
securities of a Fund, or (iii) by the sub-adviser at any time on 60 days'
written notice. Each Agreement will also terminate automatically upon its
"assignment," as that term is defined in the 1940 Act.
Under each of the current and proposed sub-advisory agreements, best efforts are
used to obtain the best available price and most favorable execution for
portfolio transactions. Orders may be placed with brokers or dealers who provide
brokerage and research services to the investment manager, sub-adviser or their
advisory clients. To the extent consistent with the requirements of the rules of
the SEC and the National Association of Securities Dealers, Inc., these orders
may be placed with brokers who sell shares of the Funds. The services provided
may include advice, either directly or through publications or writings, as to
the value of securities, the advisability of investing in, purchasing or selling
securities, and the availability of securities or purchasers or sellers of
securities; furnishing of analyses and reports concerning issuers, securities or
industries; providing information on economic factors and trends; assisting in
determining portfolio strategy; providing computer software and hardware used in
security analyses; and providing portfolio performance evaluation and technical
market analyses. Such services are used by the investment manager or sub-adviser
in connection with their investment decision-making process with respect to one
or more Funds or accounts that they manage, and need not be used exclusively
with respect to the Fund or account generating the brokerage.
As provided in the Securities Exchange Act of 1934 and the current and proposed
Agreements, higher commissions are permitted to be paid to broker/dealers who
provide brokerage and research services than to broker/dealers who do not
provide such services, if such higher commissions are deemed reasonable in
relation to the value of the brokerage and research services provided. In some
instances, services provided constitute in some part brokerage and research
services used in connection with the investment decision-making process and
constitute in some part services used in connection with administrative or other
functions not related to the investment decision-making process. In such cases,
the sub-adviser will make a good faith allocation of brokerage and research
services and will pay out of their own resources for services used by them in
connection with administrative or other functions not related to the investment
decision-making process.
The current and proposed Agreements provide that, in the absence of willful
misfeasance, bad faith, gross negligence or a reckless disregard to the
performance of its duties to a Fund, the sub-adviser shall not be liable to the
Fund or any shareholder of the Fund
21
for any action or omission in the course of, or in connection with, rendering
services under a current or proposed Agreement, or for any losses that may be
sustained in the purchase, holding or sale of any security or otherwise.
Proposal Six: To Ratify the Selection of Ernst & Young LLP as Independent
Auditors for the Company
This Proposal applies to all Companies.
The Boards of Directors have selected Ernst & Young LLP as independent auditors
of each Company for the current fiscal year and shareholders are asked to ratify
this selection. Ernst & Young LLP's principal address is Two Commerce Square,
Philadelphia, PA 19103. A representative from Ernst & Young LLP is expected to
be present at the meeting. The representative of Ernst & Young LLP will have an
opportunity to make a statement if he or she desires to do so and will be
available to respond to appropriate questions. Each Companies' Audit Committee
meets periodically with the representatives of Ernst & Young LLP to receive
reports from Ernst & Young LLP and plan for the Companies' audits.
Required Vote. A simple majority (more than 50%) of the outstanding voting
securities of each Company, regardless of individual Funds within a Company, is
required to ratify the selection of Ernst & Young LLP as independent auditor for
each such Company, except that the shareholders of Delaware Group Adviser Funds,
Inc., Delaware Group Foundation Funds and Delaware Group State Tax-Free Income
Trust may ratify the auditor selection with a majority of "votes cast," which
could be less than 50% of a Company's outstanding voting securities.
The Board of Directors of each Company unanimously recommends that you ratify
the selection of Ernst & Young LLP as independent auditors for such Company for
the current fiscal year.
Proposal Seven: To Approve the Restructuring of the Company from its Current
Form of Organization into a Delaware Business Trust
This Proposal applies to all Companies except for Delaware Group Foundation
Funds, and its Balanced, Growth and Income Portfolios.
The Boards of Directors and Trustees of each Company (except Delaware Group
Foundation Funds) (the "Current Boards") have approved separate Agreements and
Plans of Reorganization (a "Plan" or the "Plans") substantially in the form
attached to this Proxy Statement as Exhibit L. Each Plan provides for a
reorganization (a "Reorganization") pursuant to which each Company will change
its state and form of organization from a Maryland corporation, or a
Pennsylvania common law trust in the case of Delaware Group State Tax-Free
Income Trust, into a Delaware business trust. Each Company may be referred to in
this Proposal as a "Current Fund" or the "Current Funds." For those Companies
that currently issue series of shares, the Series are referred to in this
Proposal as the "Current Series."
For each Current Fund, the Reorganization involves the continuation of the
Current Fund in the form of a newly created Delaware business trust. The newly
created Delaware business trusts are referred to in this Proposal as the "New
Funds." Separate classes and series of shares of each Delaware business trust
that correspond to the classes and series of each Current Fund will carry on the
business of the Current Fund. Delaware Group Cash Reserve, Inc. ("Cash Reserve")
and Delaware Group Tax-Free Money Fund, Inc. ("Tax-Free Money Fund") do not
currently issue series of shares. These Companies will be reorganized as a
series of a corresponding Delaware business trust. The series of shares of the
New Funds that correspond to the Current Series of shares of the Current Funds
and Cash Reserve and Tax-Free Money Fund are referred to in this Proposal as the
"New Series." Each New Fund and New Series will have substantially the same name
as its corresponding Current Fund and Current Series.
Under the Reorganization, the investment objectives of each New Series will be
the same as those of its corresponding Current Fund and Current Series, as
applicable; the portfolio securities of each Current Fund and Current Series
will be transferred to its corresponding New Series; and shareholders will own
interests in each New Fund that are equivalent to their interests in the Current
Fund on the closing date of the Reorganization. The directors or trustees, and
the officers and employees of each Current Fund on the effective date of the
Reorganization will become the trustees, officers and employees, respectively,
of the corresponding New Fund and will operate the New Fund in the same manner
as they previously operated the Current Fund. The investment manager responsible
for the investment management of each New Series will be the same as the
investment manager to the Current Fund and Current Series, as applicable. For
those Current Series with sub-advisory arrangements, the sub-adviser for each
New Series will be the same as the sub-adviser to the Current Series. In
essence, a shareholder's investment in a Current
22
Fund will not change for all practical purposes. The investment manager of each
Current Fund and Current Series is referred to as the "Current Adviser" and, for
those Current Series with sub-advisory arrangements, the sub-adviser to each
Current Series is referred to as the "Current Sub-Adviser."
Background and Reasons for the Reorganizations. The Current Boards unanimously
recommend conversion of the Current Funds into Delaware business trusts because
they have determined that the Delaware business trust form of organization is an
inherently flexible form of organization and provides certain administrative
advantages to the Companies. Delaware trust law contains provisions specifically
designed for mutual funds. Those provisions take into account the unique
structure and operation of mutual funds, and allow mutual funds to simplify
their operations by reducing administrative burdens so that, in general, they
may operate more efficiently. For example, mutual funds organized as Delaware
business trusts are not required to hold annual shareholders' meetings and may
create new series or classes of shares without obtaining the approval of
shareholders at a meeting.
Under Delaware business trust law, the New Funds will have the flexibility to
respond to future business contingencies. For example, a New Fund will have the
power to consolidate with another entity, to cause each New Series to become a
separate trust and to change the New Fund's domicile all without a shareholder
vote, unless such vote is required under the 1940 Act or other applicable law.
This flexibility could help to assure that the New Fund operates under the most
advanced form of organization and could help reduce the expense and frequency of
future shareholders' meetings for non-investment related issues.
The Reorganizations also will increase uniformity among the mutual funds within
the Delaware Investments family. Increased uniformity among the mutual funds,
many of which share common directors, trustees, officers and service providers,
is expected to reduce the costs and resources devoted to compliance with varying
state corporate or trust laws and also reduce administrative burdens.
Another advantage that is afforded to a mutual fund organized as a Delaware
business trust is that there is a well established body of corporate precedent
that may be relevant in deciding issues pertaining to the trust.
For these reasons, the Current Boards believe it is in the interests of the
shareholders of the Current Funds to reorganize the Current Funds into Delaware
business trusts. At present, it appears that the most advantageous time to
consummate the Reorganizations is on or before ________________, 1999. This
date, however, may be modified by the Current Fund and the New Fund. The Current
Boards reserve the right to abandon the Reorganizations if they determine that
such action is in the best interests of the Current Funds.
The following discussion applies to the Reorganization of each Current Fund,
except where otherwise specifically noted.
Consequences and Procedures of the Reorganization. Upon consummation of the
Reorganization, the New Fund will continue the Current Fund's business with the
same investment objectives, policies and restrictions that are in effect for the
Current Fund and Current Series, as applicable, at the time of the consummation
of the Reorganization (see the discussion under "Investment Policies and
Restrictions" below). The net asset value of the shares of each class of each
Current Series, as well as the net asset value of the shares of each class of
Cash Reserve and Tax-Free Money Fund, will not be affected by the
Reorganization. The New Fund has been organized specifically for the purpose of
effecting the Reorganization. Immediately prior to the effective date of the
Reorganization (as defined in the Plan), each New Fund will have outstanding
only one share of each class of beneficial interest of each New Series
corresponding to the shares of each class of each Current Series. Immediately
prior to the effective date of the Reorganization, the New Series corresponding
to Cash Reserve and Tax-Free Money Fund will have outstanding only one share of
each class of beneficial interest corresponding to the shares of each class of
Cash Reserve and Tax-Free Money Fund, respectively. The Current Fund will be the
sole holder of the shares of beneficial interest. The Plan contemplates that the
directors and trustees serving at the time of the Reorganization will serve as
the trustees of the New Fund, with comparable responsibilities. The officers of
the Current Fund will become officers of the New Fund with comparable
responsibilities. The Reorganization will not result in the recognition of
income, gain or loss for Federal income tax purposes to the Current Fund, the
New Fund or the holders of shares of the Current Fund. (See "Federal Income Tax
Consequences of the Plan.")
To accomplish the Reorganization, the Plan provides that the Current Fund will
transfer all of its assets or the assets of the Current Series, as applicable,
subject to its related liabilities, to the corresponding New Fund and to each of
its corresponding New Series. The New Fund will establish an account for each
shareholder and will credit to that account the exact number of full and
fractional shares of the class of the New Series that such shareholder
previously held in the same class of the corresponding Current Series or Current
Fund, as applicable, on the effective date of the Reorganization. Each
shareholder will retain the right to any declared but undistributed dividends or
other distributions payable on the shares of the Current Fund and Current
Series, as applicable, that he or she owned. On the date of the Reorganization,
the net asset value per share of each class of shares of each Current Series,
and the net asset value per share of each class of shares of Cash Reserve and
Tax-Free Money Fund, will be the
23
same as the net asset value per share of the corresponding class of shares of
the New Series. The New Fund will assume all liabilities and obligations of its
corresponding Current Fund. As soon as practicable after the effective date of
the Reorganization, the Current Fund will be dissolved and its existence
terminated.
On the effective date of the Reorganization, each certificate representing
shares of a class of a Current Fund or Current Series, as applicable, will
represent an identical number of shares of the same class of the corresponding
New Series. Shareholders will have the right to exchange their certificates of
the Current Fund for certificates of the New Fund. A shareholder, however, is
not required to make this exchange of certificates.
The Plan provides that the effective date of the Reorganization will be (i) the
next business day after the later of the receipt of all necessary regulatory
approvals and the final adjournment of the meeting of shareholders of the
Current Fund at which the Plan will be considered, or (ii) such later date as
the Current Fund and the New Fund may mutually agree. It is expected that this
will be on ________________, 1999, or such earlier time as the Current Board
deems advisable and in the best interests of the Current Fund and its
shareholders. The Plan may be terminated and the Reorganization abandoned at any
time prior to the effective date of the Reorganization by the Current Board. If
the Reorganization is not so approved or if the Current Board determines to
terminate or abandon the Reorganization, the Current Fund will continue to
operate as a Maryland corporation or a Pennsylvania common law trust, as
applicable.
Capitalization and Structure. Each New Fund was established pursuant to a
substantially identical Agreement and Declaration of Trust ("Trust Document")
under the laws of the State of Delaware. Each New Fund is organized as a series
company. The Trust Document permits the Trustees to issue an unlimited number of
shares of beneficial interest, with no par value. The Board of Trustees of the
New Fund has the power to divide such shares into an unlimited number of series
or classes of beneficial interest without shareholder approval. Cash Reserve and
Tax-Free Money Fund will be reorganized as a New Series of a corresponding New
Fund. Each of the other New Funds has designated the same number of series and
classes as its corresponding Current Fund. Each share of a New Series represents
an equal proportionate interest in the assets and liabilities belonging to that
series (or class) as declared by the Board of Trustees.
Shares of the respective classes of the New Series have substantially the same
dividend, redemption, voting, exchange and liquidation rights, and terms of
conversion as the shares of the corresponding Current Fund or Current Series, as
applicable. Please see Exhibit M, "Comparison and Significant Differences for
Delaware Business Trusts and Maryland Corporations" and "Comparison and
Significant Differences for Delaware Business Trusts and Pennsylvania Common Law
Trusts." Shares of the respective classes of both the Current Fund and the
Current Series and the corresponding New Series are fully paid, non-assessable,
and freely transferable and have no preemptive or subscription rights.
Prior to the Reorganization, the New Fund will have nominal assets and no
liabilities. The sole shareholder of the New Fund will be the corresponding
Current Fund. Each New Fund and New Series will have the same investment
objective and policies as its corresponding Current Fund and Current Series, as
applicable, at the time of the Reorganization. (See the discussion under
"Investment Policies and Restrictions" below.) The Current Adviser will provide
investment management services to the New Fund and the New Series as it does to
the Current Fund and the Current Series, as applicable. For the New Series that
have sub-advisory arrangements, the Current Sub-Adviser will provide
sub-advisory services to the New Series as it does to the Current Series. The
New Fund will have the same fiscal year as the Current Fund.
Subsequent to the closing of the Reorganization, shares of the respective
classes of the Current Fund and Current Series will be exchanged for an
identical number of shares of the same class of the corresponding New Series.
Thereafter, shares of each class of the New Series will be available for
issuance at their net asset value applicable at the time of sale. The New Fund
will adopt the Current Fund's existing registration statement under the
Securities Act of 1933 and the 1940 Act.
Effects of Shareholder Approval of the Reorganization. An investment company
registered under the 1940 Act is required to: (1) submit the selection of the
company's independent auditors to all shareholders for their ratification; (2)
call a special meeting to elect directors (trustees) within 60 days if, at any
time, less than one half of the directors (trustees) holding office have been
elected by all shareholders; and (3) submit any proposed investment management
agreement and sub-advisory agreement relating to a particular series of the
investment company to the shareholders of that series for approval.
The Current Board believes that it is in the best interest of the shareholders
of the Current Fund (who will become the shareholders of the corresponding New
Fund if the Reorganization is approved) to avoid the considerable expense of
another shareholders' meeting to obtain the shareholder approvals described
above shortly after the closing of the Reorganization. The Current Board also
believes that it is not in the best interest of the shareholders to carry out
the Reorganization if the surviving New Fund would not have a Board of Trustees,
independent auditors, and investment management agreements or sub-advisory
agreements complying with the 1940 Act.
24
The Current Board will, therefore, consider approval of the Reorganization by
the requisite vote of the shareholders of the Current Fund to constitute the
approval of the Plan contained in Exhibit L, and also to constitute, for the
purposes of the 1940 Act: (1) ratification of the independent auditors for each
Current Fund at the time of the Reorganization as the New Fund's independent
auditors (please see Proposal Six); (2) election of the Directors (Trustees) of
the Current Fund who are in office at the time of the Reorganization as the
trustees of the New Fund after the closing of the Reorganization (please see
Proposal One); (3) approval by the shareholders of each Current Fund or Current
Series of the investment management agreement between the New Fund on behalf of
the New Series and the Current Adviser, which will be substantially identical to
the agreement that is in place between the Current Fund and the Current Adviser
for the corresponding Current Fund or Current Series on the effective date of
the Reorganization (please see Proposal Four); and (4) for those Current Series
subject to a sub-advisory agreement, approval by the shareholders of the Current
Series of the sub-advisory agreement between the Current Adviser and the Current
Sub-Adviser, which will be substantially identical to the agreement that is in
place between the Current Adviser and the Current Sub-Adviser on the effective
date of the Reorganization (please see Proposal Five).
The New Fund will issue a single share of each class of each New Series to the
Current Fund, and, assuming approval of the Reorganization by shareholders of
the Current Fund, the officers of the Current Fund, prior to the Reorganization,
will cause the Current Fund, as the sole shareholder of the New Fund, to vote
such shares "FOR" the matters specified in the above paragraph. The Current Fund
will then consider the requirements of the 1940 Act referred to above to have
been satisfied.
The mailing address and telephone number of the principal executive offices of
both the Current Fund and the New Fund are 1818 Market Street, Philadelphia, PA
19103, and 1-800-523-1918, respectively.
Investment Policies and Restrictions. If the investment policies and
restrictions for the Current Fund and Current Series as proposed and set forth
in Proposal Two and Sub-Proposals 3A-3G are approved by the shareholders, the
investment policies and restrictions of the corresponding New Series will be the
policies and restrictions of the Current Fund and Current Series as amended by
the provisions set forth in such Proposals. For each Current Fund and Current
Series for which the investment policies and restrictions set forth in Proposal
Two and Sub-Proposals 3A-3G are not approved, the investment policies and
restrictions of the corresponding New Series after the Reorganization will be
the investment policies and restrictions of that Current Fund and Current Series
immediately prior to the Reorganization.
Investment Management Agreements. If the proposed new investment management
agreement relating to the Current Fund and Current Series, as applicable, and as
proposed and described in Proposal Four (a "New Agreement"), is approved by the
shareholders of the Current Fund and Current Series, the terms of the investment
management agreement for the corresponding New Series will be substantially
identical to the New Agreement for the Current Fund and Current Series. For each
Current Fund and Current Series for which the New Agreement described in
Proposal Four is not approved, if any, the investment management agreement for
the corresponding New Series will be substantially identical to the existing
investment management agreement currently in place for that Current Fund and
Current Series, as applicable.
Sub-Advisory Agreements. For the Current Series with sub-advisory arrangements,
if the proposed new sub-advisory agreement relating to the Current Series, as
proposed and described in Proposal Five (a "New Sub-Advisory Agreement"), is
approved by the shareholders of the Current Series, the terms of the
sub-advisory agreement for the corresponding New Series will be substantially
identical to the New Sub-Advisory Agreement for the Current Series. For each
Current Series for which the New Sub-Advisory Agreement described in Proposal
Five is not approved, if any, the sub-advisory agreement for the corresponding
New Series will be substantially identical to the existing sub-advisory
agreement currently in place for that Current Series.
Federal and State Income Tax Consequences of the Plan. It is anticipated that
the transactions contemplated by the Plan will be tax-free for federal income
tax purposes. Consummation of the Reorganization is subject to receipt of a
legal opinion from the law firm of Stradley, Ronon, Stevens & Young, LLP,
counsel to the Current Fund and the New Fund, that, under the Internal Revenue
Code of 1986, as amended (the "Internal Revenue Code"), the exchange of assets
of the Current Fund for the shares of the corresponding New Fund, the transfer
of such shares to the holders of shares of the Current Fund, and the liquidation
and dissolution of the Current Fund pursuant to the Plan will not give rise to
the recognition of a gain or loss for federal income tax purposes to the Current
Fund, the New Fund, or shareholders of the Current Fund or the New Fund. A
shareholder's adjusted basis for tax purposes in the shares of the New Fund
after the exchange and transfer will be the same as his adjusted basis for tax
purposes in the shares of the corresponding Current Fund immediately before the
exchange. Each shareholder should consult his or her own tax adviser with
respect to the details of these tax consequences and with respect to state and
local tax consequences of the proposed transaction.
Distribution Plans and Shareholder Servicing Arrangements. The New Fund will
enter into agreements with DSC for transfer agency, dividend disbursing and
shareholder servicing and fund accounting services that are substantially
25
identical to the agreements currently in effect for each corresponding Current
Fund for such services. Delaware Distributors, L.P. ("DDLP") will
serve as the national distributor for the shares of the New Series under a
separate distribution agreement between DDLP and the New Fund that is
substantially identical to the distribution agreement currently in effect for
the Current Fund and Current Series, as applicable.
The Current Fund has adopted distribution plans under Rule 12b-1 of the 1940 Act
(each a "Distribution Plan") relating to certain classes of shares of the
Current Fund or Current Series. For each class of shares of the Current Fund
that is subject to a Distribution Plan, the corresponding New Fund also has
adopted a distribution plan that is substantially identical to the Distribution
Plan currently in place for the same class of shares of that Current Fund or
Current Series.
Requests for Redemption of the Current Fund. Any request to redeem shares of the
Current Fund that is received and processed prior to the Reorganization will be
treated as a redemption of shares of the Current Fund. Any request to redeem
shares of the Current Fund received or processed after the Reorganization will
be treated as a request for the redemption of shares of the corresponding New
Fund.
Expenses of the Reorganization. Because the Reorganization will benefit solely
the Current Fund and its shareholders, the Current Board has authorized that the
expenses incurred by the Current Fund in the Reorganization or arising out of
the Reorganization shall be paid by the Current Fund, whether or not the
Reorganization is approved by the shareholders.
Comparison of Legal Structures. A comparison of the Delaware Business Trust Act
with the Maryland General Corporation Law, and a comparison of the legal
structure of a Delaware Business Trust with a Pennsylvania common law trust,
including a comparison of relevant provisions of the governing documents of the
Current Funds and the New Funds, is included in Exhibit M, which is entitled
"Comparison and Significant Differences for Delaware Business Trusts and
Maryland Corporations" and "Comparison and Significant Differences for Delaware
Business Trusts and Pennsylvania Common Law Trusts."
Required Vote. The Plans and the transactions contemplated thereby, including
the liquidation and dissolution of the Current Funds, requires the approval of
the shareholders as set forth below:
o All Companies except for Delaware Group Adviser Funds, Inc. and Delaware
Group State Tax-Free Income Trust - a majority of all votes entitled to be
cast.
o Delaware Group Adviser Funds, Inc. - two-thirds of all votes entitled to be
cast.
o Delaware Group State Tax-Free Income Trust - a majority of the outstanding
shares.
The Current Board unanimously recommends that you vote FOR the Reorganization.
26
EXHIBIT A
OUTSTANDING SHARES AS OF RECORD DATE (December 21, 1998)
Shares Outstanding Shares Owned by Fund Directors and
on Executive Officers as a Group as of
Record Date* October 31, 1998
------------------ -----------------------------------
Delaware Group Adviser Funds, Inc.
New Pacific Fund
Overseas Equity Fund
U.S. Growth Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc.
Delaware Balanced Fund (formerly Delaware Fund)
Devon Fund
Delaware Group Equity Funds II, Inc.
Blue Chip Fund
Decatur Income Fund
Decatur Total Return Fund
Diversified Value Fund
Social Awareness Fund
Delaware Group Equity Funds III, Inc.
Trend Fund
Delaware Group Equity Funds IV, Inc.
Capital Appreciation Fund
DelCap Fund
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund
Retirement Income Fund
Delaware Group Foundation Funds
Balanced Portfolio
Growth Portfolio
Income Portfolio
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund
Global Equity Fund (formerly Global Assets Fund)
Global Bond Fund
Global Opportunities Fund (formerly Global
Equity Fund)
International Equity Fund
International Small Cap Fund
Delaware Group Government Fund, Inc.
U.S. Government Fund
Delaware Group Income Funds, Inc.
Corporate Bond Fund
Delchester Fund
Extended Duration Bond Fund
High-Yield Opportunities Fund
Strategic Income Fund
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
Delaware Group Premium Fund, Inc.
A-1
*The Shares outstanding on the record date included all shares purchased in
transactions that have settled by the record date.
Shares Outstanding Shares Owned by Fund Directors and
on Executive Officers as a Group as of
Record Date* October 31, 1998
------------------ -----------------------------------
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series
Decatur Total Return Series
Delaware Series
DelCap Series
Delchester Series
Devon Series
Emerging Markets Series
Global Bond Series
International Equity Series
REIT Series
Small Cap Value Series
Social Awareness Series
Strategic Income Series
Trend Series
Delaware Group State Tax-Free Income Trust
Tax-Free New Jersey Fund
Tax-Free Ohio Fund
Tax-Free Pennsylvania Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Pooled Trust, Inc.
The Real Estate Investment Trust Portfolio
A-2
*The Shares outstanding on the record date included all shares purchased in
transactions that have settled by the record date.
EXHIBIT B
SHAREHOLDERS OWNING 5% OR MORE OF A FUND AS OF OCTOBER 31, 1998
Number of Percent of Percent of
Name and Address Shares Fund Company
---------------- ---------- --------------------------------------------------------------------------------------------------------------------------------
WALTER P. JOHN H. JOHN A. ANTHONY ANN R. THOMAS E. JANET L.
TRUST BABICH(2) DURHAM(2) FRY(3) D. KNERR LEVEN MADISON YEOMANS
- -------------------------------------------------- ---------- ----------
Delaware Group Adviser Funds, Inc.
New Pacific Fund
Overseas Equity Fund
U.S. Growth Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc.
Delaware Balanced Fund (formerly
Delaware Fund)
Devon Fund
Delaware Group Equity Funds II, Inc.
Blue Chip Fund
Decatur Income Fund
Decatur Total Return Fund
Diversified Value Fund
Social Awareness Fund
Delaware Group Equity Funds III, Inc.
Trend Fund
Delaware Group Equity Funds IV, Inc.
Capital Appreciation Fund
DelCap Fund
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund
Retirement Income Fund
Delaware Group Foundation Funds
Balanced Portfolio
Growth Portfolio
Income Portfolio
Delaware Group Global & International
Funds, Inc.
Emerging Markets Fund
Global Equity Fund (formerly Global
Assets Fund)
Global Bond Fund
Global Opportunities Fund (formerly
Global Equity Fund)
International Equity Fund
International Small Cap Fund
Delaware Group Government Fund, Inc.
U.S. Government Fund
Delaware Group Income Funds, Inc.
Corporate Bond Fund
Delchester Fund
Extended Duration Bond Fund
High-Yield Opportunities Fund
Strategic Income Fund
B-1
Number of Percent of Percent of
Name and Address Shares Fund Company
---------------- --------- ---------- ----------
Delaware Group Limited-Term Government
Funds, Inc.
Limited-Term Government Fund
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series
Decatur Total Return Series
Delaware Series
DelCap Series
Delchester Series
Devon Series
Emerging Markets Series
Global Bond Series
International Equity Series
REIT Series
Small Cap Value Series
Social Awareness Series
Strategic Income Series
Trend Series
Delaware Group State Tax-Free Income
Trust
Tax-Free New Jersey Fund
Tax-Free Ohio Fund
Tax-Free Pennsylvania Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Pooled Trust, Inc.
The Real Estate Investment Trust
Portfolio
B-2
EXHIBIT C
YEARS THAT DIRECTORS OR TRUSTEES FIRST TOOK OFFICE
Wayne A. Walter P. John H. Anthony Ann R. Thomas F. Jeffrey Charles W. Thacher
Stork Babich Durham D. Knerr Leven Madison J. Nick E. Peck Longstreth
-------- -------- ------ -------- ----- -------- ------- ------- ---------- ---------- ------------
Delaware Group EquityVoyageur Mutual Funds I, Inc. 1991 1988 1977 1990 1989 1997 1997 1990 1977
Delaware Group Equity$ 2,302 $ 2,129 None(3) $ 2,347 $ 2,521 $ 2,404 $ 2,404
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Voyageur Mutual Funds II Inc. 1991 1988 1977 1990 1989 1997 1997 1990 1977
Delaware Group Equity$ 2,230 $ 2,063 None(3) $ 2,280 $ 2,453 $ 2,341 $ 2,341
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Voyageur Mutual Funds III Inc. 1991 1988 1977 1990 1989 1997 1997 1990 1977
Delaware Group Equity$ 3,987 $ 3,637 None(3) $ 3,876 $ 4,109 $ 3,877 $ 3,877
- -------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------
Voyageur Tax Free Funds IV, Inc. 1991 1988 1985 1990 1989 1997 1997 1990 1985
Delaware Group Equity Funds V, Inc. 1991 1988 1987 1990 1989 1997 1997 1990 1987
Delaware Group Income Funds, Inc. 1991 1988 1977 1990 1989 1997 1997 1990 1977
Delaware Group Government Fund, Inc. 1991 1988 1985 1990 1989 1997 1997 1990 1985
Delaware Group Limited-Term Government 1991 1988 1981 1990 1989 1997 1997 1990 1988
Funds, Inc.
Delaware Group Cash Reserve, Inc. 1991 1988 1978 1990 1989 1997 1997 1990 1978
Delaware Group Tax-Free Money 1991 1988 1981 1990 1989 1997 1997 1990 1981
Fund, Inc.
Delaware Group State Tax-Free 1991 1988 1977 1990 1989 1997 1997 1990 1977
Income Trust
Delaware Group Tax-Free Fund, Inc. 1991 1988 1983 1990 1989 1997 1997 1990 1983
Delaware Group Premium Fund, Inc. 1991 1988 1988 1990 1989 1997 1997 1990 1988
Delaware Group Global & International 1991 1991 1991 1991 1991 1997 1997 1991 1991
Funds, Inc.
Delaware Group Adviser Funds, Inc. 1996 1996 1998 1996 1996 1997 1997 1996 1996
Delaware Group Foundation Funds 1997 1997 1998 1997 1997 1997 1997 1997 1997
Delaware Pooled Trust, Inc 1991 1991 1991 1991 1991 1997 1997 1991 1991$ 2,565 $ 2,369 None(3) $ 2,590 $ 2,770 $ 2,636 $ 2,636
- ---------------------------------------------------------------------------------------------------------------------------------
C-1(1) Mr. Driscoll does not receive any compensation from any of the Trusts.
Compensation information for Messrs. Bennett and Zecher and Ms. Landreth is not
applicable because such nominees were not members of the Board of the Trust or
any other investment company in the Fund Complex for the 12-month period ended
on October 31, 2004.
(2) Messrs. Babich and Durham have announced their intention to retire from the
Board effective as of the date of the Meeting and therefore are not standing for
re-election.
(3) Mr. Fry received $8,827 in professional servies fees, in addition to his
Trustee Compensation, for the 12-month period ended on October 31, 2004. Such
fees were paid by the Voyageur Funds.
A-2
EXHIBIT DB
EXECUTIVE OFFICERS OF THE COMPANIES
David K. Downes (58)TRUSTS
JOSEPH H. HASTINGS (AGE 54) Executive Vice President, Chief Operating Officer,President/Interim Chief
Financial Officer of eachOfficer/Treasurer/Controller of the 34Funds and of the other 24
investment companies in thewithin Delaware Investments, family,and of Delaware Management
Holdings, Inc, Founders CBO Corporation,Inc., DMH Corp., Delaware Capital Management,Investments U.S., Inc., DIAL Holding
Company, Inc., Delaware Management Company, (aInc., Delaware Management Business
Trust, Delaware Management Company, Delaware Lincoln Cash Management, Delaware
Lincoln Investment Advisers and Delaware Capital Management (each a series of
Delaware Management Business Trust), Delaware Service Company, Inc., Lincoln
National Investment Advisers (a series of
Delaware Management Business Trust)Companies, Inc., LNC Administrative Services Corporation and
Delaware Distributors, L.P.General Management, Inc.; Executive Vice President, Chief Operating Officer, President/Chief Financial
Officer and Trustee of
Delaware Management Business Trust; Executive Vice President, Chief Operating
Officer, Chief Financial Officer and Director of Delaware Management Company,
Inc., DMH Corp., Delaware Distributors, Inc., Founders Holdings, Inc. and
Delvoy, Inc.; President, Chief Executive Officer, Chief Financial Officer and
Director of Delaware Service Company, Inc.; President, Chief Operating Officer,
Chief Financial Officer and Director of Delaware International Holdings Ltd.;
Chairman and Officer/Treasurer/Director of Delaware Management Trust Company; Chairman, Executive Vice
President/Chief ExecutiveFinancial Officer and Director of Retirement Financial Services, Inc. During the
past five years, Mr. Downes has served in various executive capacities at
different times in the Delaware Investments organization.
Richard G. Unruh (59);
Executive Vice President of each of the 34 investment
companies in the Delaware Investments family, Delaware Management Holdings,
Inc., Delaware Management Company (a series of Delaware Management Business
Trust) and Delaware Capital Management, Inc.; PresidentPresident/Interim Chief Financial Officer/Controller of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Executive
Vice President and Director/Trustee of Delaware Management Company, Inc. and Delaware
Management Business Trust; DirectorPresident/Interim Chief Financial Officer of Delaware International
AdvisersHoldings Ltd.
During the past five years, Mr. Unruh has served in various executive capacities
at different times within the Delaware Investments organization.
Paul E. Suckow (51) Executive Vice President/Chief Investment Officer, Fixed
Income of each of the 34 investment companies in the Delaware Investments
family, Delaware Management Company, Inc., Delaware Management Business Trust,
Delaware Management Company (a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware Management Business Trust); and Delaware Management Holdings, Inc.; Executive Vice President and Director of
Founders Holdings, Inc.; Executive Vice President of Delaware Capital
Management, Inc.; Director of Founders CBO Corporation; Director of HYPPCO
Finance Company Ltd. During the past five years, Mr. Suckow has served in
various executive capacities at different times within the Delaware Investments
organization.
Michael P. Bishof (36) Senior Vice President/Treasurer of each of the 34
investment companies in the Delaware Investments family and Founders Holdings,
Inc.; Senior Vice President/Investment Accounting of Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust) and Delaware Service Company,
Inc.; Senior Vice President and Treasurer/Manager of Investment Accounting of
Delaware Distributors, L.P. and Delaware Investment Advisers (a series of
Delaware Management Business Trust); Senior Vice President and Manager of
Investment Accounting of Delaware International Holdings Ltd.; Senior Vice
President and Assistant Treasurer of Founders CBO Corporation. Before joining
Delaware Investments in 1995, Mr. Bishof was a Vice President for Bankers Trust,
New York, NY, from 1994 to 1995, a Vice President for CS First Boston Investment
Management, New York, NY, from 1993 to 1994, and an Assistant Vice President for
Equitable Capital Management Corporation, New York, NY, from 1987 to 1993.
George M. Chamberlain, Jr. (51) Senior Vice President, Secretary and General
Counsel of each of the 34 investment companies in the Delaware Investments
family; Senior Vice President and Secretary of Delaware Distributors, L.P.,
Delaware Management Company (a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware Management Business Trust)
and Delaware Management Holdings, Inc.; Senior Vice President, Secretary and
Director/Trustee of DMH Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Service Company, Inc., Founders Holdings, Inc.,
Retirement Financial Services Inc., Delaware Capital Management, Inc., Delvoy, Inc. and
Delaware Management Business Trust; Executive Vice President, Secretary
and Director of Delaware Management Trust Company.
D-1
Joseph H. Hastings (48) Senior Vice President/Corporate Controller of each of
the 34 investment companies in the Delaware Investments family and Founders
Holdings, Inc.; Senior Vice President/Corporate Controller and Treasurer of
Delaware Management Holdings, Inc., DMH Corp., Delaware Management Company,
Inc., Delaware Management Business Trust, Delaware Management Company (a series
of Delaware Management Business Trust), Delaware Distributors, L.P., Delaware
Distributors, Inc., Delaware Service Company, Inc., Delaware Capital Management,
Inc., Delaware International Holdings Ltd. and Delvoy, Inc.; Chief Financial
Officer/Treasurer of Retirement Financial Services, Inc.; Executive Vice
President/Chief Financial Officer/Treasurer of Delaware Management Trust
Company; Senior Vice President/Assistant Treasurer of Founders CBO Corporation. During the past five years, Mr. Hastings has served
in various executive capacities at different times within Delaware Investments.
RICHELLE S. MAESTRO (AGE 45) Executive Vice President/General
Counsel/Secretary of the Funds and of the other 24 investment companies within
Delaware Investments, organization.
Patrick P. Coyne (35) Vice President/Senior Portfolio Managerand of Delaware Management Company, Inc., Delaware
Investment Advisers, Delaware Lincoln Cash Management, Business Trust,and Delaware Capital
Management Company (a(each a series of Delaware Management Business Trust); Executive Vice
President/General Counsel/Secretary and Director/Trustee of Delaware Management
Holdings, Inc., DMH Corp., DIAL Holding Company, Inc., Delaware Investments
U.S., Inc., Delaware General Management, Inc., Delaware Management Company,
Inc., Delaware Service Company, Inc., Delaware Distributors, Inc., Retirement
Financial Services, Inc., Lincoln National Investment Companies, Inc., and LNC
Administrative Services Corporation; Executive President/Deputy General
Counsel/Director of Delaware International Holdings Ltd.; Senior Vice
President/General Counsel/Secretary and Director/Trustee of Delaware Management
Business Trust and Delaware Distributors, L.P.; Senior Vice President/General
Counsel/Secretary of Delaware Management Trust Company; and Vice
President/General Counsel of Lincoln National Convertible Securities Fund, Inc.
and Lincoln National Income Fund, Inc. During the past five years, Ms. Maestro
has served in various executive capacities at different times within Delaware
Investments.
MICHAEL P. BISHOF (AGE 40) Senior Vice President/Investment Accounting
of the Funds and of the other 24 investment companies within Delaware
Investments, and of Delaware Management Company and Delaware Capital Management
(each a series of Delaware Management Business Trust) and Delaware Distributors,
L.P.; Senior Vice President/Treasurer/Investment Accounting of Delaware
Investment Advisers (a series of Delaware Management Business Trust),; Senior
Vice President/Manager of Investment Accounting of Delaware Capital Management,International
Advisers Ltd.; and Chief Financial Officer of Lincoln National Convertible
Securities Fund, Inc., and of the fixed-income funds in the Delaware
Investments family.Lincoln National Income Fund, Inc. During the past
five years, Mr. CoyneBishof has served in various executive capacities at different
times within the Delaware Investments organization.
Mitchell L. Conery (39) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and of the
fixed-income funds in the Delaware Investments family. Before joining Delaware
Investments in 1997, Mr. Conery was an investment officer with Travelers
Insurance from 1995 through 1996, and a research analyst with CS First Boston
from 1992 to 1995.
Paul A. Matlack (39) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust) and of the
fixed-income funds in the Delaware Investments family; Vice President of
Founders Holdings, Inc.; President and Director of Founders CBO Corporation.
During the past five years, Mr. Matlack has served in various capacities at
different times within the Delaware Investments organization.
Gary A. Reed (43) Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business Trust), and Delaware Capital
Management, Inc.; and an officer of the fixed-income funds in the Delaware
Investments family. During the past five years, Mr. Reed has served in various
capacities at different times within the Delaware Investments organization.
Babak Zenouzi (35) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and of the
equity funds in the Delaware Investments family. During the past five years, Mr.
Zenouzi has served in various capacities at different times within the Delaware
Investments organization.
Gerald T. Nichols (39) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 23
investment companies in the Delaware Investments family and of Delaware
Management Company, Inc.; Vice President of Founders Holdings, Inc.; Assistant
Secretary, Treasurer and Director of Founders CBO Corporation. During the past
five years, Mr. Nichols has served in various capacities at different times
within the Delaware organization.
Christopher S. Beck (40) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 10
investment companies in the Delaware Investments family and of Delaware
Management Company, Inc. Before joining the Delaware Investments in 1997, Mr.
Beck managed the small cap value fund for two years at Pitcairn Trust Company.
Prior to 1995, he was Director of Research at Cypress Capital Management in
Wilmington and Chief Investment Officer of the University of Delaware Endowment
Fund.
George H. Burwell (36)Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 8
investment companies in the Delaware Investments and of Delaware Management
Company. Before joining Delaware Investments in 1992, Mr. Burwell was a
portfolio manager for Midlantic Bank, New Jersey. In addition, he was a security
analyst for Balis & Zorn, New York and for First Fidelity Bank, New Jersey.
D-2
Robert L. Arnold (34) Vice President/Portfolio Manager Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business Trust), of 3 investment companies in
the Delaware Group. During the past five years, Mr. Arnold has served in various
capacities at different times within the Delaware organization.
Gerald S. Frey (52) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 8
investment companies in the Delaware Group and of Delaware Management Company,
Inc. Before joining the Delaware Group in 1996, Mr. Frey was a Senior Director
with Morgan Grenfell Capital Management, New York, NY from 1986 to 1995.
Roger A. Early (43) Vice President and Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and each
of the tax-exempt and the fixed income funds in the Delaware Group and Delaware
Management Company, Inc. Before joining The Delaware Group, Mr. Early was a
portfolio manager for Federated Investment Counseling's fixed-income group, with
over $1 billion in assets.
John B. Fields (52) Vice President and Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 10
equity investment companies in the Delaware Group and of Delaware Management
Company, Inc. Before joining the Delaware Group in 1992, Mr. Fields served as a
director of domestic equity risk management for Dupont, Wilmington, DE.
Paul Grillo (38) Vice President and Portfolio Manager of Income Funds, Inc.
Delaware Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 12
investment companies in the Delaware Group. During the last five years, Mr.
Grillo has served in various capacities at different times within the Delaware
organization.
Cynthia I. Isom (44) Vice President and Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business Trust), and 18 investment companies in
the Delaware Investments family, Delaware Management Company, Inc. and Delaware
Management Company (a series of Delaware Management Business Trust).
Frank X. Morris (37) Vice President and Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business Trust), and Delaware Pooled Trust,
Inc. Before joining the Delaware Group in 1997, he served as vice president and
director of equity research at PNC asset Management. Mr. Morris is president of
the Financial Analysis Society of Philadelphia and is a member of the
Association of Investment Management and Research and the National Association
of Petroleum Investment Analysts.
James F. Stanley (30) Vice President and Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and
Delaware Pooled Trust, Inc. Before joining the Delaware Group in 1997, Mr.
Stanley served as a senior managing equity analyst covering the chemical,
building products, and housing industries at Dreyfus Corporation.
Paul Dokas (39) Vice President and Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business Trust), Delaware Pooled Trust, Inc and
Delaware Group Foundation Funds. Before joining the Delaware Group in 1997, he
was Director of Trust Investments for Bell Atlantic Corporation in Philadelphia.
D-3Investments.
B-1
EXHIBIT E
SHAREHOLDINGS BY DIRECTORS AND NOMINEES IN THE
DELAWARE INVESTMENTS FUNDS AS OF OCTOBER 31, 1998
Percentage of
Company Shares Owned Fund/Company Owned
------- ------------ ------------------
WAYNE A. STORK
Delaware Group Equity Funds I, Inc.
Devon Fund ................................................ 65,720.574 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Income Fund........................................ 1,125.446 Less than 1%/Less than 1%
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund....................................... 142,009,027 Less than 1%/Less than 1%
Delaware Group Income Funds, Inc.
Delchester Fund............................................ 619,259.389 Less than 1%/Less than 1%
Delaware Group Income Funds, Inc.
High-Yield Opportunities Fund.............................. 1,091,608.340 /Less than 1%
Delaware Group Government Fund, Inc.
U.S. Government Fund....................................... 5,322.055 Less than 1%/Less than 1%
Delaware Group Cash Reserve, Inc............................ 3,706,011.960 Less than 1%/Less than 1%
Delaware Group Tax-Free Money Fund, Inc..................... 1,081.950 Less than 1%/Less than 1%
Delaware Group State Tax-Free Income Trust
Tax-Free Pennsylvania Fund................................. 887,532.832 /
Delaware Group Global & International Funds, Inc.
International Equity Fund.................................. 11,838.599 Less than 1%/Less than 1%
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund..................................... 9,273.539 Less than 1%/Less than 1%
JEFFREY J. NICK
Delaware Group Equity Funds II, Inc.
Decatur Total Return Fund............................... 1,270.806 Less than 1%/Less than 1%
Delaware Group Cash Reserve, Inc............................ 31,403.410 Less than 1%/Less than 1%
Delaware Group State Tax-Free Income Trust
Tax-Free New Jersey Fund................................ 19,012.257 /
WALTER P. BABICH
Delaware Group Cash Reserve, Inc............................ 7,896.800 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Total Return Fund.................................. 9,651.044 Less than 1%/Less than 1%
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund.................................... 4,314.040 Less than 1%/Less than 1%
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund..................................... 6,938.292 Less than 1%/Less than 1%
JOHN H. DURHAM
Delaware Group Cash Reserve, Inc............................ 63,271.060 Less than 1%/Less than 1%
Delaware Pooled Trust, Inc.
The Real Estate Investment Trust Portfolio................. 1,971.351 Less than 1%/Less than 1%
ANTHONY D. KNERR
None
E-1
Percentage of
Company Shares Owned Fund/Company Owned
------- ------------ ------------------
ANN R. LEVEN
Delaware Group Equity Funds I, Inc.
Delaware Fund........................................... 750.665 Less than 1%/Less than 1%
Delaware Group Equity Funds I, Inc.
Devon Fund.............................................. 254.789 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Income Fund..................................... 2,025.428 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Total Return Fund............................... 2,036.432 Less than 1%/Less than 1%
Delaware Group Equity Funds III, Inc.
Trend Fund............................................... 2,527.037 Less than 1%/Less than 1%
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund.................................... 994.566 Less than 1%/Less than 1%
Delaware Group Global & International Funds, Inc.
International Equity Fund............................... 1,174.926 Less than 1%/Less than 1%
W. THACHER LONGSTRETH
Delaware Group Equity Funds I, Inc.
Delaware Fund .......................................... 40,815.95 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Income Fund..................................... 67,652.453 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Total Return Fund............................... 4,161.893 Less than 1%/Less than 1%
Delaware Group Equity Funds III, Inc.
Trend Fund.............................................. 5,296.988 Less than 1%/Less than 1%
Delaware Group Equity Funds IV, Inc.
DelCap Fund............................................. 1,942.898 Less than 1%/Less than 1%
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund.................................... 934.814 Less than 1%/Less than 1%
Delaware Group Income Funds, Inc.
Delchester Fund......................................... 60,197.084 Less than 1%/Less than 1%
Delaware Group Government Fund, Inc.
U.S. Fund Government Fund............................... 96.057 Less than 1%/Less than 1%
Delaware Group Limited-Term Government Funds, Inc.
U.S. Government Money Fund.............................. 90.100 Less than 1%/Less than 1%
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund............................ 25,648.646 Less than 1%/Less than 1%
Delaware Group Cash Reserve, Inc............................ 40,105.860 Less than 1%/Less than 1%
Delaware Group Tax-Free Fund, Inc.
Tax-Free USA Fund....................................... 40,050.721 Less than 1%/Less than 1%
Delaware Group State Tax-Free Income Trust
Tax-Free Pennsylvania Fund.............................. 221.143 Less than 1%/Less than 1%
Delaware Group Tax-Free Money Fund, Inc..................... 470.830 Less than 1%/Less than 1%
E-2
Percentage of
Company Shares Owned Fund/Company Owned
------- ------------ ------------------
THOMAS F. MADISON
Delaware Group Equity Funds I, Inc.
Devon Fund............................................... 246.327 Less than 1%/Less than 1%
Delaware Group Global & International Funds, Inc.
International Equity Fund................................ 159.373 Less than 1%/Less than 1%
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund................................... 132.162 Less than 1%/Less than 1%
CHARLES E. PECK
Delaware Group Equity Funds I, Inc.
Delaware Fund............................................ 16,151.178 Less than 1%/Less than 1%
Delaware Group Equity Funds I, Inc.
Devon Fund............................................... 12,876.107 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Total Return Fund................................ 9,633.481 Less than 1%/Less than 1%
Delaware Group Equity Funds III, Inc.
Trend Fund............................................... 21,771.736 Less than 1%/Less than 1%
Delaware Group Equity Funds IV, Inc.
DelCap Fund.............................................. 7,583.990 Less than 1%/Less than 1%
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund..................................... 7,248.518 Less than 1%/Less than 1%
` Delaware Group Adviser Funds, Inc.
U.S. Growth Fund......................................... 17,898.466 Less than 1%/Less than 1%
Delaware Group Income Funds, Inc.
Delchester Fund.......................................... 67,477.705 Less than 1%/Less than 1%
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund............................. 16,939.372 Less than 1%/Less than 1%
Delaware Group Global & International Funds, Inc.
International Equity Fund................................ 8,691.150 Less than 1%/Less than 1%
E-3
EXHIBIT F
LISTS OF CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS
Table of Contents
Delaware Group Adviser Funds, Inc.
New Pacific Fund.........................................................F3
Overseas Equity Fund.....................................................F3
U.S. Growth Fund.........................................................F3
Delaware Group Cash Reserve, Inc..............................................F5
Delaware Group Equity Funds I, Inc.
Delaware Balanced Fund (formerly Delaware Fund)..........................F7
Devon Fund...............................................................F9
Delaware Group Equity Funds II, Inc.
Blue Chip Fund..........................................................F11
Decatur Income Fund.....................................................F13
Decatur Total Return Fund...............................................F15
Social Awareness Fund...................................................F17
Delaware Group Equity Funds III, Inc.
Trend Fund..............................................................F19
Delaware Group Equity Funds IV, Inc.
Capital Appreciation Fund...............................................F21
DelCap Fund.............................................................F23
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund....................................................F25
Retirement Income Fund..................................................F27
Delaware Group Foundation Funds
Balanced Portfolio......................................................F29
Growth Portfolio........................................................F29
Income Portfolio........................................................F29
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund...................................................F31
Global Equity Fund (formerly Global Assets Fund)........................F33
Global Bond Fund........................................................F33
Global Opportunities Fund (formerly Global Equity Fund).................F35
International Equity Fund...............................................F37
International Small Cap Fund............................................F39
Delaware Group Government Fund, Inc.
U.S. Government Fund....................................................F41
Delaware Group Income Fund, Inc.
Delchester Fund.........................................................F43
High-Yield Opportunities Fund...........................................F45
Strategic Income Fund...................................................F47
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund............................................F49
F-1
Delaware Group Premium Fund, Inc.
Capital Reserves Series.................................................F51
Cash Reserve Series.....................................................F51
Convertible Securities Series...........................................F54
Decatur Total Return Series.............................................F51
Delaware Series.........................................................F51
DelCap Series...........................................................F51
Delchester Series.......................................................F51
Devon Series............................................................F54
Emerging Markets Series.................................................F56
Global Bond Series......................................................F58
International Equity Series.............................................F60
REIT Series.............................................................F62
Small Cap Value Series..................................................F64
Social Awareness Series.................................................F54
Strategic Income Series.................................................F54
Trend Series............................................................F64
Delaware Group State Tax-Free Income Trust
Tax-Free New Jersey Fund................................................F66
Tax-Free Ohio Fund......................................................F68
Tax-Free Pennsylvania Fund..............................................F70
Delaware Group Tax-Free Money Fund, Inc......................................F72
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund...................................................F74
Tax-Free USA Fund.......................................................F76
Tax-Free USA Intermediate Fund..........................................F78
Delaware Pooled Trust, Inc.
The Real Estate Investment Trust Portfolio..............................F80
- -------------------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-2
New Pacific Fund
Overseas Equity Fund
U.S. Growth Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not purchase any security (other
than obligations of the U.S. government, its
agencies or instrumentalities) if as a result,
with respect to 75% of the Fund's total assets,
more than 5% of the Fund's assets (determined at
the time of investment) would then be invested in
securities of a single issuer.
Concentration The Fund shall not purchase any securities (other
than obligations of the U.S. government, its
agencies and instrumentalities) if as a result 25%
or more of the value of the Fund's total assets
(determined at the time of investment) would be
invested in the securities of one or more issuers
conducting their principal business activities in
the same industry, provided that there is no
limitation with respect to money market
instruments of domestic banks, U.S. branches of
foreign banks that are subject to the same
regulations as U.S. banks and foreign branches of
domestic banks (provided that the domestic bank is
unconditionally liable in the event of the failure
of the foreign branch to make payment on its
instruments for any reason). Foreign governments,
including agencies and instrumentalities thereof,
and each of the electric utility, natural gas
distribution, natural gas pipeline, combined
electric and natural gas utility, and telephone
industries shall be considered as a separate
industry for this purpose.
Borrowing* The Fund shall not borrow money, except from banks
for temporary or emergency purposes not in excess
of one-third of the value of the Fund's assets,
and except that the Fund may enter into reverse
repurchase agreements and engage in "roll"
transactions, provided that reverse repurchase
agreements, "roll" transactions and any other
transactions constituting borrowing by the Fund
may not exceed one-third of the Fund's total
assets.
Issuing Senior Securities* None.
Short Sales/Margin* The Fund shall not make short sales of securities
or maintain a short position if, when added
together, more than 25% of the value of the Fund's
net assets would be (i) deposited as collateral
for the obligation to replace securities borrowed
to effect short sales and (ii) allocated to
segregated accounts in connection with short
sales.
Underwriting The Fund shall not engage in the business of
underwriting securities of other issuers, except
to the extent that the disposal of an investment
position may technically cause Delaware Group
Adviser Funds, Inc. to be considered an
underwriter as that term is defined under the 1933
Act, as amended.
Real Estate The Fund shall not buy or sell real estate,
interests in real estate or commodities or
commodity contracts; however, the Fund may invest
in debt securities secured by real estate or
interests therein, or issued by companies which
invest in real estate or interests therein,
including real estate investment trusts, and may
purchase or sell currencies (including forward
currency contracts) and financial futures
contracts and options thereon.
Commodities See "Real Estate."
Lending The Fund shall not make loans in an aggregate
amount in excess of one-third of its
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-3
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
total assets, taken at the time any loan is made,
provided that entering into certain repurchase
agreements and purchasing debt securities shall
not be deemed loans for the purposes of this
restriction.
Illiquid Securities The Fund shall not purchase illiquid securities or
other securities that are not readily marketable
if more than 10% of the total assets of the Fund
would be invested in such securities.
Investment Companies The Fund shall not invest in securities of other
investment companies except as may be acquired as
part of a merger, consolidation, reorganization or
acquisition of assets and except that the Fund may
invest up to 5% of its total assets in the
securities of any one investment company, but may
not own more than 3% of the securities of any
investment company or invest more than 10% of its
total assets in the securities of other investment
companies provided that the Fund may not invest in
securities issued by other investment companies
without waiving the advisory fee on that portion
of its assets invested in such securities.
Control or Management The Fund shall not make investments for the
purpose of exercising control or management.
Options The Fund shall not purchase puts, calls,
straddles, spreads, and any combination thereof if
by reason thereof the value of its aggregate
investment in such classes of securities will
exceed 5% of its total assets.
Futures See "Real Estate."
Unseasoned Issuers The Fund normally shall not purchase any security
if as a result, it would then have more than 5% of
its total assets (determined at the time of
investment) invested in securities of companies
(including predecessors) less than three years
old.
Warrants The Fund shall not purchase warrants if as a
result the Fund would then have more than 5% of
its net assets (determined at the time of
investment) invested in warrants. Warrants will be
valued at the lower of cost or market and
investment in warrants which are not listed on the
New York Stock Exchange or American Stock Exchange
will be limited to 2% of the net assets of
Delaware Group Adviser Funds, Inc. (determined at
the time of investment). For the purpose of this
limitation, warrants acquired in units or attached
to securities are deemed to be without value.
Holdings by Affiliates The Fund shall not invest in securities of any
issuer if, to the knowledge of Delaware Group
Adviser Funds, Inc., any officer or director of
Delaware Group Adviser Funds, Inc. or the
investment manager or any sub-adviser owns more
than 1/2 of 1% of the outstanding securities of
such issuer, and such officers and directors who
own more than 1/2 of 1% own in the aggregate more
than 5% of the outstanding securities of such
issuer.
Oil or Gas The Fund shall not invest in oil, gas and mineral
leases or programs.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-4
Delaware Group Cash Reserve, Inc.
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 20% of its
assets in securities other than money market
instruments as defined in the Statement of
Additional Information.
Concentration The Fund shall not invest more than 5% of the
value of its assets in the securities of any one
issuer (other than obligations issued or
guaranteed by the U.S. government or federal
agencies) or acquire more than 10% of the voting
securities of such an issuer. Where securities are
issued by one entity but are guaranteed by
another, "issuer" shall not be deemed to include
the guarantor so long as the value of all
securities owned by the Fund which have been
issued or guaranteed by that guarantor does not
exceed 10% of the value of the Fund's assets.
The Fund shall not invest more than 25% of its
total assets in any particular industry, except
that the Fund may invest more than 25% of the
value of its total assets in obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities, certificates of deposit and
bankers' acceptances of banks with over one
billion dollars in assets or bank holding
companies whose securities are rated A-2 or better
by S&P or P-2 or better by Moody's.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing its net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's net assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday or holidays)
or such longer period as the Securities and
Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings
to such an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund will
not pledge more than 10% of its net assets. The
Fund will not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell securities short or
purchase securities on margin.
Underwriting The Fund shall not underwrite the securities of
other issuers, except that the Fund may acquire
portfolio securities under circumstances where, if
the securities are later publicly offered or sold
by the Fund, it might be deemed an underwriter for
purposes of the Securities Act of 1933. Not more
than 10% of the value of the Fund's net assets at
the time of acquisition will be invested in such
securities.
Real Estate The Fund shall not purchase or sell real estate,
but this shall not prevent the Fund from investing
in securities secured by real estate or interests
therein, or securities issued by companies which
invest in real estate or interests therein.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-5
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Commodities The Fund shall not purchase or sell commodities or
commodity contracts.
Lending The Fund shall not make loans to other persons
except by the purchase of obligations in which the
Fund is authorized to invest and to enter into
repurchase agreements. Not more than 10% of the
Fund's total assets will be invested in repurchase
agreements maturing in more than seven days and in
other illiquid assets.
Illiquid Securities See "Lending."
Investment Companies The Fund shall not invest in securities of other
investment companies, except as they may be
acquired as part of a merger, consolidation or
acquisition of assets.
Control or Management The Fund shall not purchase more than 10% of the
outstanding securities of any issuer or invest in
companies for the purpose of exercising control.
Options The Fund shall not write or purchase put or call
options.
Futures None.
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-6
Delaware Balanced Fund (formerly Delaware Fund)
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
value of its assets in securities of any one
company (except U.S. government bonds) or purchase
more than 10% of the voting or nonvoting
securities of any one company.
Concentration None.
Borrowing* The Fund shall not borrow, except as a temporary
measure for extraordinary or emergency purposes
and then not in excess of 10% of gross assets
taken at cost or market, whichever is lower, and
not to pledge more than 15% of gross assets taken
at cost. Any borrowing will be done from a bank
and to the extent that such borrowing exceeds 5%
of the value of Delaware Group Equity Funds I,
Inc.'s assets, asset coverage of at least 300% is
required. In the event that such asset coverage
shall at any time fall below 300%, Delaware Group
Equity Funds I, Inc. shall, within three days
thereafter (not including Sunday and holidays) or
such longer period as the Securities and Exchange
Commission may prescribe by rules and regulations,
reduce the amount of its borrowings to an extent
that the asset coverage of such borrowings shall
be at least 300%. Delaware Group Equity Funds I,
Inc. shall not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell short any security or
property.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers, except that Delaware
Group Equity Funds I, Inc. may acquire restricted
securities and securities which are not readily
marketable under circumstances where, if such
securities are sold, Delaware Group Equity Funds
I, Inc. may be deemed an underwriter for purposes
of the Securities Act of 1933.
Real Estate The Fund shall not make any investment in real
estate unless necessary for office space or the
protection of investments already made. (This
restriction does not preclude Delaware Group
Equity Funds I, Inc.'s purchase of securities
issued by real estate investment trusts.)
Commodities The Fund shall not deal in commodities.
Lending The Fund shall not make loans. However, the
purchase of a portion of an issue of publicly
distributed bonds, debentures or other securities,
whether or not the purchase was made upon the
original issuance of the securities, and the entry
into "repurchase agreements" are not to be
considered the making of a loan by Delaware Group
Equity Funds I, Inc. and Delaware Group Equity
Funds I, Inc. may loan up to 25% of its assets to
qualified broker/dealers or institutional
investors for their use relating to short sales or
other security transactions.
Illiquid Securities None.
Investment Companies The Fund shall not invest in securities of other
investment companies except at customary brokerage
commission rates or in connection with mergers,
consolidations or offers of exchange.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-7
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
The Fund shall not purchase any security issued by
any other investment company if after such
purchase it would: (a) own more than 3% of the
voting stock of such company, (b) own securities
of such company having a value in excess of 5% of
Delaware Group Equity Funds I, Inc.'s assets or
(c) own securities of investment companies having
an aggregate value in excess of 10% of Delaware
Group Equity Funds I, Inc.'s assets.
Control or Management The Fund shall not acquire control of any company.
(Delaware Group Equity Funds I, Inc.'s Certificate
of Incorporation permits control of companies to
protect investments already made, but its policy
is not to acquire control.)
Options None.
Futures None.
Unseasoned Issuers The Fund shall not invest more than 5% of the
value of its total assets in securities of
companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants None.
Holdings by Affiliates The Fund shall not purchase or retain securities
of a company which has an officer or director who
is an officer or director of Delaware Group Equity
Funds I, Inc. or an officer, director or partner
of its investment manager if, to the knowledge of
Delaware Group Equity Funds I, Inc., one or more
of such persons own beneficially more than 1/2 of
1% of the shares of the company, and in the
aggregate more than 5% thereof.
Oil or Gas None.
Miscellaneous No long or short positions on shares of Delaware
Group Equity Funds I, Inc. may be taken by its
officers, directors or any of its affiliated
persons. Such persons may buy shares of Delaware
Group Equity Funds I, Inc. for investment
purposes, however.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-8
Devon Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
value of its assets in securities of any one
company (except U.S. government bonds) or purchase
more than 10% of the voting or nonvoting
securities of any one company.
Concentration None.
Borrowing* The Fund shall not borrow, except as a temporary
measure for extraordinary or emergency purposes
and then not in excess of 10% of gross assets
taken at cost or market, whichever is lower, and
not to pledge more than 15% of gross assets taken
at cost. Any borrowing will be done from a bank
and to the extent that such borrowing exceeds 5%
of the value of Delaware Group Equity Funds I,
Inc.'s assets, asset coverage of at least 300% is
required. In the event that such asset coverage
shall at any time fall below 300%, Delaware Group
Equity Funds I, Inc. shall, within three days
thereafter (not including Sunday and holidays) or
such longer period as the Securities and Exchange
Commission may prescribe by rules and regulations,
reduce the amount of its borrowings to an extent
that the asset coverage of such borrowings shall
be at least 300%. Delaware Group Equity Funds I,
Inc. shall not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell short any security or
property.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers, except that Delaware
Group Equity Funds I, Inc. may acquire restricted
securities and securities which are not readily
marketable under circumstances where, if such
securities are sold, Delaware Group Equity Funds
I, Inc. may be deemed an underwriter for purposes
of the Securities Act of 1933.
Real Estate The Fund shall not make any investment in real
estate unless necessary for office space or the
protection of investments already made. (This
restriction does not preclude Delaware Group
Equity Funds I, Inc.'s purchase of securities
issued by real estate investment trusts.)
Commodities The Fund shall not deal in commodities, except
that the Fund may invest in financial futures,
including futures contracts on stocks and stock
indices, interest rates, and foreign currencies,
and other types of financial futures that may be
developed in the future, and may purchase or sell
options on such futures, and enter into closing
transactions with respect to those activities.
Lending The Fund shall not make loans. However, the
purchase of a portion of an issue of publicly
distributed bonds, debentures or other securities,
whether or not the purchase was made upon the
original issuance of the securities, and the entry
into "repurchase agreements" are not to be
considered the making of a loan by Delaware Group
Equity Funds I, Inc. and Delaware Group Equity
Funds I, Inc. may loan up to 25% of its assets to
qualified broker/dealers or institutional
investors for their use relating to short sales or
other security transactions.
Illiquid Securities None.
Investment Companies The Fund shall not invest in securities of other
investment companies except at
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-9
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
customary brokerage commission rates or in
connection with mergers, consolidations or offers
of exchange.
The Fund shall not purchase any security issued by
any other investment company if after such
purchase it would: (a) own more than 3% of the
voting stock of such company, (b) own securities
of such company having a value in excess of 5% of
Equity Funds I, Inc.'s assets or (c) own
securities of investment companies having an
aggregate value in excess of 10% of Delaware Group
Equity Funds I, Inc.'s assets.
Control or Management The Fund shall not acquire control of any company.
(Delaware Group Equity Funds I, Inc.'s Certificate
of Incorporation permits control of companies to
protect investments already made, but its policy
is not to acquire control.)
Options None.
Futures See "Commodities."
Unseasoned Issuers The Fund shall not invest more than 5% of the
value of its total assets in securities of
companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants None.
Holdings by Affiliates The Fund shall not purchase or retain securities
of a company which has an officer or director who
is an officer or director of Delaware Group Equity
Funds I, Inc. or an officer, director or partner
of its investment manager if, to the knowledge of
Delaware Group Equity Funds I, Inc., one or more
of such persons own beneficially more than 1/2 of
1% of the shares of the company, and in the
aggregate more than 5% thereof.
Oil or Gas None.
Miscellaneous No long or short positions on shares of Delaware
Group Equity Funds I, Inc. may be taken by its
officers, directors or any of its affiliated
persons. Such persons may buy shares of Delaware
Group Equity Funds I, Inc. for investment
purposes, however.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-10
Blue Chip Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not with respect to 75% of its
total assets, Fund will not invest more than 5% of
its total assets in the securities of any one
issuer (other than obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities or certificates of deposit for
any such securities and cash and cash items) or
purchase more than 10% of the voting securities of
any one company.
Concentration The Fund shall not invest more than 25% of its
total assets in securities of issuers all of which
conduct their principal business activities in the
same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets. Any
borrowing will be done in accordance with the
rules and regulations prescribed from time to time
by the Securities and Exchange Commission with
respect to open-end investment companies. The Fund
shall not issue senior securities as defined in
the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell short any security or
property.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers, except that the Fund
may acquire restricted or not readily marketable
securities under circumstances where, if such
securities are sold, the Fund may be deemed to be
an underwriter for purposes of the Securities Act
of 1933.
Real Estate The Fund shall not make any investment in real
estate. This restriction does preclude the Fund's
purchase of securities issued by real estate
investment trusts, the purchase of securities
issued by companies that deal in real estate, or
the investment in securities secured by real
estate or interests therein.
Commodities The Fund shall not buy or sell commodities or
commodity contracts except that the Fund may enter
into futures contracts and options thereon.
Lending The Fund shall not make loans. However, (i) the
purchase of a portion of an issue of publicly
distributed bonds, debentures or other securities,
or of other securities authorized to be purchased
by the Fund's investment policies, whether or not
the purchase was made upon the original issuance
of the securities, and the entry into "repurchase
agreements" are not to be considered the making of
a loan by the Fund; and (ii) the Fund may loan
securities to qualified broker/dealers or
institutional investors for their use relating to
short sales and other security transactions.
Illiquid Securities None.
Investment Companies None.
Control or Management None.
Options None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-11
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Futures See "Commodities."
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-12
Decatur Income Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
value of its assets in securities of any one
company (except U.S. government bonds) or purchase
more than 10% of the voting or nonvoting
securities of any one company.
Concentration None.
Borrowing* The Fund shall not borrow, except as a temporary
measure for extraordinary or emergency purposes,
and then not in excess of 10% of gross assets
taken at cost or market, whichever is lower, and
not to pledge more than 15% of gross assets taken
at cost. Any borrowing will be done from a bank,
and to the extent that such borrowing exceeds 5%
of the value of the Fund's assets, asset coverage
of at least 300% is required. In the event that
such asset coverage shall at any time fall below
300%, the Fund shall, within three days thereafter
(not including Sunday and holidays) or such longer
period as the Securities and Exchange Commission
(the "SEC") may prescribe by rules and
regulations, reduce the amount of its borrowings
to an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund shall
not issue senior securities as defined in the
Investment Company Act of 1940 except for notes to
banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell short any security or
property.
Underwriting The Fund may act as an underwriter of securities
of other issuers, but its present policy is not to
do so.
Real Estate The Fund shall not make any investment in real
estate unless necessary for office space or the
protection of investments already made. (This
restriction does not preclude the Fund's purchase
of securities issued by real estate investment
trusts.)
Commodities The Fund shall not deal in commodities, except
that the Fund may invest in financial futures,
including futures contracts on stocks and stock
indices, interest rates and foreign currencies and
other types of financial futures that may be
developed in the future, and may purchase or sell
options on such futures, and enter into closing
transactions with respect to those activities.
Lending The Fund shall not make loans. However, the
purchase of a portion of an issue of publicly
distributed bonds, debentures, or other
securities, whether or not the purchase was made
upon the original issuance of the securities, and
the entry into "repurchase agreements" are not to
be considered the making of a loan by the Fund and
the Fund may loan up to 25% of its assets to
qualified broker/dealers or institutional
investors for their use relating to short sales or
other transactions.
Illiquid Securities The Fund shall not invest more than 10% of the
value of its total assets in illiquid assets.
Investment Companies The Fund shall not purchase any security issued by
any other investment company if after such
purchase it would: (a) own more than 3% of the
voting stock of such investment company, (b) own
securities of such company having a value in
excess of 5% of the Fund's assets or (c) own
securities of investment companies having an
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-13
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
aggregate value in excess of 10% of the Fund's
assets.
The Fund shall not invest in securities of other
investment companies except at customary brokerage
commission rates or in connection with mergers,
consolidations or offers of exchange.
Control or Management The Fund shall not acquire control of any company.
(Delaware Group Equity Funds II, Inc.'s
Certificate of Incorporation permits control of
companies to protect investments already made, but
its policy is not to acquire control.)
Options See "Commodities."
Futures See "Commodities."
Unseasoned Issuers The Fund shall not invest more than 5% of the
value of its total assets in securities of
companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants None.
Holdings by Affiliates The Fund shall not purchase or retain securities
of a company which has an officer or director who
is an officer or director of Delaware Group Equity
Funds II, Inc., or an officer, director or partner
of its investment manager if, to the knowledge of
Delaware Group Equity Funds II, Inc., one or more
of such persons own beneficially more than 1/2 of
1% of the shares of the company, and in the
aggregate more than 5% thereof.
Oil or Gas None.
Miscellaneous The Fund shall not allow long or short positions
on shares of the Fund to be taken by Delaware
Group Equity Funds II, Inc.'s officers, directors
or any of its affiliated persons. Such persons may
buy shares of the Fund for investment purposes,
however.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-14
Decatur Total Return Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
market or other fair value of its assets in the
securities of any one issuer (other than
obligations of, or guaranteed by, the U.S.
government, its agencies or instrumentalities).
Concentration The Fund shall not make any investment which would
cause more than 25% of the market or other fair
value of its total assets to be invested in the
securities of issuers all of which conduct their
principal business activities in the same
industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing its net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's net assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday or holidays)
or such longer period as the Securities and
Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings
to such an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund will
not pledge more than 10% of its net assets. The
Fund will not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not purchase securities on margin,
make short sales of securities or maintain a net
short position.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers, except that the Fund
may acquire restricted or not readily marketable
securities under circumstances where, if such
securities are sold, the Fund might be deemed to
be an underwriter for the purposes of the
Securities Act of 1933.
Real Estate The Fund shall not purchase or sell real estate
but this shall not prevent the Fund from investing
in companies which own real estate or in
securities secured by real estate or interests
therein.
Commodities The Fund shall not deal in commodities, except
that the Fund may invest in financial futures,
including futures contracts on stocks and stock
indices, interest rates and foreign currencies and
other types of financial futures that may be
developed in the future, and may purchase or sell
options on such futures, and enter into closing
transactions with respect to those activities.
Lending The Fund shall not make loans. However, (i) the
purchase of a portion of an issue of publicly
distributed bonds, debentures or other securities,
or of other securities authorized to be purchased
by the Fund's investment policies, whether or not
the purchase was made upon the original issuance
of the securities, and the entry into "repurchase
agreements" are not to be considered the making of
a loan by the Fund; and (ii) the Fund may loan up
to 25% of its assets to qualified broker/dealers
or institutional investors for their use relating
to short sales or other security
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-15
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
transactions.
Illiquid Securities The Fund shall not invest more than 10% of the
value of the Fund's net assets in repurchase
agreements maturing in more than seven days and in
other illiquid assets.
Investment Companies The Fund shall not invest in securities of other
investment companies except as part of a merger,
consolidation or other acquisition.
Control or Management The Fund shall not purchase more than 10% of the
outstanding voting or nonvoting securities of any
issuer, or invest in companies for the purpose of
exercising control or management.
Options None.
Futures See "Commodities."
Unseasoned Issuers The Fund shall not invest more than 5% of the
value of its total assets in securities of
companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants The Fund shall not invest in warrants valued at
the lower of cost or market exceeding 5% of the
Fund's net assets. Included in that amount, but
not to exceed 2% of the Fund's net assets, may be
warrants not listed on the New York Stock Exchange
or American Stock Exchange.
Holdings by Affiliates The Fund shall not purchase or retain the
securities of any issuer which has an officer,
director or security holder who is a director or
officer of Delaware Group Equity Funds II, Inc. or
of its investment manager if or so long as the
directors and officers of Delaware Group Equity
Funds II, Inc. and of its investment manager
together own beneficially more than 5% of any
class of securities of such issuer.
Oil or Gas The Fund shall not invest in interests in oil, gas
or other mineral exploration or development
programs.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-16
Social Awareness Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not with respect to 75% of its
total assets, Fund shall not invest more than 5%
of its total assets in the securities of any one
issuer (other than obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities or certificates of deposit for
any such securities and cash and cash items) or
purchase more than 10% of the voting securities of
any one company.
Concentration The Fund shall not invest more than 25% of its
total assets in securities of issuers all of which
conduct their principal business activities in the
same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets. Any
borrowing will be done in accordance with the
rules and regulations prescribed from time to time
by the Securities and Exchange Commission with
respect to open-end investment companies. The Fund
shall not issue senior securities as defined in
the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell short any security or
property.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers, except that the Fund
may acquire restricted or not readily marketable
securities under circumstances where, if such
securities are sold, the Fund may be deemed to be
an underwriter for purposes of the Securities Act
of 1933.
Real Estate The Fund shall not make any investment in real
estate. This restriction does preclude the Fund's
purchase of securities issued by real estate
investment trusts, the purchase of securities
issued by companies that deal in real estate, or
the investment in securities secured by real
estate or interests therein.
Commodities The Fund shall not buy or sell commodities or
commodity contracts except that the Fund may enter
into futures contracts and options thereon.
Lending The Fund shall not make loans. However, (i) the
purchase of a portion of an issue of publicly
distributed bonds, debentures or other securities,
or of other securities authorized to be purchased
by the Fund's investment policies, whether or not
the purchase was made upon the original issuance
of the securities, and the entry into "repurchase
agreements" are not to be considered the making of
a loan by the Fund; and (ii) the Fund may loan
securities to qualified broker/dealers or
institutional investors for their use relating to
short sales and other security transactions.
Illiquid Securities None.
Investment Companies None.
Control or Management None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-17
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Options None.
Futures See "Commodities."
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-18
Trend Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
value of its assets in securities of any one
company (except U.S. government bonds) or purchase
more than 10% of the voting or nonvoting
securities of any one company.
Concentration The Fund shall not invest more than 25% of its
assets in any one particular industry.
Borrowing* The Fund shall not borrow money in excess of 10%
of the value of its assets, and then only as a
temporary measure for extraordinary or emergency
purposes. Any borrowing will be done from a bank
and to the extent that such borrowing exceeds 5%
of the value of the Fund's assets, asset coverage
of at least 300% is required. In the event that
such asset coverage shall at any time fall below
300%, the Fund shall, within three days thereafter
(not including Sunday and holidays) or such longer
period as the Securities and Exchange Commission
may prescribe by rules and regulations, reduce the
amount of its borrowings to an extent that the
asset coverage of such borrowings shall be at
least 300%. The Fund shall not issue senior
securities as defined in the Investment Company
Act of 1940, except for notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell short any security or
property.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers.
Real Estate The Fund shall not make any investment in real
estate unless necessary for office space or the
protection of investments already made. (This
restriction does not preclude the Fund's purchase
of securities issued by real estate investment
trusts.) Any investment in real estate together
with any investment in illiquid assets cannot
exceed 10% of the value of the Fund's assets.
Commodities The Fund shall not deal in commodities.
Lending The Fund shall not make loans. However, the
purchase of a portion of an issue of publicly
distributed bonds, debentures or other securities,
whether or not the purchase was made upon the
original issuance of the securities, and the entry
into "repurchase agreements" are not to be
considered the making of a loan by the Fund and
the Fund may loan up to 25% of its assets to
qualified broker/dealers or institutional
investors for their use relating to short sales or
other security transactions.
Illiquid Securities See "Real Estate."
Investment Companies The Fund shall not invest in securities of other
investment companies except at customary brokerage
commissions rates or in connection with mergers,
consolidations or offers of exchange.
The Fund shall not purchase any security issued by
any other investment company if after such
purchase it would: (a) own more than 3% of the
voting stock of such company, (b) own securities
of such company having a value in excess of 5% of
the Fund's assets or (c) own securities of
investment companies having an aggregate value in
excess of 10% of the Fund's assets.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-19
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Control or Management The Fund shall not acquire control of any company.
Options None.
Futures None.
Unseasoned Issuers The Fund shall not invest more than 5% of the
value of its total assets in securities of
companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants None.
Holdings by Affiliates The Fund shall not purchase or retain securities
of any company which has an officer or director
who is an officer or director of the Fund, or an
officer, director or partner of its investment
manager if, to the knowledge of the Fund, one or
more of such persons own beneficially more than
1/2 of 1% of the shares of the company, and in the
aggregate more than 5% thereof.
Oil or Gas None.
Miscellaneous The Fund shall not permit long or short positions
on shares of the Fund to be taken by its officers,
directors or any of its affiliated persons. Such
persons may buy shares of the Fund for investment
purposes, however, as described in the Statement
of Additional Information.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-20
Capital Appreciation Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not with respect to 75% of its
assets, invest more than 5% of the value of its
total assets in the securities of any one issuer
(except obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities
or certificates of deposit for any such
securities, and cash and cash items).
Concentration The Fund shall not make any investment which would
cause more than 25% of the market value of its
total assets to be invested in the securities of
issuers all of which conduct their principal
business activities in the same industry. This
restriction does not apply to obligations issued
or guaranteed by the U.S. Government, its agencies
or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing its net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's net assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sundays or
holidays) or such longer period as the Securities
and Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings
to such an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund will
not issue senior securities as defined in the
Investment Company Act of 1940, except for notes
to banks. Investment securities will not normally
be purchased while the Fund has an outstanding
borrowing.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not purchase securities on margin
or make short sales of securities except that the
Fund may obtain such short-term credits as may be
necessary for the clearance of purchases and sales
of portfolio securities and may engage in futures
and related options transactions and may satisfy
margin requirements relating thereto.
Underwriting The Fund shall not engage in the underwriting of
securities of other issuers, except that the Fund
may acquire restricted or not readily marketable
securities under circumstances where, if such
securities are sold, the Fund may be deemed to be
an "underwriter" as that term is defined in the
Securities Act of 1933.
Real Estate The Fund shall not purchase or sell real estate,
but this shall not prevent the Fund from investing
in securities by companies that deal in real
estate or securities secured by real estate or
interests therein (including securities issued by
real estate investment trusts).
Commodities The Fund shall not buy or sell commodities or
commodity contracts, except that the Fund may
engage into futures and related option
transactions.
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations or other
securities (including repurchase agreements), in
accordance with the Fund's investment objective
and policies, are considered loans and except that
the Fund may loan up to 25% of its assets to
qualified broker/dealers or institutional
investors for their use relating to short sales or
other security transactions.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-21
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Illiquid Securities None.
Investment Companies None.
Control or Management The Fund shall not purchase more than 10% of the
outstanding voting securities of any one company.
Options See "Short Sales/Margin."
Futures See "Commodities."
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-22
DelCap Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
market or other fair value of its assets in the
securities of any one issuer (other than
obligations of, or guaranteed by, the U.S.
government, its agencies or instrumentalities).
Concentration The Fund shall not make any investment which would
cause more than 25% of the market or other fair
value of its total assets to be invested in the
securities of issuers all of which conduct their
principal business activities in the same
industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing its net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's net assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday or holidays)
or such longer period as the Securities and
Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings
to such an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund will
not pledge more than 10% of its net assets. The
Fund will not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks. Investment securities will not
normally be purchased while the Fund has an
outstanding borrowing.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not purchase securities on margin,
make short sales of securities or maintain a net
short position.
Underwriting The Fund shall not engage in the underwriting of
securities of other issuers, except that in
connection with the disposition of a security, the
Fund may be deemed to be an "underwriter" as that
term is defined in the Securities Act of 1933.
Real Estate The Fund shall not purchase or sell real estate,
but this shall not prevent the Fund from investing
in securities secured by real estate or interests
therein.
Commodities None.
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements), in accordance
with the Fund's investment objective and policies,
are considered loans and except that the Fund may
loan up to 25% of its assets to qualified
broker/dealers or institutional investors for
their use relating to short sales or other
security transactions.
Illiquid Securities The Fund shall not invest more than 10% of the
Fund's total assets in repurchase agreements
maturing in more than seven days and other
illiquid assets.
Investment Companies The Fund shall not invest in securities of other
investment companies except as part of a merger,
consolidation or other acquisition.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-23
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Control or Management The Fund shall not purchase more than 10% of the
outstanding voting and nonvoting securities of any
issuer, or invest in companies for the purpose of
exercising control or management.
Options The Fund shall not write or purchase puts, calls
or combinations thereof, except that the Fund may
write covered call options with respect to any or
all parts of its portfolio securities and purchase
put options if the Fund owns the security covered
by the put option at the time of purchase, and
that premiums paid on all put options outstanding
do not exceed 2% of its total assets. The Fund may
sell put options previously purchased and enter
into closing transactions with respect to covered
call and put options. In addition, the Fund may
write call options and purchase put options on
stock indices and enter into closing transactions
with respect to such options.
Futures None.
Unseasoned Issuers The Fund shall not invest more than 5% of the
value of its total assets in securities of
companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants The Fund shall not invest in warrants valued at
lower of cost or market exceeding 5% of its net
assets. Included in that amount, but not to exceed
2% of its net assets, may be warrants not listed
on the New York Stock Exchange or American Stock
Exchange.
Holdings by Affiliates The Fund shall not purchase or retain the
securities of any issuer which has an officer,
director or security holder who is a director or
officer of Delaware Group Equity Funds IV, Inc. or
of its investment manager if or so long as the
directors and officers of Delaware Group Equity
Funds IV, Inc. and of its investment manager
together own beneficially more than 5% of any
class of securities of such issuer.
Oil or Gas The Fund shall not invest in interests in oil, gas
or other mineral exploration or development
programs.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-24
Small Cap Value Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
market or other fair value of its assets in the
securities of any one issuer (other than
obligations of, or guaranteed by, the U.S.
government, its agencies or instrumentalities).
Concentration The Fund shall not make any investment which would
cause more than 25% of the market or other fair
value of its total assets to be invested in the
securities of issuers all of which conduct their
principal business activities in the same
industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing its net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's net assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday or holidays)
or such longer period as the Securities and
Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings
to such an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund will
not pledge more than 10% of its net assets. The
Fund will not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks. Investment securities will not
normally be purchased while the Fund has an
outstanding borrowing.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not purchase securities on margin,
make short sales of securities or maintain a net
short position.
Underwriting The Fund shall not engage in the underwriting of
securities of other issuers, except that in
connection with the disposition of a security, the
Fund may be deemed to be an "underwriter" as that
term is defined in the Securities Act of 1933.
Real Estate The Fund shall not purchase or sell real estate
but this shall not prevent the Fund from investing
in securities secured by real estate or interests
therein.
Commodities The Fund shall not with regards to one of its
policies, which may not be changed without
shareholder approval, invest in commodities;
however, the Fund reserves the right to invest in
financial futures and options thereon, including
stock index futures, to the extent these
instruments are considered commodities.
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements), in accordance
with the Fund's investment objective and policies,
are considered loans and except that the Fund may
loan up to 25% of its assets to qualified
broker/dealers or institutional investors for
their use relating to short sales or other
security transactions.
Illiquid Securities The Fund shall not invest more than 10% of the
Fund's net assets in repurchase agreements
maturing in more than seven days and other
illiquid assets.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-25
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Investment Companies The Fund shall not invest in securities of other
investment companies except as part of a merger,
consolidation or other acquisition.
Control or Management The Fund shall not purchase more than 10% of the
outstanding voting and nonvoting securities of any
issuer, or invest in companies for the purpose of
exercising control or management.
Options The Fund shall not write or purchase puts, calls
or combinations thereof, except that the Fund may
write covered call options with respect to any or
all parts of its portfolio securities and purchase
put options if the Fund owns the security covered
by the put option at the time of purchase, and
that premiums paid on all put options outstanding
do not exceed 2% of its total assets. The Fund may
sell put options previously purchased and enter
into closing transactions with respect to covered
call and put options. In addition, the Fund may
write call options and purchase put options on
stock indices and enter into closing transactions
with respect to such options.
Futures See "Commodities."
Unseasoned Issuers The Fund shall not invest more than 5% of the
value of its total assets in securities of
companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants The Fund shall not invest in warrants valued at
lower of cost or market exceeding 5% of the Fund's
net assets. Included in that amount, but not to
exceed 2% of the Fund's net assets, may be
warrants not listed on the New York Stock Exchange
or American Stock Exchange.
Holdings by Affiliates The Fund shall not purchase or retain the
securities of any issuer which has an officer,
director or security holder who is a director or
officer of the Fund or of its investment manager
if or so long as the directors and officers of the
Fund and of its investment manager together own
beneficially more than 5% of any class of
securities of such issuer.
Oil or Gas The Fund shall not invest in interests in oil, gas
or other mineral exploration or development
programs.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-26
Retirement Income Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not with respect to 75% of its
total assets, invest more than 5% of the value of
its assets in securities of any one issuer (except
obligations issued, or guaranteed by, the U.S.
government, its agencies or instrumentalities or
certificates of deposit for any such securities,
and cash and cash items) or purchase more than 10%
of the outstanding voting securities of any one
company.
Concentration The Fund shall not make any investment which would
cause more than 25% of the market or other fair
value of its total assets to be invested in
securities of issuers all of which conduct their
principal business activities in the same
industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing its net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's net assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday or holidays)
or such longer period as the Securities and
Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings
to such an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund shall
not issue senior securities as defined by the
Investment Company Act of 1940, except for notes
to banks. Investment securities will not normally
be purchased while the Fund has an outstanding
borrowing.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not purchase securities on margin,
except that the Fund may satisfy margin
requirements with respect to futures transactions.
Underwriting The Fund shall not engage in the underwriting of
securities of other issuers, except that the Fund
may acquire restricted or not readily marketable
securities under circumstances where, if such
securities are sold, the Fund might be deemed to
be an underwriter for purposes of the Securities
Act of 1933.
Real Estate The Fund shall not purchase or sell real estate.
This restriction shall not preclude the Fund's
purchase of securities issued by real estate
investment trusts, the purchase of securities
issued by companies that deal in real estate, or
the investment in securities secured by real
estate or interests therein.
Commodities The Fund shall not buy or sell commodities or
commodity contracts, except that the Fund may
invest in financial futures and options thereon,
including stock index futures, to the extent these
instruments are considered commodities.
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements), in accordance
with the Fund's investment objectives and
policies, are considered loans and except that the
Fund
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-27
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
may loan up to 25% of its assets to qualified
broker/dealers or institutional investors for
their use relating to short sales or other
security transactions.
Illiquid Securities None.
Investment Companies The Fund shall not invest in securities of other
investment companies, except that the Fund may
invest in securities of open-end, closed-end and
unregistered investment companies, in accordance
with the limitations contained in the Investment
Company Act of 1940.
Control or Management The Fund shall not invest in companies for the
purpose of exercising control or management.
Options None.
Futures See "Commodities."
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas The Fund shall not invest in interests in oil, gas
or other mineral exploration or development
programs.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-28
Balanced Portfolio
Growth Portfolio
Income Portfolio
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification None.
Concentration The Fund shall not invest more than 25% of its
total assets in any one industry (including
investments in Underlying Funds that concentrate
in that industry) provided that there is no
limitation with respect to investments in
obligations issued or guaranteed as to principal
or interest by the U.S. Government, its agencies
or instrumentalities. For purposes of this
restriction, investments in the Underlying Funds
will not be deemed to be investments in
"investment company" industry
Borrowing* The Fund shall not borrow money or issue senior
securities, except to the extent permitted by the
Investment Company Act of 1940 Act or any rule or
order thereunder or interpretation thereof.
Subject to the foregoing, the Fund may engage in
short sales, purchase securities on margin, and
write put and call options.
Issuing Senior Securities* None.
Short Sales/Margin* See "Borrowing."
Underwriting The Fund shall not engage in underwriting of
securities of other issuers, except that portfolio
securities, including securities purchased in
private placements, may be acquired under
circumstances where, if sold, the Fund might be
deemed to be an underwriter under the Securities
Act of 1933. No limit is placed on the proportion
of the Portfolio's assets which may be invested in
such securities
Real Estate The Fund shall not purchase or sell real estate;
provided that the Fund may invest in securities
secured by real estate or interests therein or
issued by companies which invest in real estate or
interests therein.
Commodities The Fund shall not purchase or sell physical
commodities or physical commodity contracts,
including physical commodity option or futures
contracts in a contract market or other futures
market.
Lending The Fund shall not make loans other than by the
purchase of all or a portion of a publicly or
privately distributed issue of bonds, debentures
or other debt securities of the types commonly
offered publicly or privately and purchased by
financial institutions (including repurchase
agreements and loan participations), whether or
not the purchase was made upon the original
issuance of the securities, and except that each
Portfolio may loan its assets (other than shares
of the Underlying Funds) to qualified
broker/dealers or institutional investors.
Illiquid Securities None.
Control or Management None.
Options See "Borrowing."
Futures None.
Unseasoned Issuers None.
Warrants None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-29
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-30
Emerging Markets Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not, as to 50% of its respective
total assets, invest more than 5% of its
respective total assets in the securities of any
one issuer (other than obligations issued, or
guaranteed by, the U.S. government, its agencies
or instrumentalities).
Concentration The Fund shall not make any investment which would
cause 25% or more of its total assets to be
invested in the securities of issuers all of which
conduct their principal business activities in the
same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. Any
borrowing will be done from a bank and to the
extent that such borrowing exceeds 5% of the value
of the Fund's net assets, asset coverage of at
least 300% is required. In the event that such
asset coverage shall at any time fall below 300%,
the Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer
period as the Securities and Exchange Commission
(the "SEC") may prescribe by rules and
regulations, reduce the amount of its borrowings
to such an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund will
not pledge more than 10% of its net assets. The
Fund will not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not make short sales of securities,
or purchase securities on margin, except that a
Fund may satisfy margin requirements with respect
to futures transactions.
Underwriting The Fund shall not engage in the underwriting of
securities of other issuers, except that, in
connection with the disposition of a security, the
Fund may be deemed to be an "underwriter" as that
term is defined in the Securities Act of 1933.
Real Estate The Fund shall not purchase or sell real estate or
real estate limited partnerships, but this shall
not prevent the Fund from investing in securities
secured by real estate or interests therein.
Commodities The Fund shall not purchase or sell commodities or
commodity contracts, except that each Fund may
enter into futures contracts and options on
futures contracts in accordance with its
respective prospectuses, subject to the investment
restriction under "Futures."
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations Fund's
(including repurchase agreements) in accordance
with a investment objective and policies, are
considered loans and except that the Fund may loan
up to 25% of its assets to qualified
broker/dealers or institutional investors their
for use relating to short sales or other security
transactions.
Illiquid Securities None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-31
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Investment Companies None.
Control or Management None.
Options None.
Futures The Fund shall not enter into futures contracts or
options thereon, except that a Fund may enter into
futures contracts and options thereon to the
extent that not more than 5% of the Fund's assets
are required as futures contract margin deposits
and premiums on options and only to the extent
that obligations under such contracts and
transactions represent not more than 20% of the
Fund's assets.
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-32
Global Equity Fund (formerly Global Assets Fund)
Global Bond Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not as to 50% of its total assets,
invest more than 5% of its total assets in the
securities of any one issuer (other than
obligations issued, or guaranteed by, the U.S.
government, its agencies or instrumentalities).
Concentration The Fund shall not make any investment which would
cause 25% or more of its total assets to be
invested in the securities of issuers all of which
conduct their principal business activities in the
same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. Any
borrowing will be done from a bank and to the
extent that such borrowing exceeds 5% of the value
of the Fund's net assets, asset coverage of at
least 300% is required. In the event that such
asset coverage shall at any time fall below 300%,
the Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer
period as the Securities and Exchange Commission
may prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that
the asset coverage of such borrowings shall be at
least 300%. The Fund will not pledge more than 10%
of its net assets. The Fund will not issue senior
securities as defined in the Investment Company
Act of 1940, except for notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not make short sales of securities,
or purchase securities on margin, except that the
Fund may satisfy margin requirements with respect
to futures transactions.
Underwriting The Fund shall not engage in the underwriting of
securities of other issuers, except that, in
connection with the disposition of a security, the
Fund may be deemed to be an "underwriter" as that
term is defined in the Securities Act of 1933.
Real Estate The Fund shall not purchase or sell real estate or
real estate limited partnerships, but this shall
not prevent the Fund from investing in securities
secured by real estate or interests therein.
Commodities The Fund shall not purchase or sell commodities or
commodity contracts, except that the Fund may
enter into futures contracts and options on
futures contracts in accordance with its
prospectus, subject to the investment restriction
concerning "Futures."
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements) in accordance
with the Fund's investment objective and policies,
are considered loans and except that the Fund may
loan up to 25% of its assets to qualified
broker/dealers or institutional investors for
their use relating to short sales or other
security transactions.
Illiquid Securities None.
Investment Companies The Fund shall not invest in securities of other
open-end investment companies,
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-33
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
except as part of a merger, consolidation or other
acquisition. This limitation does not prohibit the
Fund from investing in the securities of
closed-end investment companies at customary
brokerage commission rates.
Control or Management None.
Options See "Futures."
Futures The Fund shall not enter into futures contracts or
options thereon, except that the Fund may enter
into futures contracts and options thereon to the
extent that not more than 5% of the Fund's assets
are required as futures contract margin deposits
and premiums on options and only to the extent
that obligations under such contracts and
transactions represent not more than 20% of the
Fund's assets.
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-34
Global Opportunities Fund
(formerly Global Equity Fund)
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not as to 75% of its total assets,
invest more than 5% of its total assets in the
securities of any one issuer (other than
obligations issued, or guaranteed by, the U.S.
government, its agencies or instrumentalities).
Concentration The Fund shall not invest 25% or more of its total
assets in any one industry provided that there is
no limitation with respect to investments in
obligations issued or guaranteed as to principal
or interest by the U.S. Government, its agencies
or instrumentalities.
Borrowing* The Fund shall not borrow money or issue senior
securities, except to the extent permitted by the
Investment Company Act of 1940 or any rule or
order thereunder or interpretation thereof.
Subject to the foregoing, the Fund may engage in
short sales, purchase securities on margin, and
write put and call options.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* See "Borrowing."
Underwriting The Fund shall not engage in underwriting of
securities of other issuers, except that portfolio
securities, including securities purchased in
private placements, may be acquired under
circumstances where, if sold, the Fund might be
deemed to be an underwriter under the Securities
Act of 1933. No limit is placed on the proportion
of the Fund's assets which may be invested in such
securities.
Real Estate The Fund shall not purchase or sell real estate;
provided that the Fund may invest in securities
secured by real estate or interests therein or
issued by companies which invest in real estate or
interests therein.
Commodities The Fund shall not purchase or sell physical
commodities or physical commodity contracts,
including physical commodity options or futures
contracts in a contract market or other futures
market.
Lending The Fund shall not make loans other than by the
purchase of all or a portion of a publicly or
privately distributed issue of bonds, debentures
or other debt securities of the types commonly
offered publicly or privately and purchased by
financial institutions (including repurchase
agreements), whether or not the purchase was made
upon the original issuance of the securities, and
except that the Fund may loan its assets to
qualified broker/dealers or institutional
investors.
Illiquid Securities None.
Investment Companies None.
Control or Management None.
Options See "Borrowing" and "Commodities."
Futures See "Commodities."
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-35
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-36
International Equity Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not, as to 75% of its respective
total assets, invest more than 5% of their
respective total assets in the securities of any
one issuer (other than obligations issued, or
guaranteed by, the U.S. government, its agencies
or instrumentalities).
Concentration The Fund shall not make any investment which would
cause 25% or more of its total assets to be
invested in the securities of issuers all of which
conduct their principal business activities in the
same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. Any
borrowing will be done from a bank and to the
extent that such borrowing exceeds 5% of the value
of the Fund's net assets, asset coverage of at
least 300% is required. In the event that such
asset coverage shall at any time fall below 300%,
the Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer
period as the Securities and Exchange Commission
(the "SEC") may prescribe by rules and
regulations, reduce the amount of its borrowings
to such an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund will
not pledge more than 10% of its net assets. The
Fund will not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not make short sales of securities,
or purchase securities on margin, except that the
Fund may satisfy margin requirements with respect
to futures transactions.
Underwriting The Fund shall not engage in the underwriting of
securities of other issuers, except that, in
connection with the disposition of a security, the
Fund may be deemed to be an "underwriter" as that
term is defined in the Securities Act of 1933.
Real Estate The Fund shall not purchase or sell real estate or
real estate limited partnerships, but this shall
not prevent the Fund from investing in securities
secured by real estate or interests therein.
Commodities The Fund shall not purchase or sell commodities or
commodity contracts, except that each Fund may
enter into futures contracts and options on
futures contracts in accordance with its
respective prospectuses subject to the investment
restriction under "Futures" below.
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements) in accordance
with the Fund's investment objective and policies,
are considered loans and except that the Fund may
loan up to 25% of its assets to qualified
broker/dealers or institutional investors for
their use relating to short sales or other
security transactions.
Illiquid Securities The Fund shall not invest more than 10% of the
Fund's total assets in repurchase agreements
maturing in more than seven days and other
illiquid assets.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-37
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Investment Companies The Fund shall not invest in securities of other
open-end investment companies, except as part of a
merger, consolidation or other acquisition. This
limitation does not prohibit the Fund from
investing in the securities of closed-end
investment companies at customary brokerage
commission rates.
Control or Management The Fund shall not purchase more than 10% of the
outstanding voting securities of any issuer, or
invest in companies for the purpose of exercising
control or management.
Options The Fund shall not write, purchase or sell
options, puts, calls or combinations thereof,
except that such Fund may: (a) purchase call
options to the extent that the premiums paid on
all outstanding call options do not exceed 2% of
such Fund's total assets; (b) write secured put
options; (c) write covered call options; and (d)
purchase put options if such Fund owns the
security covered by the put option at the time of
purchase, and provided that premiums paid on all
put options outstanding do not exceed 2% of its
total assets. Such Fund may sell put or call
options previously purchased and enter into
closing transactions with respect to the
activities noted above.
Futures The Fund shall not enter into futures contracts or
options thereon, except that a Fund may enter into
futures contracts and options thereon to the
extent that not more than 5% of the Fund's assets
are required as futures contract margin deposits
and premiums on options and only to the extent
that obligations under such contracts and
transactions represent not more than 20% of the
Fund's assets.
See "Commodities."
Unseasoned Issuers The Fund shall not invest more than 5% of the
value of its total assets in securities of
companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants None.
Holdings by Affiliates The Fund shall not purchase or retain the
securities of any issuer which has an officer,
director or security holder who is a director or
officer of Global Funds, Inc. or of its investment
manager if or so long as the directors and
officers of Global Funds, Inc. and of its
investment manager together own beneficially more
than 5% of any class of securities of such issuer.
Oil or Gas The Fund shall not invest in interests in oil, gas
or other mineral exploration or development
programs or leases.
Miscellaneous None.
- ---------------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-38
International Small Cap Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not as to 75% of its total assets,
invest more than 5% of its total assets in the
securities of any one issuer (other than
obligations issued, or guaranteed by, the U.S.
government, its agencies or instrumentalities).
Concentration The Fund shall not invest 25% or more of its total
assets in any one industry provided that there is
no limitation with respect to investments in
obligations issued or guaranteed as to principal
or interest by the U.S. Government, its agencies
or instrumentalities.
Borrowing* The Fund shall not borrow money or issue senior
securities, except to the extent permitted by the
Investment Company Act of 1940 or any rule or
order thereunder or interpretation thereof.
Subject to the foregoing, the Fund may engage in
short sales, purchase securities on margin, and
write put and call options.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* See "Borrowing."
Underwriting The Fund shall not engage in underwriting of
securities of other issuers, except that portfolio
securities, including securities purchased in
private placements, may be acquired under
circumstances where, if sold, the Fund might be
deemed to be an underwriter under the Securities
Act of 1933. No limit is placed on the proportion
of the Fund's assets which may be invested in such
securities.
Real Estate The Fund shall not purchase or sell real
estate; provided that the Fund may invest in
securities secured by real estate or interests
therein or issued by companies which invest in
real estate or interests therein.
Commodities The Fund shall not purchase or sell physical
commodities or physical commodity contracts,
including physical commodity options or futures
contracts in a contract market or other futures
market.
Lending The Fund shall not make loans other than by the
purchase of all or a portion of a publicly or
privately distributed issue of bonds, debentures
or other debt securities of the types commonly
offered publicly or privately and purchased by
financial institutions (including repurchase
agreements), whether or not the purchase was made
upon the original issuance of the securities, and
except that the Fund may loan its assets to
qualified broker/dealers or institutional
investors.
Illiquid Securities None.
Investment Companies None.
Control or Management None.
Options See "Commodities."
Futures See "Commodities."
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-39
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-40
U.S. Government Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
market or other fair value of its assets in the
securities of any one issuer (other than
obligations of, or guaranteed by, the U.S.
government, its agencies or instrumentalities).
Concentration The Fund shall not make any investment which would
cause more than 25% of the market or other fair
value of its total assets to be invested in the
securities of issuers all of which conduct their
principal business activities in the same
industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing its net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's net assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday or holidays)
or such longer period as the Securities and
Exchange Commission (the "Commission") may
prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that
the asset coverage of such borrowings shall be at
least 300%. The Fund will not pledge more than 10%
of its net assets. The Fund will not issue senior
securities as defined in the Investment Company
Act of 1940 (the "1940 Act"), except for notes to
banks. No investment securities will be purchased
while the Fund has an outstanding borrowing.
Issuing Senior Securities* See "Borrowing."
Short Sales Margin* The Fund shall not purchase securities on margin,
make short sales of securities or maintain a net
short position.
Underwriting The Fund shall not engage in the underwriting of
securities of other issuers, except that in
connection with the disposition of a security, the
Fund may be deemed to be an "underwriter" as that
term is defined in the Securities Act of 1933.
Real Estate The Fund shall not purchase or sell real estate
but this shall not prevent the Fund from investing
in securities secured by real estate or interests
therein.
Commodities None.
Lending The Fund shall not make loans, except to the
extent the purchases of debt obligations
(including repurchase agreements) in accordance
with the Fund's investment objective and policies
are considered loans and except that the Fund may
loan up to 25% of its assets to qualified
broker/dealers or institutional investors for
their use relating to short sales or other
security transactions.
Illiquid Securities The Fund shall not invest more than 10% of the
Fund's net assets in repurchase agreements
maturing in more than seven days or in other
illiquid assets.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-41
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Investment Companies The Fund shall not invest in securities of other
investment companies except as part of a merger,
consolidation or other acquisition, and except to
the extent that an issuer of mortgage-backed
securities may be deemed to be an investment
company, provided that any such investment in
securities of an issuer of a mortgage-backed
security which is deemed to be an investment
company will be subject to the limits set forth in
Section 12(d)(1)(A) of the 1940 Act.
The Fund as been advised by the staff of the
Commission that it is the staff's position that,
under the 1940 Act, the Fund may invest (a) no
more than 10% of its assets in the aggregate in
certain CMOs and REMICs which are deemed to be
investment companies under the 1940 Act and
issue their securities pursuant to an exemptive
order from the Commission, and (b) no more than
5% of its assets in any single issue of such
CMOs or REMICs.
Control or Management The Fund shall not purchase more than 10% of the
voting securities of any issuer, or invest in
companies for the purpose of exercising control or
management.
Options The Fund shall not write, purchase or sell
options, puts, calls or combinations thereof,
except that the Fund may: (a) write covered call
options with respect to any part or all of its
portfolio securities; (b) purchase call options to
the extent that the premiums paid on all
outstanding call options do not exceed 2% of the
Fund's total assets; (c) write secured put
options; (d) purchase put options to the extent
that the premiums paid on all outstanding put
options do not exceed 2% of the Fund's total
assets and only if the Fund owns the security
covered by the put option at the time of purchase.
The Fund may sell put options or call options
previously purchased or enter into closing
transactions with respect to such options.
Futures The Fund shall not enter into futures contracts or
options thereon, except that the Fund may enter
into futures contracts to the extent that not more
than 5% of the Fund's assets are required as
futures contract margin deposits and only to the
extent that obligations under such contracts or
transactions represent not more than 20% of the
Fund's assets.
Unseasoned Issuers None.
Warrants The Fund shall not invest in warrants or rights
except where acquired in units or attached to
other securities.
Holdings by Affiliates The Fund shall not purchase or retain the
securities of any issuer any of whose officers,
directors or security holders is a director or
officer of the Fund or of its investment manager
if or so long as the directors and officers of the
Fund and of its investment manager together own
beneficially more than 5% of any class of
securities of such issuer.
Oil or Gas The Fund shall not invest in interests in oil, gas
or other mineral exploration or development
programs.
Miscellaneous None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-42
Delchester Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
value of its assets in securities of any one
company (except U.S. government bonds) or purchase
more than 10% of the voting or nonvoting
securities of any one company.
Concentration The Fund shall not invest more than 25% of its
assets in any one particular industry.
Borrowing* The Fund shall not borrow money in excess of 10%
of the value of its assets and then only as a
temporary measure for extraordinary or emergency
purposes. Any borrowing will be done from a bank
and to the extent that such borrowing exceeds 5%
of the value of the Fund's assets, asset coverage
of at least 300% is required. In the event that
such asset coverage shall at any time fall below
300%, the Fund shall, within three days thereafter
(not including Sundays and holidays) or such
longer period as the Securities and Exchange
Commission may prescribe by rules and regulations,
reduce the amount of its borrowings to an extent
that the asset coverage of such borrowings shall
be at least 300%. The Fund shall not issue senior
securities as defined in the Investment Company
Act of 1940, except for notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell short any security or
property.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers, except that the Fund
may acquire restricted or not readily marketable
securities under circumstances where, if such
securities are sold, the Fund might be deemed to
be an underwriter for purposes of the Securities
Act of 1933.
Real Estate The Fund shall not make any investment in real
estate. This restriction does not preclude the
Fund's purchase of securities issued by real
estate investment trusts.
Commodities The Fund shall not buy or sell commodities or
commodity contracts.
Lending The Fund shall not make loans. However, (i) the
purchase of a portion of an issue of publicly
distributed bonds, debentures or other securities,
or of other securities authorized to be purchased
by the Fund's investment policies, whether or not
the purchase was made upon the original issuance
of the securities, and the entry into "repurchase
agreements" are not to be considered the making of
a loan by the Fund; and (ii) the Fund may loan up
to 25% of its assets to qualified broker/dealers
or institutional investors for their use relating
to short sales and other security transactions.
Illiquid Securities None.
Investment Companies The Fund shall not invest in securities of other
investment companies.
Control or Management The Fund shall not invest for the purpose of
acquiring control of any company.
Options None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-43
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Futures None.
Unseasoned Issuers The Fund shall not invest in the securities
of companies which have a record of less
than three years' continuous operation,
including any predecessor company or companies, if
such purchase at the time thereof would cause more
than 5% of the total Fund assets to be invested in
the securities of such company or companies.
Warrants None.
Holdings by Affiliates The Fund shall not purchase or retain securities
of a company which has an officer or director who
is an officer or director of Delaware Group Income
Funds, Inc., or an officer, director or partner of
the Manager if, to the knowledge of the Fund, one
or more of such persons owns beneficially more
than 1/2 of 1% of the shares of the company, and
in the aggregate more than 5% thereof.
Oil or Gas None.
Miscellaneous No long or short positions on shares of the Fund
may be taken by Delaware Group Income Funds,
Inc.'s officers, directors or any of its
affiliated persons. Such persons may buy shares of
the Fund for investment purposes, however, as
described under Purchasing Shares in the Statement
of Additional Information.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-44
High-Yield Opportunities Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not, with respect to 75% of its
total assets, invest more than 5% of its total
assets in the securities of any one issuer (other
than obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities or
certificates of deposit for any such securities
and cash and cash items) or purchase more than 10%
of the voting securities of any one company.
Concentration The Fund shall not invest more than 25% of its
total assets in securities of issuers all of which
conduct their principal business activities in the
same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets. Any
borrowing will be done in accordance with the
rules and regulations prescribed from time to time
by the Securities and Exchange Commission with
respect to open-end investment companies. The Fund
shall not issue senior securities as defined in
the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell short any security or
property.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers, except that the Fund
may acquire restricted or not readily marketable
securities under circumstances where, if such
securities are sold, the Fund may be deemed to be
an underwriter for purposes of the Securities Act
of 1933.
Real Estate The Fund shall not make any investment in real
estate. This restriction does preclude the Fund's
purchase of securities issued by real estate
investment trusts, the purchase of securities
issued by companies that deal in real estate, or
the investment in securities secured by real
estate or interests therein.
Commodities The Fund shall not buy or sell commodities or
commodity contracts except that the Fund may enter
into futures contracts and options thereon.
Lending The Fund shall not make loans. However, (i) the
purchase of a portion of an issue of publicly
distributed bonds, debentures or other securities,
or of other securities authorized to be purchased
by the Fund's investment policies, whether or not
the purchase was made upon the original issuance
of the securities, and the entry into "repurchase
agreements" are not to be considered the making of
a loan by the Fund; and (ii) the Fund may loan
securities to qualified broker/dealers or
institutional investors for their use relating to
short sales and other security transactions.
Illiquid Securities None.
Investment Companies None.
Control or Management None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-45
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Options None.
Futures See "Commodities."
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-46
Strategic Income Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not, with respect to 75% of its
total assets invest more than 5% of the value of
its total assets in securities of any one issuer
(except obligations issued, or guaranteed by, the
U.S. government, its agencies or instrumentalities
or certificates of deposit for any such
securities, and cash and cash items) or purchase
more than 10% of the voting securities of any one
company.
Concentration The Fund shall not invest more than 25% of the
value of its total assets in securities of issuers
all of which conduct their principal business
activities in the same industry. This restriction
does not apply to obligations issued or guaranteed
by the U.S. government, its agencies or
instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets. Any
borrowing will be done in accordance with the
rules and regulations prescribed from time to time
by the Securities and Exchange Commission with
respect to open-end investment companies.
Issuing Senior Securities* None.
Short Sales/Margin* The Fund shall not sell short any security or
property.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers, except that the Fund
may acquire restricted or not readily marketable
securities under circumstances where, if such
securities are sold, the Fund might be deemed to
be an underwriter for purposes of the Securities
Act of 1933.
Real Estate The Fund shall not make any investment in real
estate. This restriction does not preclude the
Fund's purchase of securities issued by real
estate investment trusts, the purchase of
securities issued by companies that deal in real
estate, or the investment in securities secured by
real estate or interests therein.
Commodities The Fund shall not buy or sell commodities or
commodity contracts, except that the Fund may
enter into futures contracts and options thereon.
Lending The Fund shall not make loans. However, (i) the
purchase of a portion of an issue of publicly
distributed bonds, debentures or other securities,
or of other securities authorized to be purchased
by the Fund's investment policies, whether or not
the purchase was made upon the original issuance
of the securities, and the entry into "repurchase
agreements" are not to be considered the making of
a loan by the Fund; and (ii) the Fund may loan
securities to qualified broker/dealers or
institutional investors for their use relating to
short sales and other security transactions.
Illiquid Securities None.
Investment Companies None.
Control or Management None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-47
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Options None.
Futures See "Commodities."
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-48
Limited-Term Government Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
market or other fair value of its assets in the
securities of any one issuer (other than
obligations of, or guaranteed by, the U.S.
government, its agencies or instrumentalities).
Concentration The Fund shall not make any investment which would
cause more than 25% of the market or other fair
value of its total assets to be invested in the
securities of issuers all of which conduct their
principal business activities in the same
industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing its net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's net assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday or holidays)
or such longer period as the Securities and
Exchange Commission (the "Commission") may
prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that
the asset coverage of such borrowings shall be at
least 300%. The Fund will not pledge more than 10%
of its net assets. The Fund will not issue senior
securities as defined in the Investment Company
Act of 1940 (the "1940 Act"), except for notes to
banks. Securities will not be purchased while the
Fund has an outstanding borrowing.
Issuing Senior Securities* See "Borrowing."
Underwriting The Fund shall not engage in the underwriting of
securities of other issuers, except that in
connection with the disposition of a security, the
Fund may be deemed to be an "underwriter" as that
term is defined in the Securities Act of 1933.
Real Estate The Fund shall not purchase or sell real estate
but this shall not prevent the Fund from investing
in securities secured by real estate or interests
therein.
Commodities None.
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements) in accordance
with the Fund's investment objective and policies
are considered loans and except that the Fund may
loan up to 25% of its assets to qualified
broker/dealers or institutional investors for
their use relating to short sales or other
security transactions.
Illiquid Securities The Fund shall not invest more than 10% of the
Fund's total assets in repurchase agreements
maturing in more than seven days and other
illiquid assets.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-49
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Investment Companies The Fund shall not invest in securities of other
investment companies except as part of a merger,
consolidation or other acquisition, and except to
the extent that an issuer of mortgage-backed
securities may be deemed to be an investment
company, provided that any such investment in
securities of an issuer of a mortgage-backed
security which is deemed to be an investment
company will be subject to the limits set forth in
Section 12(d)(1)(A) of the 1940 Act.
The Fund has been advised by the staff of the
Commission that it is the staff's position that,
under the 1940 Act, the Fund may invest (a) no
more than 10% of its assets in the aggregate in
certain CMOs and REMICs which are deemed to be
investment companies under the 1940 Act and issue
their securities pursuant to an exemptive order
from the Commission, and (b) no more than 5% of
its assets in any single issue of such CMOs or
REMICs.
Control or Management The Fund shall not purchase more than 10% of the
outstanding voting or nonvoting securities of any
issuer, or invest in companies for the purpose of
exercising control or management.
Options The Fund shall not write, purchase or sell
options, puts, calls or combinations thereof,
except that the Fund may: (a) write covered call
options with respect to any part or all of its
portfolio securities; (b) purchase call options to
the extent that the premiums paid on all
outstanding call options do not exceed 2% of the
Fund's total assets; (c) write secured put
options; (d) purchase put options to the extent
that the premiums on all outstanding put options
do not exceed 2% of the Fund's total assets and
only if the Fund owns the security covered by the
put option at the time of purchase. The Fund may
sell put options or call options previously
purchased or enter into closing transactions with
respect to such options.
Futures The Fund shall not enter into futures contracts or
options thereon, except that the Fund may enter
into futures contracts to the extent that not more
than 5% of the Fund's assets are required as
futures contract margin deposits and only to the
extent that obligations under such contracts or
transactions represent not more than 20% of the
Fund's assets.
Unseasoned Issuers None.
Warrants The Fund shall not invest in warrants or rights
except where acquired in units or attached to
other securities.
Holdings by Affiliates The Fund shall not purchase or retain the
securities of any issuer any of whose officers,
directors or security holders is a director or
officer of the Fund or of its investment manager
if or so long as the directors and officers of the
Fund and of its investment manager together own
beneficially more than 5% of any class of
securities of such issuer.
Oil or Gas The Fund shall not invest in interests in oil, gas
or other mineral exploration or development
programs.
Miscellaneous None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-50
Capital Reserves Series
Cash Reserve Series
Decatur Total Return Series
Delaware Series
DelCap Series
Delchester Series
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
value of its assets in securities of any one
issuer (other than obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities).
Concentration The Fund shall not invest more than 25% of its
total assets in any particular industry, except
that the Fund may invest more than 25% of the
value of its total assets in obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities, certificates of deposit and
bankers' acceptances of banks with over one
billion dollars in assets or bank holding
companies whose securities are rated A-2 or better
by Standard & Poor's Ratings Group ("S&P") or P-2
or better by Moody's Investors Service, Inc.
("Moody's").
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing their net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday and
holidays) or such longer period as the Securities
and Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings
to an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund will
not pledge more than 15% of its net assets. The
Fund shall not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not purchase securities on margin,
make short sales of securities or maintain a net
short position (except that the Fund may obtain
such short-term credit as may be necessary for the
clearance of purchases and sales of portfolio
securities). This restriction shall not prohibit
the Fund from satisfying margin requirements with
respect to futures transactions.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers, except that the Fund
may acquire restricted or not readily-marketable
securities under circumstances where, if such
securities are sold, the Fund might be deemed to
be an underwriter for the purposes of the
Securities Act of 1933.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-51
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Real Estate The Fund shall not make any investment in real
estate unless necessary for office space or the
protection of investments already made. (This
restriction does not preclude the Fund's purchase
of securities secured by real estate or interests
therein, or securities issued by companies which
invest in real estate or interests therein,
including real estate investment trusts.)
Commodities See "Oil and Gas."
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements) in accordance
with each Fund's investment objective and policies
are considered loans and except that the Fund may
loan up to 25% of its assets to qualified
broker/dealers or institutional investors for
their use relating to short sales or other
security transactions.
Illiquid Securities None.
Investment Companies The Fund shall not purchase any security issued by
any other investment company (except in connection
with a merger, consolidation or offer of exchange)
if after such purchase it would: (a) own more than
3% of the voting stock of such company, (b) own
securities of such company having a value in
excess of 5% of the Fund's assets or (c) own
securities of investment companies having an
aggregate value in excess of 10% of the Fund's
assets. Any such purchase shall be at the
customary brokerage commission.
Control or Management The Fund shall not purchase more than 10% of the
voting securities of any company, or invest in any
company for the purpose of exercising control or
management.
Options None.
Futures See "Short Sales/Margin."
Unseasoned Issuers The Fund shall not invest more than 5% of the
value of its total assets in securities of
companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-52
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Holdings by Affiliates The Fund shall not purchase or retain securities
of a company which has an officer or director who
is an officer or director of the Fund, or an
officer or director of its investment manager if
such persons, each owning beneficially more than
1/2 of 1% of the shares of the company, own in the
aggregate more than 5% thereof.
Oil or Gas The Fund shall not invest in interests in oil, gas
or other mineral exploration or development
programs, commodities or commodities contracts.
Miscellaneous None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-53
Convertible Securities Series
Devon Series
Social Awareness Series
Strategic Income Series
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not with respect to 75% of its
total assets, purchase the securities of any
issuer (other than those of other investment
companies or of the U.S. Government or its
agencies or instrumentalities), if immediately
thereafter the Fund would (a) have more than 5% of
the value of its total assets in the securities of
such issuer or (b) own more than 10% of the
outstanding voting securities of such issuer.
Concentration The Fund shall not invest 25% or more of its total
assets in any one industry provided that there is
no limitation with respect to investments in
obligations issued or guaranteed as to principal
or interest by the U.S. Government, its agencies
or instrumentalities.
Borrowing* The Fund shall not borrow money or issue senior
securities, except to the extent permitted by the
Investment Company Act of 1940 or any rule or
order thereunder or interpretation thereof.
Subject to the foregoing, the Fund may engage in
short sales, purchase securities on margin, and
write put and call options.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* See "Borrowing."
Underwriting The Fund shall not engage in underwriting of
securities of other issuers, except that portfolio
securities, including securities purchased in
private placements, may be acquired under
circumstances where, if sold, the Fund might be
deemed to be an underwriter under the Securities
Act of 1933. No limit is placed on the proportion
of the Fund's assets which may be invested in such
securities.
Real Estate The Fund shall not purchase or sell real estate;
provided that the Fund may invest in securities
secured by real estate or interests therein or
issued by companies which invest in real estate or
interests therein.
Commodities The Fund shall not purchase or sell physical
commodities or physical commodity contracts,
including physical commodity option or futures
contracts in a contract market or other futures
market.
Lending The Fund shall not make loans other than by the
purchase of all or a portion of a publicly or
privately distributed issue of bonds, debentures
or other debt securities of the types commonly
offered publicly or privately and purchased by
financial institutions (including repurchase
agreements), whether or not the purchase was made
upon the original issuance of the securities, and
except that the Fund may loan its assets to
qualified broker/dealers or institutional
investors.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-54
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Illiquid Securities None.
Investment Companies See "Diversification."
Control or Management None.
Options See "Borrowing."
Futures See "Commodities."
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-55
Emerging Markets Series
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not as to 50% of its respective
total assets, invest more than 5% of its
respective total assets in the securities of any
one issuer (other than obligations issued, or
guaranteed by, the U.S. government, its agencies
or instrumentalities).
Concentration The Fund shall not invest 25% or more of its total
assets in any one industry provided that there is
no limitation with respect to investments in
obligations issued or guaranteed as to principal
or interest by the U.S. Government, its agencies
or instrumentalities.
Borrowing* The Fund shall not borrow money or issue senior
securities, except to the extent permitted by the
Investment Company Act of 1940 or any rule or
order thereunder or interpretation thereof.
Subject to the foregoing, the Fund may engage in
short sales, purchase securities on margin, and
write put and call options.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* See "Borrowing."
Underwriting The Fund shall not engage in underwriting of
securities of other issuers, except that portfolio
securities, including securities purchased in
private placements, may be acquired under
circumstances where, if sold, the Fund might be
deemed to be an underwriter under the Securities
Act of 1933. No limit is placed on the proportion
of the Fund's assets which may be invested in such
securities.
Real Estate The Fund shall not purchase or sell real estate;
provided that the Fund may invest in securities
secured by real estate or interests therein or
issued by companies which invest in real estate or
interests therein.
Commodities The Fund shall not purchase or sell physical
commodities or physical commodity contracts,
including physical commodity option or futures
contracts in a contract market or other futures
market.
Lending The Fund shall not make loans other than by the
purchase of all or a portion of a publicly or
privately distributed issue of bonds, debentures
or other debt securities of the types commonly
offered publicly or privately and purchased by
financial institutions (including repurchase
agreements), whether or not the purchase was made
upon the original issuance of the securities, and
except that the Fund may loan its assets to
qualified broker/dealers or institutional
investors.
Illiquid Securities None.
Investment Companies None.
Control or Management None.
Options See "Borrowing."
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-56
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Futures See "Commodities."
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-57
Global Bond Series
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
value of its assets in securities of any one
issuer (other than obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities). This restriction shall apply
to only 50% of the assets of the Fund.
Concentration The Fund shall not invest more than 25% of its
total assets in any particular industry, except
that the Fund may invest more than 25% of the
value of its total assets in obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities, certificates of deposit and
bankers' acceptances of banks with over one
billion dollars in assets or bank holding
companies whose securities are rated A-2 or better
by Standard & Poor's Ratings Group ("S&P") or P-2
or better by Moody's Investors Service, Inc.
("Moody's").
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing its net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday and
holidays) or such longer period as the Securities
Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings
to an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund will
not pledge more than 15% of its net assets. The
Fund shall not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not purchase securities on margin,
make short sales of securities or maintain a net
short position (except that the Fund may obtain
such short-term credit as may be necessary for the
clearance of purchases and sales of portfolio
securities). This restriction shall not prohibit
the Fund from satisfying margin requirements with
respect to futures transactions.
Underwriting The Funds shall not act as an underwriter of
securities of other issuers, except that a Fund
may acquire restricted or not readily-marketable
securities under circumstances where, if such
securities are sold, the Fund might be deemed to
be an underwriter for the purposes of the
Securities Act of 1933.
Real Estate The Fund shall not make any investment in real
estate unless necessary for office space or the
protection of investments already made. (This
restriction does not preclude the Fund's purchase
of securities secured by real estate or interests
therein, or securities issued by companies which
invest in real estate or interests therein,
including real estate investment trusts.)
Commodities None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-58
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements) in accordance
with the Fund's investment objective and policies
are considered loans and except that the Fund may
loan up to 25% of its assets to qualified
broker/dealers or institutional investors for
their use relating to short sales or other
security transactions.
Illiquid Securities None.
Investment Companies The Fund shall not purchase any security issued
by any other investment company (except in
connection with a merger, consolidation or offer
of exchange) if after such purchase it would: (a)
own more than 3% of the voting stock of such
company, (b) own securities of such company having
a value in excess of 5% of the Fund's assets or
(c) own securities of investment companies having
an aggregate value in excess of 10% of the Fund's
assets. Any such purchase shall be at the
customary brokerage commission.
Control or Management None.
Options None.
Futures None.
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-59
International Equity Series
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not invest more than 5% of the
value of its assets in securities of any one
issuer (other than obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities). This restriction shall apply
to only 75% of the assets of the Fund.
Concentration The Fund shall not invest more than 25% of its
total assets in any particular industry, except
that the Fund may invest more than 25% of the
value of its total assets in obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities, certificates of deposit and
bankers' acceptances of banks with over one
billion dollars in assets or bank holding
companies whose securities are rated A-2 or better
by Standard & Poor's Ratings Group ("S&P") or P-2
or better by Moody's Investors Service, Inc.
("Moody's").
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing their net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday and
holidays) or such longer period as the Securities
and Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings
to an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund will
not pledge more than 15% of its net assets. The
Fund shall not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not purchase securities on margin,
make short sales of securities or maintain a net
short position (except that the Fund may obtain
such short-term credit as may be necessary for the
clearance of purchases and sales of portfolio
securities). This restriction shall not prohibit
the Fund from satisfying margin requirements with
respect to futures transactions.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers, except that a Fund
may acquire restricted or not readily-marketable
securities under circumstances where, if such
securities are sold, the Fund might be deemed to
be an underwriter for the purposes of the
Securities Act of 1933.
Real Estate The Fund shall not make any investment in real
estate unless necessary for office space or the
protection of investments already made. (This
restriction does not preclude the Fund's purchase
of securities secured by real estate or interests
therein, or securities issued by companies which
invest in real estate or interests therein,
including real estate investment trusts.)
Commodities See "Oil and Gas."
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-60
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements) in accordance
with the Fund's investment objective and policies
are considered loans and except that the Fund may
loan up to 25% of its assets to qualified
broker/dealers or institutional investors for
their use relating to short sales or other
security transactions.
Illiquid Securities None.
Investment Companies The Fund shall not purchase any security issued by
any other investment company (except in connection
with a merger, consolidation or offer of exchange)
if after such purchase it would: (a) own more than
3% of the voting stock of such company, (b) own
securities of such company having a value in
excess of 5% of the Fund's assets or (c) own
securities of investment companies having an
aggregate value in excess of 10% of the Fund's
assets. Any such purchase shall be at the
customary brokerage commission. The limitations
set forth in this restriction do not apply to
purchases by the Fund of securities issued by
closed-end investment companies, all of which must
be at the customary brokerage commission.
Control or Management The Fund shall not purchase more than 10% of the
voting securities of any company, or invest in any
company for the purpose of exercising control or
management.
Options See "Oil and Gas."
Futures See "Oil and Gas."
Unseasoned Issuers The Fund shall not invest more than 5% of the
value of its total assets in securities of
companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants None.
Holdings by Affiliates The Fund shall not purchase or retain securities
of a company which has an officer or director who
is an officer or director of the Fund, or an
officer or director of its investment manager if
such persons, each owning beneficially more than
1/2 of 1% of the shares of the company, own in the
aggregate more than 5% thereof.
Oil or Gas The Fund shall not invest in interests in oil, gas
or other mineral exploration or development
programs, commodities or commodities contracts.
This restriction shall not prohibit the Fund from
entering into futures contracts or options
thereon, to the extent that not more than 5% of
its assets are required as futures contract margin
deposits and premiums on options and only to the
extent that obligations under such contracts and
transactions represent not more than 20% of the
Fund's assets.
Miscellaneous None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-61
REIT Series
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification None.
Concentration The Fund shall not concentrate its investments in
the real estate industry. Invest more than 25% of
its total assets in any other single industry,
provided that there is no limitation with respect
to investments in obligations issued of guaranteed
as to principal or interest by the U.S.
Government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money or issue senior
securities, except to the extent permitted by the
Investment Company Act of 1940 or any rule or
order thereunder or interpretation thereof.
Subject to the foregoing, the Fund may engage in
short sales, purchase securities on margin, and
write put and call options
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* See "Borrowing."
Underwriting The Fund shall not engage in underwriting of
securities of other issuers, except that portfolio
securities, including securities purchased in
private placements, may be acquired under
circumstances where, if sold, the Series might be
deemed to be an underwriter under the Securities
Act of 1933. No limit is placed on the proportion
of the Fund's assets which may be invested in such
securities.
Real Estate The Fund shall not purchase or sell real estate,
provided, that the Fund may invest in securities
secured by real estate or interests therein or
issued by companies which invest in real estate or
interests therein; provided further, that the Fund
may own real estate directly as a result of a
default on securities the Fund owns.
Commodities The Fund shall not purchase or sell physical
commodities or physical commodity contracts,
including physical commodity option or futures
contracts in a contract market or other futures
market.
Lending The Fund shall not make loans other than by the
purchase of all or a portion of a publicly or
privately distributed issue of bonds, debentures
or other debt securities of the types commonly
offered publicly or privately and purchased by
financial institutions (including repurchase
agreements and loan participations), whether or
not the purchase was made upon the original
issuance of the securities, and except that the
Fund may loan its assets to qualified
broker/dealers or institutional investors.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-62
Illiquid Securities None.
Investment Companies None.
Control or Management None.
Options See "Borrowing."
Futures See "Commodities."
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-63
Small Cap Value Series
Trend Series
Category Current Fundamental Investment Restriction
- -------- -------------------------------------------
Diversification The Fund shall not invest more than 5% of the
value of its assets in securities of any one
issuer (other than obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities). This restriction shall apply
to only 75% of the assets of the Fund.
Concentration The Fund shall not invest more than 25% of its
total assets in any particular industry, except
that the Fund may invest more than 25% of the
value of its total assets in obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities, certificates of deposit and
bankers' acceptances of banks with over one
billion dollars in assets or bank holding
companies whose securities are rated A-2 or better
by Standard & Poor's Ratings Group ("S&P") or P-2
or better by Moody's Investors Service, Inc.
("Moody's").
Borrowing* The Fund shall not borrow money in excess of
one-third of the value of its net assets and then
only as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund
has no intention of increasing their net income
through borrowing. Any borrowing will be done from
a bank and to the extent that such borrowing
exceeds 5% of the value of the Fund's assets,
asset coverage of at least 300% is required. In
the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday and
holidays) or such longer period as the Securities
and Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings
to an extent that the asset coverage of such
borrowings shall be at least 300%. The Fund will
not pledge more than 15% of its net assets. The
Fund shall not issue senior securities as defined
in the Investment Company Act of 1940, except for
notes to banks.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-64
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not purchase securities on margin,
make short sales of securities or maintain a net
short position (except that the Fund may obtain
such short-term credit as may be necessary for the
clearance of purchases and sales of portfolio
securities). This restriction shall not prohibit
the Fund from satisfying margin requirements with
respect to futures transactions.
Underwriting The Fund shall not act as an underwriter of
securities of other issuers, except that the Fund
may acquire restricted or not readily-marketable
securities under circumstances where, if such
securities are sold, the Fund might be deemed to
be an underwriter for the purposes of the
Securities Act of 1933.
Real Estate The Fund shall not make any investment in real
estate unless necessary for office space or the
protection of investments already made. (This
restriction does not preclude the Fund's purchase
of securities secured by real estate or interests
therein, or securities issued by companies which
invest in real estate or interests therein,
including real estate investment trusts.)
Commodities See "Oil and Gas."
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements) in accordance
with the Fund's investment objective and policies
are considered loans and except that the Fund may
loan up to 25% of its assets to qualified
broker/dealers or institutional investors for
their use relating to short sales or other
security transactions.
Illiquid Securities None.
Investment Companies The Fund shall not purchase any security issued by
any other investment company (except in connection
with a merger, consolidation or offer of exchange)
if after such purchase it would: (a) own more than
3% of the voting stock of such company, (b) own
securities of such company having a value in
excess of 5% of the Fund's assets or (c) own
securities of investment companies having an
aggregate value in excess of 10% of the Fund's
assets. Any such purchase shall be at the
customary brokerage commission.
Control or Management The Fund shall not purchase more than 10% of the
voting securities of any company, or invest in any
company for the purpose of exercising control or
management.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-65
Options See "Oil and Gas."
Futures See "Short Sales/Margins" and "Oil and Gas."
Unseasoned Issuers The Fund shall not invest more than 5% of the
value of its total assets in securities of
companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants None.
Holdings by Affiliates The Fund shall not purchase or retain securities
of a company which has an officer or director who
is an officer or director of the Fund, or an
officer or director of its investment manager if
such persons, each owning beneficially more than
1/2 of 1% of the shares of the company, own in the
aggregate more than 5% thereof.
Oil or Gas The Fund shall not invest in interests in oil, gas
or other mineral exploration or development
programs, commodities or commodities contracts.
This restriction shall not prohibit the Fund from
entering into futures contracts or options
thereon, to the extent that not more than 5% of
its assets are required as futures contract margin
deposits and premiums on options and only to the
extent that obligations under such contracts and
transactions represent not more than 20% of the
Fund's assets.
Miscellaneous None.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-66
Tax-Free New Jersey Fund
Category Current Fundamental Investment Restriction
- -------- -------------------------------------------
Diversification The Fund shall not, with respect to 50% of the
value of the assets of the Fund, invest more than
5% of its assets in the securities of any one
issuer or invest in more than 10% of the
outstanding voting securities of any one issuer,
except that U.S. government and government agency
securities backed by the U.S. government or its
agencies or instrumentalities may be purchased
without limitation. For the purposes of this
limitation, the Fund will regard the state and
each political subdivision, agency or
instrumentality of the state, and each multistate
agency of which the state is a member as a
separate issuer.
Concentration The Fund shall not invest more than 25% of its
total assets in any particular industry or
industries, except that the Fund may invest more
than 25% of the value of its total assets in
municipal bonds, including industrial development
and pollution control bonds, and in obligations
issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of 10%
of the value of its assets and then only as a
temporary measure for extraordinary purposes. Any
borrowing will be done from a bank and to the
extent that such borrowing exceeds 5% of the value
of the Fund's assets, asset coverage of at least
300% is required. In the event that such asset
coverage shall at any time fall below 300%, the
Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer
period as the Securities and Exchange Commission
may prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that
the asset coverage of such borrowings shall be at
least 300%. The Fund will not issue senior
securities as defined in the Investment Company of
1940 (the "1940 Act"), except for notes to banks.
Investment securities will not normally be
purchased while there is an outstanding borrowing.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not make short sales of securities,
or purchase securities on margin, except that the
Fund may satisfy margin requirements with respect
to futures transactions.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-67
Underwriting The Fund shall not underwrite the securities of
other issuers, except that the Fund may
participate as part of a group in bidding for the
purchase of municipal bonds directly from an
issuer for its own portfolio in order to take
advantage of the lower purchase price available to
members of such a group.
Real Estate None.
Commodities None.
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements) in accordance
with the Fund's investment objective and policies
are considered loans.
Illiquid Securities None.
Investment Companies The Fund shall not invest in securities of other
investment companies, except as part of a merger,
consolidation or other acquisition, or in
accordance with the limitations contained in the
1940 Act.
Control or Management None.
Options None.
Futures None.
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous The Fund shall not purchase securities other than
municipal bonds and taxable short-term
investments.
From time to time, more than 10% of the Fund's
assets may be invested in municipal bonds insured
as to payment of principal and interest by a
single insurance company. The Fund believes such
investments are consistent with the foregoing
restrictions.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-68
Tax-Free Ohio Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not, with respect to 50% of the
value of the assets of the Fund, invest more than
5% of its assets in the securities of any one
issuer or invest in more than 10% of the
outstanding voting securities of any one issuer,
except that U.S. government and government agency
securities backed by the U.S. government or its
agencies or instrumentalities may be purchased
without limitation. For the purposes of this
limitation, the Fund will regard the state and
each political subdivision, agency or
instrumentality of the state, and each multistate
agency of which the state is a member as a
separate issuer.
Concentration The Fund shall not invest more than 25% of its
total assets in any particular industry or
industries, except that the Fund may invest more
than 25% of the value of its total assets in
municipal bonds, including industrial development
and pollution control bonds, and in obligations
issued or guaranteed by the U.S. government, its
agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of 10%
of the value of its assets and then only as a
temporary measure for extraordinary purposes. Any
borrowing will be done from a bank and to the
extent that such borrowing exceeds 5% of the value
of the Fund's assets, asset coverage of at least
300% is required. In the event that such asset
coverage shall at any time fall below 300%, the
Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer
period as the Securities and Exchange Commission
may prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that
the asset coverage of such borrowings shall be at
least 300%. The Fund will not issue senior
securities as defined in the Investment Company
Act of 1940 (the "1940 Act"), except for notes to
banks. Investment securities will not normally be
purchased while there is an outstanding borrowing.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not make short sales of securities,
or purchase securities on margin, except that the
Fund may satisfy margin requirements with respect
to futures transactions.
Underwriting The Fund shall not underwrite the securities of
other issuers, except that the Fund may
participate as part of a group in bidding for the
purchase of municipal bonds directly from an
issuer for its own portfolio in order to take
advantage of the lower purchase price available to
members of such a group.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-69
Real Estate None.
Commodities None.
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements) in accordance
with the Fund's investment objective and policies
are considered loans.
Illiquid Securities None.
Investment Companies The Fund shall not invest in securities of other
investment companies, except as part of a merger,
consolidation or other acquisition, or in
accordance with the limitations contained in the
1940 Act.
Control or Management None.
Options None.
Futures None.
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous The Fund shall not purchase securities other than
municipal bonds and taxable short-term
investments.
From time to time, more than 10% of the Fund's
assets may be invested in municipal bonds insured
as to payment of principal and interest by a
single insurance company. The Fund believes such
investments are consistent with the foregoing
restrictions.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-70
Tax-Free Pennsylvania Fund
Category Current Fundamental Investment Restriction
- -------- -------------------------------------------
Diversification The Fund shall not, with respect to 50% of the
value of the assets of the Fund, invest more than
5% of its assets in the securities of any one
issuer or invest in more than 10% of the
outstanding voting securities of any one issuer,
except that U.S. government and government agency
securities backed by the U.S. government or its
agencies or instrumentalities may be purchased
without limitation. For the purposes of this
limitation, the Fund will regard the state and
each political subdivision, agency or
instrumentality of the state, and each multistate
agency of which the state is a member as a
separate issuer. In addition, where securities are
issued by one agency or authority but are
guaranteed by another governmental body, "issuer"
shall not be deemed to include the guarantor so
long as the value of all securities owned by the
Fund which have been guaranteed by that guarantor
does not exceed 10% of the value of the Fund's
assets.
Concentration The Fund shall not invest more than 25% of its
total assets in any particular industry or
industries, except that the Fund may invest more
than 25% of the value of its total assets in
municipal bonds, including industrial development
and pollution control bonds, and in obligations
issued or guaranteed by the U.S. government, its
agencies or instrumentalities.
Borrowing* The Fund shall not borrow money in excess of 10%
of the value of its assets and then only as a
temporary measure for extraordinary purposes. Any
borrowing will be done from a bank and to the
extent that such borrowing exceeds 5% of the value
of the Fund's assets, asset coverage of at least
300% is required. In the event that such asset
coverage shall at any time fall below 300%, the
Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer
period as the Securities and Exchange Commission
may prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that
the asset coverage of such borrowings shall be at
least 300%. The Fund will not issue senior
securities as defined in the Investment Company
Act of 1940, except for notes to banks. Investment
securities will not normally be purchased while
there is an outstanding borrowing.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-71
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell securities short.
Underwriting The Fund shall not underwrite the securities of
other issuers or purchase securities that are
subject to restrictions on disposition under the
Securities Act of 1933 ("restricted securities"),
except that the Fund may participate as part of a
group in bidding for the purchase of municipal
bonds directly from an issuer for its own
portfolio in order to take advantage of the lower
purchase price available to members of such a
group; nor invest more than 10% of the value of
the Fund's net assets in illiquid securities.
Real Estate The Fund shall not purchase or sell real estate,
but this shall not prevent the Fund from investing
in municipal bonds secured by real estate or
interests therein.
Commodities The Fund shall not purchase or sell commodities or
commodity contracts.
Lending The Fund shall not make loans to other persons
except through the use of repurchase agreements or
the purchase of commercial paper. For these
purposes the purchase of a portion of debt
securities which is part of an issue to the public
shall not be considered the making of a loan. Not
more than 10% of the Fund's total assets will be
invested in repurchase agreements and other assets
maturing in more than seven days.
Illiquid Securities See "Underwriting" and "Lending."
Investment Companies The Fund shall not invest in securities of other
investment companies, except as they may be
acquired as part of a merger, consolidation or
acquisition of assets and except for the purchase
of shares of registered unit investment trusts
whose assets consist substantially of municipal
bonds.
Control or Management The Fund shall not purchase more than 10% of the
outstanding debt obligations of any issuer or
invest in companies for the purpose of exercising
control.
Options The Fund shall not write or purchase put or call
options.
Futures None.
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous The Fund shall not purchase securities other than
municipal bonds and taxable short-term investments
as defined in its Statement of Additional
Information.
From time to time, more than 10% of the Fund's
assets may be invested in municipal bonds insured
as to payment of principal and interest by a
single insurance company. The Fund believes such
investments are consistent with the foregoing
restrictions.
See "Real Estate."
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-72
Delaware Group Tax-Free Money Fund, Inc.
Category Current Fundamental Investment Restriction
- -------- -------------------------------------------
Diversification The Fund shall not purchase securities of any
issuer (except the U.S. government, its agencies
or instrumentalities or securities which are
backed by the full faith and credit of the United
States) if, as a result, more than 5% of its total
assets would be invested in the securities of such
issuer.
The Fund shall not purchase securities if, as a
result of such purchase, more than 25% of the
value of its assets would be invested in the
securities of government subdivisions located in
any one state, territory or possession of the
United States. The Fund may invest more than 25%
of the value of its assets in short-term
tax-exempt project notes which are guaranteed by
the U.S. government, regardless of the location of
the issuing municipality.
Concentration None.
Borrowing* The Fund shall not borrow an amount in excess of
5% of the value of its net assets and then only as
a temporary measure for extraordinary purposes or
to facilitate redemptions. Any outstanding
borrowings shall be repaid before additional
securities are purchased.
Issuing Senior Securities* None.
Short Sales/Margin* The Fund shall not sell securities short or
purchase securities on margin.
Underwriting The Fund shall not underwrite the securities of
other issuers, except that the Fund may acquire
portfolio securities under circumstances where, if
the securities are later publicly offered or sold
by the Fund, it might be deemed an underwriter for
purposes of the Securities Act of 1933. Not more
than 10% of the value of the Fund's net assets at
the time of acquisition will be invested in such
securities.
Real Estate The Fund shall not purchase or sell real estate,
but this shall not prevent the Fund from investing
in securities secured by real estate or interests
therein, or securities issued by companies which
invest in real estate or interests therein.
Commodities The Fund shall not purchase or sell commodities or
commodity contracts.
Lending The Fund shall not make loans to other persons
except by the purchase of obligations in which the
Fund is authorized to invest and to enter into
repurchase agreements. Not more than 10% of the
Fund's total assets will be invested in repurchase
agreements maturing in more than seven days and in
other illiquid assets.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-73
Illiquid Securities See "Lending."
Investment Companies The Fund shall not invest in securities of other
investment companies, except as they may be
acquired as part of a merger, consolidation or
acquisition of assets.
Control or Management The Fund shall not invest in issuers for the
purpose of exercising control.
Options The Fund shall not write or purchase put or call
options.
Futures None.
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
The Fund shall not invest more than 20% of its
assets in securities other than tax-free money
market instruments as defined under Investment
Objective and Policy in the Statement of
Additional Information, unless extraordinary
circumstances dictate a more defensive posture.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-74
Tax-Free Insured Fund
Category Current Fundamental Investment Restriction
- -------- -------------------------------------------
Diversification The Fund shall not, with respect to 50% of the
value of its assets, invest more than 5% of its
assets in the securities of any one issuer or
invest in more than 10% of the outstanding voting
securities of any one issuer, except that U.S.
government and government agency securities backed
by the U.S. government, or its agencies or
instrumentalities may be purchased without
limitation. For the purpose of this limitation,
the Fund will regard each state and political
subdivision, agency or instrumentality of a state
and each multistate agency of which a state is a
member as a separate issuer.
Concentration The Fund shall not invest more than 25% of its
total assets in any particular industry or
industries, except that the Fund may invest more
than 25% of the value of its total assets in
municipal bonds and in obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities.
Borrowing* The Fund shall not borrow money in excess of 10%
of the value of its assets and then only as a
temporary measure for extraordinary purposes. Any
borrowing will be done from a bank and to the
extent that such borrowing exceeds 5% of the value
of the Fund's assets, asset coverage of at least
300% is required. In the event that such asset
coverage shall at any time fall below 300%, the
Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer
period as the Securities and Exchange Commission
may prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that
the asset coverage of such borrowings shall be at
least 300%. The Fund will not issue senior
securities as defined in the Investment Company
Act of 1940 (the "1940 Act"), except for notes to
banks. (The issuance of three series of shares is
not deemed to be the issuance of senior securities
so long as such series comply with the appropriate
provisions of the 1940 Act.) Investment securities
will not normally be purchased while there is an
outstanding borrowing.
Issuing Senior Securities* See "Borrowing."
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-75
Short Sales/Margin* The Fund shall not sell securities short.
Underwriting The Fund shall not underwrite the securities of
other issuers, except that the Fund may
participate as part of a group in bidding for the
purchase of municipal bonds directly from an
issuer for its own portfolio in order to take
advantage of the lower purchase price available to
members of such a group; nor invest more than 10%
of the value of the Fund's net assets in illiquid
assets.
Real Estate The Fund shall not purchase or sell real estate,
but this shall not prevent the Fund from investing
in municipal bonds secured by real estate or
interests therein.
Commodities The Fund shall not purchase or sell commodities or
commodity contracts.
Lending The Fund shall not make loans to other persons
except through the use of repurchase agreements or
the purchase of commercial paper. For these
purposes, the purchase of a portion of debt
securities which is part of an issue to the public
shall not be considered the making of a loan.
Illiquid Securities See "Underwriting."
Investment Companies The Fund shall not invest in securities of other
investment companies, except as they are acquired
as part of a merger, consolidation or acquisition
of assets.
Control or Management The Fund shall not invest in companies for the
purpose of exercising control.
Options The Fund shall not write or purchase put or call
options.
Futures None.
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous The Fund shall not invest more than 20% of its
assets in securities whose interest is subject to
federal income tax.
The Fund shall not invest more than 20% of its
assets in securities (other than U.S. government
securities, securities of agencies of the U.S.
government and securities backed by the U.S.
government or its agencies or instrumentalities)
which are not covered by insurance guaranteeing
the payment, when due, of interest on and the
principal of such securities, except for defensive
purposes.
Tax-Free Fund, Inc. also has determined that, from
time to time, more than 10% of a Fund's assets may
be invested in municipal bonds insured as to
principal and interest by a single insurance
company. Tax-Free Fund, Inc. believes such
investments are consistent with the foregoing
restrictions.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-76
Tax Free USA Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not, with respect to 50% of the
value of its assets, invest more than 5% of its
assets in the securities of any one issuer or
invest in more than 10% of the outstanding voting
securities of any one issuer, except that U.S.
government and government agency securities backed
by the U.S. government, or its agencies or
instrumentalities may be purchased without
limitation. For the purpose of this limitation,
the Fund will regard each state and political
subdivision, agency or instrumentality of a state
and each multistate agency of which a state is a
member as a separate issuer.
Concentration The Fund shall not invest more than 25% of its
total assets in any particular industry or
industries, except that the Fund may invest more
than 25% of the value of its total assets in
municipal bonds and in obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities.
Borrowing* The Fund shall not borrow money in excess of 10%
of the value of its assets and then only as a
temporary measure for extraordinary purposes. Any
borrowing will be done from a bank and to the
extent that such borrowing exceeds 5% of the value
of the Fund's assets, asset coverage of at least
300% is required. In the event that such asset
coverage shall at any time fall below 300%, the
Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer
period as the Securities and Exchange Commission
may prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that
the asset coverage of such borrowings shall be at
least 300%. The Fund will not issue senior
securities as defined in the Investment Company
Act of 1940 (the "1940 Act"), except for notes to
banks. (The issuance of three series of shares is
not deemed to be the issuance of senior securities
so long as such series comply with the appropriate
provisions of the 1940 Act.) Investment securities
will not normally be purchased while there is an
outstanding borrowing.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-77
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell securities short.
Underwriting The Fund shall not underwrite the securities of
other issuers, except that the Fund may
participate as part of a group in bidding for the
purchase of municipal bonds directly from an
issuer for its own portfolio in order to take
advantage of the lower purchase price available to
members of such a group; nor invest more than 10%
of the value of the Fund's net assets in illiquid
assets.
Real Estate The Fund shall not purchase or sell real estate,
but this shall not prevent the Fund from investing
in municipal bonds secured by real estate or
interests therein.
Commodities The Fund shall not purchase or sell commodities or
commodity contracts.
Lending The Fund shall not make loans to other persons
except through the use of repurchase agreements or
the purchase of commercial paper. For these
purposes, the purchase of a portion of debt
securities which is part of an issue to the public
shall not be considered the making of a loan.
Illiquid Securities See "Underwriting."
Investment Companies The Fund shall not invest in securities of other
investment companies, except as they are acquired
as part of a merger, consolidation or acquisition
of assets.
Control or Management The Fund shall not invest in companies for the
purpose of exercising control.
Options The Fund shall not write or purchase put or call
options.
Futures None.
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous The Fund shall not invest more than 20% of its
assets in securities whose interest is subject to
federal income tax.
Tax-Free Fund, Inc. also has determined that, from
time to time, more than 10% of a Fund's assets may
be invested in municipal bonds insured as to
principal and interest by a single insurance
company. Tax-Free Fund, Inc. believes such
investments are consistent with the foregoing
restrictions.
See "Real Estate."
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-78
Tax-Free USA Intermediate Fund
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not, with respect to 50% of the
value of its assets, invest more than 5% of its
assets in the securities of any one issuer or
invest in more than 10% of the outstanding voting
securities of any one issuer, except that U.S.
government and government agency securities backed
by the U.S. government, or its agencies or
instrumentalities may be purchased without
limitation. For the purpose of this limitation,
the Fund will regard each state and political
subdivision, agency or instrumentality of a state
and each multistate agency of which a state is a
member as a separate issuer.
Concentration The Fund shall not invest more than 25% of its
total assets in any particular industry or
industries, except that the Fund may invest more
than 25% of the value of its total assets in
municipal bonds and in obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities.
Borrowing* The Fund shall not borrow money in excess of 10%
of the value of its assets and then only as a
temporary measure for extraordinary purposes. Any
borrowing will be done from a bank and to the
extent that such borrowing exceeds 5% of the value
of the Fund's assets, asset coverage of at least
300% is required. In the event that such asset
coverage shall at any time fall below 300%, the
Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer
period as the Securities and Exchange Commission
may prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that
the asset coverage of such borrowings shall be at
least 300%. The Fund will not issue senior
securities as defined in the Investment Company
Act of 1940 (the "1940 Act"), except for notes to
banks. (The issuance of three series of shares is
not deemed to be the issuance of senior securities
so long as such series comply with the appropriate
provisions of the 1940 Act.) Investment securities
will not normally be purchased while there is an
outstanding borrowing.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not sell securities short.
Underwriting The Fund shall not underwrite the securities of
other issuers, except that the Fund may
participate as part of a group in bidding for the
purchase of municipal bonds directly from an
issuer for its own portfolio in order to take
advantage of the lower purchase price available to
members of such a group; nor invest more than 10%
of the value of the Fund's net assets in illiquid
assets.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-79
Real Estate The Fund shall not purchase or sell real estate,
but this shall not prevent the Fund from investing
in municipal bonds secured by real estate or
interests therein.
Commodities None.
Lending None.
Illiquid Securities See "Underwriting."
Investment Companies The Fund shall not invest in securities of other
investment companies, except as they are acquired
as part of a merger, consolidation or acquisition
of assets.
Control or Management The Fund shall not invest in companies for the
purpose of exercising control.
Options None.
Futures None.
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous The Fund shall not invest more than 20% of its
assets in securities whose interest is subject to
federal income tax.
Tax-Free Fund, Inc. also has determined that, from
time to time, more than 10% of a Fund's assets may
be invested in municipal bonds insured as to
principal and interest by a single insurance
company. Tax-Free Fund, Inc. believes such
investments are consistent with the foregoing
restrictions.
See "Real Estate."
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-80
The Real Estate Investment Trust Portfolio
Category Current Fundamental Investment Restriction
- -------- -------------------------------------------
Diversification None.
Concentration The Fund shall not make any investment which would
cause more than 25% of the market or other fair
value of its total assets to be invested in the
securities of issuers all of which conduct their
principal business activities in the same industry
except that the Real Estate Investment Trust
Portfolios shall invest in excess of 25% of its
total assets in securities of issuers in the real
estate industry. This restriction does not apply
to obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Fund shall not borrow money, except as a
temporary measure for extraordinary purposes or to
facilitate redemptions. Any borrowing will be done
from a bank and to the extent that such borrowing
exceeds 5% of the value of its respective net
assets, asset coverage of at least 300% is
required. In the event that such asset coverage
shall at any time fall below 300%, the Fund shall,
within three days thereafter (not including Sunday
or holidays) or such longer period as the
Securities and Exchange Commission may prescribe
by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset
coverage of such borrowings shall be at least
300%. No investment securities will be purchased
while a Fund has an outstanding borrowing. The
Fund will not pledge more than 10% of its
respective net assets. The Fund will not issue
senior securities as defined in the Investment
Company Act of 1940, except for notes to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Fund shall not make short sales of securities,
or purchase securities on margin. The Fund may
satisfy margin requirements with respect to
futures transactions.
Underwriting The Fund shall not engage in the underwriting of
securities of other issuers, except that in
connection with the disposition of a security, the
Fund may be deemed to be an "underwriter" as that
term is defined in the Securities Act of 1933.
Real Estate The Fund shall not purchase or sell real estate or
real estate limited partnerships, but this shall
not otherwise prevent the Fund from investing in
securities secured by real estate or interests
therein, except that the Real Estate Investment
Trust Portfolios may each own real estate directly
as a result of a default on securities the Fund
owns.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-81
Commodities The Fund shall not purchase or sell commodities or
commodity contracts. The Fund may enter into
futures contracts and may purchase and sell
options on futures contracts in accordance with
the related prospectus subject to the investment
restrictions listed under "Futures."
Lending The Fund shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements), in accordance
with the Fund's investment objective and policies,
are considered loans, and except that the Fund may
loan up to 25% of its respective assets to
qualified broker/dealers or institutional
investors for their use relating to short sales or
other security transactions.
Illiquid Securities None.
Investment Companies None.
Control or Management None.
Options None.
Futures The Fund may enter into futures contracts and
options thereon to the extent that not more than
5% of its assets are required as futures contract
margin deposits and premiums on options and only
to the extent that obligations under such
contracts and transactions represent not more than
20% of its total assets.
See also "Short Sales/Margin" and "Commodities."
Unseasoned Issuers None.
Warrants The Fund shall not in addition to the restrictions
set forth above, in connection with the
qualification of its shares for sale in certain
states, the Fund may not invest in warrants if
such warrants, valued at the lower of cost or
market, would exceed 5% of the value of the Fund's
net assets. Included within such amount, but not
to exceed 2% of the Fund's net assets may be
warrants which are not listed on the New York
Stock Exchange or American Stock Exchange.
Warrants acquired by the Fund in units or attached
to securities may be deemed to be without value.
Holdings by Affiliates The Fund shall not purchase or retain the
securities of any issuer which has an officer,
director or security holder who is a director or
officer of Delaware Pooled Trust, Inc. or of
either of the investment advisers if or so long as
the directors and officers of Delaware Pooled
Trust, Inc. and of the investment advisers
together own beneficially more than 5% of any
class of securities of such issuer.
Oil or Gas The Fund shall not invest in interests in oil, gas
and other mineral leases or other mineral
exploration or development programs.
Miscellaneous None.
- ----------
* These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
F-82
- ----------------------------------------------------------------------------------------------------
Current Management (or
Investment Asset Size Sub-Advisory) Fee Rate
Manager or Date of as of Based On Average Daily
Company/Fund Sub-Adviser Agreement 11/30/98 Net Assets
- ----------------------------------------------------------------------------------------------------
Delaware Group Adviser Funds,Inc.
- ----------------------------------------------------------------------------------------------------
New Pacific Fund Delaware 5/4/96(1) 0.80% per year
(Investment Management) Management
Company,
Inc. ("DMC")
- ----------------------------------------------------------------------------------------------------
New Pacific Fund AIB Govett, 1/1/98(2) 0.50% per year
(Sub-Advisory) Inc. ("AIBG")
- ----------------------------------------------------------------------------------------------------
Overseas Equity Fund DMC 5/4/96(1) 1.00% per year
(Investment Management)
- ----------------------------------------------------------------------------------------------------
Overseas Equity Fund Delaware 9/15/97(3) 80% of fees paid to DMC
(Sub-Advisory) International
Advisers
Ltd.
("DIAL")
- ----------------------------------------------------------------------------------------------------
U.S. Growth Fund DMC 5/4/96(1) 0.70% per year
(Investment Management)
- ----------------------------------------------------------------------------------------------------
U.S. Growth Fund Lynch & 5/4/96(1) 0.40% per year
(Sub-Advisory) Mayer, Inc.
("L&M")
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Management
Fees that
Manage- Would Have
ment Been Due
Fees Due During The Servicing
and/or Last Fiscal /Distribution
Waived Year Under Fees Paid
Proposed Management (or Last Proposed Percentage Last Fiscal
Sub-Advisory) Fee Rate Fiscal Management Difference Year to
Based on Average Daily Year Fee Rate Between Affiliates of
Company/Fund Net Assets A B A & B Manager
- ----------------------------------------------------------------------------------------------------------------------
Delaware Group Adviser Funds,Inc.
- ----------------------------------------------------------------------------------------------------------------------
New Pacific Fund 0.85% on first $500 million
(Investment Management) 0.80% on next $500 million
0.75% on next $1,500 million
0.70% on assets in excess of
$2,500 million; all per year
- ----------------------------------------------------------------------------------------------------------------------
New Pacific Fund No Change N/A N/A
(Sub-Advisory)
- ----------------------------------------------------------------------------------------------------------------------
Overseas Equity Fund 0.85% on first $500 million
(Investment Management) 0.80% on next $500 million
0.75% on next $1,500 million
0.70% on assets in excess of
$2,500 million; all per year
- ----------------------------------------------------------------------------------------------------------------------
Overseas Equity Fund No Change N/A N/A
(Sub-Advisory)
- ----------------------------------------------------------------------------------------------------------------------
U.S. Growth Fund 0.65% on first $500 million
(Investment Management) 0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
- ----------------------------------------------------------------------------------------------------------------------
U.S. Growth Fund SRSY investigating No
(Sub-Advisory) Change
- ----------------------------------------------------------------------------------------------------------------------
- ------------------------------
(1) Last submitted to shareholders for approval on May 3, 1996 in connection
with the replacement of Lincoln Investment Management, Inc. as the Fund's
investment manager.
(2) Last submitted to shareholders for approval on January 1, 1998 in connection
with the internal restructuring of the previous sub-adviser (resulted in the
transfer of the previous sub-adviser's personnel and services to the current
sub-adviser).
(3) Last submitted to shareholders on ______ in connection with _________.
G-1
- ------------------------------------------------------------------------------------------------------
Current Management (or
Investment Asset Size Sub-Advisory) Fee Rate
Manager or Date of as of Based On Average Daily
Company/Fund Sub-Adviser Agreement 11/30/98 Net Assets
- ------------------------------------------------------------------------------------------------------
Delaware Group Cash Reserve, Inc. DMC 4/3/95(1) 0.50% on first $500 million
0.475% on next $250 million
0.45% on next $250 million
0.425% on next $250 million
0.375% on next $250 million
0.325% on next $250 million
0.30% on next $250 million
0.275% on assets in excess
of $2,000; all per year
less directors' fees
- ------------------------------------------------------------------------------------------------------
Delaware Group Equity Funds I,
Inc.
- ------------------------------------------------------------------------------------------------------
Delaware Balanced Fund DMC 4/3/95(1) 0.60% on first $100 million
(formerly Delaware Fund) 0.525% on next $150 million
0.50% on next $250 million
0.475% on assets in
excess of $500 million;
all per year less
directors' fees
- ------------------------------------------------------------------------------------------------------
Devon Fund DMC 4/3/95(1) 0.60% on first $500 million
0.50% on assets in
excess of $500 million;
all per year
- ------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Management
Fees that
Manage- Would Have
ment Been Due
Fees Due During The Servicing
and/or Last Fiscal /Distribution
Waived Year Under Fees Paid
Proposed Management (or Last Proposed Percentage Last Fiscal
Sub-Advisory) Fee Rate Fiscal Management Difference Year to
Based on Average Daily Year Fee Rate Between Affiliates of
Company/Fund Net Assets A B A & B Manager
- ---------------------------------------------------------------------------------------------------------------
Delaware Group Cash Reserve, Inc. 0.45% on first $500 million
0.40% on next $500 million
0.35% on next $1,500 million
0.30% on assets in excess of
$2,500 million; all per year
- ---------------------------------------------------------------------------------------------------------------
Delaware Group Equity Funds I,
Inc.
- ---------------------------------------------------------------------------------------------------------------
Delaware Balanced Fund 0.65% on first $500 million
(formerly Delaware Fund) 0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess
of $2,500 million;
all per year
- ---------------------------------------------------------------------------------------------------------------
Devon Fund 0.65% on first $500 million
0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in
excess of $2,500
million; all per year
- ---------------------------------------------------------------------------------------------------------------
- ----------------------
(1) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National Corporation's acquisition of DMC and DIAL.
G-2
- -----------------------------------------------------------------------------------------------------
Current Management (or
Investment Asset Size Sub-Advisory) Fee Rate
Manager or Date of as of Based On Average Daily
Company/Fund Sub-Adviser Agreement 11/30/98 Net Assets
- ---------------------------------------------------------------------------------------------------------
Delaware Group Equity Funds II,
Inc.
- ---------------------------------------------------------------------------------------------------------
Blue Chip Fund DMC 2/24/97(1) 0.65% on first $500 million
(Investment Management) 0.625% on next $500 million
0.60% on assets in excess of
$1,000 million; all per year
- ---------------------------------------------------------------------------------------------------------
Blue Chip Fund Vantage 2/24/97(1) 0.15% on average daily net
(Sub-Advisory) Global assets averaging one year old
Advisors, or less
Inc. ("VGA") 0.20% on average daily net
assets averaging two years
old or less, but greater than
one year old
0.35% on average daily net
assets averaging over two
years old; all per year
- ---------------------------------------------------------------------------------------------------------
Decatur Income Fund DMC 4/3/95(2) 0.60% on first $100 million
0.525% on next $150 million
0.50% on next $250 million
0.475% on assets in excess of
$500 million; all per year less
directors' fees
- ---------------------------------------------------------------------------------------------------------
Decatur Total Return Fund DMC 4/3/95(2) 0.60% on first $500 million
0.575% on next $250 million
0.55% on assets in excess of
$750 million; all per year less
directors' fees
- ---------------------------------------------------------------------------------------------------------
Social Awareness Fund DMC 2/24/97(1) 0.75% on first $500 million
(Investment Management) 0.725% on next $500 million
0.70% on assets in excess of
$1,000; all per year
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Management
Fees that
Manage- Would Have
ment Been Due
Fees Due During The Servicing
and/or Last Fiscal /Distribution
Waived Year Under Fees Paid
Proposed Management (or Last Proposed Percentage Last Fiscal
Sub-Advisory) Fee Rate Fiscal Management Difference Year to
Based on Average Daily Year Fee Rate Between Affiliates of
Company/Fund Net Assets A B A & B Manager
- ---------------------------------------------------------------------------------------------------------------------
Delaware Group Equity Funds II,
Inc.
- ---------------------------------------------------------------------------------------------------------------------
Blue Chip Fund 0.65% on first $500 million
(Investment Management) 0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
- ---------------------------------------------------------------------------------------------------------------------
Blue Chip Fund No Change N/A N/A
(Sub-Advisory)
- ---------------------------------------------------------------------------------------------------------------------
Decatur Income Fund 0.65% on first $500 million
0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of $2,500
million; all per year
- ---------------------------------------------------------------------------------------------------------------------
Decatur Total Return Fund 0.65% on first $500 million
0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
- ---------------------------------------------------------------------------------------------------------------------
Social Awareness Fund 0.75% on first $500 million
(Investment Management) 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------
(1) Last submitted to shareholders for initial approval on [February 24, 1997].
(2) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National Corporation's acquisition of DMC and DIAL.
G-3
- ------------------------------------------------------------------------------------------------------------------------------------
Current Management (or Proposed Management (or
Investment Asset Size Sub-Advisory) Fee Rate Sub-Advisory) Fee Rate
Manager or Date of as of Based On Average Daily Based on Average Daily
Company/Fund Sub-Adviser Agreement 11/30/98 Net Assets Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Social Awareness Fund VGA 2/24/97(1) 0.20% on average daily net No Change
(Sub-Advisory) assets averaging one year
old or less
0.25% on average daily net
assets averaging two years
old or less, but greater than
one year old
0.40% on average daily net
assets averaging over two
years old; all per year
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Group Equity Funds III,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Trend Fund DMC 4/3/95(2) 0.75% per year less 0.75% on first $500 million
directors' fees 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Group Equity Funds IV,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund DMC 11/29/96(3) 0.75% on first $500 million 0.75% on first $500 million
0.725% on next $500 million 0.70% on next $500 million
0.70% on assets in excess of 0.65% on next $1,500 million
$1,000 million; all per year 0.60% on assets in excess of
$2,500 million; all per year
- ------------------------------------------------------------------------------------------------------------------------------------
DelCap Fund DMC 4/3/95(2) 0.75% per year less 0.75% on first $500 million
directors' fees 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in
excess of $2,500
million; all per year
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------------------------
(1) Last submitted to shareholders for initial approval on [February 24, 1997].
(2) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National Corporation's acquisition of DMC and DIAL.
(3) Last submitted to shareholders for initial approval on [November 29, 1996].
- -----------------------------------------------------------------------------------------
Management
Fees that
Manage- Would Have
ment Been Due
Fees Due During The Servicing
and/or Last Fiscal /Distribution
Waived Year Under Fees Paid
Last Proposed Percentage Last Fiscal
Fiscal Management Difference Year to
Year Fee Rate Between Affiliates of
Company/Fund A B A & B Manager
- -----------------------------------------------------------------------------------------
Social Awareness Fund N/A N/A NA
(Sub-Advisory)
- -----------------------------------------------------------------------------------------
Delaware Group Equity Funds III,
Inc.
- -----------------------------------------------------------------------------------------
Trend Fund
- -----------------------------------------------------------------------------------------
Delaware Group Equity Funds IV,
Inc.
- -----------------------------------------------------------------------------------------
Capital Appreciation Fund
- -----------------------------------------------------------------------------------------
DelCap Fund
- -----------------------------------------------------------------------------------------
G-4
Current Management (or Proposed Management (or
Investment Asset Size Sub-Advisory) Fee Rate Sub-Advisory) Fee Rate
Manager or Date of as of Based On Average Daily Based on Average Daily
Company/Fund Sub-Adviser Agreement 11/30/98 Net Assets Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Group Equity Funds V,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Small Cap Value Fund
DMC 4/3/95(1) 0.75% per year less 0.75% on first $500 million
directors' fees 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
- ------------------------------------------------------------------------------------------------------------------------------------
Retirement Income Fund DMC 11/29/96(1) 0.65% on first $500 million 0.65% on first $500 million
0.625% on next $500 million 0.60% on next $500 million
0.60% on assets in excess of 0.55% on next $1,500 million
$1,000; all per year 0.50% on assets in excess of
$2,500; all per year
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Group Foundation Funds
- ------------------------------------------------------------------------------------------------------------------------------------
Balanced Portfolio DMC 12/18/97(3) 0.25% per year (currently No Change
waived to 0.10%)
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio DMC 12/18/97(3) 0.25% per year (currently No Change
waived to 0.10%)
- ------------------------------------------------------------------------------------------------------------------------------------
Income Portfolio DMC 12/18/97(3) 0.25% per year (currently No Change
waived to 0.10%)
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Group Global &
International Funds, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund DIAL 5/1/96(4) 1.25% per year 1.25% on first $500 million
1.20% on next $500 million
1.15% on next $1,500 million
1.10% on assets in excess of
$2,500 million; all per year
- ------------------------------------------------------------------------------------------------------------------------------------
Global Equity Fund (formerly DIAL 4/3/95(1) 0.75% per year less 0.85% on first $500 million
Global Assets Series) directors' fees 0.80% on next $500 million
(Investment Management) 0.75% on next $1,500 million
0.70% on assets in excess of
$2,500 million; all per year
- ------------------------------------------------------------------------------------------------------------------------------------
Management
Fees that
Manage- Would Have
ment Been Due
Fees Due During The Servicing
and/or Last Fiscal /Distribution
Waived Year Under Fees Paid
Last Proposed Percentage Last Fiscal
Fiscal Management Difference Year to
Year Fee Rate Between Affiliates of
Company/Fund A B A & B Manager
- ------------------------------------------------------------------------------------------
Delaware Group Equity Funds V,
Inc.
- ------------------------------------------------------------------------------------------
Small Cap Value Fund
N/A N/A
- ------------------------------------------------------------------------------------------
Retirement Income Fund N/A N/A
- ------------------------------------------------------------------------------------------
Delaware Group Foundation Funds
- ------------------------------------------------------------------------------------------
Balanced Portfolio N/A N/A
- ------------------------------------------------------------------------------------------
Growth Portfolio N/A N/A
- ------------------------------------------------------------------------------------------
Income Portfolio N/A N/A
- ------------------------------------------------------------------------------------------
Delaware Group Global &
International Funds, Inc.
- ------------------------------------------------------------------------------------------
Emerging Markets Fund N/A N/A
- ------------------------------------------------------------------------------------------
Global Equity Fund (formerly
Global Assets Series)
(Investment Management)
- ------------------------------------------------------------------------------------------
- ---------------------------
(1) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National corporation's acquisition of DMC and DIAL.
(2) Last submitted to shareholders for initial approval on [November 29, 1996]
(3) Last submitted to shareholders for initial approval on [December 18, 1997].
(4) Last submitted to shareholders for initial approval on [May 1, 1996].
G-5
- ----------------------------------------------------------------------------------------------------
Current Management (or
Investment Asset Size Sub-Advisory) Fee Rate
Manager or Date of as of Based On Average Daily
Company/Fund Sub-Adviser Agreement 11/30/98 Net Assets
- ----------------------------------------------------------------------------------------------------
Global Equity Fund (formerly DMC 4/3/95(1) 25% of fees paid to DIAL
Global Assets Series)
(Sub-Advisory)
- ----------------------------------------------------------------------------------------------------
Global Bond Fund DIAL 4/3/95(1) 0.75% per year less
directors' fees
- ----------------------------------------------------------------------------------------------------
Global Opportunities Fund DIAL 0.80% per year
(formerly Global Equity Series)
(Investment Management)
- ----------------------------------------------------------------------------------------------------
Global Opportunities Fund DMC 50% of fees paid to DIAL
(formerly Global Equity Series)
(Sub-Advisory)
- ----------------------------------------------------------------------------------------------------
International Equity Fund DIAL 4/3/95(1) 0.75% per year less
directors' fees
- ----------------------------------------------------------------------------------------------------
International Small Cap Fund DIAL 7/21/97(2) 1.25% per year
- ----------------------------------------------------------------------------------------------------
Delaware Group Government Fund,
Inc.
- ----------------------------------------------------------------------------------------------------
U.S. Government Fund DMC 4/3/95(1) 0.60% per year less
directors' fees
- ----------------------------------------------------------------------------------------------------
[RESTUBBED FROM PREVIOUS PAGE]
- -------------------------------------------------------------------------------------------------------------------
Management
Fees that
Manage- Would Have
ment Been Due
Fees Due During The Servicing
and/or Last Fiscal /Distribution
Waived Year Under Fees Paid
Proposed Management (or Last Proposed Percentage Last Fiscal
Sub-Advisory) Fee Rate Fiscal Management Difference Year to
Based on Average Daily Year Fee Rate Between Affiliates of
Company/Fund Net Assets A B A & B Manager
- --------------------------------------------------------------------------------------------------------------------
Global Equity Fund (formerly No Change
Global Assets Series)
(Sub-Advisory)
- -------------------------------------------------------------------------------------------------------------------
Global Bond Fund 0.75% on first $500 million N/A N/A
0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
- -------------------------------------------------------------------------------------------------------------------
Global Opportunities Fund 0.85% on first $500 million
(formerly Global Equity Series) 0.80% on next $500 million
(Investment Management) 0.75% on next $1,500 million
0.70% on assets in excess of
$2,500 million; all per year
- -------------------------------------------------------------------------------------------------------------------
Global Opportunities Fund No Change
(formerly Global Equity Series)
(Sub-Advisory)
- -------------------------------------------------------------------------------------------------------------------
International Equity Fund 0.85% on first $500 million
0.80% on next $500 million
0.75% on next $1,500 million
0.70% on assets in excess of
$2,500 million; all per year
- -------------------------------------------------------------------------------------------------------------------
International Small Cap Fund 1.25% on first $500 million N/A N/A
1.20% on next $500 million
1.15% on next $1,500 million
1.10% on assets in excess of
$2,500 million; all per year
- -------------------------------------------------------------------------------------------------------------------
Delaware Group Government Fund,
Inc.
- -------------------------------------------------------------------------------------------------------------------
U.S. Government Fund 0.55% on first $500 million
0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
- -------------------------------------------------------------------------------------------------------------------
- ----------------------
(1) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National Corporation's acquisition of DMC and DIAL.
(2) Last submitted to shareholders for initial approval on [July 21, 1997].
G-6
- ----------------------------------------------------------------------------------------------------
Current Management (or
Investment Asset Size Sub-Advisory) Fee Rate
Manager or Date of as of Based On Average Daily
Company/Fund Sub-Adviser Agreement 11/30/98 Net Assets
- -------------------------------------------------------------------------------------------------------
Delaware Group Income Funds, Inc.
- -------------------------------------------------------------------------------------------------------
Corporate Bond Fund
- -------------------------------------------------------------------------------------------------------
Delchester Fund DMC 4/3/95(1) 0.60% on first $500 million
0.575% on next $250 million
0.55% on assets in excess of
$750 million; all per year
less director's fees
- -------------------------------------------------------------------------------------------------------
Extended Duration Bond Fund
- -------------------------------------------------------------------------------------------------------
High-Yield Opportunities Fund DMC 12/27/96(2) 0.65% on first $500 million
0.625% on next $500 million
0.60% on assets in excess of
$1,000 million; all per year
- -------------------------------------------------------------------------------------------------------
Strategic Income Fund DMC 9/30/96(3) 0.65% on first $500 million
(Investment Management) 0.625% on next $500 million
0.60% on assets in excess of
$1,000 million; all per year
- -------------------------------------------------------------------------------------------------------
Strategic Income Fund DIAL 9/30/96(3) 1/3 of management fees
(Sub-Advisory) paid to DMC
- -------------------------------------------------------------------------------------------------------
Delaware Group Limited-Term
Government Funds, Inc.
- -------------------------------------------------------------------------------------------------------
Limited-Term Government Fund DMC 4/3/95(1) 0.50% per year less
directors' fees
- -------------------------------------------------------------------------------------------------------
[RESTUBBED FROM PREVIOUS PAGE]
- -------------------------------------------------------------------------------------------------------------------
Management
Fees that
Manage- Would Have
ment Been Due
Fees Due During The Servicing
and/or Last Fiscal /Distribution
Waived Year Under Fees Paid
Proposed Management (or Last Proposed Percentage Last Fiscal
Sub-Advisory) Fee Rate Fiscal Management Difference Year to
Based on Average Daily Year Fee Rate Between Affiliates of
Company/Fund Net Assets A B A & B Manager
- --------------------------------------------------------------------------------------------------------------------
Delaware Group Income Funds, Inc.
- --------------------------------------------------------------------------------------------------------------------
Corporate Bond Fund
- --------------------------------------------------------------------------------------------------------------------
Delchester Fund 0.65% on first $500 million
0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Extended Duration Bond Fund
- --------------------------------------------------------------------------------------------------------------------
High-Yield Opportunities Fund 0.65% on first $500 million N/A N/A
0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Strategic Income Fund 0.65% on first $500 million N/A N/A
(Investment Management) 0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Strategic Income Fund No Change N/A N/A
(Sub-Advisory)
- --------------------------------------------------------------------------------------------------------------------
Delaware Group Limited-Term
Government Funds, Inc.
- --------------------------------------------------------------------------------------------------------------------
Limited-Term Government Fund 0.50% on first $500 million N/A N/A
0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
(1) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National Corporation's acquisition of DMC and DIAL.
(2) Last submitted to shareholders for initial approval on [December 27, 1996].
(3) Last submitted to shareholders for initial approval on [September 30,
1996].
G-7
- ----------------------------------------------------------------------------------------------------
Current Management (or
Investment Asset Size Sub-Advisory) Fee Rate
Manager or Date of as of Based On Average Daily
Company/Fund Sub-Adviser Agreement 11/30/98 Net Assets
- -------------------------------------------------------------------------------------------------------
Delaware Group Premium Fund, Inc.
- -------------------------------------------------------------------------------------------------------
Capital Reserves Series DMC 4/3/95(1) 0.60% per year less
directors' fees
- -------------------------------------------------------------------------------------------------------
Cash Reserve Series DMC 4/3/95(1) 0.50% per year less
directors' fees
- -------------------------------------------------------------------------------------------------------
Convertible Securities Series DMC 5/1/97(2) 0.75% per year
- -------------------------------------------------------------------------------------------------------
Decatur Total Return Series DMC 4/3/95(1) 0.60% per year less
directors' fees
- -------------------------------------------------------------------------------------------------------
Delaware Series DMC 4/3/95(1) 0.60% per year less
directors' fees
- -------------------------------------------------------------------------------------------------------
DelCap Series DMC 4/3/95(1) 0.75% per year less
directors' fees
- -------------------------------------------------------------------------------------------------------
Delchester Series DMC 4/3/95(1) 0.60% per year less
directors' fees
- -------------------------------------------------------------------------------------------------------
[RESTUBBED FROM PREVIOUS PAGE]
- -------------------------------------------------------------------------------------------------------------------
Management
Fees that
Manage- Would Have
ment Been Due
Fees Due During The Servicing
and/or Last Fiscal /Distribution
Waived Year Under Fees Paid
Proposed Management (or Last Proposed Percentage Last Fiscal
Sub-Advisory) Fee Rate Fiscal Management Difference Year to
Based on Average Daily Year Fee Rate Between Affiliates of
Company/Fund Net Assets A B A & B Manager
- --------------------------------------------------------------------------------------------------------------------
Delaware Group Premium Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------
Capital Reserves Series 0.50% on first $500 million
0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Cash Reserve Series 0.45% on first $500 million
0.40% on next $500 million
0.35% on next $1,500 million
0.30% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Convertible Securities Series 0.75% on first $500 million N/A N/A
0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Decatur Total Return Series 0.65% on first $500 million
0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Delaware Series 0.65% on first $500 million
0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
DelCap Series 0.75% on first $500 million N/A N/A
0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Delchester Series 0.65% on first $500 million
0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
- -------------
(1) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National Corporation's acquisition of DMC and DIAL.
(2) Last submitted to shareholders for initial approval on [May 1, 1997].
G-8
- ---------------------------------------------------------------------------------------------------------
Current Management (or
Investment Asset Size Sub-Advisory) Fee Rate
Manager or Date of as of Based On Average Daily
Company/Fund Sub-Adviser Agreement 11/30/98 Net Assets
- ---------------------------------------------------------------------------------------------------------
Devon Series DMC 5/1/97(1) 0.60% per year
- ---------------------------------------------------------------------------------------------------------
Emerging Markets Series DIAL 5/1/96(2) 1.25% per year
- ---------------------------------------------------------------------------------------------------------
Global Bond Series DIAL 5/1/96(2) 0.75% per year
- ---------------------------------------------------------------------------------------------------------
International Equity Series DIAL 10/7/92(3) 0.75% per year less
directors' fees
- ---------------------------------------------------------------------------------------------------------
REIT Series
- ---------------------------------------------------------------------------------------------------------
Small Cap Value Series DMC 4/3/95(4) 0.75% per year
- ---------------------------------------------------------------------------------------------------------
Social Awareness Series DMC 5/1/97(1) 0.75% per year
(Investment Management)
- ---------------------------------------------------------------------------------------------------------
Social Awareness Series VGA 5/1/97(1) 0.25% on first $20 million
(Sub-Advisory) 0.35% on next $30 million
0.40% on assets in excess of
$50 million; all per year
- ---------------------------------------------------------------------------------------------------------------------
Management
Fees that
Manage- Would Have
ment Been Due
Fees Due During The Servicing
and/or Last Fiscal /Distribution
Waived Year Under Fees Paid
Proposed Management (or Last Proposed Percentage Last Fiscal
Sub-Advisory) Fee Rate Fiscal Management Difference Year to
Based on Average Daily Year Fee Rate Between Affiliates of
Company/Fund Net Assets A B A & B Manager
- --------------------------------------------------------------------------------------------------------------------
Devon Series 0.65% on first $500 million
0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Emerging Markets Series 1.25% on first $500 million N/A N/A
1.20% on next $500 million
1.15% on next $1,500 million
1.10% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Global Bond Series 0.75% on first $500 million N/A N/A
0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
International Equity Series 0.85% on first $500 million
0.80% on next $500 million
0.75% on next $1,500 million
0.70% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
REIT Series No Change N/A N/A
- --------------------------------------------------------------------------------------------------------------------
Small Cap Value Series 0.75% on first $500 million N/A N/A
0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Social Awareness Series 0.75% on first $500 million N/A N/A
(Investment Management) 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
- --------------------------------------------------------------------------------------------------------------------
Social Awareness Series No Change N/A N/A
(Sub-Advisory)
- ---------------
(1) Last submitted to shareholders for initial approval on [May 1, 1997].
(2) Last submitted to shareholders for initial approval on [May 1, 1996].
(3) Last submitted to shareholders for initial approval on [October 7, 1992].
(4) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National Corporation's acquisition of DMC and DIAL.
G-9
- ------------------------------------------------------------------------------------------------------
Current Management (or
Investment Asset Size Sub-Advisory) Fee Rate
Manager or Date of as of Based On Average Daily
Company/Fund Sub-Adviser Agreement 11/30/98 Net Assets
- ------------------------------------------------------------------------------------------------------
Strategic Income Series DMC 5/1/97(1) 0.65% per year
(Investment Management)
Strategic Income Series DIAL 5/1/97(1) 1/3 of management fees
(Sub-Advisory) paid to DMC
Trend Series DMC 4/3/95(2) 0.75% per year
Delaware Group State Tax-Free
Income Trust
Tax-Free New Jersey Fund DMC 9/2/97(3) 0.55% on first $500 million
0.525% on next $500 million
0.50% on assets in excess of
$1,000 million; all per year
Tax-Free Ohio Fund DMC 9/2/97(3) 0.55% on first $500 million
0.525% on next $500 million
0.50% on assets in excess of
$1,000 million all per year
Tax-Free Pennsylvania Fund DMC 4/3/95(2) 0.60% on first $500 million
0.575% on next $250 million
0.55% on assets in excess of
$750 million; all per year
Delaware Group Tax-Free Money DMC 4/3/95(2) 0.50% per year less directors' fees
Fund, Inc.
- -------------------------------------------------------------------------------------------------------------------
Management
Fees that
Manage- Would Have
ment Been Due
Fees Due During The Servicing
and/or Last Fiscal /Distribution
Waived Year Under Fees Paid
Proposed Management (or Last Proposed Percentage Last Fiscal
Sub-Advisory) Fee Rate Fiscal Management Difference Year to
Based on Average Daily Year Fee Rate Between Affiliates of
Company/Fund Net Assets A B A & B Manager
- ------------------------------------------------------------------------------------------------------------------
Strategic Income Series 0.65% on first $500 million N/A N/A
(Investment Management) 0.60% on next $500 million
0.55% on next $1,500
million; per year
0.50% on assets in excess of
$2,500 million; all per year
Strategic Income Series No Change N/A N/A
(Sub-Advisory)
Trend Series 0.75% on first $500 million N/A N/A
0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
Delaware Group State Tax-Free
Income Trust
Tax-Free New Jersey Fund 0.55% on first $500 million N/A N/A
0.50% on next $500 million
0.45% on next $1,500 million;
0.425% on assets in excess of
$2,500 million; all per year
Tax-Free Ohio Fund 0.55% on first $500 million N/A N/A
0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Tax-Free Pennsylvania Fund 0.55% on first $500 million
0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware Group Tax-Free Money 0.45% on first $500 million
Fund, Inc. 0.40% on next $500 million
0.35% on next $1,500 million
0.30% on assets in excess of
$2,500 million; all per year
- ---------------
(1) Last submitted to shareholders for initial approval on [May 1, 1997].
(2) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National Corporation's acquisition of DMC and DIAL.
(3) Last submitted to shareholders for initial approval on [September 2, 1997].
G-10
- ------------------------------------------------------------------------------------------------------------------------------------
Current Management (or
Investment Asset Size Sub-Advisory) Fee Rate
Manager or Date of as of Based On Average Daily
Company/Fund Sub-Adviser Agreement 11/30/98 Net Assets
- -------------------------------------------------------------------------------------------------------
Delaware Group Tax-Free Fund,
Inc.
- -------------------------------------------------------------------------------------------------------
Tax-Free Insured Fund DMC 4/3/95(1) 0.60% per year less
directors' fees
- -------------------------------------------------------------------------------------------------------
Tax-Free USA Fund DMC 4/3/95(1) 0.60% on first $500 million
0.575% on next $250 million
0.55% on assets in excess of
$750 million; all per year
less directors' fees
- -------------------------------------------------------------------------------------------------------
Tax-Free USA Intermediate Fund DMC 4/3/95(1) 0.50% per year less
directors' fees
- -------------------------------------------------------------------------------------------------------
Delaware Pooled Trust, Inc.
- -------------------------------------------------------------------------------------------------------
The Real Estate Investment Trust DMC 11/29/95(2) 0.75% per year
Portfolio
(Investment Management)
- -------------------------------------------------------------------------------------------------------
The Real Estate Investment Trust Lincoln 11/29/95(2) 30% of management fee
Portfolio Investment paid to DMC
(Sub-Advisory) Management,
Inc.
- -------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Management
Fees that
Manage- Would Have
ment Been Due
Fees Due During The Servicing
and/or Last Fiscal /Distribution
Waived Year Under Fees Paid
Proposed Management (or Last Proposed Percentage Last Fiscal
Sub-Advisory) Fee Rate Fiscal Management Difference Year to
Based on Average Daily Year Fee Rate Between Affiliates of
Company/Fund Net Assets A B A & B Manager
- -----------------------------------------------------------------------------------------------------------------------------
Delaware Group Tax-Free Fund,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Tax-Free Insured Fund 0.50% on first $500 million
0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
- -----------------------------------------------------------------------------------------------------------------------------
Tax-Free USA Fund 0.55% on first $500 million
0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
- -----------------------------------------------------------------------------------------------------------------------------
Tax-Free USA Intermediate Fund 0.50% on first $500 million
0.475% on next $500 million N/A N/A
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
- -----------------------------------------------------------------------------------------------------------------------------
Delaware Pooled Trust, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
The Real Estate Investment Trust 0.75% on first $500 million N/A N/A
Portfolio 0.70% on next $500 million
(Investment Management) 0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
- -----------------------------------------------------------------------------------------------------------------------------
The Real Estate Investment Trust No Change N/A N/A
Portfolio
(Sub-Advisory)
- -----------------------------------------------------------------------------------------------------------------------------
- ---------------
(1) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National Corporation's acquisition of DMC and DIAL.
(2) Last submitted to shareholders for initial approval on [November 29, 1995].
G-11
EXHIBIT H
ACTUAL AND HYPOTHETICAL EXPENSE TABLES
Class A Shares Class B & C Shares Institutional Shares Other*
Names of Fund/Company Actual Proposed Actual Proposed Actual Proposed Actual Proposed
- --------------------- ------ -------- ------ -------- ------ -------- ------ --------
New Pacific Fund
(Delaware Group Adviser Funds, Inc.)
Management Fees........................ 0.80% 0.85% 0.80%` 0.85% 0.80% 0.85% N/A N/A
12b-1 Fees............................. 0.30% 0.30% 1.00% 1.00% None None N/A N/A
Other Expenses......................... 1.75% 1.75% 1.75% 1.75% 1.75% 1.75% N/A N/A
---- ---- ---- ---- ---- ---- --- ---
Total Operating Expenses...... 2.85% 2.90% 3.55% 3.60% 2.55% 2.60% N/A N/A
==== ==== ==== ==== ==== ==== === ===
Total Operating Expenses
After Waiver**....... 2.00% ***% 2.70% ***% 1.70% ***% N/A N/A
==== === ==== === ==== === === ===
Delaware Balanced Fund (formerly Delaware Fund)
(Delaware Group Equity Funds I, Inc.)
Management Fees........................ 0.60% 0.65% 0.60%` 0.65% 0.60% 0.65% N/A N/A
12b-1 Fees............................. 0.19% 0.19% 0.00% 0.00% 0.00% 0.00% N/A N/A
Other Expenses......................... 0.27% 0.27% 0.00% 0.00% 0.00% 0.00% N/A N/A
---- ---- ---- ---- ---- ---- --- ---
Total Operating Expenses N/A N/A
=== ===
Total Operating Expenses
After Waiver**....... 0.00% ***% 0.00% ***% 0.00% ***% N/A N/A
==== === ==== === ==== === === ===
Devon Fund
(Delaware Group Equity Funds I, Inc.)
Management Fees........................ 0.60% 0.65% 0.60% 0.65% 0.60% 0.65% N/A N/A
12b-1 Fees............................. 0.30% 0.30% 1.00% 1.00% None None N/A N/A
Other Expenses........................ 0.82% 0.82% 1.52% 1.52% 0.52% 0.52% N/A N/A
---- ---- ---- ---- ---- ---- --- ---
Total Operating Expenses..... 1.72% 1.75% 3.12% 3.17% 1.12% 1.17% N/A N/A
==== ==== ==== ==== ==== ==== === ===
Total Operating Expenses
After Waiver**....... 1.30% ***% 2.00% ***% 1.00% ***% N/A N/A
==== === ==== === ==== === === ===
Decatur Income Fund
(Delaware Group Equity Funds II, Inc.)
Management Fees........................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% N/A N/A
12b-1 Fees............................. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% N/A N/A
Other Expenses......................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% N/A N/A
---- ---- ---- ---- ---- ---- --- ---
Total Operating Expenses...... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% N/A N/A
==== ==== ==== ==== ==== ==== === ===
Total Operating Expenses
After Waiver**....... 0.00% ***% 0.00% ***% 0.00% ***% N/A N/A
==== === ==== === ==== === === ===
Decatur Total Return Fund
(Delaware Group Equity Funds II, Inc.)
Management Fees........................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% N/A N/A
12b-1 Fees............................. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% N/A N/A
Other Expenses......................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% N/A N/A
---- ---- ---- ---- ---- ---- --- ---
Total Operating Expenses..... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% N/A N/A
==== ==== ==== ==== ==== ==== === ===
Total Operating Expenses
After Waiver**...... 0.00% ***% 0.00% ***% 0.00% ***% N/A N/A
==== === ==== === ==== === === ===
H-1
Global Equity Fund
(Delaware Group Global
& International Funds, Inc.)
Management Fees........................ 0.75% 0.85% 0.75% 0.85% 0.75% 0.85% N/A N/A
12b-1 Fees............................. 0.30% 0.30% 1.00% 1.00% None None N/A N/A
Other Expenses......................... 1.11% 1.11% 1.11% 1.11% 1.11% 1.11% N/A N/A
---- ---- ---- ---- ---- ---- --- ---
Total Operating Expenses..... 2.16% 2.26% 2.86% 2.96% 1.86% 1.96% N/A N/A
==== ==== ==== ==== ==== ==== === ===
Total Operating Expenses
After Waiver**...... 1.85% ***% 2.55% ***% 1.55% ***% N/A N/A
==== === ==== === ==== === === ===
Global Opportunities Fund (formerly Global Equity Fund)
(Delaware Group Global &
International Funds, Inc.)
Management Fees........................ 0.80% 0.85% 0.80% 0.85% 0.80% 0.85% N/A N/A
12b-1 Fees............................. 0.30% 0.30% 1.00% 1.00% None None N/A N/A
Other Expenses......................... 1.51% 1.51% 1.51% 1.51% 0.00% 0.00% N/A N/A
---- ---- ---- ---- ---- ---- --- ---
Total Operating Expenses..... 2.61% 2.66% 3.31% 3.36% 0.00% 0.00% N/A N/A
==== ==== ==== ==== ==== ==== === ===
Total Operating Expenses
After Waiver**...... 0.80% ***% 0.80% ***% 0.00% ***% N/A N/A
==== === ==== === ==== === === ===
International Equity Fund
(Delaware Group Global &
International Funds, Inc.)
Management Fees........................ 0.75% 0.85% 0.75% 0.85% 0.75% 0.85% N/A N/A
12b-1 Fees............................. 0.30% 0.30% 1.00% 1.00% None None N/A N/A
Other Expenses......................... 0.66% 0.66% 0.66% 0.66% 0.66% 0.66% N/A N/A
---- ---- ---- ---- ---- ---- --- ---
Total Operating Expenses..... 1.71% 1.81% 2.41% 0.00% 1.41% 1.51% N/A N/A
==== ==== ==== ==== ==== ==== === ===
Total Operating Expenses
After Waiver**...... 1.70% ***% 2.40% ***% 1.40% ***% N/A N/A
==== === ==== === ==== === === ===
Delchester Fund
(Delaware Group Income
Funds, Inc.)
Management Fees........................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% N/A N/A
12b-1 Fees............................. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00 N/A N/A
Other Expenses......................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% N/A N/A
---- ---- ---- ---- ---- ---- --- ---
Total Operating Expenses..... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% N/A N/A
==== ==== ==== ==== ==== ==== === ===
Total Operating Expenses
After Waiver**...... 0.00% ***% 0.00% ***% 0.00% ***% N/A N/A
==== === ==== === ==== === === ===
Decatur Total Return Series
(Delaware Group Premium Fund, Inc.)
Management Fees........................ N/A N/A N/A N/A N/A N/A 0.60% 0.65%
12b-1 Fees............................ N/A N/A N/A N/A N/A N/A None None
Other Expenses......................... N/A N/A N/A N/A N/A N/A 0.11% 0.11%
--- --- --- --- --- --- ---- ----
Total Operating Expenses..... N/A N/A N/A N/A N/A N/A 0.71% 0.76%
=== === === === === === ==== ====
Total Operating Expenses
After Waiver**...... N/A N/A N/A N/A N/A N/A 0.71% ***%
=== === === === === === ==== ===
H-2
Delaware Series
(Delaware Group Premium Fund, Inc.)
Management Fees........................ N/A N/A N/A N/A N/A N/A 0.60% 0.65%
12b-1 Fees............................. N/A N/A N/A N/A N/A N/A None None
Other Expenses......................... N/A N/A N/A N/A N/A N/A 0.07% 0.07%
--- --- --- --- --- --- ---- ----
Total Operating Expenses..... N/A N/A N/A N/A N/A N/A 0.67% 0.72%
=== === === === === === ==== ====
Total Operating Expenses
After Waiver**...... N/A N/A N/A N/A N/A N/A 0.67% ***%
=== === === === === === ==== ===
Delchester Series
(Delaware Group Premium Fund, Inc.)
Management Fees........................ N/A N/A N/A N/A N/A N/A 0.60% 0.65%
12b-1 Fees............................. N/A N/A N/A N/A N/A N/A None None
Other Expenses......................... N/A N/A N/A N/A N/A N/A 0.10% 0.10%
--- --- --- --- --- --- ---- ----
Total Operating Expenses..... N/A N/A N/A N/A N/A N/A 0.70% 0.75%
=== === === === === === ==== ====
Total Operating Expenses
After Waiver**...... N/A N/A N/A N/A N/A N/A 0.70% ***%
=== === === === === === ==== ===
Devon Series
(Delaware Group Premium Fund, Inc.)
Management Fees........................ N/A N/A N/A N/A N/A N/A 0.60% 0.65%
12b-1 Fees............................. N/A N/A N/A N/A N/A N/A None None
Other Expenses......................... N/A N/A N/A N/A N/A N/A 0.31% 0.31%
--- --- --- --- --- --- ---- ----
Total Operating Expenses..... N/A N/A N/A N/A N/A N/A 0.91% 0.96%
=== === === === === === ==== ====
Total Operating Expenses
After Waiver**...... N/A N/A N/A N/A N/A N/A 0.80% ***%
=== === === === === === ==== ===
International Equity Series
(Delaware Group Premium Fund, Inc.)
Management Fees........................ N/A N/A N/A N/A N/A N/A 0.75% 0.85%
12b-1 Fees............................. N/A N/A N/A N/A N/A N/A None None
Other Expenses......................... N/A N/A N/A N/A N/A N/A 0.20% 0.20%
--- --- --- --- --- --- ---- ----
Total Operating Expenses..... N/A N/A N/A N/A N/A N/A 0.95% 1.05%
=== === === === === === ==== ====
Total Operating Expenses
After Waiver**...... N/A N/A N/A N/A N/A N/A 0.95% ***%
=== === === === === === ==== ===
H-3
EXHIBIT I
FUNDS SIMILARLY MANAGED BY THE INVESTMENT MANAGERS
AND SUB-ADVISERS
Domestic Equity Funds
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* As of 11/30/98 On Average Daily Net Assets on Average Daily Net Assets++
---- ----------- -------------- ------------------------ --------------------------
Aggressive Growth Fund DMC $____________ 1.00% per year 0.75% on the first $500 million
0.70% on the next $500 million
0.65% on the next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
The Growth and Income DMC $____________ 0.55% per year N/A
Portfolio**
Growth Stock Fund DMC $____________ 1.00% per year 0.65% on the first $500 million
(Investment Management) 0.60% on the next $500 million
0.55% on the next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
Growth Stock Fund VAM $____________ 0.50% per year 0.325% per year
(Sub-Advisory)
Mid Cap Value Fund DMC $____________ 0.75% on first $500 million N/A
0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
The Large Cap Value Equity DMC $____________ 0.55% per year less 0.55% per year
Portfolio** directors' fees
The Mid-Cap Growth Equity DMC $____________ 0.80% per year less 0.75% per year
Portfolio** directors' fees
The Real Estate Investment DMC $____________ 0.75% per year N/A
Trust Portfolio II **
(Investment Management)
The Real Estate Investment LIM $____________ 30% of management fee paid N/A
Trust Portfolio II** to DMC
(Sub-Advisory)
Small Cap Contrarian Fund DMC $____________ 0.75% on first $500 million N/A
0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
The Small Cap Growth Equity DMC $____________ 0.75% per year N/A
Portfolio**
The Small/Mid Cap Value DMC $____________ 0.65% per year N/A
Equity Portfolio**
Tax-Efficient Equity Fund DMC $____________ 0.75% on first $500 million 0.75% on first $500 million
0.725% on next $500 million 0.70% on next $500 million
0.70% on assets in excess of 0.65% on next $1,500 million
$1,000 million; all per year 0.60% on assets in excess of
$2,500 million; all per year
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* As of 11/30/98 On Average Daily Net Assets on Average Daily Net Assets++
---- ----------- -------------- ------------------------ --------------------------
Growth and Income Fund of VGA $4,004,488,483 0.20% per year N/A
Lincoln Multi-Funds
Special Opportunities Fund of VGA $ 885,491,436 0.20% per year N/A
Lincoln Multi-Funds
Social Awareness Fund of VGA $1,710,210,719 0.20% per year N/A
Lincoln Multi-Funds
Managed Fund of VGA $ 468,863,668 0.20% per year N/A
Lincoln Multi-Funds
Core Equity Fund of VGA $ 666,471,755 0.20% per year N/A
Lincoln Dirctor Funds
Lincoln National LIM $ 107,643,507 0.875% per year N/A
Convertible Securities
Fund, Inc.
Lincoln National LIM $ 300,098,000 0.75% on first $200 million N/A
Aggressive Growth 0.70% on next $200 million N/A
Fund 0.65% on assets in
excess of $400 million;
all per year
Lincoln National Capital LIM $ 636,124,000 0.80% per year N/A
Appreciation Fund
Lincoln National Equity LIM $ 945,271,000 0.95% N/A
Income Fund
Lincoln National Growth LIM $3,941,773,000 0.48% on first $200 million N/A
& Income Fund 0.40% on next $200 million
0.30% on assets in excess
of $400 million; all
per year
Lincoln National LIM $1,698,006,000 " " N/A
Social Awareness
Fund
Lincoln National LIM $ 844,084,000 " " N/A
Special Opportunities
Fund
I-1
Domestic Fixed-Income Funds
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 11/30/98 On Average Daily Net Assets on Average Daily Net Assets
---- ------------ -------------- --------------------------- ---------------------------
The Aggregate Fixed Income DMC $____________ 0.40% per year N/A
Portfolio**
Delaware Group Dividend and DMC $____________ 0.55% per year N/A
Income Fund, Inc. ***
Delaware-Voyageur US DMC $____________ 0.50% per year 0.55% on first $500 million
Government Securities Fund 0.50% on next $500 million
(Investment Management) 0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million per year
Delaware-Voyageur US VAM $____________ 0.25% per year N/A
Government Securities Fund
(Sub-Advisory)
The Diversified Core Fixed DMC $____________ 0.43% per year N/A
Income Portfolio**
(Investment Management)
The Diversified Core Fixed DIAL $____________ Fee equal to portion on N/A
Income Portfolio** management fee attributable
(Sub-Advisory) to foreign investments
The High Yield Bond DMC $____________ 0.45% per year N/A
Portfolio**
The Intermediate Fixed DMC $____________ 0.40% per year less 0.40% per year
Income Portfolio** directors' fees
The Limited Term Maturity DMC $____________ 0.30% per year N/A
Portfolio**
I-2
Global and International Funds
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 11/30/98 On Average Daily Net Assets on Average Daily Net Assets
---- ----------- -------------- ------------------------ ------------------------
Delaware Group Global DMC $____________ 0.70% per year N/A
Dividend and Income Fund,
Inc. ***
(Investment Management)
Delaware Group Global DIAL $____________ 40% of management fees paid N/A
Dividend and Income Fund, to DMC
Inc. ***
(Sub-Advisory)
The Emerging Markets DIAL $____________ 1.20% per year 1.00% per year
Portfolio**
The Global Equity Portfolio** DIAL $____________ 0.75% per year N/A
(Investment Management)
The Global Equity Portfolio** DMC $____________ 0.50% of management fee paid N/A
(Sub-Advisory) to DIAL
The Global Fixed-Income DIAL $____________ 0.50% per year less 0.50% per year
Portfolio** directors' fees
The International Equity DIAL $____________ 0.75% per year less 0.75% per year
Portfolio** directors' fees
The International DIAL $____________ 0.50% per year N/A
Fixed-Income Portfolio**
The International Mid Cap DIAL $____________ 0.70% per year N/A
Sub Portfolio**
The Labor Select DIAL $____________ 0.75% per year N/A
International Equity
Portfolio**
Latin America Fund DIAL $____________ 1.25% per year N/A
New Europe Fund DIAL $____________ 1.25% per year N/A
I-3
National Tax-Free Funds
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 11/30/98 On Average Daily Net Assets on Average Daily Net Assets
---- ----------- -------------- ------------------------ ------------------------
National High-Yield DMC $____________ 0.65% per year 0.55% on first $500 million
Municipal Bond Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess
of $2,500 million; all per year
State Tax-Free Funds
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 11/30/98 On Average Daily Net Assets on Average Daily Net Assets
---- ------------ -------------- ------------------------ ------------------------
Delaware-Voyageur Tax-Free DMC $____________ 0.50% per year 0.55% on first $500 million
Arizona Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.50% per year 0.50% on first $500 million
Arizona Insured Fund 0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Voyageur Arizona Municipal DMC $____________ 0.40% per year N/A
Income Fund, Inc. ***
Delaware-Voyageur Tax-Free DMC $____________ 0.50% per year 0.55% on first $500 million
California Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.50% on first $500 million N/A
California Insured Fund 0.475% on next $500 million
0.45% on next $1,500
million
0.425% on assets in excess
of $2,500 million;
all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.50% per year 0.55% on first $500 million
Colorado Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Voyageur Colorado Insured DMC $____________ 0.40% per year N/A
Municipal Income Fund,
Inc.***
I-4
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 11/30/98 On Average Daily Net Assets on Average Daily Net Assets
---- ------------ -------------- ------------------------ ------------------------
Delaware-Voyageur Tax-Free DMC $____________ 0.55% on first $500 million N/A
Florida Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess
of $2,500 million; all per
year
Delaware-Voyageur Tax-Free DMC $____________ 0.50% on first $500 million N/A
Florida Insured Fund 0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess
of $2,500 million; all per
year
Voyageur Florida Insured DMC $____________ 0.40% per year N/A
Municipal Income Fund***
Delaware-Voyageur Tax-Free DMC $____________ 0.50% per year 0.55% on first $500 million
Idaho Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.50% per year 0.55% on first $500 million
Iowa Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.55% on first $500 million N/A
Kansas Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess
of $2,500 million; all per
year
Delaware-Voyageur Tax-Free DMC $____________ 0.50% per year 0.55% on first $500 million
Minnesota Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur DMC $____________ 0.50% per year 0.50% on first $500 million
Minnesota Insured Fund 0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.40% per year 0.50% on first $500 million
Minnesota Intermediate Fund 0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
I-5
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 11/30/98 On Average Daily Net Assets on Average Daily Net Assets
---- ------------ -------------- ------------------------ ------------------------
Delaware-Voyageur DMC $____________ 0.65% per year 0.55% on first $500 million
Minnesota High Yield 0.50% on next $500 million
Municipal Bond Fund 0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Voyageur Minnesota Municipal DMC $____________ 0.40% per year N/A
Income Fund,
Inc.***
Voyageur Minnesota Municipal DMC $____________ 0.40% per year N/A
Income Fund II, Inc. ***
Voyageur Minnesota Municipal DMC $____________ 0.40% per year N/A
Income Fund III, Inc.***
Delaware-Voyageur Tax-Free DMC $____________ 0.50% on first $500 million N/A
Missouri Insured Fund 0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.55% on first $500 million N/A
New Mexico Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.50% per year 0.55% on first $500 million
New York Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.50% per year 0.50% on next $500 million
North Dakota Fund 0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.50% on first $500 million N/A
Oregon Insured Fund 0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.55% on first $500 million N/A
Utah Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.50% on first $500 million N/A
Washington Insured Fund 0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur Tax-Free DMC $____________ 0.50% per year 0.55% on first $500 million
Wisconsin Fund 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
I-6
EXHIBIT J
FORM OF INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between [REGISTRANT], a[____________] ("Fund") on behalf
of the [SERIES] ("Series"), and [MANAGER NAME] , a ________________]
("Investment Manager").
WITNESSETH:
WHEREAS, the Fund has been organized and operates as an investment company
registered under the Investment Company Act of 1940 and is currently comprised
of [_] series, including the Series; as a separate series of the Fund, each
series engages in the business of investing and reinvesting its assets in
securities, and
WHEREAS, the Investment Manager is a registered investment adviser under the
Investment Advisers Act of 1940 and engages in the business of providing
investment management services; and
WHEREAS, the Fund on behalf of the Series and the Investment Manager desire to
enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
each of the parties hereto intending to be legally bound, it is agreed as
follows:
1. The Fund hereby employs the Investment Manager to manage the investment
and reinvestment of the Series' assets and to administer its affairs,
subject to the direction of the Fund's Board of Directors and officers of
the Fund for the period and on the terms hereinafter set forth. The
Investment Manager hereby accepts such employment and agrees during such
period to render the services and assume the obligations herein set forth
for the compensation herein provided. The Investment Manager shall for all
purposes herein be deemed to be an independent contractor, and shall,
unless otherwise expressly provided and authorized, have no authority to
act for or represent the Fund in any way, or in any way be deemed an agent
of the Fund. The Investment Manager shall regularly make decisions as to
what securities and other instruments to purchase and sell on behalf of the
Series and shall effect the purchase and sale of such investments in
furtherance of the Series' objectives and policies and shall furnish the
Board of Directors of the Fund with such information and reports regarding
the Series' investments as the Investment Manager deems appropriate or as
the Directors of the Fund may reasonably request.
2. The Fund shall conduct its own business and affairs and shall bear the
expenses and salaries necessary and incidental thereto including, but not
in limitation of the foregoing, the costs incurred in: the maintenance of
its corporate existence; the maintenance of its own books, records and
procedures; dealing with its own shareholders; the payment of dividends;
transfer of stock, including issuance, redemption and repurchase of shares;
preparation of share certificates; reports and notices to shareholders;
calling and holding of shareholders' meetings; miscellaneous office
expenses; brokerage commissions; custodian fees; legal and accounting fees;
taxes; and federal and state registration fees. Directors, officers and
employees of the Investment Manager may be directors, officers and
employees of any of the investment companies within the Delaware
Investments family (including the Fund). Directors, officers and employees
of the Investment Manager who are directors, officers and/or employees of
these investment companies shall not receive any compensation from such
companies for acting in such dual capacity.
In the conduct of the respective businesses of the parties hereto and in
the performance of this Agreement, the Fund and Investment Manager may
share facilities common to each, which may include legal and accounting
personnel, with appropriate proration of expenses between them.
J-1
3. (a) Subject to the primary objective of obtaining the best available
prices and execution, the Investment Manager will place orders for the
purchase and sale of portfolio securities and other instruments with such
broker/dealers selected who provide statistical, factual and financial
information and services to the Fund, to the Investment Manager, to any
Sub-Adviser, as defined in Paragraph 5 hereof, or to any other fund for
which the Investment Manager or any such Sub-Adviser provides investment
advisory services and/or with broker/dealers who sell shares of the Fund or
who sell shares of any other fund for which the Investment Manager or any
such Sub-Adviser provides investment advisory services. Broker/dealers who
sell shares of the funds of which Delaware Management Company is investment
manager, shall only receive orders for the purchase or sale of portfolio
securities to the extent that the placing of such orders is in compliance
with the Rules of the Securities and Exchange Commission and the National
Association of Securities Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above and subject to
such policies and procedures as may be adopted by the Board of Directors
and officers of the Fund, the Investment Manager may ask the Fund and the
Fund may agree to pay a member of an exchange, broker or dealer an amount
of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange, broker or dealer would
have charged for effecting that transaction, in such instances where the
Fund and the Investment Manager have determined in good faith that such
amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such member, broker or dealer,
viewed in terms of either that particular transaction or the Investment
Manager's overall responsibilities with respect to the Fund and to other
funds and other advisory accounts for which the Investment Manager or any
Sub-Adviser, as defined in Paragraph 5 hereof, exercises investment
discretion.
4. As compensation for the services to be rendered to the Fund by the
Investment Manager under the provisions of this Agreement, the Fund shall
pay to the Investment Manager monthly from the Series' assets, a fee based
on the average daily net assets of the Series during the month. Such fee
shall be calculated in accordance with the following schedule:
Monthly Annual Rate Average Daily Net Assets
------- ----------- ------------------------
If this Agreement is terminated prior to the end of any calendar month, the
management fee shall be prorated for the portion of any month in which this
Agreement is in effect according to the proportion which the number of
calendar days, during which the Agreement is in effect, bears to the number
of calendar days in the month, and shall be payable within 10 days after
the date of termination.
5. The Investment Manager may, at its expense, select and contract with one
or more investment advisers registered under the Investment Advisers Act of
1940 ("Sub-Advisers") to perform some or all of the services for the Series
for which it is responsible under this Agreement. The Investment Manager
will compensate any Sub-Adviser for its services to the Series. The
Investment Manager may terminate the services of any Sub-Adviser at any
time in its sole discretion, and shall at such time assume the
responsibilities of such Sub-Adviser unless and until a successor
Sub-Adviser is selected and the requisite approval of the Series'
shareholders is obtained. The Investment Manager will continue to have
responsibility for all advisory services furnished by any Sub-Adviser.
6. The services to be rendered by the Investment Manager to the Fund under
the provisions of this Agreement are not to be deemed to be exclusive, and
the Investment Manager shall be free to render similar or different
services to others so long as its ability to render the services provided
for in this Agreement shall not be impaired thereby.
7. The Investment Manager, its directors, officers, employees, agents and
shareholders may engage in other businesses, may render investment advisory
services to other investment companies, or to any other corporation,
association, firm or individual, and may render underwriting services to
the Fund or to any other investment company, corporation, association, firm
or individual.
J-2
8. It is understood and agreed that so long as the Investment Manager
and/or its advisory affiliates shall continue to serve as the Fund's
investment adviser, other mutual funds as may be sponsored or advised by
the Investment Manager or its affiliates shall have the right permanently
to adopt and to use the words "Delaware," "Delaware Investments" or
"Delaware Group" in their names and in the names of any series or class of
shares of such funds.
9. In the absence of willful misfeasance, bad faith, gross negligence, or a
reckless disregard of the performance of its duties as the Investment
Manager to the Fund, the Investment Manager shall not be subject to
liability to the Fund or to any shareholder of the Fund for any action or
omission in the course of, or connected with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale of
any security, or otherwise.
10. This Agreement shall be executed and become effective as of the date
written below if approved by the vote of a majority of the outstanding
voting securities of the Series. It shall continue in effect for a period
of two years and may be renewed thereafter only so long as such renewal and
continuance is specifically approved at least annually by the Board of
Directors or by the vote of a majority of the outstanding voting securities
of the Series and only if the terms and the renewal hereof have been
approved by the vote of a majority of the Directors of the Fund who are not
parties hereto or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. Notwithstanding
the foregoing, this Agreement may be terminated by the Fund at any time,
without the payment of a penalty, on sixty days' written notice to the
Investment Manager of the Fund's intention to do so, pursuant to action by
the Board of Directors of the Fund or pursuant to the vote of a majority of
the outstanding voting securities of the Series. The Investment Manager may
terminate this Agreement at any time, without the payment of a penalty, on
sixty days' written notice to the Fund of its intention to do so. Upon
termination of this Agreement, the obligations of all the parties hereunder
shall cease and terminate as of the date of such termination, except for
any obligation to respond for a breach of this Agreement committed prior to
such termination, and except for the obligation of the Fund to pay to the
Investment Manager the fee provided in Paragraph 4 hereof, prorated to the
date of termination. This Agreement shall automatically terminate in the
event of its assignment.
11. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
12. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities"; "interested persons"; and "assignment"
shall have the meaning defined in the Investment Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have caused their corporate seals to be
affixed and duly attested and their presents to be signed by their duly
authorized officers as of the day of , 19 .
J-3
[MANAGER NAME] [REGISTRANT NAME]
for the [SERIES NAME]
By:_________________________________
Name:_______________________________
Title:______________________________
By:__________________________________
Name:________________________________
Title:_______________________________
Attest:_____________________________
Name:_______________________________
Title:______________________________
Attest:______________________________
Name:________________________________
Title:_______________________________
J-4
EXHIBIT K
FORM OF SUB-ADVISORY AGREEMENT
AGREEMENT, made by and between [MANAGER NAME] ("Investment Manager"), and
[SUB-ADVISER NAME] ("Sub-Adviser").
WITNESSETH:
WHEREAS, [REGISTRANT NAME], a [______________] ("Fund"), has been organized and
operates as an investment company registered under the Investment Company Act of
1940 and engages in the business of investing and reinvesting its assets in
securities, and
WHEREAS, the Investment Manager and the Fund on behalf of the [Series]
("Series") have entered into an agreement of even date herewith ("Investment
Management Agreement") whereby the Investment Manager will provide investment
advisory services to the Fund on behalf of the Series; and
WHEREAS, the Investment Management Agreement permits the Investment Manager to
hire one or more Sub-Adviser to assist the Investment Manager in providing
investment advisory services to the Fund on behalf of the Series; and
WHEREAS, the Investment Manager and the Sub-Adviser are registered Investment
Advisers under the Investment Advisers Act of 1940 and engage in the business of
providing investment management services.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
each of the parties hereto intending to be legally bound, it is agreed as
follows:
1. The Investment Manager hereby employs the Sub-Adviser, subject always to
the Investment Manager's control and supervision, to manage the investment
and reinvestment of that portion of the Series' assets as the Investment
Manager shall designate from time to time and to furnish the Investment
Manager with investment recommendations, asset allocation advice, research,
economic analysis and other investment services with respect to securities
in which the Series may invest, subject to the direction of the Board and
officers of the Fund for the period and on the terms hereinafter set forth.
The Sub-Adviser hereby accepts such employment and agrees during such
period to render the services and assume the obligations herein set forth
for the compensation herein provided. The Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor, and shall,
unless otherwise expressly provided and authorized, have no authority to
act for or represent the Fund in any way, or in any way be deemed an agent
of the Fund. The Sub-Adviser shall regularly make decisions as to what
securities to purchase and sell on behalf of the Series with respect to
that portion of the Series' assets designated by the Investment Manager,
shall effect the purchase and sale of such investments in furtherance of
the Series' objectives and policies and shall furnish the Board of
Directors of the Fund with such information and reports regarding its
activities as the Investment Manager deems appropriate or as the Directors
of the Fund may reasonably request in the performance of its duties and
obligations under this Agreement, the Sub-Adviser shall act in conformity
with the Articles of Incorporation, By-Laws and Prospectus of the Fund and
with the instructions and directions of the Investment Manager and of the
Board of Directors of the Fund and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986 and all
other applicable federal and state laws and regulations consistent with the
provisions of Section 15(c) of the Investment Company Act of 1940.
K-1
2. Under the terms of the Investment Management Agreement, the Fund shall
conduct its own business and affairs and shall bear the expenses and
salaries necessary and incidental thereto including, but not in limitation
of the foregoing, the costs incurred in: the maintenance of its corporate
existence; the maintenance of its own books, records and procedures;
dealing with its own shareholders; the payment of dividends; transfer of
stock, including issuance and repurchase of shares; preparation of share
certificates; reports and notices to shareholders; calling and holding of
shareholders' meetings; miscellaneous office expenses; brokerage
commissions; custodian fees; legal and accounting fees; taxes; and federal
and state registration fees. Without limiting the foregoing, except as the
Investment Manager and the Sub-Adviser may agree in writing from time to
time, the Sub-Adviser shall have no responsibility for record maintenance
and preservation obligations under Section 31 of the Investment Company Act
of 1940.
Directors, officers and employees of the Sub-Adviser may be directors,
officers and employees of other funds which have employed the Sub-Adviser
as sub-adviser or investment manager. Directors, officers and employees of
the Sub-Adviser who are Directors, officers and/or employees of the Fund,
shall not receive any compensation from the Fund for acting in such dual
capacity. In the conduct of the respective business of the parties hereto
and in the performance of this Agreement, the Fund, the Investment Manager
and the Sub-Adviser may share facilities common to each, which may include
legal and accounting personnel, with appropriate proration of expenses
between and among them.
3. (a) Subject to the primary objective of obtaining the best available
prices and execution, the Sub-Adviser will place orders for the purchase
and sale of portfolio securities and other instruments with such
broker/dealers who provide statistical, factual and financial information
and services to the Fund, to the Investment Manager, to the Sub-Adviser or
to any other Fund for which the Investment Manager or Sub-Adviser provides
investment advisory services and/or with broker/dealers who sell shares of
the Fund or who sell shares of any other Fund for which the Investment
Manager or Sub-Adviser provides investment advisory services.
Broker/dealers who sell shares of the Funds for which the Investment
Manager or Sub-Adviser provides advisory services shall only receive orders
for the purchase or sale of portfolio securities to the extent that the
placing of such orders is in compliance with the rules of the Securities
and Exchange Commission and the National Association of Securities Dealers,
Inc.
(b) Notwithstanding the provisions of subparagraph (a) above and subject to
such policies and procedures as may be adopted by the Board of Directors
and officers of the Fund, the Sub-Adviser may ask the Fund and the Fund may
agree to pay a member of an exchange, broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount
of commission another member of an exchange, broker or dealer would have
charged for effecting that transaction, in such instances where it and the
Sub-Adviser have determined in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and research
services provided by such member, broker or dealer, viewed in terms of
either that particular transaction or the Sub-Adviser's overall
responsibilities with respect to the Fund and to other funds and other
advisory accounts for which the Investment Manager or the Sub-Adviser
exercises investment discretion.
4. As compensation for the services to be rendered to the Fund for the
benefit of the Series by the Sub-Adviser under the provisions of this
Agreement, the Investment Manager shall pay to the Sub-Adviser:
[(The following language is used for funds that do not have an asset-based
sub-advisory fee rate:) a monthly fee equal to [%] of the fees paid to the
Investment Manager under the Investment Management Agreement.]
[(The following language is used for funds that have an asset-based
sub-advisory fee rate:) a monthly fee equal to [insert asset-based fee
rate]; provided however, that the Sub-Adviser shall waive all or a portion
of the fees payable under this Agreement to the extent necessary to bear
its proportionate share of any management fee waiver undertaken by the
Investment Manager. The amount of such waiver by the Sub-Adviser shall be
calculated by multiplying the dollar amount of the management fees waived
by the investment manager by the percentage that the then-current
sub-advisory fee rate represents of the then-current investment management
fee rate.]
K-2
If this Agreement is terminated prior to the end of any calendar month, the
Sub-Advisory fee shall be prorated for the portion of any month in which
this Agreement is in effect according to the proportion which the number of
calendar days, during which the Agreement is in effect, bears to the number
of calendar days in the month, and shall be payable within 10 days after
the date of termination.
5. The services to be rendered by the Sub-Adviser to the Fund for the
benefit of the Series under the provisions of this Agreement are not to be
deemed to be exclusive, and the Sub-Adviser shall be free to render similar
or different services to others so long as its ability to render the
services provided for in this Agreement shall not be impaired thereby;
provided, however, except for advisory arrangements implemented prior to
the date of this Agreement, during the term of this Agreement, the
Sub-Adviser, will not, without the written consent of the Investment
Manager, which consent will not be unreasonably withheld, render investment
company (or portfolio thereof) which the Investment manger reasonably
determines would be in competition with and which has investment policies
similar to those of the Portfolio.
6. Subject to the limitation set forth in Paragraph 5, the Sub-Adviser, its
directors, officers, employees, agents and shareholders may engage in other
businesses, may render investment advisory services to other investment
companies, or to any other corporation, association, firm or individual,
and may render underwriting services to the Fund or to any other investment
company, corporation, association, firm or individual.
The Investment Manager agrees that it shall not use the Sub-Adviser's name
or otherwise refer to the Sub-Adviser in any materials distributed to third
parties, including the Series' shareholders, without the prior written
consent of the Sub-Adviser.
7. In the absence of willful misfeasance, bad faith, gross negligence, or a
reckless disregard of the performance of its duties as Sub-Adviser to the
Fund, the Sub-Adviser shall not be subject to liability to the Fund, to the
Investment Manager or to any shareholder of the Fund for any action or
omission in the course of, or connected with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale of
any security, or otherwise.
8. This Agreement shall be executed and become effective as of the date
written below if approved by the vote of a majority of the outstanding
voting securities of the Series. It shall continue in effect for a period
of two years and may be renewed thereafter only so long as such renewal and
continuance is specifically approved at least annually by the Board of
Directors or by the vote of a majority of the outstanding voting securities
of the Series and only if the terms and the renewal hereof have been
approved by the vote of a majority of the Directors of the Fund who are not
parties hereto or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. Notwithstanding
the foregoing, this Agreement may be terminated by the Investment Manager
or the Fund at any time, without the payment of a penalty, on sixty days'
written notice to the Sub-Adviser, of the Investment Manager's or the
Fund's intention to do so, in the case of the Fund pursuant to action by
the Board of Directors of the Fund or pursuant to the vote of a majority of
the outstanding voting securities of the Series. The Sub-Adviser may
terminate this Agreement at any time, without the payment of a penalty on
sixty days' written notice to the Investment Manager and the Fund of its
intention to do so. Upon termination of this Agreement, the obligations of
all the parties hereunder shall cease and terminate as of the date of such
termination, except for any obligation to respond for a breach of this
Agreement committed prior to such termination, and except for the
obligation of the Investment Manager to pay to the Sub-Adviser the fee
provided in Paragraph 4 hereof, prorated to the date of termination. This
Agreement shall automatically terminate in the event of its assignment.
This Agreement shall automatically terminate upon the termination of the
Investment Management Agreement.
K-3
9. This Agreement shall extend to and bind the successors of the parties
hereto.
10. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities"; "interested person"; and "assignment"
shall have the meaning defined in the Investment Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have caused their corporate seals to
be affixed and duly attested and their presents to be signed by their duly
authorized officers as of the day of [_____________], [______].
[MANAGER NAME]
By:
-----------------------------------
Name:
Title:
Attest:
--------------------------------
[SUB-ADVISER NAME]
By:
-----------------------------------
Name:
Title:
Attest:
--------------------------------
Agreed to and accepted as of the day and year first above written:
[REGISTRANT NAME]
on behalf of the [SERIES NAME]
By:
-----------------------------------
Chairman
Attest:
--------------------------------
K-4
EXHIBIT L
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENTREDOMESTICATION
BETWEEN VOYAGEUR INVESTMENT TRUST
AND PLAN OF REORGANIZATIONDELAWARE INVESTMENTS MUNICIPAL TRUST
This Agreement and Plan of Reorganization ("Agreement"AGREEMENT") is made as of
this ___ day of ______________, 1998___________, 2004 by and between [name of Delaware
business trust],DELAWARE INVESTMENTS MUNICIPAL
TRUST, a Delaware businessstatutory trust ("Fund"(the "DELAWARE TRUST"), and [name of Maryland
corporation/Delaware Group State Tax-Free Income Trust],VOYAGEUR
INVESTMENT TRUST, a Maryland
corporation/Pennsylvania common lawMassachusetts business trust ("Corporation/Trust"(the "MASSACHUSETTS TRUST")
(the FundDelaware Trust and the Corporation/TrustMassachusetts Trusts are hereinafter collectively
referred to as the "parties""TRUSTS").
In consideration of the mutual promises contained herein, and
intending to be legally bound, the partiesTrusts hereto agree as follows:
1. Plan of Reorganization.PLAN OF REORGANIZATION.
(a) Upon satisfaction of the conditions precedent described in Section
3 hereof, the Corporation/Massachusetts Trust will convey, transfer and deliver to the
FundDelaware Trust at the closing provided for in Section 2 hereof (hereinafter
referred to as the "Closing""CLOSING") all of the Corporation's/Trust's then-existing assets the assets
belongingallocated to each
class of shares of each of the Massachusetts Trust's [five] series of the Corporation/Trust to be conveyed, transferred
and deliveredshares to
the corresponding class and series of shares of the Fund.Delaware Trust. In
consideration thereof, the FundDelaware Trust agrees at the Closing (1) toto: (i) assume
and pay when due, to the extent that theythere exist Massachusetts Trust obligations
and liabilities on or after the Effective Date of the Reorganization (as defined
in Section 2 hereof), all of the Corporation's/Trust'ssuch obligations and liabilities, whether absolute,
accrued, contingent or otherwise, including all fees and expenses in connection
with thethis Agreement, which fees and expenses shall, in turn, include, without
limitation, costs of legal advice, accounting, printing, mailing, proxy
solicitation and transfer taxes, if any, thesuch obligations and liabilities
allocated to each class of shares of each series of the Corporation/Massachusetts Trust to
become the obligations and liabilities of the corresponding class of shares and
series of the Fund,Delaware Trust; (ii) adopt as its own the Massachusetts Trust's
Notification of Registration on Form N-8A ("FORM N-8A") for purposes of the
Investment Company Act of 1940, as amended ("1940 ACT"); (iii) file with the
U.S. Securities and (2)Exchange Commission (the "COMMISSION") an amendment to such
Form N-8A pursuant to Section 8(a) of the 1940 Act; and (iv) deliver, in
accordance with paragraph (b) of this Section 1, full and fractional shares of
beneficial interest, $.01without par value, of the Delaware Trust of each class of
shares of the Fund's[five] separate series of the Delaware Trust denominated as
[Delaware Tax-Free California Insured Fund,] [Delaware Tax-Free Florida Fund,]
Delaware Tax-Free Florida Insured Fund, Delaware Tax-Free Missouri Insured Fund
and the respective classes of those series, all as set forth in the
Appendix attached heretoDelaware Tax-Free Oregon Insured Fund (hereinafter the series are individually and
collectively referred to as "Series of the Fund" and the classes are
individually referred to as a "Class of the Fund" and collectively as "Classes
of the Fund""SERIES OF THE DELAWARE TRUST"), equal in number to
the number of full and fractional shares of common stock/beneficial interest, ______without par
value, of, respectively, eachthe corresponding class of shares of the Corporation's/Massachusetts
Trust's [five] [three] separate series bearing substantially the same name and
class structure as the respective classescorresponding Series of those
series, all as set forth in the Appendix attached heretoDelaware Trust (hereinafter the
series are referred to
individually and collectively as "Series of the
Corporation/Trust" and the classes are referred to individually as a "Class of
the Corporation/Trust" and collectively, as "Classes of the Corporation/Trust""SERIES OF THE MASSACHUSETTS
TRUST") outstanding immediately prior to the Effective Date of the
Reorganization. The transactionsreorganization contemplated hereby areis intended to qualify as
a reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended ("Code"CODE"). L-1The Massachusetts Trust shall distribute to the
shareholders of each class of shares of each Series of the Massachusetts Trust
the shares of the corresponding class of shares and Series of the Delaware Trust
in accordance with this Agreement and the resolutions of the Massachusetts
Trust's Board Trustees authorizing the transactions contemplated by this
Agreement.
C-1
(b) In order to effect suchthe delivery of the Fundshares of the Series of the
Delaware Trust described in Section 1(a)(iv) hereof, the Delaware Trust will
establish an open account for each shareholder of each class of shares of each
Series of the Corporation/Massachusetts Trust and, on the Effective Date of the
Reorganization, will credit to such account full and fractional shares of
such Series and Classbeneficial interest, without par value, of the Fundcorresponding class of shares and
Series of the Delaware Trust equal to the number of full and fractional shares
of beneficial interest such shareholder holds in thethat corresponding Seriesclass of
shares and ClassSeries of the Corporation/Massachusetts Trust at the close of regular trading on
the New York Stock Exchange, Inc. ("NYSE") on the business day immediately
preceding the Effective Date of the Reorganization; fractionalReorganization. Fractional shares of each
ClassSeries of the FundDelaware Trust will be carried to the third decimal place. OnAt the
close of regular trading on the NYSE on the business day immediately preceding
the Effective Date of the Reorganization, the net asset value per share of beneficial interesteach
class of shares of each ClassSeries of the FundDelaware Trust shall be deemed to be the
same as the net asset value per share of the corresponding Classclass of shares and
Series of the Corporation/Trust at the close of regular trading on
the New York Stock Exchange on the business day immediately preceding the
Effective Date of the Reorganization.Massachusetts Trust. On the Effective Date of the Reorganization,
each certificate representing shares of athe Series and Class of the Corporation/Massachusetts Trust
will be deemed to represent the same number and the corresponding class of
shares and Series of the corresponding Series and Class of the Fund. Each shareholder of the
Corporation/Trust will have the right to exchange his (her) share certificates
for share certificates of the Fund. However, a shareholder need not make this
exchange of certificates unless he (she) so desires.Delaware Trust. Simultaneously with the crediting of
the corresponding class of shares and Series of the Series and Classes of the FundDelaware Trust to the
shareholders of record of the Corporation/Series of the Massachusetts Trust, the
corresponding class of shares and Series of the Series and
Classes of the Corporation/Massachusetts Trust held by such
shareholdershareholders shall be cancelled. Shareholders of each Series of the
Massachusetts Trust will have the right to deliver their share certificates of
that Series of the Massachusetts Trust in exchange for share certificates of the
corresponding class of shares and Series of the Delaware Trust. However, a
shareholder need not deliver such certificates to the Delaware Trust unless the
shareholder so desires.
(c) As soon as practicable after the Effective Date of the
Reorganization, the Corporation/Massachusetts Trust shall take all necessary steps under
Maryland/Pennsylvania lawactions to
effect a complete dissolution of the Corporation/Trust.Company under Massachusetts law.
(d) The expenses of entering into and carrying out this Agreement will
be borne by [PLEASE CONFIRM: Delaware Management Company, a series of Delaware
Management Business Trust ("DMC")].
2. Closing and Effective Date of the Reorganization.CLOSING AND EFFECTIVE DATE OF THE REORGANIZATION.
The Closing shall consist ofof: (i) the conveyance, transfer and
delivery of the Corporation's/Massachusetts Trust's assets to the Fund,Delaware Trust, in exchange
for the assumption and payment, when due, by the FundDelaware Trust of the
Corporation's/Massachusetts Trust's obligations and liabilities; (ii) the adoption by the
Delaware Trust as its own of the Massachusetts Trust's Form N-8A for purposes of
the 1940 Act; (iii) the filing with the Commission of an amendment to such Form
N-8A pursuant to Section 8(a) of the 1940 Act containing such amendments to the
Form N-8A as are determined by the Delaware Trust's Board of Trustees to be
necessary and (ii)appropriate as a result of the transactions contemplated by this
Agreement; and (iv) the issuance and delivery of the Fund'sDelaware Trust's shares,
all in accordance with Section 1(b),1 hereof, together with related acts necessary to
consummate such transactions. The Closing shall occur either on (a) the business
day immediately following the later of the receipt of all necessary regulatory
approvals and the final adjournment of the meeting of shareholders of the
Corporation/Massachusetts Trust at which this Agreement will beis considered and approved, or (b)
such later date as the partiesTrusts may mutually agree ("Effective Date of the Reorganization"EFFECTIVE DATE OF THE
REORGANIZATION").
C-2
3. Conditions Precedent.CONDITIONS PRECEDENT.
The obligations of the Corporation/Massachusetts Trust and the FundDelaware Trust to
effectuate the reorganizationtransactions hereunder shall be subject to the satisfaction of
each of the following conditions:
(a) Such authority and orders from the SecuritiesCommission and Exchange
Commission ("Commission")state
securities commissions as may be necessary to permit the partiesTrusts to
carry out the transactions contemplated by this Agreement shall have
been received;
(b) (i) One or more post-effective amendments to the
Corporation's/Massachusetts Trust's Registration Statement on Form N-1A
("Registration
Statement"REGISTRATION STATEMENT") under the Securities Act of 1933, as
amended, and the Investment
Company1940 Act, of 1940, as amended ("1940 Act"), containing such amendments to thesuch
Registration Statement as are determined byunder the Trusteessupervision of the
FundMassachusetts Trust's Board of Trustees to be necessary and
appropriate as a result of this Agreement, shall have been filed with
the Commission; (ii) the FundDelaware Trust shall have adopted as its own
such Registration Statement, as so amended; and (iii) the most recent
post-effective amendment or amendments to the Massachusetts Trust's
Registration Statement filed with the Commission relating to
the Fund shall have become effective, and no stop-orderstop order
suspending the effectiveness of the Registration Statement shall have
been issued, and no proceeding for that purpose shall have been
initiated or threatened by the Commission (other than any such stop-order,stop
order, proceeding or threatened proceeding thatwhich shall have been
withdrawn or terminated); and (iv) an amendment of the Form
N-8A Notification of Registration filed pursuant to Section 8(a) of the 1940 Act
("Form N-8A") reflecting the change in legal form of the Corporation/Trust to a
Delaware business trust shall have been filed with the Commission and the Fund
shall have expressly adopted such amended Form N-8A as its own for purposes of
the 1940 Act;
L-2
(c) Each party shall have received an opinion of Stradley
Ronon Stevens & Young, LLP Philadelphia, Pennsylvania,("SRS&Y"), to the effect that, assuming the
reorganization contemplated hereby is carried out in accordance with
this Agreement, the laws of the States of Delaware and Maryland, and
in accordance with customary representations provided by the Trusts in
a certificate(s) delivered to SRS&Y, the reorganization contemplated
by this Agreement qualifies as a "reorganization" under Section 368 of
the Code, and thus will not give rise to the recognition of income,
gain or loss for federal income tax purposes to the Corporation/Massachusetts
Trust, the FundDelaware Trust or the shareholders of the Corporation/Massachusetts
Trust or the Fund;Delaware Trust;
(d) The Corporation/Massachusetts Trust shall have received an opinion of
Stradley, Ronon, Stevens & Young, LLP,SRS&Y, dated the Effective Date of the Reorganization, addressed to
and in form and substance reasonably satisfactory to the Corporation,Massachusetts
Trust, to the effect thatthat: (i) the FundDelaware Trust is a statutory trust
duly formed as a business trustand in good standing under the laws of the State of
Delaware; (ii) this Agreement and the reorganization provided for hereintransactions contemplated
thereby and the execution and delivery of this Agreement have been
duly authorized and approved by all requisite action of the FundDelaware
Trust and this Agreement has been duly executed and delivered by the
FundDelaware Trust and is a legal, valid and binding agreement of the
FundDelaware Trust in accordance with its terms; and (iii) the shares of
the FundDelaware Trust to be issued in the reorganization have been duly
authorized and, upon issuance thereof in accordance with this
Agreement, will have been validly issued and fully paid and will be
non-assessablenonassessable by the Fund;Delaware Trust;
C-3
(e) The FundDelaware Trust shall have received the opinion of
Stradley,
Ronon, Stevens & Young, LLP,SRS&Y, dated the Effective Date of the Reorganization, addressed to
and in form and substance reasonably satisfactory to the Fund,Delaware
Trust, to the effect that: (i) the CorporationMassachusetts Trust is a corporation duly organized, and
validly existing under the laws of the State of Maryland/the Trust is a business trust organized
and subsistingin good standing under the laws of the
Commonwealth of Pennsylvania;Massachusetts; (ii) the Corporation/Massachusetts Trust is an
open-end investment company of the management type registered under
the 1940 Act; and (iii) this Agreement and the reorganization
provided for hereintransactions
contemplated hereby and the execution and delivery of this Agreement
have been duly authorized and approved by all requisite [corporate]corporate
action of the Corporation/Massachusetts Trust and this Agreement has been duly
executed and delivered by the Corporation/Massachusetts Trust and is a legal,
valid and binding agreement of the Corporation/Massachusetts Trust in accordance
with its terms;
L-3
(f) The shares of each Series and Class of the Fund areDelaware Trust to be
delivered under this Agreement shall be eligible for offeringsale with each
state commission, agency or jurisdiction with which such eligibility
is required in order to the public in those statespermit shares of each Series of the United States and
jurisdictions in whichDelaware
Trust lawfully to be delivered to each shareholder of the shares of their
corresponding Series and Class of the Corporation/Massachusetts Trust are presently eligible for offering toon the public so as to
permitEffective Date
of the issuance and delivery of shares contemplated by this Agreement to be
consummated;Reorganization;
(g) This Agreement and the reorganizationtransactions contemplated hereby
shall have been duly adopted and approved by the appropriate action of
the Massachusetts Trust's Board of Trustees and the shareholders of
each Series of the Corporation/Trust at an annual or special meeting or any
adjournment thereof;Massachusetts Trust;
(h) The shareholders of each Series of the Corporation/Massachusetts Trust
shall have votedapproved the transactions contemplated by this Agreement,
which approval is deemed to be approval to direct the Corporation/Massachusetts
Trust to vote, and the Corporation/Massachusetts Trust shall have voted, as sole
shareholder of each Series of the Fund,Delaware Trust, to:
(i)(1) Elect as Trusteestrustees of the FundDelaware Trust the
following individuals: Messrs.Jude T. Driscoll, Walter P. Babich,
John H. Durham, Anthony D. Knerr, W. Thacher Longstreth,
Charles E. Peck, Wayne A. Stork,Ann R. Leven, Thomas F.
Madison and Jeffrey J. Nick,Janet L. Yeomans; and
Ms.
Ann R. Leven;
(ii) Select Ernst & Young LLP as the independent
auditors for the Fund for the fiscal year ending [month and day], 1999/2000;
(iii) (A) With respect to each Series, if at the
annual or special meeting specified in paragraph (g) of this Section 3 (or any
adjournment thereof) the shareholders of a Series of the Corporation/Trust (x)
approve a proposal for a new investment management agreement ("New(2) Approve an Investment Management Agreement")Agreement
between the current investment advisor to the Series (the
"Advisor")DMC and the Corporation/Delaware Trust on behalf of sucheach Series approve an
investment management agreement betweenof
the Advisor and the Fund on behalf of
such Series that is substantially identical to the New Investment Management
Agreement, or (y) do not approve a proposal for a New Investment Management
Agreement between the Advisor and the Corporation/Delaware Trust, on behalf of such
Series, approve an investment management agreement between the Advisor and the
Fund on behalf of such Series thatwhich is substantially identical to the
then-current investment management agreementInvestment Management Agreement between the AdvisorDMC and
the Corporation/Massachusetts Trust on behalf of such Series;
L-4
(B) With respect to each Series that is subject to a
sub-advisory agreement, if any, if at the annual or special meeting specified in
paragraph (g) of this Section 3 (or any adjournment thereof) the shareholders of
such Series of the
Corporation/Trust (x) approve a proposal for a new
sub-advisory agreement ("New Sub-Advisory Agreement") between the AdvisorMassachusetts Trust;
(i) The Delaware Trust's Board of Trustees shall have duly
adopted and approved this Agreement and the current sub-advisor (the "Sub-Advisor") with respect to the assets of such
Series, approve a New Sub-Advisory Agreement between the Advisortransactions contemplated
hereby and the
Sub-Advisor with respect to the assets of such Series that is substantially
identical to the New Sub-Advisory Agreement, or (y) do not approve a proposal
for a New Sub-Advisory Agreement between the Advisor and the Sub-Advisor,
approve a sub-advisory agreement between the Advisor and the Sub-Advisor with
respect to the assets of such Series that is substantially identical to the
then-current sub-advisory agreement between the Advisor and the Sub-Advisor with
respect to the assets of such Series;
(i) The Trustees of the Fund shall have taken the following actions by unanimous consent
or, where required, at a meeting duly called for such purposes:
(i)C-4
(1) Approval of the investment management agreements
and the sub-advisory agreements, if any,Investment Management Agreement
described in paragraph (h)(2) of this Section 3 hereof for each Series of the Fund;
(ii) Approval of a distribution plan, if any, for
each Classon behalf of
each Series of the Fund,Delaware Trust;
(2) Approval of a Distribution Agreement between
Delaware Distributors, L.P. and the Delaware Trust on behalf
of each Series of the Delaware Trust;
(3) Approval of Second Amended and Restated Financial
Intermediary Distribution Agreement dated August 21, 2003
between Delaware Distributors, L.P. and Lincoln Financial
Distributors, Inc. on behalf of the Delaware Trust;
(4) Approval of a Form of Dealer Agreement between
Delaware Distributors, L.P. and securities dealers, dated
January [ ], 2001, as adoptedamended, on behalf of each Series of the
Delaware Trust;
(5) Approval and adoption pursuant to Rule 18f-3
under the 1940 Act of a Multiple Class Plan for the Delaware
Trust on behalf of its Series of the Delaware Trust for Class
A, Class B, and Class C shares;
(6) Approval, creation and designation of Class A,
Class B and Class C, shares for the Series of the Delaware
Trust;
(7) Approval and adoption pursuant to Rule 12b-1
under the 1940 Act that is substantially identical to the then-current distribution
plan, if any, as adopted pursuant to Rule 12b-1 under the 1940 Actof a Class A Distribution Plan, Class B
Distribution Plan and Class C Distribution Plan for each
Class of each corresponding Series of
the Corporation/Delaware Trust;
(iii)(8) Approval of a Shareholder Services Agreement
between Delaware Service Company, Inc. and the Delaware Trust,
on behalf of each Series of the Delaware Trust;
(9) Approval of a Fund Accounting Agreement between
Delaware Service Company, Inc. and the Delaware Trust;
(10) Approval of the assignment to the Delaware Trust
of the Corporation's/Massachusetts Trust's Custodian(i) Amended and Restated Mutual
Fund Custody and Services Agreement with The Chase Manhattandated [ ], between Mellon
Bank, toN.A. and the Fund;
(iv)Massachusetts Trust on behalf of the Series
of the Delaware Trust;
(11) Selection of Ernst & Young LLP as the Fund'sDelaware
Trust's independent auditors for the fiscal year ending [month and day], 2000;
(v) Approval of the Fund's Shareholders Services
Agreement with Delaware Service Company, Inc.August
31, [2005];
(vi) Approval of the Fund Accounting Agreement
with Delaware Service Company, Inc. that covers the funds comprising the
Delaware Investments Family of Funds;
L-5
(vii) Approval of the Distribution Agreement between
the Fund and Delaware Distributors, L.P. on behalf of the Series and Classes;
(viii)(12) Authorization of the issuance by the Fund,Delaware
Trust, prior to the Effective Date of the Reorganization, of
one share of beneficial interest of each class of each Series
and Class of the FundDelaware Trust to the Corporation/Massachusetts Trust in
consideration for the payment of $10.00 per$1.00 for each such share for
the purpose of enabling the Corporation/Massachusetts Trust to vote on the
matters referred to in paragraph (h) of this Section 3 hereof;
(ix)3;
(13) Submission of the matters referred to in
paragraph (h) of this Section 3 to the Corporation/Massachusetts Trust as
sole shareholder of each class of each Series of the Fund;Delaware
Trust; and
(x)C-5
(14) Authorization of the issuance and delivery by
the FundDelaware Trust of shares of each Series and Class of the FundDelaware
Trust on the Effective Date of the Reorganization and the
assumption by the Series of the Delaware Trust of the
obligations and liabilities of the corresponding Series of the
Massachusetts Trust in exchange for the assets of the
corresponding Series of the Corporation/Massachusetts Trust pursuant to
the terms and provisions of this Agreement.
At any time prior to the Closing, any of the foregoing conditions may
be waived or amended, or any additional terms and conditions may be fixed, by
the Massachusetts Trust's Board of Directors/Trustees or the Delaware Trust's Board of
the
Corporation/TrustTrustees, if, in the judgment of such Board, such waiver, amendment, term or
condition will not affect in a materially adverse way the benefits intended to
be accorded theto its shareholders of the Corporation/Trust under this Agreement.
4. Termination.DISSOLUTION OF THE MASSACHUSETTS TRUST.
Promptly following the consummation of the distribution of each class
of shares of each Series of the Delaware Trust to holders of the corresponding
class of shares and Series of the Massachusetts Trust under this Agreement, the
officers of the Massachusetts Trust shall take all steps necessary under
Massachusetts law to dissolve its corporate status, including publication of any
necessary notices to creditors, receipt of any necessary pre-dissolution
clearances from the Commonwealth of Massachusetts, and filing a Termination of
Trust with the Office of the Secretary of State of the Commonwealth of
Massachusetts.
5. TERMINATION.
The Massachusetts Trust's Board of Directors/Trustees of the Corporation/Trust may terminate this
Agreement and abandon the reorganization contemplated hereby, notwithstanding
approval thereof by the shareholders of the Corporation/Series of the Massachusetts Trust,
at any time prior to the Effective Date of the Reorganization if, in the
judgment of such Board, the facts and circumstances make proceeding with this
Agreement inadvisable.
5. Entire Agreement.6. ENTIRE AGREEMENT.
This Agreement embodies the entire agreement between the partiesTrusts and
there are no agreements, understandings, restrictions or warranties among the
partiesTrusts other than those set forth herein or herein provided for.
6. Further Assurances.7. FURTHER ASSURANCES.
The Corporation/Massachusetts Trust and the FundDelaware Trust shall take such further
action as may be necessary or desirable and proper to consummate the
transactions contemplated hereby.
L-6
7. Counterparts.8. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
8. Governing Law.9. GOVERNING LAW.
This Agreement and the transactions contemplated hereby shall be
governed by and construed and enforced in accordance with the laws of the State
of Maryland/ Commonwealth of Pennsylvania.Delaware.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
C-6
IN WITNESS WHEREOF, the FundDelaware Trust and the Corporation/Massachusetts Trust
have each caused this Agreement and Plan of Reorganization to be executed on its
behalf by its Chairman, President or a Vice President and attested by its Secretary or an Assistant
Secretary, all as of the day and year first-above written.
[Name of Maryland corporation/ Delaware Group
State Tax-Free Income Trust]VOYAGEUR INVESTMENT TRUST
(a Maryland Corporation/Pennsylvania Common
Law Trust)
Attest:
By: /s/ George M. Chamberlain, Jr By: /s/ Jeffrey J. Nick
---------------------------------- -----------------------------------
George M. Chamberlain, Jr. Jeffrey J. Nick
Secretary President and Chief Executive
Officer
[Name of Delaware business trust]
(a DelawareMassachusetts business trust)
Attest: By:
/s/ Eric E. Miller------------------------------- ---------------------------------
Name: Name:
Title: Title:
DELAWARE INVESTMENTS MUNICIPAL TRUST
(a Delaware statutory trust)
Attest: By:
/s/ Jeffrey J. Nick
------------------------------------- --------------------------
Eric E. Miller Jeffrey J. Nick
Assistant Secretary President and
Chief Executive
Officer
L-7
Appendix
Series and Classes of [name of Maryland Corresponding Series and
corporation/ Delaware Group State Classes of [name of Delaware
Tax-Free Income Trust] business trust]
L-8------------------------------- ---------------------------------
Name: Name:
Title: Title:
C-7
EXHIBIT MD
A COMPARISON OF GOVERNING DOCUMENTS AND SIGNIFICANT DIFFERENCES
FOR DELAWARE BUSINESS TRUSTS AND MARYLAND CORPORATIONS
Unless otherwise defined in this Exhibit, capitalized terms have the meanings
set forth in Proposal Seven.STATE LAW
- -------------------------- ------------------------------------------------------ -------------------------------------------------
Delaware Business Trust Maryland Corporation
- -------------------------- ------------------------------------------------------ -------------------------------------------------DELAWARE STATUTORY TRUST MASSACHUSETTS BUSINESS TRUST
------------------------ ----------------------------
Governing Documents -- CreatedGOVERNING A Delaware statutory trust (a "DST") is formed by A Massachusetts business trust (an "MBT") is
DOCUMENTS/ a governing instrument and the filing of a created by filing a declaration of trust with the
GOVERNING BODY certificate of trust with the Delaware Secretary Secretary of the Commonwealth of Massachusetts and
of State. The Delaware law governing a DST is with the clerk of every city or town in
referred to in this comparison as the "Delaware Massachusetts where the trust has a usual place of
Act." business.
A DST is an unincorporated association organized An MBT is an unincorporated association organized
under the Delaware Act whose operations are under the Massachusetts statute governing business
governed by its governing instrument (which may -- A corporation's articles of incorporationtrusts (the "Massachusetts Statute") and is
consist of one or more instruments, including an mustinstruments). Its business considered to be filed with the State Department of
agreementa hybrid, having characteristics
and declaration of trust and By-Laws) and a Assessments and Taxation of the State of
Certificate of Trust, which must be filed with the Maryland in order to form a Maryland
Delaware Secretary of State. The Delaware Business corporation.
Trust ("DBT") statutes found at Del. Code. Ann. title
12, S.3801, et seq. are referred to in this chart as -- Under Maryland law, the business and
the "Delaware Act." affairs of a corporation are governed by its
articles of incorporation and By-Laws (the
-- A DBT is an unincorporated association organized "charter documents"). A Board of Directors
under the Delaware Act which operates similar to a manages or directs the business and affairs
typical corporation. A DBT's operations are governed of a Maryland corporation.
by a trust instrument and By-Laws. The business and
affairs of a DBT are managed by or under the -- A Maryland corporation organizeddirection of both corporations and common law trusts. An
of one or more trustees (referred to herein as the MBT's operations are governed by a trust
"trustees" or the "board"). instrument and by-laws. The business and affairs
of an MBT are managed by or under the direction of
a Boardboard of Trustees. open-endtrustees.
If a DST is a registered investment company is subject to the
1940 Act.
-- DBTs are organized as an open-end investment
company subject tounder
the Investment Company Act of 1940, as amended
(the "1940 Act"). Shareholders own
shares of "beneficial interest" as compared to the
shares of "common stock" issued by corporations.
There, such DST is however, no practical difference between the
two types of shares.
-- As described in this chart, DBTs are granted a
significant amount of organizational and operational
flexibility. The Delaware Act makes it easier to
obtain needed shareholder approvals, and also permits
management of a DBT to take various actions without
beingnot required to make state filingshave
a trustee who is a resident of Delaware or obtain
shareholder approval. The Delaware Act also contains
favorable limitations on shareholder and Trustee
liability, and provides for indemnification outwho has
a principal place of business in Delaware;
provided that notice that the DST is such a
registered investment company is set forth in the
DST's certificate of trust propertyand the DST has a
registered office and a registered agent for
any shareholder or Trustee that
may be held personally liableservice of process in Delaware.
The governing instrument for Delaware Investments The governing instrument for the obligationsMBT, Voyageur
Municipal Trust (the "DE Trust"), a DST, is Investment Trust (the "Trust"), is comprised of an
comprised of an agreement and declaration of trust Amended and Restated Agreement and Declaration of
(the "DE Declaration") and by-laws (the "DE Trust (the "MA Declaration") and Amended and
By-Laws"). The DE Trust's governing body is the Restated By-Laws (the "MA By-Laws"). The Trust's
board. governing body is a Delaware Trust.
- -------------------------- ------------------------------------------------------ ------------------------------------------------board of Trustees (referred to
herein as the "Trustees" or "the Board").
Each trustee of the DE Trust holds office for the Each Trustee shall serve during the continued
lifetime of the DE Trust or until such trustee's lifetime of the Trust until he or she dies,
earlier death, resignation, having been declared resigns or is removed (as described below), or, if
bankrupt or incompetent by a court, removal, or, sooner, until the next meeting of shareholders
if sooner than any such events, until the next called for the purpose of electing Trustees and
meeting of shareholders called for the purpose of until the election and qualification of his or her
electing trustees and until the election and successor.
qualification of his or her successor.
M-1D-1
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Delaware Business Trust Maryland Corporation
- -------------------------- ------------------------------------------------------ -------------------------------------------------DELAWARE STATUTORY TRUST MASSACHUSETTS BUSINESS TRUST
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Multiple Series and --DESIGNATION OF Under the Delaware Act, the ownership interests in Under the Massachusetts Statute, the ownership
OWNERSHIP SHARES OR a declaration of trustDST are denominated as "beneficial interests" interests in an MBT are denominated as "beneficial
INTERESTS and are held by "beneficial owners." However, interests" and are held by "beneficial owners."
there is flexibility as to how a governing However, there is flexibility as to how a
instrument refers to "beneficial interests" and governing instrument refers to "beneficial
"beneficial owners" and the governing instrument interests" and "beneficial owners" and the
may -- Maryland law permits a corporationidentify "beneficial interests" and governing instrument may identify "beneficial
"beneficial owners" as "shares" and interests" and "beneficial owners" as "shares" and
"shareholders," respectively. "shareholders," respectively.
The DE Trust's beneficial interests, without par The Trust's beneficial interests, without par
value, are designated as "shares" and its value, are designated as "shares" and its
beneficial owners are designated as beneficial owners are designated as
"shareholders." This comparison will use the "shareholders." This comparison will use the
"share" and "shareholder" terminology. "share" and "shareholder" terminology.
SERIES AND CLASSES Under the Delaware Act, the governing instrument The Massachusetts Statute is largely silent as to
Classesmay provide for classes, groups or series of shares, oran MBT's ability to issue one or more series or
shares, shareholders or trustees, having such classes of stockbeneficial interests or any
relative rights, powers and ifduties as set forth in requirements for the creation of such series or
the governing instrument. Such classes, groups or classes, although the trust documents creating an
series may be created in the DST's governing MBT may provide methods or authority to create
instrument or otherwise in the manner provided in such series or classes without seeking shareholder
the governing instrument. No state filing is approval.
necessary and, unless required by the governing
instrument, shareholder approval is not needed.
Except to the extent otherwise provided in the
governing instrument of a DST, where the DST is a
registered investment company under the 1940 Act,
any class, group or series of shares established
by the governing instrument shall be a class,
group or series preferred as to distributions or
dividends over all other classes, groups or series
with respect to assets specifically allocated to
such class, group or series as contemplated by
Section 18 (or any amendment or successor
provision) of trustees or the stock is1940 Act and any regulations
issued thereunder.
The DE Declaration authorizes the board to divide The MA Declaration provides that the beneficial
the DE Trust's shares into separate and distinct interest in the Trust shall at all times be
series and to divide any series into separate divided into an unlimited number of shares,
classes of shares as permitted by the shareholders, having such relative rights, powers and charter is requiredDelaware without par value. Subject to describe each class,
duties as the declarationprovisions of
trust may provide. The including any preferences, conversion orAct. Such series and classes will have the rights the MA Declaration, each share shall have the
and preferences set forth in the DE Declaration voting rights, shall be entitled to receive
unless otherwise provided in resolutions of the dividends, when and declared with respect
board with respect to such series or class. The thereto. No shares shall have any priority or
board may classify or reclassify any unissued preference over any other share of the same series
shares or any shares of the DE Trust or any series or class with respect to dividends or
or class, that were previously issued and are distributions upon termination of the Trust or of
reacquired, into one or more series or classes such series or class made pursuant to the MA
that may be established and designated from time Declaration. The Trustees may from time to time
to time. The trustees may from time to time divide or combine the shares of any particular
divide or combine the shares of any particular series or class into a greater or lesser number of
series into a greater or lesser number of shares shares of that series or class without changing
of that series so long as such division or the proportionate beneficial interest of the
combination does not materially change the shares of that series or class in the assets
proportionate beneficial interests of the shares belonging to that series or class or in any way
of that series in the assets held with respect to affecting the rights of shares of any other series
that series or materially affect the rights of or class.
shares of any other series.
D-2
DELAWARE STATUTORY TRUST MASSACHUSETTS BUSINESS TRUST
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