-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JK4FGtxyn3hyuZUd9aRHuFtFKURj30rVzrKMsY5We4md63/kgHFAP8uEXkmTZrHe 0WcDoViwnGUPrzGpyM3gkw== 0001125282-06-003218.txt : 20060602 0001125282-06-003218.hdr.sgml : 20060602 20060602154139 ACCESSION NUMBER: 0001125282-06-003218 CONFORMED SUBMISSION TYPE: SC TO-I PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20060602 DATE AS OF CHANGE: 20060602 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DELAWARE INVESTMENTS DIVIDEND & INCOME FUND INC CENTRAL INDEX KEY: 0000896923 IRS NUMBER: 232713064 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-I SEC ACT: 1934 Act SEC FILE NUMBER: 005-59009 FILM NUMBER: 06883246 BUSINESS ADDRESS: STREET 1: 2005 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2152552127 MAIL ADDRESS: STREET 1: 2005 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 FORMER COMPANY: FORMER CONFORMED NAME: DELAWARE GROUP DIVIDEND & INCOME FUND INC DATE OF NAME CHANGE: 19930714 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DELAWARE INVESTMENTS DIVIDEND & INCOME FUND INC CENTRAL INDEX KEY: 0000896923 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 232713064 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-I BUSINESS ADDRESS: STREET 1: 2005 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2152552127 MAIL ADDRESS: STREET 1: 2005 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 FORMER COMPANY: FORMER CONFORMED NAME: DELAWARE GROUP DIVIDEND & INCOME FUND INC DATE OF NAME CHANGE: 19930714 SC TO-I 1 p413486_schtoi.txt FORM SC TO-I AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 2, 2006 =============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- SCHEDULE TO ISSUER TENDER OFFER STATEMENT UNDER SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. (Name of Subject Company) DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. (Name of Filing Person (Issuer)) SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE (Title of Class of Securities) 245915103 - (CUSIP Number of Class of Securities) David F. Connor, Esq., Secretary Delaware Investments Dividend and Income Fund, Inc. 2005 Market Street Philadelphia, Pennsylvania 19103 800-523-1918 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Person) ---------------- CALCULATION OF FILING FEE ---------------- TRANSACTION VALUATION $7,428,344 (a) AMOUNT OF FILING FEE: $1,486 (b) ---------------- (a) Pursuant to Rule 0-11(b)(1) under the Securities Exchange Act of 1934, as amended, the transaction value was calculated by multiplying 579,434 shares of Common Stock of Delaware Investments Dividend and Income Fund, Inc. by $12.82, the Net Asset Value per share as of 4:00 p.m. May 26, 2006. (b) Calculated as 1/50 of 1% of the Transaction Valuation. / / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: ________________________________________ Form or Registration No.: ________________________________________ Filing Party: ________________________________________ Date Filed: ________________________________________ |_| Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: |_| third-party tender offer subject to Rule 14d-1. |X| issuer tender offer subject to Rule 13e-4. |_| going-private transaction subject to Rule 13e-3. |_| amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: |_| =============================================================================== 1 EXPLANATORY NOTE Copies of the Offer to Purchase, dated June 2, 2006, and the Letter of Transmittal, among other documents, have been filed by Delaware Investments Dividend and Income Fund, Inc., as Exhibits to this Schedule TO, Tender Offer Statement (the "Schedule"), pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Unless otherwise indicated, all material incorporated herein by reference in response to items or sub-items of this Schedule is incorporated by reference from the corresponding caption in the Offer to Purchase, including the information provided under those captions. ITEM 1. SUMMARY TERM SHEET. Reference is hereby made to the Summary Term Sheet of the Offer to Purchase, which is attached as Exhibit (a)(1)(i) and is incorporated herein by reference. ITEM 2. SUBJECT COMPANY INFORMATION. (a) The name of the issuer is Delaware Investments Dividend and Income Fund, Inc., a diversified, closed-end management investment company organized as a Maryland corporation (the "Fund"). The principal executive offices of the Fund are located at 2005 Market Street, Philadelphia, Pennsylvania 19103. The telephone number is 1-800- 523-1918. (b) The title of the subject class of equity securities described in the offer is shares of Common Stock, par value $0.01 per share (the "Shares"). As of May 26, 2006 there were 11,588,670 Shares issued and outstanding. (c) The principal market in which the Shares are traded is the New York Stock Exchange. For information on the high, low and closing (as of 4:00 p.m. on the last day of each of the Fund's fiscal quarters) net asset values and market prices of the Shares in such principal market for each quarter during the past two fiscal years (as well as the first fiscal quarter of 2006), see Section 8, "Price Range of Shares" of the Offer to Purchase, which is incorporated herein by reference. ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON. (a) The name of the filing person is Delaware Investments Dividend and Income Fund, Inc. (previously defined as the "Fund"), a diversified, closed-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act") and organized as a Maryland corporation. The principal executive offices of the Fund are located at 2005 Market Street, Philadelphia, Pennsylvania 19103. The telephone number is 1-800-523-1918. The filing person is the subject company. The members of the Board of Directors of the Fund are as follows: Jude T. Driscoll (Chairman), Thomas L. Bennett, John A. Fry, Anthony D. Knerr, Lucinda S. Landreth, Ann R. Leven, Thomas F. Madison, Janet L. Yeomans and J. Richard Zecher. Mr. Driscoll is considered an "interested person" of the Fund, as that term is defined in the 1940 Act, because of his affiliation with the investment adviser of the Fund. The executive officers of the Fund are Jude T. Driscoll, Chairman, President and Chief Executive Officer and Michael P. Bishof, Senior Vice President and Chief Financial Officer. Correspondence to the Directors and executive officers of the Fund should be mailed to c/o Delaware Investments Dividend and Income Fund, Inc., 2005 Market Street, Philadelphia, Pennsylvania 19103. 2 ITEM 4. TERMS OF THE TRANSACTION. (a) The Fund's Board of Directors has determined to commence an offer to purchase up to 5%, or 579,434 Shares of the Fund's issued and outstanding Common Stock. The offer is for cash at a price equal to the Fund's net asset value ("NAV") as of 4:00 p.m., New York City time, on July 3, 2006, or such later date after which the offer is extended, upon the terms and subject to the conditions set forth in the enclosed Offer to Purchase and the related Letter of Transmittal (which together constitute the "Offer"). A copy of the Offer to Purchase and the Letter of Transmittal is attached hereto as Exhibit (a)(1)(i) and Exhibit (a)(1)(ii), respectively, each of which is incorporated herein by reference. For more information on the type and amount of consideration offered to shareholders, the scheduled expiration date, extending the Offer and the Fund's intentions in the event of oversubscription, see Section 1, "Price; Number of Shares; Service Fee" and Section 15, "Extension of Tender Period; Termination; Amendments" of the Offer to Purchase. For information on the dates relating to the withdrawal of tendered Shares, the procedures for tendering Shares and withdrawing Shares tendered, and the manner in which Shares will be accepted for payment, see Section 2, "Procedures for Tendering Shares," Section 3, "Withdrawal Rights" and Section 4, "Payment for Shares" in the Offer to Purchase. For information on the federal income tax consequences of the Offer, see Section 2, "Procedures for Tendering Shares," Section 10, "Certain Effects of the Offer" and Section 14, "Certain Federal Income Tax Consequences," in the Offer to Purchase. (b) The Fund has been informed that no Directors, officers or affiliates (as the term "affiliate" is defined in Rule 12b-2 under the Exchange Act) of the Fund intend to tender Shares pursuant to the Offer to Purchase and, therefore, the Fund does not intend to purchase Shares from any officer, Director or affiliate of the Fund pursuant to the Offer to Purchase. ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. (e) Reference is hereby made to Section 7, "Plans or Proposals of the Fund," Section 9, "Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares" and Section 16, "Fees and Expenses" of the Offer to Purchase, which is incorporated herein by reference. Except as set forth therein, the Fund does not know of any agreement, arrangement or understanding, whether or not legally enforceable, between the Fund (including any of the Fund's executive officers or Directors, any person controlling the Fund or any officer or director of any corporation or other person ultimately in control of the Fund) and any other person with respect to any securities of the Fund. The foregoing includes, but is not limited to: the transfer or the voting of securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss, or the giving or withholding of proxies, consents or authorizations. ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS. (a)-(c) Reference is hereby made to Section 6, "Purpose of the Offer," Section 7, "Plans or Proposals of the Fund," Section 10, "Certain Effects of the Offer" and Section 11, "Source and Amount of Funds" of the Offer to Purchase, which is incorporated herein by reference. Except as noted herein and therein, the events listed in Item 1006(c) of Regulation M-A are not applicable to the Fund (including any of the Fund's executive officers or Directors, any person controlling the Fund or any officer or director of any corporation or other person ultimately in control of the Fund). 3 ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a)-(b) Reference is hereby made to Section 11, "Source and Amount of Funds" of the Offer to Purchase, which is incorporated herein by reference. (d) Not applicable. The information requested by Item 1007(a), (b) and (d) of Regulation M-A is not applicable to the Fund's executive officers and Directors, any person controlling the Fund or any executive officer or director of a corporation or other person ultimately in control of the Fund. ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a)-(b) Reference is hereby made to Section 9, "Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares" of the Offer to Purchase, which is incorporated herein by reference. There have not been any transactions in the Shares of the Fund that were effected during the past 60 days by the Fund. In addition, based upon the Fund's records and upon information provided to the Fund by its Directors, executive officers and affiliates (as such term is used in Rule 12b-2 under the Exchange Act), to the best of the Fund's knowledge, there have not been any transactions involving the Shares of the Fund that were effected during the past 60 days by any executive officer or Director of the Fund, any person controlling the Fund, any executive officer or director of any corporation or other person ultimately in control of the Fund or by any associate or subsidiary of any of the foregoing, including any executive officer or director of any such subsidiary. ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED. (a) No persons have been employed, retained or are to be compensated by or on behalf of the Fund to make solicitations or recommendations in connection with the Offer. ITEM 10. FINANCIAL STATEMENTS. Not applicable. ITEM 11. ADDITIONAL INFORMATION. (a)(1) Reference is hereby made to Section 9, "Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares" of the Offer to Purchase, which is incorporated herein by reference. (a)(2)-(5) Not applicable. (b) Reference is hereby made to the Offer to Purchase, which is incorporated herein by reference. ITEM 12. EXHIBITS. (a)(1)(i) Letter to Shareholders from the President of the Fund and Offer to Purchase. (a)(1)(ii) Letter of Transmittal. (a)(1)(iii) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(iv) Letter to Clients and Client Instruction Form. (a)(1)(v) Notice of Guaranteed Delivery. 4 (a)(1)(vi) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(2) Not applicable. (a)(3) Not applicable. (a)(4) Not applicable. (a)(5) Press Release dated May 19, 2006.1 (b) Not applicable. (d)(1) Form of Depositary and Information Agent Agreement between the Fund and Mellon Investor Services LLC. (d)(2) Investment Management Agreement with Delaware Management Company dated January 1, 1999.2 (d)(3) Transfer Agency Agreement with Mellon Investor Services LLC dated December 8, 2000.3 (d)(4) Fund Administration and Accounting Agreement with Delaware Service Company, Inc. dated July 1, 1998.4 (d)(4)(i) Amendment dated May 19, 2005 to the Fund Administration and Accounting Agreement with Delaware Service Company, Inc. dated July 1, 1998.5 (d)(5) Global Custodian Agreement between the Fund and The Chase Manhattan Bank, N.A., dated May 1, 1996.6 (d)(5)(i) Amendment dated November 20, 1997 to the Global Custodian Agreement between the Fund and the Chase Manhattan Bank, N.A., dated May 1, 1996.6 (d)(5)(ii) Amendment dated August 24, 1998 to the Global Custodian Agreement between the Fund and the Chase Manhattan Bank, N.A., dated May 1, 1996.6 (d)(5)(iii) Amendment dated July 1, 2001 to the Global Custodian Agreement between the Fund and the Chase Manhattan Bank, N.A., dated May 1, 1996.7 (d)(5)(iv) Amendment dated July 17, 2003 to the Global Custodian Agreement between the Fund and the Chase Manhattan Bank, N.A., dated May 1, 1996.7 (g) Not applicable. (h) Not applicable. - --------------- 1 Previously filed on Schedule TO via EDGAR on May 19, 2006. 2 Incorporated by reference to Exhibit (d)(2) of the Fund's (file number 811- 7460) Issuer Tender Offer Statement on Schedule TO, filed with the SEC on June 3, 2005. 3 Incorporated by reference to Exhibit (d)(3) of the Fund's (file number 811- 7460) Issuer Tender Offer Statement on Schedule TO, filed with the SEC on June 3, 2005. 4 Incorporated by reference to Exhibit (d)(6) of the Fund's (file number 811- 7460) Issuer Tender Offer Statement on Schedule TO, filed with the SEC on June 1, 2000. 5 Incorporated by reference to Exhibit (d)(4)(i) of the Fund's (file number 811-7460) Issuer Tender Offer Statement on Schedule TO, filed with the SEC on June 3, 2005. 6 Incorporated by reference to Exhibit (d)(7) of the Fund's (file number 811- 7460) Issuer Tender Offer Statement on Schedule TO, filed with the SEC on June 1, 2000. 7 Incorporated by reference to Exhibit (d)(5) of the Fund's (file number 811- 7460) Issuer Tender Offer Statement on Schedule TO, filed with the SEC on June 3, 2005. 5 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. /s/ Jude T. Driscoll Jude T. Driscoll Chairman, Director, President and Chief Executive Officer June 2, 2006 6 EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE ------------ -------------------------------------------------------------------------------------------------------- ------ (a)(1)(i) Letter to Shareholders from the President of the Fund and Offer to Purchase. (a)(1)(ii) Letter of Transmittal. (a)(1)(iii) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(iv) Letter to Clients and Client Instruction Form. (a)(1)(v) Notice of Guaranteed Delivery. (a)(1)(vi) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (d)(1) Form of Depositary and Information Agent Agreement between the Fund and Mellon Investor Services LLC.
7 EX-99.(A)(1)(I) 2 p413486ex99a-1_i.txt EXHIBIT 99(A)(1)(I) Exhibit (a)(1)(i) DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. 2005 MARKET STREET PHILADELPHIA, PENNSYLVANIA 19103 Dear Shareholder: On May 18, 2006, the Board of Directors of the Delaware Investments Dividend and Income Fund, Inc. (the "Fund"), approved a tender offer for shares of the Fund's Common Stock. The Fund is commencing an offer to purchase up to 5% of its issued and outstanding shares upon the terms and subject to the conditions set forth in the enclosed Offer to Purchase and the related Letter of Transmittal (which together constitute the "Offer"). If more than 5% of the Common Stock is tendered and not withdrawn, any purchases will be made on a pro rata basis. The offer is for cash at a price per share equal to the Fund's net asset value ("NAV") as of 4:00 p.m. New York City time the day after the offer expires (as described below). The Offer is designed to provide shareholders of the Fund the opportunity to redeem shares based on their NAV should they wish to do so. In order to participate, the materials described in the Offer must be delivered to Mellon Investor Services LLC by 11:59 p.m. New York City time, June 30, 2006, or such later date to which the Offer is extended (the "Expiration Date"). The pricing time and date for the Offer is currently scheduled to be 4:00 p.m. New York City time on July 3, 2006. Should the Offer be extended beyond June 30, 2006, the pricing date will be the next business day following the newly designated Expiration Date. The amount to be paid per share will be the NAV of the Common Stock as of 4:00 p.m. New York City time on the pricing date. Shareholders who choose to participate in the Offer can expect payments for shares tendered and accepted to be mailed within approximately ten business days after the Expiration Date. The Fund will charge a per account fee of $25.00 ("Service Fee") for each account for which any shares are tendered and accepted to help defray the costs of conducting the Offer. Shareholders whose shares are not held of record in the name of a broker, dealer, commercial bank, trust company or other nominee ("Nominee") must attach a check or money order for an amount equal to $25.00 with the Letter of Transmittal. Shareholders whose shares are held of record in the name of a Nominee should not include a check for the Service Fee; rather, the Nominee will pay the Service Fee and that firm may bill you separately for that fee. The Service Fee will be returned to you or the Nominee, as appropriate, only if the Fund does not accept any of the shares that you have tendered. If, after carefully evaluating all of the information set forth in the Offer to Purchase, you wish to tender Shares pursuant to the Offer, please follow the instructions contained in the Offer to Purchase and Letter of Transmittal or, if your shares are held of record in the name of a broker, dealer, commercial bank, trust company or other nominee, contact that firm to effect the tender for you. Shareholders are urged to consult their own investment and tax advisers and make their own decisions whether to tender any shares and, if so, how may shares to tender. As of 4:00 p.m. on Friday, May 26, 2006, the Fund's NAV was $12.82 per share and 11,588,670 shares were issued and outstanding. The Fund's NAV during the pendency of this Offer may be obtained by contacting Mellon Investor Services LLC, the Fund's Depositary and Information Agent, toll free at: 1-866-340-1397. NEITHER THE FUND NOR ITS BOARD OF DIRECTORS IS MAKING ANY RECOMMENDATION TO ANY SHAREHOLDER WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES IN THE OFFER. THE FUND AND BOARD URGE EACH SHAREHOLDER TO READ AND EVALUATE THE OFFER AND RELATED MATERIALS CAREFULLY AND MAKE HIS OR HER OWN DECISION. QUESTIONS, REQUESTS FOR ASSISTANCE AND REQUESTS FOR ADDITIONAL COPIES OF THE OFFER SHOULD BE DIRECTED TO MELLON INVESTOR SERVICES LLC, AT 1-866-340-1397. Sincerely, /s/ Jude T. Driscoll ---------------------------------------- Jude T. Driscoll Chairman, Director, Chief Executive Officer and President June 2, 2006 This Page Intentionally Left Blank OFFER TO PURCHASE DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. OFFER TO PURCHASE FOR CASH 579,434 OUTSTANDING SHARES OF COMMON STOCK SUMMARY TERM SHEET THIS SUMMARY HIGHLIGHTS CERTAIN INFORMATION IN THIS OFFER TO PURCHASE. TO UNDERSTAND THE OFFER FULLY AND FOR A MORE COMPLETE DESCRIPTION OF THE TERMS OF THE OFFER, YOU SHOULD READ CAREFULLY THIS ENTIRE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL. WE HAVE INCLUDED SECTION REFERENCES PARENTHETICALLY TO DIRECT YOU TO A MORE COMPLETE DESCRIPTION IN THE OFFER TO PURCHASE OF THE TOPICS IN THIS SUMMARY. WHAT AND HOW MANY SECURITIES IS DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. (THE "FUND") OFFERING TO PURCHASE? (SEE SECTION 1, "PRICE; NUMBER OF SHARES; SERVICE FEE") The Fund is offering to purchase up to 5% or 579,434 shares (the "Offer Amount") of its shares of Common Stock ("Share" or "Shares"). If the number of Shares properly tendered and not withdrawn prior to the date and time the offer expires is less than or equal to the Offer Amount, the Fund will, upon the terms and subject to the conditions of the offer, purchase all Shares tendered. If more Shares than the Offer Amount are properly tendered and not withdrawn prior to the date the offer expires, the Fund will purchase the Offer Amount on a pro rata basis. Shareholders cannot be assured that all of their tendered Shares will be repurchased. HOW MUCH AND IN WHAT FORM WILL THE FUND PAY ME FOR MY SHARES? (SEE SECTION 1, "PRICE; NUMBER OF SHARES; SERVICE FEE" AND SECTION 4, "PAYMENT FOR SHARES") The Fund will pay cash for any Shares purchased pursuant to the offer. The purchase price will equal the net asset value ("NAV") per share, as of 4:00 p.m., New York City time, on July 3, 2006, unless the offer is extended. As of May 26, 2006, the Fund's NAV was $12.82 per Share. Of course, the NAV can change every business day. WHEN DOES THE OFFER EXPIRE? CAN THE FUND EXTEND THE OFFER, AND IF SO, WHEN WILL THE FUND ANNOUNCE THE EXTENSION? (SEE SECTION 1, "PRICE; NUMBER OF SHARES; SERVICE FEE" AND SECTION 15, "EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS") o The offer expires on Friday, June 30, 2006, at 11:59 p.m., New York City time, unless the Fund extends the offer. o The Fund may extend the offer period at any time. If it does, the Fund will determine the purchase price on the first business day after the new expiration date. o If the offer period is extended, the Fund will make a public announcement of the extension no later than 9:30 a.m. Eastern time on the next business day following the previously scheduled expiration date. WILL I HAVE TO PAY ANY FEES OR COMMISSIONS? (SEE SECTION 1, "PRICE; NUMBER OF SHARES; SERVICE FEE," SECTION 4, "PAYMENT FOR SHARES" AND SECTION 16, "FEES AND EXPENSES") Yes, a service fee of $25.00 must be paid to the Fund for each account for which any shares are tendered to help defray certain costs, including the processing of tender forms, effecting payment, postage and handling. In the case where none of the Shares you tender are accepted, the Fund will return the Service Fee. DOES THE FUND HAVE THE FINANCIAL RESOURCES TO PAY ME FOR MY SHARES? (SEE SECTION 11, "SOURCE AND AMOUNT OF FUNDS") Yes. Assuming the Fund purchases 579,434 Shares at the May 26, 2006 NAV of $12.82 per Share, the Fund's total cost, not including fees and expenses incurred in connection with the offer, will be approximately $7.4 million. The Fund intends to first use cash on hand to pay the purchase price for Shares tendered, and then intends to sell portfolio securities to raise the additional cash needed for the purchase of the Shares. The Fund will not borrow money to finance the purchase of Shares in the offer. (i) HOW DO I TENDER MY SHARES? (SEE SECTION 2, "PROCEDURES FOR TENDERING SHARES") If your Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you should contact that firm if you wish to tender your Shares. All other shareholders wishing to participate in the offer must, prior to the date and time the offer expires, EITHER: o Complete and execute the Letter of Transmittal (or facsimile thereof), together with any required signature guarantees, and any other documents required by the Letter of Transmittal. YOU MUST SEND THESE MATERIALS ALONG WITH A $25.00 CHECK OR MONEY ORDER MADE PAYABLE TO DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. to Mellon Investor Services LLC (the "Depositary") at its address set forth on page (v) of this offer. If you hold certificates for Shares, you must send the certificates to the Depositary at its address set forth on page (v) of this offer. If your Shares are held in book-entry form, you must comply with the Book-Entry Delivery Procedure set forth in Section 2.C of this offer. In all these cases, the Depositary must receive these materials prior to the date and time the offer expires. OR o Comply with the Guaranteed Delivery Procedure set forth in Section 2.D of this offer. The Fund's transfer agent holds Shares in uncertificated form for certain shareholders pursuant to the Fund's dividend reinvestment plan. When a shareholder tenders share certificates, the Depositary will accept any of the shareholder's uncertificated shares for tender first, and accept the balance of tendered shares from the shareholder's certificated shares. UNTIL WHAT TIME CAN I WITHDRAW TENDERED SHARES? (SEE SECTION 3, "WITHDRAWAL RIGHTS") You may withdraw your tendered Shares at any time before 5:00 p.m. New York City time on the date the offer period expires. In addition, after 11:59 p.m. New York City time on July 28, 2006, if the Fund has not yet accepted tendered shares for payment, you may withdraw your tendered shares. HOW DO I WITHDRAW TENDERED SHARES? (SEE SECTION 3, "WITHDRAWAL RIGHTS") If you desire to withdraw tendered Shares, you should either: o Give proper written notice to the Depositary; or o If your Shares are held of record in the name of a broker, dealer, commercial bank, trust company or other nominee, contact that firm to withdraw your tendered Shares. WILL THERE BE ANY TAX CONSEQUENCES TO TENDERING MY SHARES? (SEE SECTION 2, "PROCEDURES FOR TENDERING SHARES," SECTION 10, "CERTAIN EFFECTS OF THE OFFER" AND SECTION 14, "CERTAIN FEDERAL INCOME TAX CONSEQUENCES") If your tendered Shares are purchased, it will be a taxable transaction either in the form of a "sale or exchange" or, under certain circumstances, as a "dividend." Please consult your tax advisor as to the tax consequences of tendering your Shares in this offer. WHAT IS THE PURPOSE OF THE OFFER? (SEE SECTION 6, "PURPOSE OF THE OFFER") The purpose of the offer is to fulfill a commitment made in the Fund's prospectus, dated March 18, 1993, by the Board of Directors of the Fund to conduct a tender offer for Shares of the Fund when, among other things, the Shares trade at an average discount from NAV of more than 3% for a certain period of time during any given year. The offer is intended to attempt to reduce any market discount in the Fund's Shares. There can be no assurance that the offer will result in the Fund's Shares trading at a price that approximates or is equal to their NAV. The Fund's Board of Directors intends to review whether this tender offer effectively reduces the Fund's market discount and the Board may decide to make similar offers as described in the Fund's prospectus. In addition, if a discount to the Fund's NAV persists, the Board may consider alternative methods of reducing the discount. Therefore, the Fund cannot assure you that the Fund will make a similar tender offer in the future. (ii) Please bear in mind that neither the Fund nor its Board has made any recommendation as to whether or not you should tender your Shares. Shareholders are urged to consult their own investment and tax advisers and make their own decisions whether to tender any Shares and, if so, how many Shares to tender. WHAT ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER? (SEE SECTION 5, "CERTAIN CONDITIONS OF THE OFFER") It is the Board of Directors' policy that the Fund cannot accept Shares tendered for payment under any one of the following circumstances that, in the view of the Board of Directors, make it inadvisable to proceed with the offer, purchase or payment. The following is not a complete list of the conditions to the offer. For a complete list of the conditions to the offer, please see Section 5, "Certain Conditions of the Offer" of this offer. o The Fund would be unable to sell portfolio securities in an orderly manner and the sale would have an adverse effect on the NAV of the Fund to the detriment of those shareholders who do not tender their Shares. o The offer could impair compliance with U.S. Securities and Exchange Commission or Internal Revenue Service requirements. o Trading generally or prices on the New York Stock Exchange or NASDAQ are suspended or limited. o The purchase of Shares in the offer would result in the delisting of the Shares on the New York Stock Exchange. o In the Board of Directors' judgment, there is any material legal action or proceeding instituted or threatened, challenging the offer or otherwise materially adversely affecting the Fund. o Certain circumstances beyond the Fund's control, including limitations imposed by federal or state authorities on the extension of credit by lenders or where banks have suspended payment. o Circumstances where, in the Board of Directors' judgment, the Fund or its shareholders may be adversely affected if Shares were purchased in the offer. o The Board of Directors determines that the purchase of Shares would be a breach of their fiduciary duty. IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES? (SEE SECTION 10, "CERTAIN EFFECTS OF THE OFFER" AND SECTION 16, "FEES AND EXPENSES") If you do not tender your Shares (or if you own Shares following completion of the offer) you will be subject to any increased risks associated with the reduction in the Fund's total assets due to the payment for the tendered Shares. These risks may include greater volatility due to decreased diversification and proportionately higher expenses. The reduced net assets of the Fund as a result of the offer may result in less investment flexibility for the Fund, depending on the number of Shares repurchased, and may have an adverse effect on the Fund's investment performance. WHOM DO I CONTACT IF I HAVE QUESTIONS ABOUT THE TENDER OFFER? For additional information or assistance, you may contact the Depositary toll-free at 1-866-340-1397 between the hours of 9:00 a.m. and 6:00 p.m. Eastern time, Monday through Friday, except holidays. (iii) DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. OFFER TO PURCHASE FOR CASH 579,434 OF ITS ISSUED AND OUTSTANDING SHARES OF COMMON STOCK AT NET ASSET VALUE PER SHARE ---------- THE OFFER PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M. NEW YORK CITY TIME ON JUNE 30, 2006, UNLESS THE OFFER IS EXTENDED. ---------- To the holders of Common Stock of DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.: Delaware Investments Dividend and Income Fund, Inc., a diversified, closed-end management investment company organized as a Maryland corporation (the "Fund"), is offering to purchase up to 5%, or 579,434 shares of its Common Stock ("Offer Amount"), with par value of $0.01 per share ("Shares"), for cash at a price (the "Purchase Price") equal to their net asset value ("NAV") as of 4:00 p.m. New York City time on July 3, 2006, or if the offer is extended, on the next business day after the offer expires. The offer period and withdrawal rights will expire at 11:59 p.m. New York City time on June 30, 2006 (the "Initial Expiration Date"), unless extended (the Initial Expiration Date or the latest date to which the Offer is extended, the "Expiration Date"), upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal (which together constitute the "Offer"). The Shares are currently traded on the New York Stock Exchange ("NYSE") under the ticker symbol "DDF." The NAV on May 26, 2006 was $12.82 per Common Share. Through the Expiration Date, you can obtain current NAV quotations from Mellon Investor Services LLC ("Depositary") by calling 1-866-340-1397 between the hours of 9:00 a.m. and 6:00 p.m. Eastern time, Monday through Friday, except holidays. Also, see Section 8, "Price Range of Shares." The Offer is not conditioned upon the tender of any minimum number of Shares. If the number of Shares properly tendered and not withdrawn prior to the Expiration Date is less than or equal to the Offer Amount, the Fund will, upon the terms and subject to the conditions of the Offer, purchase all Shares tendered. If more Shares than the Offer Amount are properly tendered and not withdrawn prior to the Expiration Date, the Fund will, upon the terms and subject to the conditions of the Offer, purchase the Offer Amount on a pro rata basis. See Section 1, "Price; Number of Shares; Service Fee." A $25.00 service fee ("Service Fee") will be charged to each account tendering Shares in order to help defray certain costs of the tender, including the processing of tender forms, effecting payment, postage and handling. When tendering Shares on behalf of their clients, brokers, dealers, commercial banks, trust companies or other nominees will be required to pay the Service Fee for Shares tendered by such firm on behalf of each of their client accounts. The Service Fee will not be deducted from the purchase price. The fee will be used as an offset to the foregoing costs. If, after carefully evaluating all of the information set forth in the Offer, you wish to tender Shares pursuant to the Offer, please either follow the instructions contained in the Offer and Letter of Transmittal or, if your Shares are held of record in the name of a broker, dealer, commercial bank, trust company or other nominee, contact such firm to effect the tender for you. If you do not wish to tender your Shares, you need not take any action. (iv) THIS OFFER IS BEING MADE TO ALL SHAREHOLDERS OF THE FUND AND IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THIS OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE SECTION 5, "CERTAIN CONDITIONS OF THE OFFER." IMPORTANT NEITHER THE FUND NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH SHAREHOLDER'S SHARES. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISERS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE FUND AS TO WHETHER SHAREHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THE FUND HAS BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE OFFICER OF THE FUND INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER. Questions and requests for assistance and requests for additional copies of this Offer to Purchase and Letter of Transmittal should be directed to the Depositary and Information Agent at the telephone number set forth below. Mellon Investor Services LLC Telephone Number: 1-866-340-1397 By Facsimile Transmission: Mellon Investor Services LLC Attn: Reorganization Dept. 1-201-680-4626 Confirm Receipt by Telephone: 1-201-680-4860
By Mail: By Overnight Courier: By Hand: - ---------------------------- ---------------------------- ---------------------------- Mellon Investor Services LLC Mellon Investor Services LLC Mellon Investor Services LLC Attn: Reorganization Dept. Attn: Reorganization Dept. Attn: Reorganization Dept. P.O. Box 3300 480 Washington Boulevard 120 Broadway, 13th Floor South Hackensack, NJ 07606 Mail Drop - Reorg New York, NY 10271 Jersey City, NJ 07310
June 2, 2006 (v) TABLE OF CONTENTS SECTION PAGE ---- Summary Term Sheet .................................................. (i) 1. Price; Number of Shares; Service Fee ................................ 1 2. Procedures for Tendering Shares ..................................... 2 3. Withdrawal Rights ................................................... 4 4. Payment for Shares .................................................. 5 5. Certain Conditions of the Offer ..................................... 6 6. Purpose of the Offer ................................................ 7 7. Plans or Proposals of the Fund ...................................... 7 8. Price Range of Shares ............................................... 7 9. Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares ............................... 8 10. Certain Effects of the Offer ........................................ 9 11. Source and Amount of Funds .......................................... 10 12. Certain Information about the Fund .................................. 10 13. Additional Information .............................................. 11 14. Certain Federal Income Tax Consequences ............................. 11 15. Extension of Tender Period; Termination; Amendments ................. 14 16. Fees and Expenses ................................................... 14 17. Miscellaneous ....................................................... 14 1. PRICE; NUMBER OF SHARES; SERVICE FEE. The Fund will, upon the terms and subject to the conditions of the Offer, accept for payment (and thereby purchase) up to the Offer Amount or such lesser number of its issued and outstanding Shares which are properly tendered (and not withdrawn in accordance with Section 3, "Withdrawal Rights") prior to the Initial Expiration Date. The Fund reserves the right to extend the Offer to a later Expiration Date. See Section 15, "Extension of Tender Period; Termination; Amendments." The later of the Initial Expiration Date or the latest time and date to which the Offer is extended is hereinafter called the "Expiration Date." The purchase price of the Shares will be their NAV computed as of 4:00 p.m. New York City time on July 3, 2006, or if the Offer period is extended, the next business day following the newly designated Expiration Date. The NAV on May 26, 2006 was $12.82 per Share. You can obtain current NAV quotations from the Depositary by calling 1-866-340-1397 during normal business hours. Shareholders tendering Shares shall be entitled to receive all dividends declared on or before the Expiration Date, but not yet paid on Shares tendered pursuant to the Offer. See Section 8, "Price Range of Shares." The Fund will not pay interest on the purchase price under any circumstances. The Offer is being made to all shareholders of the Fund and is not conditioned upon any minimum number of Shares being tendered. If the number of Shares properly tendered and not withdrawn prior to the Expiration Date is less than or equal to the Offer Amount, the Fund will, upon the terms and subject to the conditions of the Offer, purchase all Shares so tendered. If more Shares than the Offer Amount are properly tendered and not withdrawn prior to the Expiration Date, the Fund will purchase the Offer Amount on a pro rata basis. Shareholders will pay to the Fund a $25.00 Service Fee for each account for which any Shares are being tendered pursuant to the Offer to help defray certain costs of the tender, including the processing of tender forms, effecting payment, postage and handling. Brokers, dealers, commercial banks, trust companies or other nominees ("Nominee Holder" or "Nominee Holders") will be required to pay the Service Fee in an amount equal to $25.00 multiplied by the number of such Nominee Holder's client accounts tendering shares pursuant to the Offer. Shareholders tendering through a Nominee Holder should consider that Nominee Holders may charge the Service Fee to the account of tendering shareholders, at such Nominee Holder's discretion. The Fund expects that the cost to the Fund of effecting this tender offer will exceed the aggregate of all Service Fees received from those who tender their Shares. Such excess costs associated with the tender will be charged against the capital of the Fund. The Service Fee will not be deducted from the proceeds of the purchase. Each shareholder (who does not tender Shares through a Nominee Holder) must pay the amount of the Service Fee by submitting with the Letter of Transmittal a check or money order made payable to Delaware Investments Dividend and Income Fund, Inc. for $25.00 for each Fund account. Each Nominee Holder must pay the amount of the Service Fee by submitting with the Letter of Transmittal a check or money order made payable to Delaware Investments Dividend and Income Fund, Inc. in an amount equal to $25.00 multiplied by the number of client accounts represented by such Nominee Holder's Letter of Transmittal. The Service Fee will be returned to a shareholder or Nominee Holder only in circumstances where none of the Shares tendered are accepted. Tendering shareholders will not be obligated to pay transfer taxes on the purchase of Shares by the Fund, except in the circumstances set forth in Section 4, "Payment for Shares." On May 26, 2006, there were approximately 11,588,670 Shares issued and outstanding and there were approximately 413 holders of record of Shares. The Fund has been advised that no Directors, officers or affiliates (as such term is used in Rule 12b-2 under the Securities Exchange Act of 1934, as amended ("Exchange Act")) of the Fund intend to tender any Shares pursuant to the Offer. The Fund reserves the right, in its sole discretion, at any time or from time to time, to extend the period of time during which the Offer is open by giving oral or written notice of such extension to the Depositary and making a public announcement thereof. See Section 15, "Extension of Tender Period; Termination; Amendments." There can be no assurance, however, that the Fund will exercise its right to extend the Offer. If the Fund decides, in its sole discretion, to decrease the number of Shares being sought and, at the time that notice of such decrease is first published, sent or given to holders of Shares in the manner specified below, the Offer is scheduled to expire at any time earlier than the tenth business day from the date that such notice is first so published, sent or given, the Offer will be extended at least until the end of such ten business day period. During any extension, all Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the right of a tendering shareholder to withdraw his or her Shares. 1 2. PROCEDURES FOR TENDERING SHARES. A. PROPER TENDER OF SHARES. Shareholders having Shares that are registered in the name of a Nominee Holder, such as a broker, dealer, commercial bank, trust company or other nominee, should contact such firm if they desire to tender their Shares. For Shares to be properly tendered pursuant to the Offer, the following must occur prior to 11:59 p.m. New York City time on the Expiration Date: (a) A properly completed and duly executed Letter of Transmittal (or facsimile thereof), together with any required signature guarantees, (or an Agent's Message in the case of a book-entry transfer, all as described in Section 2.C.), payment of the Service Fee and any other documents required by the Letter of Transmittal, must be transmitted to and received by the Depositary at its address set forth on page (v) of this Offer; and (b) Either the certificates for Shares must be transmitted to and received by the Depositary at its address set forth on page (v) of this Offer, or the tendering shareholder must comply with the Book-Entry Delivery Procedure set forth in Section 2.C; or (c) Shareholders must comply with the Guaranteed Delivery Procedure set forth in Section 2.D. If the Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, agents, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and must submit proper evidence satisfactory to the Fund of their authority to so act. Letters of Transmittal and certificates representing Shares should be sent to the Depositary; they should not be sent or delivered to the Fund. The Fund's transfer agent holds Shares in uncertificated form for certain shareholders pursuant to the Fund's dividend reinvestment plan. When a shareholder tenders certificated shares, the Depositary will accept any of the shareholder's uncertificated shares for tender first, and accept the balance of tendered shares from the shareholder's certificated shares. Section 14(e) of the Exchange Act and Rule 14e-4 promulgated thereunder make it unlawful for any person, acting alone or in concert with others, to tender Shares in a partial tender offer for such person's own account unless at the time of tender, and at the time the Shares are accepted for payment, the person tendering has a net long position equal to or greater than the amount tendered in (i) Shares, and will deliver or cause to be delivered such Shares for the purpose of tender to the person making the Offer within the period specified in the Offer, or (ii) an equivalent security and, upon acceptance of his or her tender, will acquire Shares by conversion, exchange, or exercise of such equivalent security to the extent required by the terms of the Offer, and will deliver or cause to be delivered the Shares so acquired for the purpose of tender to the Fund prior to or on the Expiration Date. Section 14(e) and Rule 14e-4 provide a similar restriction applicable to the tender or guarantee of a tender on behalf of another person. The acceptance of Shares by the Fund for payment will constitute a binding agreement between the tendering shareholder and the Fund upon the terms and subject to the conditions of the Offer, including the tendering shareholder's representation that (i) such shareholder has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Exchange Act and (ii) the tender of such Shares complies with Rule 14e-4. By submitting the Letter of Transmittal subject to, and effective upon, acceptance for payment of the Shares tendered in accordance with the terms and subject to the conditions of the Offer, in consideration of the acceptance for payment of such shares in accordance with the terms of the Offer, the tendering shareholders shall be deemed to sell, assign and transfer to, or upon the order of, the Fund all right, title and interest in and to all the Shares that are being tendered and that are being accepted for purchase pursuant to the Offer (and any and all dividends, distributions, other Shares or other securities or rights declared or issuable in respect of such Shares after the Expiration Date) and irrevocably constitute and appoint the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and any such dividends, distributions, other Shares or securities or rights), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver certificates for such Shares (and any such other dividends, distributions, other Shares or securities or rights) or transfer ownership of such Shares (and any such other dividends, distributions, other Shares or securities or rights), together, in 2 either such case, with all accompanying evidences of transfer and authenticity to or upon the order of the Fund, upon receipt by the Depositary, as the agent of the tendering shareholder, of the purchase price, (b) present such Shares (and any such other dividends, distributions, other Shares or securities or rights) for transfer on the books of the Fund, and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any such other dividends, distributions, other Shares or securities or rights), all in accordance with the terms of the Offer. Upon such acceptance for payment, all prior powers of attorney given by the tendering shareholder with respect to such Shares (and any such dividends, distributions, other shares or securities or rights) will, without further action, be revoked and no subsequent powers of attorney may be given by the tendering Shareholder (and, if given, will not be effective.) By submitting the Letter of Transmittal, and in accordance with the terms and conditions of the Offer, the tendering shareholder also shall be deemed to represent and warrant that: (a) the tendering shareholder has full power and authority to tender, sell, assign and transfer the tendered Shares (and any and all dividends, distributions, other Shares or other securities or rights declared or issuable in respect of such Shares after the Expiration Date); (b) when and to the extent the Fund accepts the Shares for purchase, the Fund will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, proxies, encumbrances or other obligations relating to their sale or transfer, and not subject to any adverse claim; (c) on request, the tendering shareholder will execute and deliver any additional documents deemed by the Depositary or the Fund to be necessary or desirable to complete the sale, assignment and transfer of the tendered Shares (and any and all dividends, distributions, other Shares or securities or rights declared or issuable in respect of such Shares after the Expiration Date); and (d) the tendering shareholder has read and agreed to all of the terms of the Offer, including this Offer to Purchase and the Letter of Transmittal. B. SIGNATURE GUARANTEES AND METHOD OF DELIVERY. Signatures on the Letter of Transmittal are required to be guaranteed if stock certificates for Fund Shares and/or a check for cash is to be issued in a name other than the registered owner of such Shares. In those instances, all signatures on the Letter of Transmittal must be guaranteed by an eligible guarantor acceptable to the Depositary (an "Eligible Guarantor"). An eligible guarantor includes a bank, broker, dealer, credit union, savings association or other entity that is a member in good standing of the securities transfer medallion program, or a bank, broker, dealer, credit union, savings association or other entity that is an "eligible guarantor institution" as such term is defined in Rule 17Ad-15 under the Exchange Act. Shareholders should contact the Depositary for a determination as to whether a particular institution is such an Eligible Guarantor. If Shares are tendered for the account of an institution that qualifies as an Eligible Guarantor, signatures on the Letter of Transmittal are not required to be guaranteed. If the Letter of Transmittal is signed by a person or persons authorized to sign on behalf of the registered owner(s), then the Letter of Transmittal must be accompanied by documents evidencing such authority to sign to the satisfaction of the Fund. THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, IS AT THE ELECTION AND RISK OF THE PARTY TENDERING SHARES. IF DOCUMENTS ARE SENT BY MAIL, IT IS RECOMMENDED THAT THEY BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. C. BOOK-ENTRY DELIVERY PROCEDURE. The Depositary will establish accounts with respect to the Shares at the Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Offer by June 7, 2006. Any financial institution that is a participant in any of the Book-Entry Transfer Facility's systems may make delivery of tendered Shares by (i) causing such Book-Entry Transfer Facility to transfer such Shares into the Depositary's account in accordance with such Book-Entry Transfer Facility's procedure for such transfer; and (ii) causing a confirmation of receipt of such delivery to be received by the Depositary. The Book-Entry Transfer Facility may charge the account of such financial institution for tendering Shares on behalf of shareholders. Notwithstanding that delivery of Shares may be properly effected in accordance with this Book-Entry Delivery Procedure, the following must be transmitted to and received by the Depositary at the appropriate address set forth on page (v) of this Offer to Purchase before 5:00 p.m. New York City time on the Expiration Date: (i) The Letter of Transmittal (or manually signed facsimile thereof), with signature guarantee, if required, or, in lieu of the Letter of Transmittal, an Agent's Message (as defined below) in connection with a book-entry transfer; and (ii) Payment of the Service Fee and all other documents required by the Letter of Transmittal. 3 The term "Agent's Message" means a message from the Book-Entry Transfer Facility transmitted to, and received by, the Depositary forming a part of a timely confirmation of a book-entry transfer (a "Book-Entry Confirmation"), which states that the Book-Entry Transfer Facility has received an express acknowledgment from the Book-Entry Transfer Facility participant tendering the Shares that are the subject of the Book-Entry Confirmation that (i) the Book-Entry Transfer Facility participant has received and agrees to be bound by the terms of the Letter of Transmittal; and (ii) the Fund may enforce such agreement against the Book-Entry Transfer Facility participant. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY FOR PURPOSES OF THIS OFFER. D. GUARANTEED DELIVERY PROCEDURE. If your certificates for Shares are not immediately available or time will not permit the Letter of Transmittal and other required documents to reach the Depositary prior to the Expiration Date, you may properly tender Shares if the following three conditions are met: (i) You make such tenders by or through an Eligible Guarantor; and (ii) The Depositary receives, prior to 5:00 p.m. New York City time on the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by the Fund (delivered by hand, mail, telegram, telex or facsimile transmission); and (iii) The certificates for all tendered Shares, or a Book-Entry Confirmation, together with a properly completed and duly executed Letter of Transmittal (or, in the case of book-entry transfer, an Agent's Message in lieu of the Letter of Transmittal), payment of the Service Fee and any other documents required by the Letter of Transmittal, are received by the Depositary within three New York Stock Exchange ("NYSE") trading days after the execution date of the Notice of Guaranteed Delivery. E. DETERMINATION OF VALIDITY. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of tenders will be determined by the Fund, in its sole discretion, whose determination shall be final and binding. The Fund reserves the absolute right to reject any or all tenders determined by it not to be in appropriate form or the acceptance of or payment for which may, in the opinion of the Fund's counsel, be unlawful. Failure to include payment of the Service Fee with the Letter of Transmittal, or failure of a personal check in payment of the Service Fee to clear, will be deemed to be an incomplete tender and will be rejected. The Fund also reserves the absolute right to waive any of the conditions of the Offer or any defect in any tender with respect to any particular Shares or any particular shareholder, and the Fund's interpretations of the terms and conditions of the Offer will be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such times as the Fund shall determine. Tendered Shares will not be accepted for payment unless the defects or irregularities have been cured within such time or waived. Neither the Fund, the Depositary nor any other person shall be obligated to give notice of any defects or irregularities in tenders, nor shall any of them incur any liability for failure to give such notice. F. FEDERAL INCOME TAX WITHHOLDING. To prevent backup federal income tax withholding equal to 28% of the gross payments made pursuant to the Offer, each shareholder must notify the Depositary of such shareholder's correct taxpayer identification number (or certify that such taxpayer is awaiting a taxpayer identification number) and provide certain other information by completing the Substitute Form W-9 included in the Letter of Transmittal. Foreign shareholders who are individuals and who have not previously submitted a Form W-8 to the Fund must do so in order to avoid backup withholding. For an additional discussion of backup federal income tax withholding as well as a discussion of certain other federal income tax consequences to tendering shareholders, see Section 14, "Certain Federal Income Tax Consequences." 3. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 3, tenders of Shares made pursuant to the Offer will be irrevocable. If you desire to withdraw Shares tendered on your behalf by a broker, dealer, commercial bank, trust company or other 4 nominee, you may withdraw by contacting that firm and instructing them to withdraw such Shares. You have the right to withdraw Shares tendered at any time prior to 5:00 p.m. New York City time on the Expiration Date. In addition, after 11:59 p.m. New York City time, on July 28, 2006, if the Fund has not yet accepted tendered Shares for payment, you may withdraw your tendered Shares. Upon terms and subject to the conditions of the Offer, the Fund expects to accept for payment properly tendered Shares promptly after the Expiration Date. To be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at the address set forth on page (v) of this Offer. Any notice of withdrawal must specify the name of the person who deposited the Shares to be withdrawn, the number of Shares to be withdrawn, and the names in which the Shares to be withdrawn are registered. If certificates have been delivered to the Depositary, the name of the registered holder and the serial numbers of the particular certificates evidencing the Shares withdrawn must also be furnished to the Depositary and the signature on the notice of withdrawal must be guaranteed by an Eligible Guarantor. If Shares have been delivered pursuant to the Book-Entry Delivery Procedure set forth in Section 2, "Procedures for Tendering Shares," any notice of withdrawal must specify the name and number of the account at the appropriate Book-Entry Transfer Facility to be credited with the withdrawn Shares (which must be the same name, number, and Book-Entry Transfer Facility from which the Shares were tendered), and must comply with the procedures of that Book-Entry Transfer Facility. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Fund in its sole discretion, whose determination shall be final and binding. None of the Fund, the Depositary or any other person is or will be obligated to give any notice of any defects or irregularities in any notice of withdrawal, and none of them will incur any liability for failure to give any such notice. Shares properly withdrawn shall not thereafter be deemed to be tendered for purposes of the Offer. However, withdrawn Shares may be retendered by following the procedures described in Section 2, "Procedures for Tendering Shares," prior to 11:59 p.m. New York City time on the Expiration Date. 4. PAYMENT FOR SHARES. For purposes of the Offer, the Fund will be deemed to have accepted for payment (and thereby purchased) Shares that are tendered and not withdrawn when, as and if it gives oral or written notice to the Depositary of its acceptance of such Shares for payment pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, the Fund will, promptly after the Expiration Date, accept for payment (and thereby purchase) Shares properly tendered prior to 11:59 p.m. New York City time on the Expiration Date. Payment for Shares accepted for payment pursuant to the Offer will be made by the Depositary out of funds made available to it by the Fund. The Depositary will act as agent for tendering shareholders for the purpose of effecting payment to the tendering shareholders. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) Share certificates evidencing such Shares or a Book-Entry Confirmation of the delivery of such Shares, (ii) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) or, in the case of a book-entry transfer, an Agent's Message in lieu of the Letter of Transmittal, (iii) any other documents required by the Letter of Transmittal, and (iv) payment of the Service Fee. Accordingly, payment may not be made to all tendering shareholders at the same time and will depend upon when Share certificates are received by the Depositary or Book-Entry Confirmations of tendered Shares are received in the Depositary's account at the Book-Entry Transfer Facility or the clearance of payment of the Service Fee. If any tendered Shares are not accepted for payment pursuant to the terms and subject to the conditions of the Offer for any reason, or are not paid because of an invalid tender, or if certificates are submitted for more Shares than are tendered or if a shareholder withdraws tendered shares by a valid notice of withdrawal (i) certificates for such unpurchased Shares will be returned, without expense to the tendering shareholder, as soon as practicable following expiration, termination or withdrawal of the Offer, (ii) Shares delivered pursuant to the Book-Entry Delivery Procedures will be credited to the appropriate account maintained within the appropriate Book-Entry Transfer Facility, and (iii) uncertificated Shares held by the Fund's transfer agent pursuant to the Fund's dividend reinvestment plan will be returned to the dividend reinvestment plan account maintained by the transfer agent. The Service Fee for a particular client account will be returned to the tendering shareholder or Nominee Holder only in the case where none of the Shares tendered have been accepted for payment. 5 The Fund will pay all transfer taxes, if any, payable on the transfer to it of Shares purchased pursuant to the Offer. If, however, payment of the purchase price is to be made to, or (in the circumstances permitted by the Offer) if unpurchased Shares are to be registered in the name of any person other than the registered holder, or if tendered certificates, if any, are registered or the Shares tendered are held in the name of any person other than the person signing the Letter of Transmittal, the amount of any transfer taxes (whether imposed on the registered holder or such other person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. Shareholders tendering Shares shall be entitled to receive all dividends declared on or before the Expiration Date, but not yet paid, on Shares tendered pursuant to the Offer. The Fund will not pay any interest on the purchase price under any circumstances. In addition, if certain events occur, the Fund may not be obligated to purchase Shares pursuant to the Offer. See Section 5, "Certain Conditions of the Offer." Any tendering shareholder or other payee who fails to complete fully and sign the Substitute Form W-9 in the Letter of Transmittal may be subject to required federal income tax withholding of 28% of the gross proceeds paid to such shareholder or other payee pursuant to the Offer. Non-U.S. shareholders should provide the Depositary with a completed Form W-8 in order to avoid 28% backup withholding. A copy of Form W-8 will be provided upon request from the Depositary. See Section 2, "Procedures for Tendering Shares" and Section 14, "Certain Federal Income Tax Consequences." 5. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer, it is the announced policy of the Board of Directors of the Fund, which may be changed by the Directors, that the Fund cannot accept tenders or effect repurchases if: (1) such transactions, if consummated, would (a) result in delisting of the Fund's Shares from the NYSE (the NYSE Listed Company Manual states that the NYSE would promptly initiate suspension and delisting procedures with respect to closed-end funds if the average market capitalization of the entity over thirty consecutive trading days is below $15,000,000); (b) impair the Fund's status as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code") (which would make the Fund subject to U.S. federal income taxes on all of its income and gains in addition to the taxation of shareholders who receive distributions from the Fund); or (c) result in a failure to comply with the applicable asset coverage requirements in the event any senior securities are issued and outstanding; (2) the amount of Shares tendered would require liquidation of such a substantial portion of the Fund's securities that the Fund would not be able to liquidate portfolio securities in an orderly manner in light of the existing market conditions and such liquidation would have an adverse effect on the NAV of the Fund to the detriment of non-tendering shareholders; (3) there is any (a) in the Board of Directors' judgment, material legal action or proceeding instituted or threatened challenging such transactions or otherwise materially adversely affecting the Fund; (b) suspension of or limitation on prices for trading securities generally on the NYSE or other national securities exchange(s), or the National Association of Securities Dealers Automated Quotation System ("NASDAQ") National Market System; (c) declaration of a banking moratorium by Federal or state authorities or any suspension of payment by banks in the United States or New York State; (d) limitation affecting the Fund or the issuers of its portfolio securities imposed by federal or state authorities on the extension of credit by lending institutions; (e) commencement of war, armed hostilities or other international or national calamity directly or indirectly involving the United States; or (f) in the Board of Directors' judgment, other event or condition which would have a material adverse effect on the Fund or its shareholders if tendered Shares were purchased; or (4) the Board of Directors determines that effecting any such transaction would constitute a breach of their fiduciary duty owed to the Fund or its shareholders. The Directors may modify these conditions in light of experience. The Fund reserves the right, at any time during the pendency of the Offer, to terminate, extend or amend the Offer in any respect. If the Fund determines to terminate or amend the Offer or to postpone the acceptance for payment of or payment for Shares tendered, it will, to the extent necessary, extend the period of time during which the Offer is open as provided in Section 15, "Extension of Tender Period; Termination; Amendments." Moreover, in the event any of the foregoing conditions are modified or waived in whole or in part at any time, the Fund will promptly make a public announcement of such waiver and may, depending on the materiality of the modification or waiver, extend the Offer period as provided in Section 15, "Extension of Tender Period; Termination; Amendments." 6 6. PURPOSE OF THE OFFER. At the Fund's inception, the Board of Directors recognized the possibility that the Fund's Shares might trade at a discount to the NAV and determined that it would be in the best interests of shareholders to take action to attempt to reduce or eliminate that discount. As stated in the Fund's Prospectus, dated March 18, 1993 (the "Prospectus"), the Board determined that tender offers for Shares of the Fund might help reduce any market discount that may develop, and committed to the Fund, subject to exceptions detailed in the Prospectus, to conduct an annual tender offer of the Fund's issued and outstanding Shares if, during the period of twelve calendar weeks prior to a date in the second quarter designated by the Board, Shares have traded on the principal securities exchanges where listed, at an average discount from NAV of more than 3%, as of the last trading day in each week during such twelve-week period. Those conditions have been met and the Board has determined to effect this Offer under Rule 13e-4 of the Exchange Act. Any Shares acquired by the Fund pursuant to the Offer will thereafter constitute authorized but unissued shares. There can be no assurance that this Offer will reduce or eliminate any spread between market price and the NAV of the Shares. The market price of the Shares will, among other things, be determined by the relative demand for and supply of Shares in the market, the Fund's investment performance, the Fund's dividends and yields and investor perception of the Fund's overall attractiveness as an investment as compared with other investment alternatives. Nevertheless, the fact that the Offer is being conducted may result in more of a reduction in the spread between market price and NAV than might otherwise be the case. Consistent with their fiduciary obligations, in addition to the Offer, the Board of Directors will continue to explore alternative means to reduce or eliminate the Fund's market value discount from NAV. Therefore, the Fund cannot assure you that it will make a similar tender offer in the future. NEITHER THE FUND NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH SHAREHOLDER'S SHARES AND HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISERS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. 7. PLANS OR PROPOSALS OF THE FUND. Except to the extent described herein, the Fund has no present plans or proposals, and is not engaged in any negotiations, that relate to or would result in: any extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the Fund; any purchase, sale or transfer of a material amount of assets of the Fund (other than in its ordinary course of business); any material changes in the Fund's present capitalization (except as resulting from the Offer or otherwise set forth herein); or any other material changes in the Fund's structure or business. 8. PRICE RANGE OF SHARES. The Shares are traded on the NYSE. During each fiscal quarter of the Fund during the past two fiscal years (as well as the first fiscal quarter of 2006), the high and low NAV, and Market Price per Share, as well as the Closing NAV and Market Price per Share (as of 4:00 p.m. on the last day of each of the Fund's fiscal quarters) were as follows: NAV ($) MARKET PRICE ($) ------------------- ------------------- FISCAL QUARTER ENDED HIGH LOW CLOSE HIGH LOW CLOSE - -------------------- ----- ----- ----- ----- ----- ----- February 27, 2004 12.58 11.91 12.57 12.81 11.65 12.23 May 28, 2004 12.83 11.47 11.92 12.64 9.87 11.08 August 31, 2004 12.28 11.72 12.26 11.54 10.64 11.31 November 30, 2004 12.98 12.27 12.97 12.43 11.17 11.76 February 28, 2005 12.91 13.38 13.19 12.49 11.55 12.17 May 31, 2005 13.41 12.34 12.72 12.34 11.05 11.99 August 31, 2005 13.52 12.87 13.12 13.20 11.94 12.86 November 30, 2005 13.29 12.19 12.65 13.20 11.53 12.55 February 28, 2006 12.96 12.53 12.90 12.75 11.21 12.45 The Fund has a managed distribution policy. Under the policy, the Fund declares and pays monthly distributions and is managed with a goal of generating as much of the distribution as possible from ordinary income (net investment income and short-term capital gains). The balance of the distribution then comes from long-term capital gains and, if 7 necessary, a return of capital. The current annualized rate is $0.96 per share. The Fund continues to evaluate its monthly distributions in light of ongoing economic and market conditions and may change the amount of the monthly distribution in the future. However, the Offer could result in additional distributions separate from those declared pursuant to the managed distribution policy due to the sale of portfolio securities in connection with the Offer. See "Recognition of Capital Gains" in Section 10, "Certain Effects of the Offer." Shareholders tendering Shares shall be entitled to receive all dividends declared on or before the Expiration Date, but not yet paid, on Shares tendered pursuant to the Offer. At this time, it is anticipated that a cash dividend will be declared by the Board of Directors with a record date occurring before the Expiration Date and that, accordingly, holders of Shares purchased pursuant to the Offer will receive such dividend with respect to such Shares. The amount and frequency of dividends in the future will depend on circumstances existing at that time. 9. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES. The members of the Board of Directors of the Fund are: Jude T. Driscoll (Chairman), Thomas L. Bennett, John A. Fry, Anthony D. Knerr, Lucinda S. Landreth, Ann R. Leven, Thomas F. Madison, Janet L. Yeomans and J. Richard Zecher. Mr. Driscoll is considered an "interested person" of the Fund, as that term is defined in the 1940 Act, as amended (the "1940 Act"), because of his affiliation with the investment adviser of the Fund. The executive officers of the Fund are Jude T. Driscoll, Chairman, President and Chief Executive Officer and Michael P. Bishof, Senior Vice President and Chief Financial Officer. Correspondence to the Directors and executive officers of the Fund should be mailed to c/o Delaware Investments Dividend and Income Fund, Inc., 2005 Market Street, Philadelphia, Pennsylvania 19103. Based upon the Fund's records and upon information provided to the Fund by its Directors, executive officers and affiliates (as such term is used in Rule 12b-2 under the Exchange Act), as of May 26, 2006, the Directors, executive officers and their associates (as that term is defined in Rule 12b-2 under the Exchange Act) of the Fund as a group beneficially owned no Shares. The Fund has been informed that no Director or executive officer of the Fund intends to tender any Shares pursuant to the Offer. Based upon the Fund's records and upon information provided to the Fund by its Directors, executive officers and affiliates (as such term is used in Rule 12b-2 under the Exchange Act), neither the Fund nor, to the best of the Fund's knowledge, any of the Directors or executive officers of the Fund, nor any associates of any of the foregoing, has effected any transactions in the Shares during the sixty business day period prior to the date hereof. Except as set forth in this Offer to Purchase, neither the Fund nor, to the best of the Fund's knowledge, any of its affiliates, Directors or executive officers, is a party to any contract, arrangement, understanding or relationship with any other person relating, directly or indirectly, to the Offer with respect to any securities of the Fund (including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies, consents or authorizations). Delaware Management Company (a series of Delaware Management Business Trust) (the "Adviser") serves as investment adviser to the Fund pursuant to an investment management agreement. Under the investment management agreement, the Adviser provides investment advisory services to the Fund for an annual fee calculated daily at the rate of 0.55% of the Fund's adjusted average weekly net assets. The Fund also is a party to certain other service agreements. The Fund is a party to an Administration and Accounting Agreement with Delaware Service Company, Inc. (the "Administrator"), an affiliate of the Adviser. Under the terms of the Administration and Accounting Agreement as of May 19, 2005, the Administrator provides accounting and administration services to the Fund for a monthly fee computed at the annual rate of 0.04% of the Fund's adjusted average weekly net assets. JPMorgan Chase & Co. serves as custodian for the Fund's portfolio securities pursuant to the Custodian Agreement entered into with the Fund. Under the Custodian Agreement, the Fund is obligated to pay a fee equal to 0.001% of the Fund's average daily net assets, plus trading fees and other out-of-pocket expenses. For the fiscal year ended November 30, 2005, the Fund paid $9,933 in custodian fees. The Fund is a party to a transfer agency agreement with Mellon Investor Services LLC. Pursuant to this transfer agency agreement, the Fund is obligated to pay 8 Mellon Investor Services LLC a monthly fee equal to $2,340 plus out-of-pocket expenses for the services it provides as transfer agent, dividend disbursing agent and registrar for the Fund. The Fund also entered into several agreements in connection with its Commercial Paper Program (the "Program"). Under the Program, the Fund sells unsecured promissory notes (the "Notes") to institutional accredited investors in private placements. The agreements related to the Program are a Depositary Agreement and a Liquidity Agreement with JPMorgan Chase. Under the Depositary Agreement, JPMorgan Chase serves as the depositary and issuing and payment agent with respect to the Notes, and under the Liquidity Agreement, JPMorgan Chase has committed to loaning the Fund up $30 million at any one time to pay maturing Notes. The Fund also is a party to a Placement Agency Agreement with Banc of America Securities LLC, as the successor by merger of Continental Bank N.A. ("Banc of America"), pursuant to which Banc of America will use its reasonable best efforts to sell Notes on behalf of the Fund. 10. CERTAIN EFFECTS OF THE OFFER. Effect on NAV and Consideration Received by Tendering Shareholders. To pay the aggregate purchase price of Shares accepted for payment pursuant to the Offer, the Fund anticipates that funds will be first derived from any cash on hand and then from the proceeds from the sale of portfolio securities held by the Fund. If the Fund is required to sell a substantial amount of portfolio securities to raise cash to finance the Offer, the market prices of the Fund's portfolio securities, and hence the Fund's NAV, may decline. If such a decline occurs, the Fund cannot predict what its magnitude might be or whether such a decline would be temporary or continue to or beyond the Expiration Date. Because the price per Share to be paid in the Offer will be dependent upon the NAV per Share as determined on the first business day after the Expiration Date, if such a decline continued to the Expiration Date, the consideration received by tendering shareholders would be reduced more than it otherwise might. In addition, the sale of portfolio securities will cause increased brokerage and related transaction expenses, and the Fund may receive proceeds from the sale of portfolio securities less than their valuations by the Fund. Accordingly, because of the Offer, the Fund's NAV per Share may decline more than it otherwise might, thereby reducing the amount of proceeds received by tendering shareholders and the value per Share for non-tendering shareholders. The Fund will sell portfolio securities during the pendency of the Offer to raise cash for the purchase of Shares. Thus, it is likely that during the pendency of the Offer, and possibly for a short time thereafter, the Fund will hold a greater than normal percentage of its net assets in cash and cash equivalents. This large cash position may interfere with the Fund's ability to meet its investment objective. The Fund is required by law to pay for tendered Shares it accepts for payment promptly after the Expiration Date of this Offer. Because the Fund will not know the number of Shares tendered until the Expiration Date, the Fund will not know until the Expiration Date the amount of cash required to pay for such Shares. If on or prior to the Expiration Date the Fund does not have, or believes it is unlikely to have, sufficient cash to pay for all Shares tendered, it may extend the Offer to allow additional time to sell portfolio securities and raise sufficient cash. Recognition of Capital Gains. As noted, the Fund will likely be required to sell portfolio securities pursuant to the Offer. If the Fund's tax basis for the securities sold is less than the sale proceeds, the Fund will recognize capital gains. The Fund would expect to distribute any such gains to shareholders of record (reduced by net capital losses realized during the fiscal year, if any, and available capital loss carry-forwards) following the end of the Fund's fiscal year on November 30. This recognition and distribution of gains, if any, would have two negative consequences: first, shareholders at the time of a declaration of distributions would be required to pay taxes on a greater amount of capital gain distributions than otherwise would be the case; and second, to raise cash to make the distributions, the Fund might need to sell additional portfolio securities, thereby possibly being forced to realize and recognize additional capital gains. It is impossible to predict what the amount of unrealized gains or losses would be in the Fund's portfolio at the time that the Fund is required to liquidate portfolio securities (and hence the amount of capital gains or losses that would be realized and recognized). As of November 30, 2005, there was unrealized appreciation of investments on a tax basis of $10,290,474, and no remaining capital loss carry-forwards from prior years. In addition, some of the distributed gains may be realized on securities held for one year or less, which would generate income taxable to the shareholders at ordinary income rates. This could adversely affect the Fund's performance. 9 Tax Consequences of Repurchases to Shareholders. The Fund's purchase of tendered Shares pursuant to the Offer will have tax consequences for tendering shareholders and may have tax consequences for non-tendering shareholders. See Section 14 "Certain Federal Income Tax Consequences." Effect on Remaining Shareholders, Higher Expense Ratio and Less Investment Flexibility. The purchase of Shares by the Fund pursuant to the Offer will have the effect of increasing the proportionate interest in the Fund of non-tendering shareholders. All shareholders remaining after the Offer will be subject to any increased risks associated with the reduction in the Fund's aggregate assets resulting from payment for the tendered Shares, such as greater volatility due to decreased diversification and proportionately higher expenses. The reduced net assets of the Fund as a result of the Offer may result in less investment flexibility for the Fund, depending on the number of Shares repurchased, and may have an adverse effect on the Fund's investment performance. Effect on Percentage of Illiquid and Restricted Securities in the Fund's Portfolio. As of May 26, 2006, the Fund held illiquid or restricted securities in an amount equal to less than one-half of one percent of the Fund's total net assets. Therefore, if the Fund does not purchase any such securities prior to the Expiration Date, the Offer and the number of Shares purchased pursuant to the Offer, will not materially increase the portion of illiquid securities in the portfolio. Possible Proration. If greater than 5% of the Fund's Shares are tendered pursuant to the Offer, the Fund would, upon the terms and subject to the conditions of the Offer, purchase Shares tendered on a pro rata basis. Accordingly, shareholders cannot be assured that all of their tendered Shares will be repurchased. Effect on Commercial Paper Program. As a result of the decline in Fund assets due to the Tender Offer, the Fund anticipates that it will be required to reduce the amount of leverage it employs through the Program. This will require the sale of additional portfolio securities and a further reduction in the Fund's assets, with the attendant consequences discussed above. THE OFFER MAY HAVE CERTAIN ADVERSE CONSEQUENCES FOR TENDERING AND NON-TENDERING SHAREHOLDERS. 11. SOURCE AND AMOUNT OF FUNDS. The actual cost to the Fund cannot be determined at this time because the number of Shares to be purchased will depend on the number tendered, and the price will be based on the NAV per Share on the business day after the Expiration Date. If the NAV per Share on that date were the same as the NAV per Share on May 26, 2006, and if 5% of the outstanding Shares are purchased pursuant to the Offer, the estimated cost to the Fund, not including fees and expenses incurred in connection with the Offer, would be approximately $7.4 million. The monies to be used by the Fund to purchase Shares pursuant to the Offer will be first obtained from any cash on hand and then from the proceeds of sales of securities in the Fund's investment portfolio. The Directors believe that the Fund has sufficient liquidity to purchase the Shares that may be tendered pursuant to the Offer. However, if, in the judgment of the Directors, there is not sufficient liquidity of the assets of the Fund to pay for tendered Shares, the Fund may terminate the Offer. See Section 5, "Certain Conditions of the Offer." The Fund will not borrow money or undertake any other alternative arrangements to finance the purchase of tendered Shares. 12. CERTAIN INFORMATION ABOUT THE FUND. The Fund was organized as a Maryland corporation on February 2, 1993, and is a diversified, closed-end management investment company registered under the 1940 Act. The Shares were first issued to the public on March 26, 1993. As a closed-end investment company, the Fund differs from an open-end investment company (i.e., a mutual fund) in that it does not redeem its Shares at the election of a shareholder and does not continuously offer its Shares for sale to the public. The Fund's primary investment objective is to seek high current income. Capital appreciation is a secondary objective. The Fund seeks to achieve its objective by investing in income generating equity securities, including dividend paying common stocks, convertible securities, preferred stocks and other equity related securities. The Fund also invests in non-convertible debt securities consisting primarily of corporate bonds, including high yield, high risk debt securities. The principal executive offices of the Fund are located at 2005 Market Street, Philadelphia, Pennsylvania 19103. 10 13. ADDITIONAL INFORMATION. The Fund is subject to the information and reporting requirements of the 1940 Act and in accordance therewith is obligated to file reports and other information with the Securities and Exchange Commission (the "Commission") relating to its business, financial condition and other matters. The Fund has also filed an Issuer Tender Offer Statement on Schedule TO with the Commission. Such reports and other information are available for inspection at the public reference room at the Commission's office, 100 F Street, N.E., Washington, D.C. 20549. Copies may be obtained, by mail, upon payment of the Commission's customary charges, by writing to its principal office at 100 F Street, N.E., Washington, D.C. 20549. Such reports and other information are also available on the Commission's web site (http://www.sec.gov). 14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following discussion is a general summary of the U.S. federal income tax consequences of a sale of Shares pursuant to the Offer. Shareholders should consult their own tax advisers regarding the tax consequences of a sale of Shares pursuant to the Offer, as well as the effects of state, local and foreign tax laws. See also "Federal Income Tax Withholding," in Section 2.F. Federal Income Tax Consequences to Tendering Shareholders - U.S. Shareholders. In General. A shareholder's tender of all or a part of its Shares for cash pursuant to the Offer will be a taxable transaction for federal income tax purposes. The tax consequences of the sale will be determined in part under the stock redemption rules of Section 302 of the Code. The amount and characterization of income recognized by a shareholder in connection with a sale pursuant to the Offer will depend on whether the sale is treated as an "exchange" or a "dividend" for tax purposes. Treatment as an Exchange. If the redemption qualifies under any of the provisions of Section 302(b) of the Code, as more fully described below, the cash received pursuant to the Offer will be treated as a distribution from the Fund in exchange for the Shares sold. The treatment accorded to such an exchange results in a shareholder's recognizing gain or loss equal to the difference between (a) the cash received by the shareholder pursuant to the Offer and (b) the shareholder's adjusted tax basis in the Shares surrendered. Assuming the Shares are held as capital assets, such recognized gain or loss will be capital gain or loss. If the Shares were held longer than one year, such capital gain or loss will be long-term. The maximum rate on long-term capital gains for individuals applicable to such a sale of Shares is 15%. Under certain "wash sales" rules, recognition of a loss on Shares sold pursuant to the Offer will ordinarily be disallowed to the extent a shareholder acquires Shares within 30 days before or after the date Shares are purchased pursuant to the Offer and, in that event, the basis and holding period of the Shares acquired will be adjusted to reflect the disallowed loss. Treatment as a Dividend. If none of the provisions under Section 302(b) of the Code outlined below are satisfied, a shareholder will be treated as having received a dividend taxable as ordinary income in an amount equal to the entire amount of cash received by the shareholder for its Shares pursuant to the Offer to the extent the Fund has current and/or accumulated earnings and profits. Any amounts treated as distributions to shareholders in excess of the Fund's current and accumulated earnings and profits will be treated as a return of capital to such shareholders to the extent of their basis in their Shares and then as capital gain (which will be long-term or short-term depending on such shareholder's applicable holding period for the Shares tendered). Accordingly, the differentiation between "dividend" and "sale or exchange" treatment is important with respect to the amount (there is no basis offset for dividends) and character of income that tendering shareholders are deemed to receive. While the marginal tax rates for dividends and capital gains remains the same (35%) for corporate shareholders, under the Code the top income tax rate on ordinary income of individuals (35%) exceeds the maximum tax rate on net capital gains (15%) except to the extent any such dividends are designated by the Fund as qualified dividend income taxable at the same rate as net capital gains. In general, for individuals the amount of dividends that may be designated by the Fund as qualified dividend income cannot exceed the amount of qualified dividend income earned by the Fund on its investments for the taxable year. For corporate shareholders, the amount of dividends that may be designated by the Fund as qualifying for the 70% corporate dividends-received deduction cannot exceed the amount of the dividends received by the Fund on its investments in domestic corporations for the taxable year. 11 Each shareholder's tax adviser should determine whether that shareholder qualifies under one of the provisions of Section 302(b) of the Code. In the event that the transaction is treated as a dividend distribution to a shareholder for federal income tax purposes, such shareholder's remaining tax basis in the Shares actually redeemed will be added to the tax basis of such shareholder's remaining Shares in the Fund. In the event that a shareholder actually owns no Shares in the Fund after the redemption, but the transaction is nevertheless treated as a dividend distribution because such shareholder constructively owns Shares in the Fund (see below), such shareholder's tax basis should be added to Shares in the Fund owned by related persons that were considered constructively owned by such shareholder. Constructive Ownership of Stock. In determining whether the provisions under Section 302(b) of the Code, as described below, are satisfied, a shareholder must take into account not only Shares actually owned by such shareholder, but also Shares that are constructively owned within the meaning of Section 318 of the Code. Under Section 318 of the Code, a shareholder may constructively own Shares actually owned, and in some cases constructively owned, by certain related individuals and certain entities in which the shareholder or a related individual or entity has an interest. The rules of constructive ownership are complex and must be applied to a particular shareholder's situation by a tax adviser. The Provisions of Section 302(b) of the Code. Under Section 302(b) of the Code, a redemption will be taxed as an exchange, and not as a dividend, if it (a) results in a "complete redemption" of all the Shares owned by a shareholder, (b) is "substantially disproportionate" with respect to a shareholder, or (c) is "not essentially equivalent to a dividend" with respect to a shareholder. Each shareholder should be aware that, under certain circumstances, sales, purchases, or transfers of Shares in the market or to or from other parties contemporaneous with sales pursuant to the Offer may be taken into account in determining whether the tests under clause (a), (b), or (c) above are satisfied. Further, the Fund believes that in the event the Offer is oversubscribed, resulting in a proration, it is likely that less than all the Shares tendered by a shareholder will be purchased by the Fund. Proration may affect whether a sale by a shareholder will satisfy the provisions (a), (b), or (c) above. A brief description of the three major provisions of Section 302(b) of the Code is as follows: 1. A Complete Redemption of Interest. The receipt of cash by a shareholder will result in a "complete redemption" of all the Shares owned by the shareholder within the meaning of Section 302(b)(3) of the Code if either (i) all the Shares actually and constructively owned by the shareholder are sold pursuant to the Offer or (ii) all the Shares actually owned by the shareholder are sold pursuant to the Offer, the only Shares the shareholder constructively owns are actually owned by such shareholder's family members, and the shareholder is eligible to waive and effectively waives, under procedures described in Section 302(c) of the Code, such constructive ownership. 2. A Substantially Disproportionate Redemption. The receipt of cash by a shareholder will be "substantially disproportionate" with respect to such shareholder within the meaning of Section 302(b)(2) of the Code if the percentage of the total outstanding Shares actually and constructively owned by the shareholder immediately following the sale of Shares pursuant to the Offer is less than 80 percent of the percentage of the total outstanding Shares actually and constructively owned by such shareholder immediately before such sale. 3. Not Essentially Equivalent to a Dividend. Even if a sale by a shareholder fails to meet the "complete redemption" or "substantially disproportionate" tests, a shareholder may nevertheless meet the "not essentially equivalent to a dividend" test. Whether a specific redemption is "not essentially equivalent to a dividend" depends on the individual shareholder's facts and circumstances. In any event, the redemption must result in a "meaningful reduction" of the shareholder's proportionate interest in the Fund. The Internal Revenue Service (the "IRS") has indicated in published rulings that, in the case of a minority shareholder in a publicly held corporation whose relative stock investment in the corporation was minimal and who exercised no control over corporate affairs, a small reduction in the percentage ownership interest of such shareholder in such corporation (from ..0001118 percent to .0001081 percent - 3.3% reduction under the facts of this ruling) was sufficient to constitute a "meaningful reduction." Shareholders seeking to rely on this test should consult their own tax advisers as to the application of this particular standard to their own situations. Backup Withholding. The Depositary may be required to withhold 28% of the gross proceeds paid to a shareholder or other payee pursuant to the Offer unless either: (a) the shareholder has completed and submitted to the Depositary the Substitute Form W-9 included with the Letter of Transmittal, providing the shareholder's taxpayer identification number/social security number and certifying under penalties of perjury: (i) that such number is correct, and (ii) either 12 that (A) the shareholder is exempt from backup withholding, (B) the shareholder has not been notified by the IRS that the shareholder is subject to backup withholding as a result of an under-reporting of interest or dividends, or (C) the IRS has notified the shareholder that the shareholder is no longer subject to backup withholding; or (b) an exception applies under applicable law and Treasury regulations. Federal Income Tax Consequences to Tendering Shareholders - Non-U.S. Shareholders. U.S. Withholding at the Source. Any payments to a tendering shareholder who is a nonresident alien individual, a foreign trust or estate or a foreign corporation (as such terms are defined in the Code) that does not hold its shares in connection with a trade or business conducted in the United States (a "Foreign Shareholder") that are treated as dividends for U.S. federal income tax purposes under the rules set forth above, will be subject to U.S. withholding tax at the rate of 30% (unless a reduced rate applies under an applicable tax treaty). A tendering Foreign Shareholder who realizes a capital gain on a tender of Shares will not be subject to U.S. federal income tax on such gain, unless the Shareholder is an individual who is physically present in the U.S. for 183 days or more and certain other conditions are satisfied. Such persons are advised to consult their own tax advisers. Special rules may also apply in the case of Foreign Shareholders that are: (i) engaged in a U.S. trade or business; (ii) former citizens or residents of the U.S.; or (iii) subject to special rules such as "controlled foreign corporations." Such persons are advised to consult their own tax advisers. Backup Withholding and Certification Rules. Non-U.S. shareholders have special U.S. tax certification requirements to avoid backup withholding at a rate of 28%, and if applicable, to obtain the benefit of any income tax treaty between the non-U.S. shareholder's country of residence and the United States. To claim these tax benefits, the non-U.S. shareholder must provide the Depositary with a properly completed Form W-8BEN (or other Form W-8, where applicable, or their substitute forms) to establish his or her status as an non-U.S. shareholder, to claim beneficial ownership over Shares, and to claim, if applicable, a reduced rate of or exemption from withholding tax under the applicable treaty. Federal Income Tax Consequences to Non-Tendering Shareholders. Federal Income Tax Consequences to Non-Tendering Shareholders. The tender offer plan described in the Prospectus contemplates that a shareholder wishing to accept the tender offer must tender all (but not less than all) of the Shares owned by such shareholder or attributed to it under Section 318 of the Code, unless the Fund has received a private letter ruling from the IRS that a tender of less than all of a shareholder's Shares will not cause non-tendering shareholders to realize constructive distributions on their Shares under Section 305 of the Code. In connection with the 2005 tender offer and the favorable private letter ruling received by the Fund on May 5, 2005, the Fund, through its counsel, was informed by the Office of Associate Chief Counsel (Corporate) that the IRS would not issue to the Fund a similar ruling in future years. The IRS's informal policy is to issue no more than two such rulings to any one taxpayer on the premise that multiple tender offers may constitute such a "plan" that has the result of increasing the proprietary interests of some shareholders in the assets and income of the funds and the receipt of money by other shareholders. Since the Fund's organization in 1993, the Fund has consummated two tender offers, one in 2000 and one in 2005. In light of this communication from the IRS, it has been determined that the Fund has no affirmative obligation to obtain a ruling from the IRS as a pre-condition to accepting partial tenders. The Fund has previously stated that it would not seek a private letter ruling from the IRS in connection with accepting partial tenders for any future Fund tender offers. If the sale of Shares pursuant to the Offer is treated as a "dividend" to a tendering shareholder, however, a constructive dividend under Code Section 305(c) may result to non-tendering shareholders whose proportionate interest in the earnings and assets of the Fund has been increased as a result of such tender. The Fund does not believe the Offer should cause non-tendering shareholders to realize constructive distributions on their Shares under Section 305 of the Code, but rather, the Offer should be treated as an "isolated transaction" within the meaning of Treasury regulations. This is because, among other things, the Fund is not required by its charter, bylaws or otherwise to redeem any of its Shares, the Board has a fiduciary duty to the Fund and its shareholders to consider the appropriateness of any share repurchase, and the Fund has no absolute commitment to make any further tender offers subsequent to the present Offer. THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS A SUMMARY INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY. IN VIEW OF THE INDIVIDUAL NATURE OF TAX CONSEQUENCES, EACH SHAREHOLDER IS ADVISED TO CONSULT ITS OWN TAX ADVISER WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO IT OF THE OFFER, INCLUDING THE EFFECT AND APPLICABILITY OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF 13 CHANGES IN FEDERAL OR OTHER TAX LAWS. THE ADVICE ABOVE WAS NOT WRITTEN AND IS NOT INTENDED TO BE USED AND CANNOT BE USED BY ANY TAXPAYER FOR PURPOSES OF (I) AVOIDING UNITED STATES FEDERAL INCOME TAX PENALTIES THAT MAY BE IMPOSED, OR (II) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TRANSACTION OR MATTER ADDRESSED HEREIN. 15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS. The Fund reserves the right, at any time and from time to time, to extend the period of time during which the Offer is pending by making a public announcement thereof. In the event that the Fund so elects to extend the tender period, the NAV for the Shares tendered will be computed as of 4:00 p.m. New York City time on the first business day following the Expiration Date, as extended. During any such extension, all Shares previously tendered and not purchased or withdrawn will remain subject to the Offer. The Fund also reserves the right, at any time and from time to time up to and including the Expiration Date, to (a) terminate the Offer and not to purchase or pay for any Shares or, subject to applicable law, postpone payment for Shares upon the occurrence of any of the conditions specified in Section 5, "Certain Conditions of the Offer"; and (b) amend the Offer in any respect by making a public announcement thereof. Such public announcement will be issued no later than 9:00 a.m. New York City time on the next business day after the previously scheduled Expiration Date and will disclose the approximate number of Shares tendered as of that date. Without limiting the manner in which the Fund may choose to make a public announcement of extension, termination or amendment, except as provided by applicable law (including Rule 13e-4(d)(2), Rule 13e-4(e)(3), and Rule 14e-1(d) under the Exchange Act), the Fund shall have no obligation to publish, advertise or otherwise communicate any such public announcement. If the Fund materially changes the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Fund will extend the Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) promulgated under the Exchange Act. These rules require that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer (other than a change in price or a change in percentage of securities sought) will depend on the facts and circumstances, including the relative materiality of such terms or information. If (i) the Fund increases or decreases the price to be paid for Shares, or the Fund increases or decreases the number of Shares being sought and (ii) the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given, the Offer will be extended at least until the expiration of such period of ten business days. 16. FEES AND EXPENSES. The Fund will not pay to any broker or dealer, commercial bank, trust company or other person any solicitation fee for any Shares purchased pursuant to the Offer. The Fund will reimburse such persons for customary handling and mailing expenses incurred in forwarding the Offer. No such broker, dealer, commercial bank or trust company has been authorized to act as the agent of the Fund or the Depositary for purposes of the Offer. The Fund has retained Mellon Investor Services LLC to act as Depositary and Information Agent. The Fund will pay the Depositary/Information Agent reasonable and customary compensation for its services and will also reimburse the Depositary/Information Agent for certain out-of-pocket expenses and indemnify it against certain liabilities. The Fund will use the Service Fees it receives to offset the fees charged by the Depositary. 17. MISCELLANEOUS. The Offer is not being made to, nor will the Fund accept tenders from, owners of Shares in any jurisdiction in which the Offer or its acceptance would not comply with the securities or Blue Sky laws of such jurisdiction. The Fund is not aware of any jurisdiction in which the making of the Offer or the tender of Shares would not be in compliance with the laws of such jurisdiction. However, the Fund reserves the right to exclude holders in any jurisdiction in which it is asserted that the Offer cannot lawfully be made. So long as the Fund makes a good-faith effort to comply with any state law deemed applicable to the Offer, the Fund believes that the exclusions of holders residing in such jurisdiction is permitted under Rule 13e-4(f)(9) promulgated under the Exchange Act. Delaware Investments Dividend and Income Fund, Inc. June 2, 2006 14 EX-99.(A)(1)(II) 3 p413486ex99a-1_ii.txt EXHIBIT 99(A)(1)(II) Exhibit (a)(1)(ii) DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. LETTER OF TRANSMITTAL (DDF) ____________________________________________________________________________________________________________________________________ LETTER OF TRANSMITTAL TO TENDER SHARES OF [_] SUBSTITUTE FORM W-9 DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. ________________________________________________________________ Pursuant to the Offer to Purchase dated June 2, 2006, Delaware PLEASE CERTIFY YOUR TAXPAYER ID OR SOCIAL SECURITY NUMBER BY Investments Dividend and Income Fund, Inc. (the "Fund") has SIGNING BELOW. offered to purchase up to 5%, or 579,434 shares, of its Common ________________________________________________________________ Stock. The offer expires at 11:59 p.m. New York City time on June If the Taxpayer ID Number |___________________________________ 30, 2006, unless extended. See Instructions on the reverse side. printed above is INCORRECT | OR if the space is BLANK |[_] | | | | | | | | | | I/we, the undersigned, hereby surrender to you for tendering the write in the CORRECT number |___________________________________ share (s) identified below. I/we hereby agree to the terms and here. | conditions of the Offer to Purchase dated June 2, 2006 ("Offer to ________________________________________________________________ Purchase"). I/we hereby certify and warrant that: (i) I/we have Under penalties of perjury. I certify that: received and read the Offer to Purchase; (ii) I/we have complied 1. The number shown on this form is my correct taxpayer with all instructions on the reverse side of this Letter of identification number (or I am waiting for a number to be issued Transmittal and the requirements of the Offer to Purchase; (iii) to me), AND I/we have full authority to surrender these certificate(s) and 2. I am not subject to backup withholding because: (A) I am give the instructions in this Letter of Transmittal; and (iv) the exempt from backup withholding, or (B) I have not been notified shares represented by these certificates are free and clear of by the Internal Revenue Service (IRS) that I am subject to all liens, restrictions, adverse claims and encumbrances. backup withholding as a result of a failure to report all interest or dividends, or (C) the IRS has notified me that I am Please complete the back if you would like to transfer ownership no longer subject to backup withholding, AND or request special mailing. 3. I am a U.S. person (including a U.S. resident alien). CERTIFICATION INSTRUCTIONS. You must cross out item 2 above if Enclosed herewith is my check or money order for $25 for the you have been notified by the IRS that you are currently subject service fee ("Service Fee"), as described in the Offer to to backup withholding because you have failed to report all Purchase made payable to Delaware Investments Dividend and Income interest and dividends on your tax return. Fund, Inc. Signature: Date: --------------------------------- ------------- ________________________________________________________________ | ________________________________________________________________ PLACE AN [X] IN ONE TENDER BOX ONLY (3) [_] Tender All ____________________________________________________________________ (1) SIGNATURE: This form MUST be signed by the registered holder(s) exactly as their name(s) appears on the certificate(s) or by person(s) authorized to sign on behalf of the registered ________________________________________________________________ holder(s) by documents transmitted herewith. (4) [_] Partial | | | | | | O | | | | | Tender |_________________________________________ | WHOLE SHARES FRACTIONS X | --------------------------------------------------------------- | Signature of Shareholder Date Daytime Telephone # | | | X | --------------------------------------------------------------- | Signature of Shareholder Date Daytime Telephone # | | ____________________________________________________________________________________________________________________________________ If you cannot produce some or all of your Fund stock certificates, you must obtain a lost instrument open penalty surety bond. Please see the reverse side of this form for instructions. ____________________________________________________________________________________________________________________________________ (5) AFFIDAVIT OF LOST, MISSING OR DESTROYED CERTIFICATE(S) AND AGREEMENT OF INDEMNITY THIS AFFIDAVIT IS INVALID IF NOT SIGNED BELOW AND A CHECK IS NOT INCLUDED Taxpayer ID or Social Security Number: TOTAL SHARES LOST Please Fill In Certificate No(s), if known Number of Shares - ------------------------------------------ ---------------- Attach separate schedule if needed By signing this form I/We swear, depose and state that: I/We am/are the lawful owner(s) of the certificates representing the Shares described in this Letter of Transmittal. The Shares have not been endorsed, pledged, cashed, negotiated, transferred, assigned, or otherwise disposed of. I/We have made a diligent search for the certificates representing such Shares and have been unable to find it or them and make this Affidavit for the purpose of inducing the tender of the Shares, as outlined in the Letter of Transmittal, without the surrender of the original(s), and also to request and induce Federal Insurance Company to provide suretyship for me/us to cover the missing Shares under its Blanket Bond # 8302-00-67. I/We hereby agree to surrender the certificates representing the Shares for cancellation should I/We, at any time, find such certificates. I/We hereby agree for myself/ourselves, my/our heirs, successors, assigns and personal representatives, in consideration of the proceeds of the sale, exchange, redemption or cancellation of the securities, and the aforementioned suretyship, to indemnify, protect and hold harmless Federal Insurance Company (the Surety), Mellon Investor Services LLC, Delaware Investments Dividend and Income Fund Inc. and all their subsidiaries and any other party to the transaction, from and against any and all loss, costs, and damages including court costs and attorney's fees, which they may be subject to or liable for in respect to the tender of the Shares without requiring surrender of the original certificates. The rights accruing to the parties under the preceding sentence shall not be limited or abridged by their negligence, inadvertence, accident, oversight, breach or failure to inquire into, contest, or litigate any claim, whenever such negligence, inadvertence, accident, oversight, breach or failure may occur or may have occurred. We agree that this Affidavit and Indemnity Agreement is to become part of Blanket Bond # 8302-00-67 underwritten by Federal Insurance Company. Any person who, knowingly, and with intent to defraud any insurance company or other person, files an application or statement of claim, containing any materially false information, or conceals for the purpose of misleading, information concerning any fact material thereto, commits a fraudulent insurance act, which is a crime, and shall also be subject to civil penalties as prescribed by law. X Signed by Affidavit (stockholder) on this (date) ----------------------------- --------------------------------------- Month Day Year Social Security # Date Notary Public ------------------------ ----------------------------- ------------------------------- LOST CERTIFICATES SURETY PREMIUM/SERVICE FEE CALCULATION The following formula should be used to calculate the surety premium, if any, and service fee that you must submit with this form. 1. CALCULATE THE SHARE VALUE OF THE LOST SHARES BY MULTIPLYING THE NUMBER OF SHARES THAT ARE LOST BY THE CASH RATE: o Enter number of Share(s) lost _________________________ X (Cash Rate) $_____ = $__________________ Share value o IF THE SHARE VALUE EXCEEDS $500,000, OR IF THE HOLDER IS FOREIGN, DO NOT COMPLETE THIS AFFIDAVIT. COMPLETE ONLY THE LETTER OF TRANSMITTAL AND CONTACT MELLON INVESTOR SERVICES REGARDING THE LOST CERTIFICATE(S). 2. ONLY CALCULATE A SURETY PREMIUM IF THE SHARE VALUE EXCEEDS $3,000.00, OTHERWISE ENTER ZERO (0) ON THE SURETY PREMIUM LINE BELOW. The surety premium equals 1% (.01) of the share value noted in line 1 above: $ __________________________ X (1%) or (.01) = _______ $ __________________________ Surety Premium 3. ADD THE SERVICE FEE BASED ON THE SHARE VALUE FEE GUIDE NOTED BELOW _______________________________ $_________________ Service Fee o If the Share value is less than or equal to $250.00, the Service Fee = $50.00 o If the Share value is greater than $250.00 but less than or equal to $3,000.00, the Service Fee = $100.00 o If the Share value is greater than $3,000.00, the Service Fee = $200.00 4. TOTAL AMOUNT DUE (ADD LINES 2 & 3) _______________________________________________________________ $________________ Total Amount PLEASE ENCLOSE A MONEY ORDER, CERTIFIED CHECK OR CASHIERS' CHECK FOR THE REQUIRED AMOUNT, MADE PAYABLE TO MELLON INVESTOR SERVICES. ____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________ (6) (7) SPECIAL TRANSFER INSTRUCTIONS SPECIAL MAILING INSTRUCTIONS ____________________________________________________________________________________________________________________________________ If you want your check for cash to be SIGNATURE GUARANTEE MEDALLION Fill in ONLY if you want your check for cash to be issued in ANOTHER NAME, fill in this MAILED to someone other than the registered holder section with the information for the new or to the registered holder at an address other than account/payee name. that shown on the front of this Letter of Transmittal. __________________________________ (Title of Officer Signing this Guarantee) ________________________________________ Name (Please Print First, Middle & __________________________________ ____________________________________________________ Last Name) (Name of Guarantor - Please Print) Name (Please Print First, Middle & Last Name) ________________________________________ Address (Number and Street) __________________________________ ____________________________________________________ (Address of Guarantor Firm) Address (Number and Street) ________________________________________ (City, State & Zip Code) __________________________________ ____________________________________________________ ________________________________________ (Tax Identification or Social Security __________________________________ ____________________________________________________ Number) (City, State & Zip Code) ____________________________________________________________________________________________________________________________________ INSTRUCTIONS FOR COMPLETING THE LETTER OF TRANSMITTAL (1) Sign, date and include your daytime telephone number in this Transmittal form in Box 1. After completing all other applicable sections, return this Letter of Transmittal and your stock certificates in the enclosed envelope. Please note that if you fail to enclose a certified check or money order for the $25.00 Service Fee made payable to Mellon Investor Services your tender will be deemed incomplete and will be rejected. The method of delivery of any documents, including share certificates, is at the election and risk of the tendering shareholder. If documents are sent by mail, it is recommended that they be sent by registered mail, properly insured, with return receipt requested. [_] PLEASE SIGN IN BOX 2 TO CERTIFY YOUR TAXPAYER ID OR SOCIAL SECURITY NUMBER if you are a U.S. Taxpayer. If the Taxpayer ID or Social Security Number is incorrect or blank, write the corrected number in Box 2 and sign to certify. Please note that Mellon Investor Services may withhold 28% of your proceeds as required by the IRS if the Taxpayer ID or Social Security Number is not certified on our records. If you are a non - U.S. Taxpayer, please complete and return form W-8BEN. (3) If you are tendering all your shares for cash, please check this box only. (4) If you are tendering some of your shares for cash, please check the box, indicate the number of shares you wish to tender and receive in cash. If you cannot produce some or all of your Fund stock certificates, you must obtain a lost instrument open penalty surety bond and file it with Mellon. To do so through Mellon's program with Federal Insurance Company, complete Box 5 on the front side of this form, including the lost securities premium and service fees calculations, and return the form together with your payment as instructed. Please print clearly. Alternatively, you may obtain a lost instrument open penalty surety bond from an insurance company of your choice that is rated A+XV or better by A. M. Best & Company. In that instance, you would pay a surety premium directly to the surety bond provider you select and you would pay Mellon its service fee only. Please contact us at the number provided below for further instructions on obtaining your own bond. Note that this amount is in addition to the $25 Service Fee. If you want your check for cash to be issued in another name, fill in Box 6. Signature(s) in Box 6 must be medallion guaranteed. (7) Complete Box 7 only if your check for cash is to be delivered to a person other than the registered holder or to the registered holder at a different address. HOW TO CONTACT MELLON INVESTOR SERVICES By Telephone - 9 a.m. to 6 p.m. New York Time, Monday through Friday, except for bank holidays: From within the U.S., Canada or Puerto Rico: 1-800-340-1397 (Toll Free) From outside the U.S.: 1-201-329-8660 (Collect) BY MAIL: BY OVERNIGHT COURIER: BY HAND: Mellon Investor Services LLC Mellon Investor Services LLC Mellon Investor Services LLC Attn: Reorganization Dept. Attn: Reorganization Dept. Attn: Reorganization Dept. P.O. Box 3300 480 Washington Boulevard 120 Broadway, 13th Floor South Hackensack, NJ 07606 Mail Drop - Reorg New York, NY 10271 Jersey City, NJ 07310
EX-99.(A)(1)(III) 4 p413486ex99a-i_iii.txt EXHIBIT 99(A)(1)(III) Exhibit (a)(1)(iii) OFFER BY DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. TO PURCHASE FOR CASH UP TO 5% OF ITS SHARES OF COMMON STOCK THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON JUNE 30, 2006 ("EXPIRATION DATE"), UNLESS EXTENDED THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS OUTLINED IN THE FUND'S OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL. June 2, 2006 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We are enclosing herewith the material listed below relating to the offer of Delaware Investments Dividend and Income Fund, Inc., a Maryland corporation registered under the Investment Company Act of 1940, as amended, as a closed-end, diversified management investment company (the "Fund"), to purchase up to 5% of its outstanding shares of Common Stock, par value $0.01 (the "Shares") upon the terms and subject to the conditions set forth in its Offer to Purchase dated June 2, 2006 and in the related Letter of Transmittal (which together constitute the "Offer"). The price to be paid for the Shares is an amount per Share, net to the seller in cash, equal to 100% of the net asset value per Share as determined by the Fund as of 4:00 p.m., New York City time, on July 3, 2006, unless the Expiration Date is extended beyond June 30, 2006. WHEN TENDERING SHARES ON BEHALF OF YOUR CLIENTS, YOU WILL BE REQUIRED TO PAY, ON BEHALF OF THOSE CLIENTS, A SERVICE FEE IN AN AMOUNT EQUAL TO $25.00 PER CLIENT ACCOUNT. THE SERVICE FEE FOR A PARTICULAR CLIENT ACCOUNT WILL BE RETURNED ONLY IN A CASE WHERE NONE OF THE SHARES TENDERED FOR THAT CLIENT ACCOUNT HAVE BEEN ACCEPTED. We are asking you to contact your clients for whom you hold Shares registered in your name (or in the name of your nominee) or who hold Shares registered in their own names. Please bring the Offer to their attention as promptly as possible. No fees or commission will be payable to brokers, dealers or other persons for soliciting tenders for Shares pursuant to the Offer. The Fund will, however, upon request, reimburse you for reasonable and customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Fund will pay all transfer taxes on its purchase of Shares, subject to Section 4, "Payment For Shares" of the Offer to Purchase. HOWEVER, BACKUP WITHHOLDING AT A 28% RATE MAY BE REQUIRED UNLESS EITHER AN EXEMPTION IS PROVED OR THE REQUIRED TAXPAYER IDENTIFICATION INFORMATION AND CERTIFICATIONS ARE PROVIDED. SEE SECTION 2, "PROCEDURES FOR TENDERING SHARES," OF THE OFFER TO PURCHASE. For your information and for forwarding to your clients, we are enclosing the following documents: 1. A letter to shareholders from the President of the Fund and the Offer to Purchase dated June 2, 2006; 2. The Letter of Transmittal for your use and to be provided to your clients; 3. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; 4. Notice of Guaranteed Delivery; 5. Form of letter to clients, which may be sent to your clients for whose accounts you hold Shares registered in your name (or in the name of your nominee); and 6. Return envelope addressed to the Depositary. The Offer is not being made to, nor will the Fund accept tenders from, holders of Shares in any State or other jurisdiction in which the Offer would not be in compliance with the securities or Blue Sky laws of such jurisdiction. As described in the Fund's Offer to Purchase under Section 2, "Procedures for Tendering Shares," tenders may be made without the concurrent deposit of Share certificates if (1) such tenders are made by or through an Eligible Guarantor (as defined in the Offer to Purchase); (2) a properly completed and duly executed Notice of Guaranteed Delivery in the Form provided by the Fund is delivered to the Depositary prior to 5:00 p.m. New York City time on the Expiration Date; and (3) certificates for tendered Shares (or a Book-Entry Confirmation, as defined in the Offer to Purchase) together with a properly completed and duly executed Letter of Transmittal (or, in the case of book-entry transfer, an Agent's Message, as defined in the Offer to Purchase), the $25.00 service fee payable in respect of the Shares tendered hereby and any other documents required by the Letter of Transmittal, are received by the Depositary within three New York Stock Exchange trading days after execution of a Notice of Guaranteed Delivery. As described in the Offer, if more than 5% of the Fund's outstanding Shares are duly tendered prior to the Expiration Date, the Fund will repurchase 5% of the Fund's outstanding Shares on a pro rata basis upon the terms and subject to the conditions of the Offer. NEITHER THE FUND NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. Additional copies of the enclosed material may be obtained from the Depositary at the appropriate address and telephone number set forth in the Fund's Offer to Purchase. Any questions you have with respect to the Offer should be directed to the Depositary at its address and telephone numbers set forth in the Offer to Purchase. Very truly yours, DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. /s/ Jude T. Driscoll ---------------------------------------- JUDE T. DRISCOLL Chairman, Director, Chief Executive Officer and President NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. OR THE DEPOSITARY/INFORMATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS OR USE ANY MATERIAL ON THEIR BEHALF WITH RESPECT TO THE OFFER, OTHER THAN THE MATERIAL ENCLOSED HEREWITH AND THE STATEMENTS SPECIFICALLY SET FORTH IN SUCH MATERIAL. 2 EX-99.(A)(1)(IV) 5 p413486ex99a-i_iv.txt EXHIBIT 99(A)(1)(IV) Exhibit (a)(i)(iv) OFFER BY DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. TO PURCHASE FOR CASH UP TO 5% OF ITS SHARES OF COMMON STOCK THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON JUNE 30, 2006 ("EXPIRATION DATE"), UNLESS EXTENDED THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS OUTLINED IN THE OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL. June 2, 2006 To Our Clients: Enclosed for your consideration is the Offer to Purchase, dated June 2, 2006, of Delaware Investments Dividend and Income Fund, Inc. (the "Fund"), and a related Letter of Transmittal. Together these documents constitute the "Offer." The Fund is offering to purchase up to 5% of its outstanding shares of Common Stock, par value $0.01 (the "Shares"), upon the terms and subject to the conditions set forth in the Offer. A TENDER OF YOUR SHARES CAN BE MADE ONLY BY US AS THE REGISTERED HOLDER AND ONLY PURSUANT TO YOUR INSTRUCTIONS. The Offer to Purchase and the Letter of Transmittal are being sent to you for your information only. They cannot be used by you to tender Shares held by us for your account. We are the registered holder of Shares held for your account. Your attention is called to the following: (1) The purchase price to be paid for the Shares is an amount per Share, net to the seller in cash, equal to the net asset value in U.S. dollars per Share as determined by the Fund as of 4:00 p.m., New York City time, on July 3, 2006, unless otherwise extended. A SERVICE FEE IN AN AMOUNT EQUAL TO $25.00 PER CLIENT ACCOUNT IS PAYABLE UPON THE TENDER OF SHARES. WE WILL PAY THE SERVICE FEE FOR EACH ACCOUNT AND YOUR ACCOUNT(S) WILL BE BILLED SEPARATELY FOR THIS CHARGE. WITH RESPECT TO A PARTICULAR CLIENT ACCOUNT, IF NONE OF THE SHARES TENDERED ARE ACCEPTED, AN AMOUNT EQUAL TO $25.00 PER SUCH ACCOUNT WILL BE RETURNED. The current net asset value of the Fund will be calculated daily and may be obtained by calling Mellon Investor Services LLC, the Depositary/Information Agent, toll free at 1-866-340-1397 between the hours of 9:00 a.m. and 6:00 p.m. New York City time, except holidays. (2) The Offer is not conditioned upon any minimum number of Shares being tendered. (3) Upon the terms and subject to the conditions of the Offer, the Fund will purchase all Shares validly tendered (and not withdrawn) on or prior to the Expiration Date, provided that the total number of Shares tendered does not exceed 5% of the Fund's outstanding Shares. In the event that more than 5% of the Fund's outstanding Shares are tendered, the Fund will purchase 5% of the Fund's outstanding Shares on a pro rata basis. (4) Tendering shareholders will not be obligated to pay stock transfer taxes on the purchase of Shares by the Fund pursuant to the Offer, except in the instances described in Section 4, "Payment for Shares," of the Offer to Purchase. (5) Your instructions to us should be forwarded in ample time before the Expiration Date to permit us to submit a tender on your behalf. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the instruction form set forth below. An envelope to return your instructions to us is enclosed. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified below. YOUR INSTRUCTIONS TO US SHOULD BE FORWARDED AS PROMPTLY AS POSSIBLE IN ORDER TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE OFFER. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with applicable law. NEITHER THE FUND NOR ITS BOARD OF DIRECTORS IS MAKING ANY RECOMMENDATION TO ANY SHAREHOLDER WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES IN THE OFFER. EACH SHAREHOLDER IS URGED TO READ AND EVALUATE THE OFFER AND ACCOMPANYING MATERIALS CAREFULLY. INSTRUCTIONS The undersigned acknowledge(s) receipt of our letter, the enclosed Offer to Purchase dated June 2, 2006, and the Letter of Transmittal, relating to the Fund's purchase of up to 5% of its outstanding Shares. The undersigned instructs us to tender to the Fund the number of Shares indicated below (which are held by us for the account of the undersigned), upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal that we have furnished to the undersigned. AGGREGATE NUMBER OF SHARES TO BE TENDERED: [_] All Shares held for the undersigned; or [_] __________ Shares (Enter number of Shares to be tendered). PLEASE SIGN HERE _________________________ _________________________ Dated: __________, 2006 Name(s):________________________________________________________________________ (please print) Address: _______________________________________________________________________ _______________________________________________________________________ City State Zip Code Area Code and Telephone Number: ________________________________________________ Employer Identification or Social Security Number: _____________________________ 2 EX-99.(A)(1)(V) 6 p413486ex99a-i_v.txt EXHIBIT 99(A)(1)(V) Exhibit (a)(i)(v) NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK OF DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. This form, or one substantially equivalent hereto, must be used to accept the Offer (as defined below) if Shareholders' certificates for common stock, par value $0.01 per share (the "Shares") of Delaware Investments Dividend and Income Fund, Inc. are not immediately available or time will not permit the Letter of Transmittal and other required documents to be delivered to the Depositary on or before 11:59 p.m., New York City time, June 30, 2006, or such later date to which the Offer is extended (the "Expiration Date"). Such form may be delivered by hand or transmitted by facsimile transmission or mail to the Depositary, and must be received by the Depositary on or before 5:00 p.m. New York City time on the Expiration Date. See Section 2, "Procedures for Tendering Shares," of the Offer to Purchase. The Depositary: MELLON INVESTOR SERVICES LLC Facsimile Copy Number: 1-201-680-4626 To Confirm Receipt of Notice of Guaranteed Delivery and Facsimile Transmission: 1-201-680-4860 For Account Information Call: Toll Free: 1-866-340-1397 By First Class Mail, By Overnight Courier, By Hand:
By Registered Certified or Express Mail By First Class Mail: or Overnight Courier: By Hand: - ------------------------------- ------------------------------- ------------------------------- Mellon Investor Services LLC Mellon Investor Services LLC Mellon Investor Services LLC Attention: Reorganization Dept. Attention: Reorganization Dept. Attention: Reorganization Dept. Post Office Box 3300 480 Washington Boulevard 120 Broadway, 13th Floor South Hackensack, NJ 07606 Mail Stop-Reorg New York, NY 10271 Jersey City, NJ 07310
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED ABOVE DOES NOT CONSTITUTE A VALID DELIVERY Ladies and Gentlemen: The undersigned hereby tenders to Delaware Investments Dividend and Income Fund, Inc. (the "Fund"), upon the terms and subject to the conditions set forth in its Offer to Purchase, dated June 2, 2006 and the related Letter of Transmittal (which, together with any amendments or supplements to these documents, collectively constitute the "Offer"), receipt of which is hereby acknowledged, the number of Shares set forth below pursuant to the guaranteed delivery procedures set forth in Section 2, "Procedures for Tendering Shares," of the Offer to Purchase. - -------------------------------------------------------------------------------- Number of Shares Tendered: _______________________________ Certificate Nos. (if available): __________________________________________________________ __________________________________________________________ If Shares will be tendered by book-entry transfer, check box: [_] The Depository Trust Company Account Number: __________________________________________ Name(s) of Record Holder(s): __________________________________________________________ __________________________________________________________ Address: _________________________________________________ _________________________________________________ Area Code and Telephone Number: __________________________ Taxpayer Identification (Social Security) Number: ________ Dated: _____________________________________________, 2006 - ---------------------------------------------------------- Signature(s) - -------------------------------------------------------------------------------- GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program, the Stock Exchange Medallion Program or an "Eligible Guarantor Institution" as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby (a) represents that the above named person(s) "own(s)" the Shares tendered hereby within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended ("Rule 14e-4"), (b) represents that such tender of Shares complies with Rule 14e-4 and (c) guarantees to deliver to the Depositary either certificates representing the Shares tendered hereby, in proper form for transfer, or confirmation of Book-Entry Transfer of such Shares into the Depositary's accounts at The Depository Trust Company, in each case with delivery of a properly completed and duly executed Letter of Transmittal, with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase), and any other required documents, within three New York Stock Exchange trading days after the date hereof. ______________________________________ _______________________________________ Name of Firm:_________________________ --------------------------------------- (AUTHORIZED SIGNATURE) Address: _____________________________ Name: _________________________________ (PLEASE PRINT) ______________________________________ Title: ________________________________ Area Code and Tel. No. _______________ Dated: __________________________, 2006 DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. YOUR SHARE CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. EX-99.(A)(1)(VI) 7 p413486ex99a-i_vi.txt EXHIBIT 99(A)(1)(VI) Exhibit (a)(1)(vi) IMPORTANT TAX INFORMATION Under the Federal income tax law, you are subject to certain penalties as well as withholding of tax at the applicable rate if you have not provided us with your correct social security number or other taxpayer identification number. PLEASE READ THIS NOTICE CAREFULLY. You (as a payee) are required by law to provide us (as payer) with your correct taxpayer identification number. If you are an individual, your taxpayer identification number is your social security number. Otherwise, your taxpayer identification number is the employer identification number issued by the IRS. If you have not provided us with your correct taxpayer identification number, you may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, interest, dividends, and other payments that we make to you may be subject to backup withholding. If backup withholding applies, a payor is required to withhold at the IRS mandated applicable rate from interest, dividends and other payments made to you. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained. Enclosed is a reply envelope in which you must return the enclosed Form W-9 to furnish us your correct name and taxpayer identification number. Please read the instructions below, sign and date the Form W-9 and return to us. INSTRUCTIONS FOR SUBSTITUTE FORM W-9 FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER (Selection references to the Internal Revenue Code.) PURPOSE OF FORM.- A person who is required to file an information return with the IRS must obtain your correct TIN to report income paid to you, real estate transactions, mortgage interest you paid, the acquisition or abandonment of secured property, or contributions you made to an IRA. Use Form W-9 to furnish your correct TIN to the requester (the person asking you to furnish your TIN) and, when applicable, (1) to certify that the TIN you are furnishing is correct (or that you are waiting for a number to be issued), (2) to certify that you are not subject to backup withholding, and (3) to claim exemption from backup withholding if you are an exempt payee. Furnishing your correct TIN and making the appropriate certifications will prevent certain payments from being subject to backup withholding. NOTE: If a requester gives you a form other than a W-9 to request your TIN, you must use the requester's form. HOW TO OBTAIN A TIN.-If you do not have a TIN, apply for one immediately. To apply, get FORM SS-5, Application for a Social Security Number Card (for individuals), from your local office of the Social Security Administration, or FORM SS-4, Application for Employer Identification Number (for businesses and all other entities), from your local IRS office. To complete Form W-9 if you do not have a TIN, write "Applied for" in the space for the TIN, sign and date the form, and give it to the requester. Generally, you will then have 60 days to obtain a TIN and furnish it to the requester. If the requester does not receive your TIN within 60 days, backup withholding, if applicable, will begin and continue until you furnish your TIN to the requester. For reportable interest or dividends payments, the payer must exercise one of the following options concerning backup withholding during this 60-day period. Under option (1), a payer must backup withhold on any withdrawals you make from your account after 7 business days after the requester receives this form back from you. Under option (2), the payer must backup withhold on any reportable interest or dividend payments made to your account, regardless of whether you make any withdrawals. The backup withholding under option (2) must begin no later than 7 business days after the requester receives this form back. Under option (2), the payer is required to refund the amounts withheld if your certified TIN is received within the 60-day period and you were not subject to backup withholding during that period. NOTE: Writing "APPLIED FOR" on the form means that you have already applied for a TIN OR that you intend to apply for one in the near future. As soon as you receive your TIN, complete another Form W-9, include your TIN, sign and date the form, and give it to the requester. WHAT IS BACKUP WITHHOLDING?-Persons making certain payments to you are required by the IRS to withhold at the applicable rate from payments that meet certain conditions. This is called "backup withholding." Payments that could be subject to backup withholding include interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee compensation, and certain payments from fishing boat operators, but do not include real estate transactions. If you give the requester your correct TIN, make the appropriate certifications, and report all your taxable interest and dividends on your tax return, your payments will not be subject to backup withholding. Payments you receive will be subject to backup withholding if: 1. You do not furnish your TIN to the requester, or 2. The IRS notifies the requester that you furnished an incorrect TIN, or 3. You are notified by the IRS that you are subject to backup withholding because you failed to report all your interest and dividends on your tax return (for reportable interest and dividends only), or 4. You fail to certify to the requester that you are not subject to backup withholding under (3) above (for reportable interest and dividend accounts opened after 1983 only), or 5. You fail to certify your TIN. This applies only to reportable interest, dividend, broker, or barter exchange accounts opened after 1983, or broker accounts considered inactive in 1983. Except as explained in (5) above, other reportable payments are subject to backup withholding only if (1) or (2) above applied. Certain payees and payments are exempt from backup withholding and information reporting. See PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING, below and EXEMPT PAYEES AND PAYMENTS under SPECIFIC INSTRUCTIONS, below, if you are an exempt payee. PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING-The following is a list of payees exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except item (9). For broker transactions, payees listed in (1) through (13) and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker as exempt. Payments subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (1) through (7), except a corporation that provides medical and health care services or bills and collects payments for such services is not exempt from backup withholding or information reporting. Only payees described in items (2) through (6) are exempt from backup withholding for barter exchange transactions, patronage dividend, and payments by certain fishing boat operators. (1) A corporation. (2) An organization exempt from tax under section 501(a), or an IRA, or a custodial account under section 403(b)(7). (3) The United States or any of its agencies or instrumentalities. (4) A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities. (5) A foreign government or any of its political subdivisions, agencies, or instrumentalities. (6) An international organization or any of its agencies or instrumentalities. (7) A foreign central bank of issue. (8) A dealer in securities or commodities required to register in the PAGE 2 United States or a possession of the United States. (9) A futures commission merchant registered with the Commodity Futures Trading Commission. (10) A real estate investment trust (11) An entity registered at all times during the tax year under the Investment Company Act of 1940. (12) A common trust fund operated by a bank under section 584(a). (13) A financial institution. (14) A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List. (15) A trust exempt from tax under section 664 or described in section 4947. Payments of dividends and patronage dividends generally not subject to backup withholding include the following: o Payments to nonresident aliens subject to withholding under section 1441. o Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident partner. o Payments of patronage dividends not paid in money. o Payments made by certain foreign organizations. o Payments of interest generally not subject to backup withholding include the following: o Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct TIN to the payer. o Payments of tax-exempt interest (including exempt-interest dividends under section 852). o Payments described in section 6049(b)(5) to nonresident aliens. o Payments on tax-free covenant bonds under section 1451. o Payments made by certain foreign organizations. o Mortgage interest paid by you. Payments that are not subject to information reporting are also not subject to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A, and 6050N, and their regulations. PENALTIES FAILURE TO FURNISH TIN.--If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis that results in no of backup withholding, you are subject to a $500 penalty. CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. SPECIFIC INSTRUCTIONS NAME.--If you are an individual, you must generally provide the name shown on your social security card. However, if you have changed your last name, for instance, due to marriage, without informing the Social Security Administration of the name change, please enter your first name, the last name shown on your social security card and your new last name. If you are a sole proprietor, you must furnish your individual name and either your SSN or EIN. You may also enter your business name on Form W-9. Enter your name(s) as shown on your social security card and/or as it was used to apply for your EIN on Form SS-4. SIGNING THE CERTIFICATION.-- (1) INTEREST, DIVIDEND, AND BARTER EXCHANGE ACCOUNTS OPENED BEFORE 1984 AND BROKER ACCOUNTS CONSIDERED ACTIVE DURING 1983.--You are required to furnish your correct TIN, but you are not required to sign the certification. (2) INTEREST, DIVIDEND, BROKER AND BARTER EXCHANGE ACCOUNTS OPENED AFTER 1983 AND BROKER ACCOUNTS CONSIDERED INACTIVE DURING 1983.--You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item (2) in the certification before signing the form. (3) REAL ESTATE TRANSACTIONS.--You must sign the certification. You may cross out item (2) of the certification. (4) OTHER PAYMENTS.--You are required to furnish your correct TIN, but you are not required to sign the certification unless you have been notified of an incorrect TIN. Other payments include payments made in the course of the requester's trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services, payments to a nonemployee for services (including attorney and accounting fees), and payments to certain fishing boat crew members. (5) MORTGAGE INTEREST PAID BY YOU, ACQUISITION OR ABANDONMENT OF SECURED PROPERTY, OR IRA CONTRIBUTIONS. --You are required to furnish your correct TIN, but you are not required to sign the certification. (6) EXEMPT PAYEES AND PAYMENTS.--If you are exempt from backup withholding, you should complete this form to avoid possible erroneous backup withholding. Enter your correct TIN write "EXEMPT" on Form W-9, sign and date the form. If you are a nonresident alien or foreign entity not subject to backup withholding, give the requester a completed FORM W-8, Certificate of Foreign Status. (7) TIN "APPLIED FOR."--Follow the instructions under How To Obtain a TIN, on page 1, sign and date this form. SIGNATURE.--For a joint account, only the person whose TIN is shown in Part I should sign the form. PRIVACY ACT NOTICE.--Section 6109 requires you to furnish your correct TIN to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, or contributions you made to an IRA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. You must provide your TIN whether or not you are required to file a tax return. Payers must generally withhold the applicable taxable interest, dividend, and certain other payments to a payee who does not furnish a TIN to a payer. Certain penalties may also apply. WHAT NAME AND NUMBER TO GIVE THE REQUESTER FOR THIS TYPE OF ACCOUNT: GIVE NAME AND SSN OF: - ------------------------- --------------------- 1. Individual The individual 2. Two or more The actual owner of the individuals (joint account or, if combined account) funds, the first individual on the account(1) 3. The Custodian The minor(2) account of a minor (Uniform Gift to Minors Act) 4. a. The usual The grantor-trustee(1) revocable savings trust (grantor is also trustee) b. So-called trust The actual owner(1) account that is not a legal Or valid trust under state law 5. Sole proprietorship The owner(3) FOR THIS TYPE OF ACCOUNT: GIVE NAME AND EIN OF: - ------------------------- --------------------- 6. Sole proprietorship The owner(3) 7. A valid trust, estate, Legal entity(4) or pension trust 8. Corporate The corporation 9. Association, club The organization religious, charitable, educational, or other tax-exempt organization 10. Partnership The partnership 11. A broker or The broker or nominee registered nominee 12. Account with the The public entity Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Show the individual's name. See item 5 or 6. You may also enter your business name. (4) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.) NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. REVISED DEC, 2001 EX-99.(D)(1) 8 p413486ex99d-1.txt EXHIBIT 99(D)(1) Exhibit (d)(1) [Mellon LOGO] MELLON INVESTOR SERVICES A Mellon Financial Company(SM) DEPOSITARY AND INFORMATION AGENT AGREEMENT THIS DEPOSITARY AGREEMENT (this "Agreement") between Delaware Investments Dividend and Income Fund, Inc., a Maryland corporation (the "Purchaser"), and Mellon Investor Services LLC, a New Jersey limited liability company ("Mellon"), is dated as of May __, 2006 1. APPOINTMENT. (a) Purchaser is offering to purchase up to 5% of its issued and outstanding shares of Common Stock, $0.01 par value (the "Shares"), for cash, upon the terms and conditions set forth in its Offer to Purchase dated June 2, 2005 (the "Offer to Purchase") and in the related letter of transmittal (which shall include the Internal Revenue Service Form W-9) (the "Letter of Transmittal"), copies of which are attached hereto as Exhibits A and B, respectively, and which together, as they may be amended from time to time, constitute the "Offer." Purchaser hereby appoints Mellon to act as depositary in connection with the Offer and Mellon hereby accepts such appointment in accordance with and subject to the terms and conditions set forth in this Agreement. (b) The "Expiration Date" for the Offer shall be 11:59 p.m. New York City time, on June 30, 2006 unless and until the Purchaser shall have extended the period of time for which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Purchaser from time to time, shall expire. All terms not defined herein shall have the same meaning as in the Offer. 2. TENDER OF SHARES. Mellon, in its capacity as depositary, will receive tenders of shares. Subject to the terms and conditions of this Agreement, Mellon is authorized to accept such tenders of shares in accordance with the Offer, and to act in accordance with the following instructions: (a) Shares shall be considered validly tendered to Mellon only if tenders of shares are made in accordance with the terms and conditions set forth in the Offer to Purchase, and: (i) Mellon receives prior to the Expiration Date (x) certificates for such Shares, (or a Confirmation (as defined in paragraph (b) below) relating to such Shares) and (y) a properly completed and duly executed Letter of Transmittal (or facsimile thereof) or an Agent's Message (as defined in paragraph (b) below) relating thereto; or (ii) Mellon receives (x) a Notice of Guaranteed Delivery (as defined in paragraph (b) below) relating to such Shares from an Eligible Institution (as defined in paragraph (b) below) prior to the Expiration Date and (y) certificates for such Shares (or a Confirmation relating to such Shares) and either a properly completed and duly executed Letter of Transmittal (or facsimile thereof) or an Agent's Message relating thereto at or prior to 5:00 P.M., New York City time, on the third New York Stock Exchange, Inc. (the "NYSE") trading day after the date of execution of such Notice of Guaranteed Delivery; and (iii) in the case of either clause (i) or (ii) above, if applicable, determination of all questions as to the validity, form eligibility (including timeliness of receipt) and acceptance of any Shares tendered or delivered shall be determined by Mellon on behalf of the Purchaser in the first instance, but the Purchaser retains full discretion to make a final determination of the adequacy of the items received, as provided in Section 8 hereof. (b) For the purpose of this Agreement: (i) a "Confirmation" shall be a confirmation of book-entry transfer of Shares into a Mellon account at The Depository Trust Company (the "Book-Entry Transfer Facility") to be established and maintained by Mellon in accordance with Section 3 hereof; (ii) a "Notice of Guaranteed Delivery" shall be a notice of guaranteed delivery substantially in the form attached as Exhibit C hereto or a telegram, telex, facsimile transmission or letter substantially in such form, or if sent by a Book-Entry Transfer Facility, a message transmitted through electronic means in accordance with the usual procedures of such Book-Entry Transfer Facility and Mellon substantially in such form; provided, however, that if such notice is sent by a Book-Entry Transfer Facility through electronic means, it must state that such Book-Entry Transfer Facility has received an express acknowledgment from the participant on whose behalf such notice is given that such participant has received and agrees to be bound by the form of such notice; (iii) an "Eligible Institution" shall be a member firm of a national securities exchange registered with the Securities and Exchange Commission or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States; and (iv) an "Agent's Message" shall be a message transmitted through electronic means by a Book-Entry Transfer Facility, in accordance with the normal procedures of such Book-Entry Transfer Facility and Mellon, to and received by Mellon and forming part of a Confirmation, which states that such Book-Entry Transfer Facility has received an express acknowledgment from the participant in such Book-Entry Transfer Facility tendering the Shares which are the subject of such Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal, and that the Purchaser may enforce such agreement against such participant. The term Agent's Message shall also include any hard copy printout evidencing such message generated by a computer terminal maintained at Mellon's office. (c) Purchaser acknowledges that, in connection with the Offer, Mellon may enter into agreements or arrangements with a Book-Entry Transfer Facility that, among other things, provide that (i) delivery of an Agent's Message will satisfy the terms of the Offer with respect to the Letter of Transmittal, (ii) such agreements or arrangements are enforceable against the Purchaser by such Book-Entry Transfer Facility or participants therein and (iii) Mellon, as depositary, is authorized to enter into such agreements or arrangements on behalf of the Purchaser. Without limiting any other provision of this Agreement, Mellon is expressly authorized to enter into any such agreements or arrangements on behalf of the Purchaser and to 2 make any necessary representations or warranties in connection thereunder, and any such agreement or arrangement shall be enforceable against the Purchaser. 3. BOOK-ENTRY ACCOUNT. Mellon shall take all commercially reasonable steps to establish and, subject to such establishment, maintain an account at each Book-Entry Transfer Facility for book-entry transfers of Shares, as set forth in the Letter of Transmittal and the Offer to Purchase. Mellon will maintain the Book Entry account until all Shares tendered pursuant to the Offer shall have been subject to payment or returned. 4. PROCEDURE FOR DISCREPANCIES. Mellon shall follow its regular procedures to attempt to reconcile any discrepancies between the number of Shares that any Letter of Transmittal may indicate are owned by a surrendering stockholder and the number that the Record Stockholders List indicates such stockholder owned of record as of the Expiration Date. In any instance where Mellon cannot reconcile such discrepancies by following such procedures, Mellon will consult with the Purchaser for instructions as to the number of Shares, if any, Mellon is authorized to accept for exchange. In the absence of such instructions, Mellon is authorized not to accept any such Shares for exchange and will return to the surrendering stockholder (at Mellon's option by either first class mail under a blanket surety bond or insurance protecting Mellon and the Purchaser from losses or liabilities arising out of the non-receipt or non-delivery of Shares or by registered mail insured separately for the value of such Shares), to such stockholder's address as set forth in the Letter of Transmittal, any certificates for Shares surrendered in connection therewith, the related Letters of Transmittal and any other documents received with such Shares. 5. LOST CERTIFICATES. If any holder of Shares as of the Expiration Date reports to Mellon that his or her failure to surrender a certificate representing any Shares registered in his or her name at the Expiration Date according to the Record Stockholders List is due to the theft, loss or destruction of such certificate, upon receipt from such stockholder of an affidavit of such theft, loss or destruction and a bond of indemnity, both in form and substance satisfactory to Mellon and in compliance with any other applicable requirements, Mellon will effect issuance of certificates for new Shares to the former stockholder as though the certificate for Shares had been surrendered. 6. TREATMENT OF RESTRICTIVE LEGENDS. All certificates representing Shares are eligible to make a tender of those shares pursuant to Section 2 hereof. 7. DATE/TIME STAMP. Each document received by Mellon relating to its duties hereunder shall be dated and time stamped when received. 8. PROCEDURE FOR DEFICIENT ITEMS. (a) Mellon will examine any certificate representing Shares, Letter of Transmittal (or facsimile thereof), Notice of Guaranteed Delivery or Agent's Message and any other document (including any checks or money orders payable to the Purchaser) required by the Letter of Transmittal received by Mellon to determine whether any tender may be defective. In the event Mellon concludes that (i) any Letter of Transmittal, Notice of Guaranteed Delivery, Agent's Message or other document has been improperly completed, executed or transmitted, (ii) any of 3 the certificates for Shares is not in proper form for transfer (as required by the aforesaid instructions) (iii) service fee checks or money orders ("service fee checks") are not properly executed or timely received, or (iv) if some other irregularity in connection with the tender of Shares exists, then Mellon is authorized, subject to subsection (b) below, to advise the tendering stockholder, or transmitting Book-Entry Transfer Facility, as the case may be, of the existence of the irregularity, but Mellon is not authorized to accept any tender not in accordance with the terms and subject to the conditions set forth in the Offer, or any other tender which Mellon deems to be defective, unless Mellon shall have received from the Purchaser the Letter of Transmittal that was surrendered (or if the tender was made by means of a Confirmation containing an Agent's Message, a written notice), duly dated and signed by an authorized officer of the Purchaser, indicating that any defect or irregularity in such tender has been cured or waived and that such tender has been accepted by the Purchaser. (b) Promptly upon concluding that any tender is defective, Mellon shall, after consultation with Purchaser, use reasonable efforts in accordance with Mellon's regular procedures to notify the person tendering such Shares, or Book-Entry Transfer Facility transmitting the Agent's Message, as the case may be, of such determination and, when necessary, return the certificates and/or service fee checks involved to such person in the manner described in Section 12 hereof. The Purchaser shall have full discretion to determine whether any tender is complete and proper and shall have the absolute right to reject any or all tenders of any particular Shares determined by it not to be in proper form and to determine whether the acceptance of or payment for such tenders may, in the opinion of counsel for the Purchaser, be unlawful; it being specifically agreed that Mellon shall have neither discretion nor responsibility with respect to these determinations. To the extent permitted by applicable law, the Purchaser also reserves the absolute right to waive any of the conditions of the Offer or any defect or irregularity in the tender of any particular Shares. The interpretation by the Purchaser of the terms and conditions of the Offer to Purchase, the Letter of Transmittal and the instructions thereto, a Notice of Guaranteed Delivery or an Agent's Message (including without limitation the determination of whether any tender is complete and proper) shall be final and binding. (c) If less than all of the Shares validly tendered pursuant to the Offer are to be accepted because the Offer is oversubscribed by the Expiration Date, Mellon shall pro rate the Shares pursuant to (i) the terms and conditions of the Offer to Purchase and (ii) any instructions provided to Mellon by Purchaser regarding such proration. Mellon shall maintain accurate records as to all Shares tendered prior to or on the Expiration Date. 9. REPORT OF TENDER ACTIVITY. At 11:00 a.m. New York City time, or as promptly as practicable thereafter on each business day, or more frequently if reasonably requested as to major tally figures, Mellon shall advise each of the parties named below by telephone as to, based upon a preliminary review (and at all times subject to final determination by Purchaser), as of the close of business on the preceding business day or the most recent practicable time prior to such request, as the case may be: (i) the number of Shares duly tendered on such day; (ii) the number of Shares duly tendered represented by certificates physically held by Mellon on such day; (iii) the number of Shares represented by Notices of Guaranteed Delivery on such day; (iv) the number of Shares withdrawn on such day; and (v) the cumulative totals of Shares in categories (i) through (iv) above: 4 (a) Michael E. Dresnin, Esq., Delaware Investments - Legal Department, medresnin@delinvest.com, 215.255.1511. (b) Ms. Elizabeth Wisser, Delaware Investments - T/A Systems Control Project Manager, 215-255-8728, ewisser@delinvest.com Mellon shall furnish to each of the above-named persons a written report confirming the above information that has been communicated orally on the day following such oral communication as well as any other information reasonably requested from time to time. Mellon shall furnish to the Dealer-Manager (as defined in the Offer to Purchase) and the Purchaser, such reasonable information, to the extent such information has been furnished to Mellon, on the tendering stockholders as may be requested from time to time. Mellon shall furnish to the Purchaser, upon request, master lists of Shares tendered for purchase, including an A-to-Z list of the tendering stockholders. 10. INSTRUCTIONS. Any instructions given to Mellon orally, as permitted by any provision of this Agreement, shall be confirmed in writing by the Purchaser or the Dealer-Manager, as the case may be, as soon as practicable. Mellon shall not be liable or responsible and shall be fully authorized and protected for acting, or failing to act, in accordance with any oral instructions which do not conform with the written confirmation received in accordance with this Section. 11. NOTICE OF WITHDRAWAL. In accordance with the following conditions, Mellon will return to any person tendering Shares, in the manner described in Section 12 hereof, any certificates representing Shares (and, if a complete withdrawal, the service fee checks) tendered by such person but duly withdrawn pursuant to the Offer to Purchase. To be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be received by Mellon, within the time period specified for withdrawal in the Offer to Purchase, at Mellon's address set forth on the back page of the Offer to Purchase. Any notice of withdrawal must specify the name of the person having deposited the Shares to be withdrawn, the number of Shares to be withdrawn and, if the certificates representing such Shares have been delivered or otherwise identified to Mellon, the name of the registered holder(s) of such Shares as set forth in such certificates. If the certificates have been delivered to Mellon, then prior to the release of such certificates the tendering stockholder must also submit the certificate number(s) shown on the particular certificates evidencing such Shares and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution. Mellon is authorized and directed to examine any notice of withdrawal to determine whether it believes any such notice may be defective. In the event Mellon concludes that any such notice is defective it shall, after consultation with and on the instructions of the Purchaser, use reasonable efforts in accordance with its regular procedures to notify the person delivering such notice of such determination. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser in its sole discretion, whose determination shall be final and binding. Any Shares so withdrawn shall no longer be considered to be properly tendered unless such Shares are re-tendered prior to the Expiration Date pursuant to Section 2 hereof. 5 12. RETURN OF SHARES. If, pursuant to the terms and conditions of the Offer, the Purchaser has notified Mellon that it does not accept certain of the Shares tendered or purported to be tendered or a stockholder withdraws any tendered Shares, Mellon shall promptly return the deposited certificates (and, if a complete withdrawal, the service fee checks) for such Shares, together with any other documents received, to the person who deposited the same. Certificates for such unpurchased Shares shall be forwarded by Mellon, at its option, by: (i) first class mail under a blanket surety bond protecting Mellon and the Purchaser from losses or liabilities arising out of the non-receipt or non-delivery of such Shares; or (ii) registered mail insured separately for the value of such Shares. If any such Shares were tendered or purported to be tendered by means of a Confirmation containing an Agent's Message, Mellon shall notify the Book-Entry Transfer Facility that transmitted said Confirmation of the Purchaser's decision not to accept the Shares. 13. AMENDMENT/EXTENSION OF OFFER. Any amendment to or extension of the Offer, as the Purchaser shall from time to time determine, shall be effective upon notice to Mellon from the Purchaser given prior to the time the Offer would otherwise have expired, and shall be promptly confirmed by the Purchaser in writing; provided that Mellon may rely on and shall be authorized and protected in acting or failing to act upon any such notice even if such notice is not confirmed in writing or such confirmation conflicts with such notice. If at any time the Offer shall be terminated as permitted by the terms thereof, the Purchaser shall promptly notify Mellon of such termination. 14. DISTRIBUTION OF ENTITLEMENTS. (a) If under the terms and conditions set forth in the Offer to Purchase the Purchaser becomes obligated to accept and pay for Shares tendered, upon instruction by the Purchaser and as promptly as practicable, but in any event not later than 5:00 p.m., New York City time, on the fifth NYSE trading day after the latest of: (i) the Expiration Date; (ii) the physical receipt by Mellon of a certificate or certificates representing tendered Shares (in proper form for transfer by delivery), a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) or a Confirmation including an Agent's Message and any other documents required by the Letter of Transmittal; and (iii) the deposit by the Purchaser with Mellon of sufficient federal or other immediately available funds to pay, subject to the terms and conditions of the Offer, all stockholders for whom checks representing payment for Shares are to be drawn, less any adjustments required by the terms of the Offer, and all applicable tax withholdings, Mellon shall deliver or cause to be delivered to the tendering stockholders and designated payees, consistent with this Agreement and the Letter of Transmittal, official bank checks of Mellon, as agent for the Purchaser, and payable through Mellon in the amount of the applicable purchase price specified in the Offer (less any applicable tax withholding) for the Shares theretofore properly tendered and purchased under the terms and conditions of the Offer. The Purchaser will also deposit with Mellon, upon request, federal or other immediately available funds in an amount equal to the total stock transfer taxes or other governmental charges, if any, payable in respect of the transfer or issuance to the Purchaser or its nominee or nominees of all Shares so purchased. Mellon shall apply to the proper authorities for the refund of money paid on account of such 6 transfer taxes or other governmental charges. On receipt of such refund, Mellon will promptly pay over to the Purchaser all money refunded. (b) At such time as the Purchaser shall notify Mellon, Mellon shall request the transfer agent for the Shares to cancel and retire all Shares purchased pursuant to the Offer. (c) Mellon hereby waives any and all rights of lien, attachment or set off whatsoever, if any, against the securities, money, assets or property that are deposited with or received by Mellon from Purchaser, whether such rights arise by reason of statutory or common law, by contract or otherwise. 15. INFORMATION AGENT. In Mellon's capacity as Information Agent, Mellon shall: (i) Assist in the coordination of all printing activities and advertisement placement, if required, in connection with the Offer. (ii) Establish contacts with brokers, dealers, banks and other nominees on Purchaser's behalf in accordance with Rule 13e-4 under the Securities Exchange Act of 1934, as amended. (iii) Determine the material requirements necessary to fulfill mailing requirements to all registered and "street" holders and other interested parties. (iv) Assist with document review in a timely manner, including, but not limited to, the following documents: Offer to Purchase, Letter of Transmittal (including Certification of Taxpayer Identification Number on Substitute Form W-9), Notice of Guaranteed Delivery and Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees and Letter to Clients of Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees ("Offering Materials"). (v) Facilitate the distribution of materials to the registered and beneficial owners of Purchaser's common stock and to other interested parties. (vi) Provide a dedicated toll-free line for all shareholder inquiries from 9:00 a.m. to 6:00 p.m. ET each business day. (vii) Provide status reporting to management upon commencement of activity and continuing daily including total shares presented and tendered. (viii) Facilitate payment of all broker forwarding invoices, subject to collection from Purchaser of monies for this purpose. (ix) Build and maintain a current file of eligible participants, including registered holders and beneficial holders identified through Mellon's research. 7 16. TAX REPORTING. (a) On or before January 31st of the year following the year in which the Purchaser accepts Shares for payment, Mellon shall prepare and mail to each tendering stockholder whose Shares were accepted, other than stockholders who demonstrate their status as nonresident aliens in accordance with United States Treasury Regulations ("Foreign Stockholders"), a Form 1099-B reporting the purchase of Shares as of the date such Shares are accepted for payment. Mellon shall also prepare and file copies of such Forms 1099-B by magnetic tape with the Internal Revenue Service in accordance with Treasury Regulations on or before February 28th of the year following the year in which the Shares are accepted for payment. (b) Mellon shall deduct and withhold the appropriate backup withholding tax from the purchase price payable with respect to Shares tendered by any stockholder, other than a Foreign Stockholder, who has not properly provided Mellon with a taxpayer identification number, in accordance with Treasury Regulations. Mellon shall forward such withholding taxes to the Internal Revenue Service with the appropriate required documentation customarily required to discharge the Purchaser's applicable withholding obligation with respect to such transactions. (c) Should any issue arise regarding federal income tax reporting or withholding, Mellon shall take such action as the Purchaser may reasonably request in writing. Such action may be subject to additional fees. 17. AUTHORIZATIONS AND PROTECTIONS. As depositary hereunder Mellon: (a) shall have no duties or obligations other than those specifically set forth herein (including any exhibits hereto), or as may subsequently be agreed to in writing by Mellon and the Purchaser; (b) shall have no obligation to make payment for any tendered Shares unless the Purchaser shall have provided the necessary federal or other immediately available funds to pay in full amounts due and payable with respect thereto; (c) shall be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value, or genuineness of any certificates or the Shares represented thereby deposited with Mellon or tendered through an Agent's Message hereunder and will not be required to and will make no representations as to or be responsible for the validity, sufficiency, value, or genuineness of the Offer; (d) shall not be obligated to take any legal action hereunder; if, however, Mellon determines to take any legal action hereunder, and, where the taking of such action might in Mellon's judgment subject or expose it to any expense or liability, Mellon shall not be required to act unless it shall have been furnished with an indemnity reasonably satisfactory to it; 8 (e) may rely on and shall be authorized and protected in acting or failing to act upon any certificate, instrument, opinion, notice, letter, telegram, telex, facsimile transmission, Agent's Message or other document or security delivered to Mellon and reasonably believed by Mellon to be genuine and to have been signed by the proper party or parties; (f) may rely on and shall be authorized and protected in acting or failing to act upon the written, telephonic, electronic and oral instructions, with respect to any matter relating to Mellon's actions as depositary specifically covered by this Agreement (or supplementing or qualifying any such actions) of officers of the Purchaser; (g) may consult counsel satisfactory to it, and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by Mellon hereunder in good faith and in accordance with the advice of such counsel; (h) shall not be called upon at any time to, and shall not, advise any person tendering or considering tendering pursuant to the Offer as to the wisdom of making such tender or as to the market value of any security tendered thereunder or as to any other financial or legal aspect of the Offer or any transactions related thereto; (i) may perform any of its duties hereunder either directly or by or through agents or attorneys; (j) shall not be liable or responsible for any recital or statement contained in the Offer or any other documents relating thereto; (k) shall not be liable or responsible for any failure of the Purchaser to comply with any of their respective obligations relating to the Offer, including without limitation obligations under applicable securities laws; (l) is not authorized, and shall have no obligation, to pay any brokers, dealers, or soliciting fees to any person, including without limitation the Dealer-Manager; and (m) shall not be liable or responsible for any delay, failure, malfunction, interruption or error in the transmission or receipt of communications or messages through electronic means to or from a Book-Entry Transfer Facility, or for the actions of any other person in connection with any such message or communication. 18. INDEMNIFICATION. The Purchaser agrees to indemnify Mellon for, and hold it harmless from and against, any loss, liability, claim or expense ("Loss") arising out of or in connection with its duties under this Agreement or this appointment, including the costs and expenses of defending itself against any Loss, except to the extent that such Loss shall have been determined by a court of competent jurisdiction to be a result of Mellon's gross negligence or intentional misconduct. 9 19. LIMITATION OF LIABILITY. (a) In the absence of gross negligence or intentional misconduct on its or its agent's or attorney's part, Mellon shall not be liable for any action taken, suffered, or omitted by it or its agents or attorneys or for any error of judgment made by it or its agents or attorneys in the performance of its or its agent's or attorney's duties under this Agreement. Anything in this agreement to the contrary notwithstanding, in no event shall Mellon be liable for special, indirect, incidental or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if Mellon has been advised of the likelihood of such damages and regardless of the form of action. Any liability of Mellon will be limited to the amount of fees paid by Purchaser hereunder. (b) In the event any question or dispute arises with respect to the proper interpretation of this Agreement or Mellon's duties hereunder or the rights of the Purchaser or of any stockholders surrendering certificates for Shares pursuant to the Offer, Mellon shall not be required to act and shall not be held liable or responsible for refusing to act until the question or dispute has been judicially settled (and Mellon may, if it deems it advisable, but shall not be obligated to, file a suit in interpleader or for a declaratory judgment for such purpose) by final judgment rendered by a court of competent jurisdiction, binding on all stockholders and parties interested in the matter, which is no longer subject to review or appeal, or settled by a written document in form and substance satisfactory to Mellon and executed by the Purchaser and each such stockholder and party. In addition, Mellon may require for such purpose, but shall not be obligated to require, the execution of such written settlement by all the stockholders and all other parties that may have an interest in the settlement. 20. REPRESENTATIONS, WARRANTIES AND COVENANTS. Purchaser represents, warrants and covenants that (a) it is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, (b) the making and consummation of the Offer and the execution, delivery and performance of all transactions contemplated thereby (including, without limitation, this Agreement) have been duly authorized by all necessary corporate action and will not result in a breach of or constitute a default under the charter or bylaws of the Purchaser or any indenture, agreement or instrument to which it is a party or is bound, (c) this Agreement has been duly executed and delivered by the Purchaser and constitutes the legal, valid, binding and enforceable obligation of the Purchaser, (d) the Offer will comply in all material respects with all applicable requirements of law and (e) to the best of its knowledge, there is no material litigation pending or threatened as of the date hereof in connection with the Offer. 21. NOTICES. All notices, demands and other communications given pursuant to the terms and provisions hereof shall be in writing, shall be deemed effective on the date of receipt, and may be sent by facsimile, overnight delivery services, or by certified or registered mail, return receipt requested to: 10 If to Purchaser: with an additional copy to: Delaware Investments Dividend and David P. O'Connor, Esq. Income Fund, Inc. General Counsel One Commerce Square Delaware Management Company Philadelphia, PA 19103 One Commerce Square Attn: Michael E. Dresnin, Esq. Philadelphia, PA 19103 Tel: 215.255.1511 Tel: 215.255.1360 Fax: 215.255.1640 Fax: 215.255. 1640 medresnin@delinvest.com dpoconnor@delinvest.com If to Mellon: with an additional copy to: Mellon Investor Services LLC Mellon Investor Services LLC 480 Washington Blvd, 27th Floor 480 Washington Blvd, 29th Floor Jersey City NJ 07310 Jersey City NJ 07310 Attn: Jaddiel Ramos, Event Manager Attn: Legal Department Tel: 201-680-4364 Tel: 201-680-2198 Fax: 201-680-4665 Fax: 201-680-4610 22 SPECIMEN SIGNATURES. Set forth in Exhibit E hereto is a list of the names and specimen signatures of the persons authorized to act for the Purchaser under this Agreement. The Secretary or any Assistant Secretary of the Purchaser shall, from time to time, certify to Mellon the names and signatures of any other persons authorized to act for the Purchaser under this Agreement. 23. FEES. Whether or not any Shares are tendered or the Offer is consummated, for Mellon's services as depositary hereunder Purchaser shall pay to Mellon compensation in accordance with the fee schedule attached as Exhibit F hereto, together with reimbursement for reasonable out-of-pocket expenses, including reasonable fees and disbursements of Mellon's counsel that are reasonably documented. Purchaser shall reimburse Mellon for any bank fees resulting from a bounced check. All amounts owed to Mellon hereunder are due upon receipt of the invoice. Delinquent payments are subject to a late payment charge of one and one half percent commencing forty-five days from the date the invoice is received. 24. TERMINATION. Either party may terminate this Agreement upon 30 days prior written notice to the other party. Unless so terminated, this Agreement shall continue in effect until all Shares have been received and paid for. In the event of such termination, the Purchaser will appoint a successor depositary and inform Mellon of the name and address of any successor 11 depositary so appointed, provided that no failure by the Purchaser to appoint such a successor depositary shall affect the termination of this Agreement or the discharge of Mellon as depositary hereunder. Upon any such termination, Mellon shall be relieved and discharged of any further responsibilities with respect to its duties hereunder. Upon payment of all outstanding fees and expenses hereunder, Mellon shall promptly forward to the Purchaser or its designee any certificate for Shares, Letter of Transmittal or other document that Mellon may hold or receive after its appointment has so terimnated. 25. FORCE MAJEURE. Mellon shall not be liable for any failure or delay arising out of conditions beyond its reasonable control including, but not limited to, work stoppages, fires, civil disobedience, riots, rebellions, storms, electrical, mechanical, computer or communications facilities failures, acts of God or similar occurrences. 25A. DISASTER RECOVERY. During the term of this Agreement, Mellon shall maintain commercially reasonable disaster recovery facilities and procedures. 26. MISCELLANEOUS. a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to conflict of laws rules or principles. b) No provision of this Agreement may be amended, modified or waived, except in a writing signed by all of the parties hereto. c) In the event that any claim of inconsistency between this Agreement and the terms of the Offer arise, as they may from time to time be amended, the terms of the Offer shall control, except with respect to Mellon's duties, liabilities and rights, including without limitation compensation and indemnification, which shall be controlled by the terms of this Agreement. d) If any provision of this Agreement shall be held illegal, invalid, or unenforceable by any court, this Agreement shall be construed and enforced as if such provision had not been contained herein and shall be deemed an Agreement among the parties hereto to the full extent permitted by applicable law. e) This Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the respective successors and assigns of the parties hereto. f) This Agreement may not be assigned by any party without the prior written consent of all parties. g) Sections 17, 18, 19, and 23 hereof shall survive termination of this Agreement. 12 IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers as of the day and year above written. DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. By: ----------------------------------- Name: Title: MELLON INVESTOR SERVICES LLC By: ----------------------------------- Name: Jaddiel Ramos Title: Event Manager, Corporate Actions Exhibit A Offer to Purchase Exhibit B Letter of Transmittal Exhibit C Notice of Guaranteed Delivery Exhibit D List of Affiliates Exhibit E List of Authorized Representatives Exhibit F Schedule of Fees 13 EXHIBIT A OFFER TO PURCHASE 14 EXHIBIT B LETTER OF TRANSMITTAL 15 EXHIBIT C NOTICE OF GUARANTEED DELIVERY 16 EXHIBIT D LIST OF AFFILIATES Shareholder Certificate Numbers of Shares 17 EXHIBIT E LIST OF AUTHORIZED REPRESENTATIVES Name Title Specimen Signature - --------------------- ----------------------- ------------------------------ - --------------------- ----------------------- ------------------------------ - --------------------- ----------------------- ------------------------------ - --------------------- ----------------------- ------------------------------ 18 EXHIBIT F 19 -----END PRIVACY-ENHANCED MESSAGE-----