Rule 497(c)
                                                       Registration No. 33-69760
================================================================================
[GRAPHIC OMITTED]                                               600 FIFTH AVENUE
DELAFIELD                                                     NEW YORK, NY 10020
FUND                                                                212.830.5341
INCORPORATED                                                        800.221.3079
--------------------------------------------------------------------------------
PROSPECTUS

APRIL 29, 2008


The  investment  objectives of the Fund are to seek  long-term  preservation  of
capital (sufficient growth to outpace inflation over an extended period of time)
and growth of capital.  The  minimum  initial  purchase  is $5,000.  The minimum
initial  purchase  requirement  may be waived  subject to the  discretion of the
Fund. The minimum initial purchase for Individual Retirement Accounts is $250.

THE  SECURITIES AND EXCHANGE  COMMISSION  HAS NOT APPROVED OR DISAPPROVED  THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
TABLE OF CONTENTS

<S> <C>                                                    <C>  <C>
2   Risk/Return Summary: Investments, Risks                 6   Management, Organization and Capital
    and Performance                                             Structure
4   Risk/Return Summary: Fee Table                          7   Shareholder Information
5   Investment Objectives, Principal Investment            15   Distribution Arrangements
    Strategies and Related Risks                           16   Financial Highlights
</TABLE>

THE PRIVACY POLICY IS INCLUDED WITH THIS PROSPECTUS BUT IS NOT PART OF THE
PROSPECTUS.
<PAGE>

I. RISK/RETURN SUMMARY: INVESTMENTS, RISKS AND PERFORMANCE
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVES

The  objectives  of the  Fund  are to seek  long-term  preservation  of  capital
(sufficient  growth to outpace  inflation  over an extended  period of time) and
growth of  capital.  There can be no  assurance  that the Fund will  achieve its
investment objectives.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will seek to achieve  its  objectives  by  investing  primarily  in the
equity securities of domestic companies.  Specifically,  the Fund will primarily
invest in equity securities of domestic  companies which the investment  manager
(the "Manager")  believes to be undervalued or to represent special  situations.
An example of a special  situation  is a company  undergoing  change  that might
cause its market value to grow at a rate faster than the market generally.

Under  normal  circumstances  the Fund will  have  more  than 65% of its  assets
invested in equity securities,  including common stocks,  securities convertible
into common  stocks or rights or warrants to  subscribe  for or purchase  common
stocks. The Fund, however, may also invest not more than 35% of its total assets
in debt  securities  and  preferred  stocks  that the Manager  believes  offer a
significant opportunity for price appreciation.

PRINCIPAL RISKS

o    Since the Fund primarily  contains  common stocks of domestic  issuers,  an
     investment  in the Fund should be made with an  understanding  of the risks
     inherent in an investment in common stocks,  including a susceptibility  to
     general stock market movements and volatile changes in value.

o    While  the  Fund's  investment   strategy  is  not  constrained  by  market
     capitalization,  the  Fund's  investments  may  include  common  stocks  of
     companies with small and medium market capitalizations.  Investing in small
     cap and mid cap companies may involve greater risk than investing in larger
     size  companies  since  small  and  mid  cap  companies  tend  to  be  more
     susceptible to adverse  business  events or economic  downturns than larger
     companies,  are less  liquid and more  thinly  traded  than those of larger
     companies and are subject to greater price  volatility.  The  securities of
     small  cap and mid cap  companies  may also  perform  differently  from the
     market as a whole and from other types of stocks.

o    The value of the Fund's shares and the securities held by the Fund can each
     decline in value.

o    As with all equity  investments,  it is possible to lose money by investing
     in the Fund.

RISK/RETURN BAR CHART AND TABLE

The following  bar chart and table may assist you in deciding  whether to invest
in the Fund.  The bar chart shows the change in annual total returns of the Fund
for the last ten calendar  years.  The table shows how the Fund's average annual
total returns for the last one, five, and ten year and since  inception  periods
compared  with that of the S&P 500  Index  and the  Russell  2000  Index.  While
analyzing this information, please note that the Fund's past performance (before
and  after  taxes) is not an  indication  of how the Fund  will  perform  in the
future.


                                      -2-
<PAGE>
<TABLE>
<CAPTION>
                         DELAFIELD FUND, INC. (1),(2)
[GRAPHIC OMITTED]

CALENDAR YEAR END             % TOTAL RETURN


<S>                                  <C>
1998                               -11.47%
1999                                 8.40%
2000                                13.98%
2001                                32.18%
2002                                -7.46%
2003                                40.14%
2004                                20.85%
2005                                 6.00%
2006                                20.38%
2007                                 4.90%


<FN>
(1)  The Fund's highest  quarterly  return was 28.00% for the quarter ended June
     30, 1999;  the lowest  quarterly  return was -24.98% for the quarter  ended
     September 30, 1998.

(2)  Participating  Organizations  may charge a fee to investors for  purchasing
     and redeeming shares.  The net return to such investors may be less than if
     they had invested in the Fund directly.
</FN>
</TABLE>

<TABLE>
<CAPTION>
   AVERAGE ANNUAL TOTAL                                                       SINCE
   RETURNS - FOR THE PERIODS     ONE YEAR     FIVE YEARS     TEN YEARS     NOVEMBER 19,

   ENDED DECEMBER 31, 2007                                                    1993**
   --------------------------- ------------ ------------- -------------- -----------------
   DELAFIELD FUND, INC.

<S>                               <C>          <C>           <C>              <C>
   Return Before Taxes            4.90%        17.77%        11.73%           13.88%

   Return After Taxes on          3.26%        15.87%        10.54%           12.21%
   Distributions

   Return After Taxes on          3.26%        15.32%        10.14%           11.79%
   Distributions and Sale of
   Fund Shares

   S&P 500 Index*                 5.49%        12.83%         5.91%           10.52%

   Russell 2000 Index*           -1.57%        16.25%         7.08%            9.67%

   ----------------------------------------------------------------------------------------

o    After-tax  returns are calculated using the historical  highest  individual
     federal  marginal  income tax rates and do not  reflect the impact of state
     and local taxes.

o    Actual  after-tax  returns  depend on an  investor's  tax situation and may
     differ  from those  shown.  After-tax  returns  shown are not  relevant  to
     investors who hold their shares through tax-deferred arrangements,  such as
     401(k) plans or individual retirement accounts.

<FN>

*    Average  annual  total return is a measure of the Fund's  performance  over
     time.  The Fund's  average annual return is compared with the S&P 500 Index
     and the  Russell  2000  Index.  While  the Fund  does not seek to match the
     returns of the S&P 500 Index and the Russell 2000 Index,  these Indices are
     good indicators of general stock market performance and small company stock
     market  performance,  respectively.  You may not invest directly in the S&P
     500 Index and the  Russell  2000  Index and,  unlike the Fund,  they do not
     incur fees and expenses.

**   Inception date of the Fund.
</FN>
</TABLE>


                                       -3-
<PAGE>
                                    FEE TABLE

--------------------------------------------------------------------------------
This table describes the fees and expenses that you may pay if you buy and hold
shares in the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES

   (FEES PAID DIRECTLY FROM YOUR INVESTMENT)

   <S>                                                             <C>
   Maximum Sales Charge Imposed on Purchases..................     None
   Maximum Deferred Sales Charge..............................     None
   Maximum Sales Charge Imposed on Reinvested Dividends.......     None
   Redemption Fee for Shares held 90 days or less.............     2.00%
   (as a percent of amount redeemed)
</TABLE>
<TABLE>
ANNUAL FUND OPERATING EXPENSES

   (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)

   <S>                                                            <C>      <C>
   Management Fees............................................             0.75%
   Distribution and Service (12b-1) Fees*.....................             0.25%
   Other Expenses**...........................................             0.33%
      Administration Fees.....................................    0.21%
                                                                           ------
   Total Annual Fund Operating Expenses*......................             1.33%
<FN>
*    The Fund's  distributor has voluntarily waived a portion of the 12b-1 Fees.
     After such waiver, the 12b-1 Fees were 0.20%. As a result, the actual Total
     Annual Fund Operating  Expenses were 1.28%.  The fee waiver may be modified
     or discontinued from time to time by the Fund's  distributor  without prior
     notice.

**   "Other expenses"  includes  acquired fund fees and expenses.  Acquired fund
     fees and expenses are indirect fees that the Fund incurs from  investing in
     the shares of another fund.

</FN>
</TABLE>

<TABLE>
<CAPTION>
EXAMPLE

This  Example is intended to help you compare the cost of  investing in the Fund
with the cost of investing in other equity funds.  The Example  assumes that you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those  periods.  The Example  also  assumes  that your
investment  has a 5% return  each year and that the  Fund's  operating  expenses
remain the same.  Although  your actual  costs may be higher or lower,  based on
these assumptions your costs would be:


<S>              <C>               <C>               <C>
1 YEAR           3 YEARS           5 YEARS           10 YEARS
  $135              $421              $729             $1,601

</TABLE>

                                       -4-
<PAGE>

II.   INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES
      AND RELATED RISKS
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVES

The Fund's investment  objectives are to seek long-term  preservation of capital
(sufficient  growth to outpace  inflation  over an extended  period of time) and
growth of  capital.  There can be no  assurance  that the Fund will  achieve its
investment objectives.

The  investment  objectives  of the Fund  described  in this section may only be
changed  upon the  approval  of the  holders  of a majority  of the  outstanding
shares. The investment strategies of the Fund may be changed without shareholder
approval.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will seek to achieve  its  objectives  by  investing  primarily  in the
equity securities of domestic companies.  Specifically,  the Fund will primarily
invest in equity securities of domestic  companies which the Manager believes to
be  undervalued  or to  represent  special  situations.  An example of a special
situation  is a company  undergoing  change that might cause its market value to
grow at a rate faster than the market generally.

Under  normal  circumstances  the Fund will  have  more  than 65% of its  assets
invested in equity securities,  including common stocks,  securities convertible
into common  stocks or rights or warrants to  subscribe  for or purchase  common
stocks. The Fund, however, may also invest not more than 35% of its total assets
in debt  securities  and  preferred  stocks  that the Manager  believes  offer a
significant opportunity for price appreciation.

Critical  factors that will be considered in the selection of any  securities in
which the Fund may  invest  will  include  the values of  individual  securities
relative  to  other  investment  alternatives,  trends  in the  determinants  of
corporate  profits,  corporate  cash flow,  balance  sheet  changes,  management
capability and practices,  and the economic and political outlook.  Although the
balance sheet of a company is important to the Manager's analysis,  the Fund may
invest in  financially  troubled  companies if the Manager has reason to believe
that the  underlying  assets  are worth far more  than the  market  price of the
shares. In addition,  companies  generating free cash flow (defined as earnings,
depreciation, and deferred income tax in excess of need for capital expenditures
and dividends) will be considered attractive. Investment securities will also be
assessed upon their earning power,  stated asset value and off the balance sheet
values.  The  Manager  intends to invest in  companies  that are managed for the
benefit of their  shareholders  and not by  management  that  believes  the most
important measure of a company's success is its size.

The Fund will not seek to realize  profits  by  anticipating  short-term  market
movements and intends to purchase securities for long-term capital  appreciation
under ordinary circumstances.

The  Fund  seeks  to  attain  its  investment  objectives   principally  through
investments in the following securities.

(I)  COMMON STOCK: The Manager intends to invest primarily in equity  securities
     of domestic  companies  in order to seek to achieve  the Fund's  investment
     objectives.  Since the Fund  primarily  contains  common stocks of domestic
     issuers,  an investment in the Fund should be made with an understanding of
     the risks  inherent in an  investment  in common stocks which may include a
     susceptibility  to general stock market  movements and volatile  changes in
     value.

(II) UNITED  STATES   GOVERNMENT   SECURITIES:   The  United  States  Government
     securities  in which  the Fund may  invest  include  obligations  issued or
     guaranteed   by   the   United   States   Government,   its   agencies   or
     instrumentalities.

DEFENSIVE POSITION

The Fund may take a defensive  position  when the Manager  has  determined  that
adverse  business or financial  conditions  warrant  such a position.  When in a
defensive  position  the Fund may remain  uninvested  or may invest  temporarily
without limit in rated or unrated debt securities,  preferred stocks, repurchase
agreements, shares of money market funds (which may be affiliated with the Fund)
or in money market instruments.

o    Money  market  funds are  registered  investment  companies  that invest in
     high-quality,  short-term debt instruments of a specified nature. The money
     market funds seek to maintain investment  portfolios with a dollar-weighted
     average maturity of 90 days or less, to value their  investment  portfolios
     at amortized cost and to maintain a net asset value of $1.00 per share.

o    Money market  instruments  for this purpose include  obligations  issued or
     guaranteed   by   the   United   States   Government,   its   agencies   or
     instrumentalities,  commercial  paper  rated  in the  highest  grade by any
     nationally  recognized  rating  agency,  and  certificates  of deposit  and
     bankers' acceptances issued by domestic banks having total assets in excess
     of one billion dollars.

o    A repurchase  agreement is an instrument  under which the Fund  purchases a
     United States Government  security from a vendor,  with an agreement by the
     vendor to  repurchase  the security at the same price,  plus  interest at a
     specified rate.

While  taking a  defensive  position  the Fund may not  achieve  its  investment
objectives.

                                       -5-
<PAGE>
PORTFOLIO TURNOVER

Purchases and sales are made for the Fund whenever  necessary,  in the Manager's
opinion,  to meet the Fund's  objectives.  Portfolio  turnover  may  involve the
payment by the Fund of dealer  spreads  or  underwriting  commissions  and other
transactions   costs.  The  greater  the  portfolio  turnover  the  greater  the
transaction  costs to the Fund.  This could have an adverse effect on the Fund's
total rate of return.  The Fund will minimize portfolio turnover because it will
not seek to realize  profits by  anticipating  short-term  market  movements and
intends to buy  securities  for long-term  capital  appreciation  under ordinary
circumstances.

BUY/SELL DECISIONS

The Fund's  investment  manager  considers the following factors when buying and
selling securities for the Fund: (i) the value of individual securities relative
to other investment  alternatives,  (ii) trends in the determinants of corporate
profits,  (iii) corporate cash flow, (iv) balance sheet changes,  (v) management
capability and practices and (vi) the economic and political outlook.

RELATED RISKS

Common stocks are especially  susceptible to general stock market  movements and
to volatile  changes in value as market  confidence  in and  perceptions  of the
issuers change.  These perceptions are based on unpredictable  factors including
expectations  regarding  government,  economic,  monetary  and fiscal  policies,
inflation and interest rates,  economic expansion or contraction,  and global or
regional political,  economic or banking crises. Common stocks in which the Fund
invests may decrease in value  causing the value of an investment in the Fund to
decrease.

In  addition,   while  the  Fund's   strategy  is  not   constrained  by  market
capitalization,  the Fund's  investments  may include common stocks of small and
mid cap  companies.  Investments  in small  and mid cap  companies  may  involve
greater risk than investing in larger size companies. For example, small cap and
mid cap  companies  rely on  limited  product  lines,  financial  resources  and
business activities,  making them more susceptible to adverse business events or
economic  downturns than larger  companies.  The securities of small cap and mid
cap  companies  are also less liquid and more thinly traded than those of larger
companies and are subject to greater price  volatility.  The securities of small
cap and mid cap  companies  may also  perform  differently  from the market as a
whole and from other types of stocks.

PORTFOLIO HOLDINGS

A schedule of the Fund's complete portfolio holdings, current as of quarter-end,
will be available on the Fund's website no earlier than 15 days after the end of
each quarter.  This  information  will remain  available on the website at least
until  updated for the next quarter or until the Fund files with the  Securities
and Exchange  Commission  ("SEC") its  semi-annual/annual  shareholder report or
quarterly  portfolio  holdings report that includes such period. The most recent
schedule is available on the Fund's website at  http://www.delafieldfund.com  or
by calling  toll free at  800.221.3079.  The Fund may  terminate  or modify this
policy at any time without further notice to shareholders.  A description of the
Fund's  policies and  procedures  with respect to the  disclosure  of the Fund's
portfolio securities is available in the Statement of Additional Information.

III. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
--------------------------------------------------------------------------------

The  Fund's  investment  manager  is  Reich & Tang  Asset  Management,  LLC (the
"Manager").  The Delafield Asset Management division of the Manager provides the
investment advisory services to the Fund on behalf of the Manager. The Manager's
principal business office is located at 600 Fifth Avenue, New York, NY 10020. As
of  March  31,  2008,  Reich & Tang  Asset  Management,  LLC was the  investment
manager,  adviser or sub-adviser with respect to assets aggregating in excess of
$17.8  billion.  The  Manager  has been an  investment  adviser  since  1970 and
currently  is manager or  sub-adviser  of  seventeen  portfolios  of  registered
investment companies,  of which it acts as administrator for twelve. The Manager
also  advises  high  net  worth  individuals,  private  funds,  pension  trusts,
profit-sharing trusts and endowments.


Mr. J. Dennis Delafield and Mr. Vincent Sellecchia are primarily responsible for
the day-to-day  investment management of the Fund. Mr. Delafield is Chairman and
Director of the Fund and is Managing Director of the Manager.  Mr. Sellecchia is
President of the Fund and Managing  Director of the Manager.  Both Mr. Delafield
and Mr.  Sellecchia  have been  associated  with the  Manager  in an  investment
advisory  capacity  since  September  1991.  The Fund's  Statement of Additional
Information  provides  additional  information  about  the  portfolio  managers'
compensation, other accounts managed by the portfolio managers and the portfolio
managers' ownership of securities of the Fund.

Pursuant to the Investment Management Contract between the Fund and the Manager,
the Manager  manages the Fund's  portfolio of securities and makes the decisions
with  respect to the purchase  and sale of  investments,  subject to the general
control of the Board of Directors of the Fund.  Under the Investment  Management
Contract,  the Fund will pay a management  fee at an annual rate of 0.80% on the
first $250 million of net assets of the Fund; 0.75% on the next $250

                                       -6-
<PAGE>

million of net assets of the Fund;  0.70% on the next $500 million of net assets
of the Fund;  and 0.65% on all net assets of the Fund over $1  billion.  For the
fiscal year ended  December 31, 2007, the Fund paid the Manager a management fee
equal to 0.76% per annum of the Fund's average daily net assets.  The management
fees are accrued  daily and paid monthly.  A discussion  regarding the basis for
the Board of Directors  approving the  continuance of the Investment  Management
Contract is available  in the Fund's  semi-annual  report for the period  ending
June 30, 2007.

Pursuant  to the  Administrative  Services  Contract  between  the  Fund and the
Manager,  the  Manager  provides  all  management  and  administrative  services
reasonably  necessary for the Fund's  operation,  other than those services that
the Manager provides to the Fund pursuant to the Investment Management Contract.
The  Manager  also  provides  the Fund with the  personnel  to perform all other
clerical and accounting type functions not performed by the Manager  pursuant to
the Investment Management Contract and the Administrative Services Contract. For
its  services  under the  Administrative  Services  Contract,  the Fund pays the
Manager a fee equal to 0.21% per annum of the Fund's  average  daily net assets.
For the fiscal year ended December 31, 2007, the Fund paid the manager a fee for
administrative services equal to 0.21% per annum of the Fund's average daily net
assets.


The Manager,  at its discretion,  may voluntarily  waive all or a portion of the
management  and  administrative  services  fees.  Any  portion of the total fees
received  by the  Manager may be used to provide  shareholder  services  and for
distribution of Fund shares.

IV. SHAREHOLDER INFORMATION
--------------------------------------------------------------------------------

The Fund sells and redeems its shares on a  continuing  basis at their net asset
value.  The Fund does not impose a charge for either  purchases or  redemptions,
except for a redemption fee imposed on shares held for 90 calendar days or less.
All  transactions  in Fund shares are processed  through Reich & Tang  Services,
Inc., the Fund's transfer agent (the "Transfer  Agent"),  who accepts orders for
purchases and redemptions from Participating Organizations (see "How to Purchase
and Redeem  Shares" for a definition of  Participating  Organizations)  and from
investors directly.

PRICING OF FUND SHARES

The Fund  determines the net asset value ("NAV") of the shares of the Fund as of
the close of regular trading on the New York Stock Exchange  ("NYSE")  (normally
at 4:00 PM,  Eastern  time) on each  day that the NYSE is open for  business  (a
"Fund Business  Day"). It is expected that the NYSE will be closed on New Year's
Day,  Martin Luther King Jr. Day,  Presidents'  Day, Good Friday,  Memorial Day,
Independence  Day,  Labor Day,  Thanksgiving  Day and  Christmas  Day.  The Fund
calculates  its net asset value by  dividing  the value of the Fund's net assets
(i.e.,  the value of its  securities  and  other  assets  less its  liabilities,
including  expenses payable or accrued but excluding  capital stock and surplus)
by the number of shares outstanding of the Fund at the time the determination is
made.  Purchases and redemptions  will be processed at the time of determination
of net asset  value next  following  the receipt of any  purchase or  redemption
order.

The Fund generally values  short-term  fixed income and money market  securities
with remaining  maturities of 60 days or less at amortized cost.  Securities for
which market quotations are readily available are valued at their current market
value, as determined by such quotations.  Securities for which market quotations
are not readily  available  are valued at fair value as determined in good faith
in  accordance  with  policies  and  procedures  established  by  the  Board  of
Directors.  In determining  fair value,  the Fund will seek to assign a value to
the  security  which it  believes  represents  the  amount  that the Fund  could
reasonably  expect to receive upon the security's  current sale. With respect to
securities  that are actively  traded on U.S.  exchanges,  the Fund expects that
market  quotations will generally be available and that fair value might be used
only in limited  circumstances,  such as when  trading  for a security is halted
during  the  trading  day.  Fair  value  pricing  involves  judgments  that  are
inherently  subjective  and inexact and it is not  possible  to  determine  with
certainty  when, and to what extent,  an event will affect a market price.  As a
result,  there can be no assurance  that fair value pricing will reflect  actual
market value and it is possible  that the fair value  determined  for a security
may differ materially from the value that could be realized upon the sale of the
security.

The value of any shares of  open-end  funds held by the Fund will be  calculated
using the NAV of such funds. The prospectuses for any such open-end funds should
explain the circumstances under which these funds use fair value pricing and the
effects of using fair value pricing.

HOW TO PURCHASE AND REDEEM SHARES

Investors who have accounts with  Participating  Organizations may invest in the
Fund through their Participating Organizations in accordance with the procedures
established  by  the   Participating   Organizations  and  are  referred  to  as
Participant Investors. "Participating Organizations" include securities brokers,
banks  and  financial   institutions   or  other   industry   professionals   or
organizations  which have entered into  agreements  with the Fund's  distributor
with respect to investment of their customer accounts in the Fund. Investors who
have accounts with Participating  Organizations but who do not wish to invest in
the Fund  through  their  Participating  Organizations,  may  invest in the Fund
directly and will not receive the benefit of the servicing  functions  performed
by a Participating Organization.

                                       -7-
<PAGE>
The  minimum  initial  investment  in the Fund is $5,000.  The  minimum  initial
investment  requirement  may be waived  subject to the  discretion  of the Fund.
There is no  minimum  amount  for  subsequent  purchases.  The  minimum  initial
investment for an Individual Retirement Account is $250.

The Fund will  normally  have its  assets  invested  as is  consistent  with the
investment  objectives  of the Fund.  The Fund  reserves the right to reject any
purchase  order.  In  addition,  the Fund does not accept cash and may refuse to
accept cash equivalents (i.e., travelers cheques, money orders, cashiers' checks
or similar instruments) and certain other forms of payment, at its discretion.

Shares are issued as of the close of  regular  trading on the NYSE,  on any Fund
Business  Day on which an order for the  shares  and  accompanying  payment  are
received,  in accordance with the Fund's policies,  by the Fund's transfer agent
before the close of regular trading on the NYSE.

There is no  redemption  charge  (except on shares held for 90 calendar  days or
less),  no minimum  period of  investment  and no  restriction  on  frequency of
withdrawals.  Proceeds  of  redemptions  are paid by check or bank wire.  Unless
other  instructions  are given in proper form to the Fund's  transfer  agent,  a
check for the proceeds of a redemption will be sent to the shareholder's address
of record.

The date of payment upon redemption generally may not be postponed for more than
seven days after shares are tendered for redemption, and the right of redemption
may not be suspended,  except for (i) any period during which the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (ii) any
period during which the SEC determines that trading thereon is restricted, (iii)
for any period during which an emergency (as  determined by the SEC) exists as a
result  of  which  disposal  by the  Fund of its  securities  is not  reasonably
practicable  or as a result of which it is not  reasonably  practicable  for the
Fund fairly to  determine  the value of its net  assets,  or (iv) for such other
period as the SEC may by order permit for the protection of the  shareholders of
the Fund.

Redemption  requests  received by the Fund's  transfer agent before the close of
regular  trading on the NYSE, on any Fund  Business Day become  effective at the
close of regular trading on the NYSE that day.

The Fund and its agents  reserve  the right to  "freeze"  or  "block"  (that is,
disallow  any further  purchases  or  redemptions  from any  account) or suspend
account  services in certain  instances as  permitted or required by  applicable
laws and regulations,  including applicable anti-money  laundering  regulations.
Examples  of such  instances  include,  but are not  limited  to,  (i)  where an
accountholder  appears  on  the  list  of  "blocked"  entities  and  individuals
maintained pursuant to OFAC (Office of Foreign Assets Control) regulations, (ii)
where the Fund or its agents detect suspicious activity or suspect fraudulent or
illegal  activity,  or (iii) when  notice has been  received  by the Fund or its
agents that there is a dispute  between the  registered  or  beneficial  account
owners.

The Fund  reserves  the right to redeem all the  shares in an account  (with the
exception  of IRAs) if the net asset  value of all the  remaining  shares in the
account  after a  withdrawal  is less  than  $500.  Written  notice  of any such
mandatory  redemption  will  be  given  at  least  30  days  in  advance  to any
shareholder  whose  account  is to be  redeemed.  During  the  notice  period  a
shareholder may avoid mandatory redemption by purchasing  sufficient  additional
shares to increase his total net asset value to at least $500. The Fund may also
elect to impose a monthly service charge of $10 on accounts that fall below $500
after a withdrawal instead of redeeming such shares.

For Participant  Investor accounts,  notice of a proposed  mandatory  redemption
will  be  made  to  the  appropriate   Participating   Organization   only.  The
Participating  Organization  will be responsible  for notifying the  Participant
Investors of the proposed mandatory redemption.

In addition, in accordance with applicable customer identification  regulations,
the Fund  reserves the right to redeem the shares of any  shareholder  and close
the  shareholder's  account  if the Fund and its agents are unable to verify the
shareholder's  identity within a reasonable time after the shareholder's account
is opened. If the Fund closes a shareholder's account in this manner, the shares
will be valued in accordance with the net asset value next calculated  after the
Fund decides to close the account.

INVESTMENTS THROUGH PARTICIPATING ORGANIZATIONS

When instructed by a Participant Investor to purchase or redeem Fund shares, the
Participating Organization,  on behalf of the Participant Investor, transmits to
the Fund's transfer agent a purchase or redemption  order,  and in the case of a
purchase order, payment for the shares being purchased.

Participating  Organizations may confirm to Participant  Investors each purchase
and  redemption  of  Fund  shares  for  their  accounts.   Also,   Participating
Organizations  may send periodic  account  statements to  Participant  Investors
showing (i) the total number of Fund shares owned by each  Participant  Investor
as of the statement  closing date, (ii) purchases and redemptions of Fund shares
by each  Participant  Investor  during the period  covered by the  statement and
(iii) the income

                                       -8-
<PAGE>
earned by Fund shares of each  Participant  Investor during the statement period
(including  dividends and distributions paid in cash or reinvested in additional
Fund shares).  Participant Investors whose Participating  Organizations have not
undertaken to provide such statements will receive them from the Fund directly.

Participating Organizations may charge Participant Investors a fee in connection
with their use of  specialized  purchase and  redemption  procedures  offered to
Participant   Investors  by  the  Participating   Organizations.   In  addition,
Participating  Organizations offering purchase and redemption procedures similar
to those  offered to  shareholders  who invest in the Fund  directly  may impose
charges, limitations, minimums and restrictions in addition to or different from
those applicable to shareholders  who invest in the Fund directly.  Accordingly,
the total return to investors who invest through Participating Organizations may
be less than by investing in the Fund directly.  Participating Organizations may
also set deadlines  for receipt of orders from  Participant  Investors  that are
earlier than the order  deadline of the Fund due to processing or other reasons.
A  Participant  Investor  should read this  Prospectus in  conjunction  with the
materials provided by the Participating  Organization  describing the procedures
under which Fund shares may be purchased and redeemed through the  Participating
Organization.

Certain  qualified  Participating   Organizations  may  transmit  an  investor's
purchase or  redemption  order to the Fund's  transfer  agent after the close of
regular  trading on the NYSE on the day the order is received  from the investor
as long as the investor has placed his order with the Participating Organization
before the close of regular  trading on the NYSE on that day. The investor  will
then receive the net asset value of the Fund's shares determined as of the close
of regular trading on the NYSE on the day he placed his order with the qualified
Participating  Organization.  Participating  Organizations  are  responsible for
instituting  procedures  to ensure  that  purchase  orders  by their  respective
clients are processed expeditiously.

DIRECT PURCHASE AND REDEMPTION PROCEDURES

The following purchase and redemption  procedures apply to investors who wish to
invest in the Fund  directly.  These  investors may obtain the Fund  application
necessary to open an account by telephoning  the Fund at either  212.830.5341 or
toll free at 800.221.3079.

All shareholders  will receive from the Fund a quarterly  statement  listing the
total  number of  shares of the Fund  owned as of the  statement  closing  date,
purchases and  redemptions  of shares of the Fund during the quarter  covered by
the statement and the  dividends  and  distributions  paid on shares of the Fund
during the statement period (including  dividends and distributions paid in cash
or reinvested in additional  shares of the Fund).  Certificates  for Fund shares
will not be issued to investors.

INITIAL PURCHASE OF SHARES

MAIL AND PERSONAL DELIVERY

Investors  may send or  personally  deliver a check made  payable to  "Delafield
Fund, Inc." along with a completed Fund application to:

    Delafield Fund, Inc.
    c/o Reich & Tang Funds
    600 Fifth Avenue - 8th Floor
    New York, New York 10020

Checks  are  accepted  subject  to  collection  at full  value in United  States
currency. If your check is returned unpaid due to insufficient funds, your order
will be cancelled  and your account will be charged a $20 fee for each  returned
check.

BANK WIRE

To purchase  shares of the Fund using the wire system for  transmittal  of money
among banks, an investor, prior to his or her initial purchase of shares, should
first  telephone the Fund at 212.830.5341 or toll free at 800.221.3079 to obtain
the Fund  application  necessary  to open a new  account.  The  investor  should
complete and fax the Fund application  along with any required  documentation to
the Fund at 212.315.1112. The original Fund application and documentation should
then be mailed to the address specified under "Mail and Personal  Delivery." The
investor  should  then  telephone  the Fund at the above  number to obtain a new
account number and then instruct a member bank of the Federal  Reserve System to
wire the amount of the investment immediately to:

    Bank of New York Mellon

    ABA #021000018
    Reich & Tang Funds
    DDA #8900403519
    For Delafield Fund, Inc.
    Account of (Investor's Name)---------------------
    Fund Account # ----------------------------------

                                       -9-
<PAGE>

An account will not be opened  until the Fund has received the Fund  application
and required  documentation  in proper form and has accepted the purchase  order
for its shares.

There may be a charge by the investor's bank for  transmitting the money by bank
wire.  The Fund does not charge  investors  in the Fund for its  receipt of wire
transfers.  Payment in the form of a "bank  wire"  received  prior to 4:00 p.m.,
Eastern time,  on a Fund  Business Day will be treated as a payment  received on
that day.

ELECTRONIC FUNDS TRANSFERS (EFT), PRE-AUTHORIZED CREDIT AND DIRECT DEPOSIT
PRIVILEGE

You may purchase shares of the Fund (minimum of $50) by having salary,  dividend
payments,  interest payments or any other payments  designated by you, including
federal  salary,  social  security,  or  certain  veteran's,  military  or other
payments from the federal  government,  automatically  deposited  into your Fund
account.  You can also have money debited from your checking account.  To enroll
in any one of these  programs,  please  contact  your broker or the Fund for the
appropriate  form. You may elect at any time to terminate your  participation by
notifying in writing the  appropriate  depositing  entity and/or federal agency.
Death or legal incapacity will automatically terminate your participation in the
Privilege.  Further,  the Fund may terminate your participation in the Privilege
upon 30 days' notice to you.

SUBSEQUENT PURCHASES OF SHARES

Subsequent purchases can be made by personal delivery or by bank wire, as
indicated above, or by mailing a check to:

    Delafield Fund, Inc.
    c/o Reich & Tang Funds
    600 Fifth Avenue - 8th Floor
    New York, New York 10020

All payments should clearly indicate the shareholder's account number.

Provided that the information on the Fund application form on file with the Fund
is still  applicable,  a shareholder  may reopen an account without filing a new
Fund application at any time during the calendar year the shareholder's  account
is closed or during the following calendar year.

REDEMPTION OF SHARES

A redemption is effected  immediately  following,  and at a price  determined in
accordance with the next  determination of net asset value per share of the Fund
following  receipt by the Fund's transfer agent of the redemption order (and any
supporting documentation which the Fund's transfer agent may require). Normally,
payment for  redeemed  shares is made on the next Fund  Business  Day.  However,
redemption requests will not be effected unless the check (including a certified
or  cashier's  check) used for  investment  has been  cleared for payment by the
investor's bank,  currently considered by the Fund to occur within 15 days after
investment.

A shareholder's  original Fund application  permits the shareholder to redeem by
written request and to elect one or more of the additional redemption procedures
described below. A shareholder may only change the instructions indicated on his
original Fund  application  by  transmitting  a written  direction to the Fund's
transfer agent. Requests to institute or change any of the additional redemption
procedures  will require a signature  guarantee.  When a signature  guarantee is
called for, the  shareholder  should have "Signature  Guaranteed"  stamped under
his/her  signature and  guaranteed by an eligible  guarantor  institution  which
includes a domestic bank, a domestic  savings and loan  institution,  a domestic
credit union, a member bank of the Federal  Reserve System or a member firm of a
national securities exchange,  pursuant to the Fund's transfer agent's standards
and procedures.

In accordance  with the Fund's  frequent  trading  policies and procedures  (see
below under "Frequent Trading"),  the Fund assesses a 2.0% fee on the redemption
of shares held 90  calendar  days or less.  Redemption  fees will be paid to the
Fund to help offset  transaction costs. The fee does not apply to (i) any shares
purchased through reinvested  distributions  (dividends and capital gains), (ii)
shares redeemed as part of the Systematic  Withdrawal  Plan,  (iii)  involuntary
redemptions  imposed by the Fund or its agents;  (iv) shares maintained  through
certain employee pension benefit plans subject to the Employee Retirement Income
Security  Act that  offer  the Fund as an  investment  vehicle,  and (v)  shares
purchased  through certain  intermediaries  that charge an overall fee on client
accounts that hold such shares  through "wrap  accounts."  The Fund reserves the
right to modify or eliminate the redemption fee or waivers at any time.

If your  shares  are held  through a  Participating  Organization  in an omnibus
account,  the Fund generally relies on the Participating  Organization to assess
the redemption fee on underlying  shareholder  accounts.  Certain  Participating
Organizations  may apply  different or additional  redemption fees or waivers to
accounts  held  with  them.  If you  purchase  shares  of  the  Fund  through  a
Participating  Organization,  you should contact your Participating Organization
or refer to the materials provided by your  Participating  Organization for more
information  on whether and to what extent the redemption fee will be applied to
redemptions of shares you hold through the Participating Organization.

                                      -10-
<PAGE>

The Fund will use the  first-in,  first-out  (FIFO)  method to determine  the 90
calendar day holding period.  Under this method, the date of the redemption will
be compared to the earliest purchase date of shares held in the account. If this
holding period is 90 calendar days or less, the redemption fee will be assessed.
In determining  "90 calendar days" the first day after a purchase of shares will
be day one of the holding period for such shares.  Thus, shares purchased on May
2, 2008,  for  example,  will be subject to the fee if they are  redeemed  on or
prior to July 31, 2008.  If they are  redeemed on or after  August 1, 2008,  the
shares will not be subject to the  redemption  fee. The  redemption  fee will be
applied on redemptions of each  investment made by a shareholder for shares held
in the Fund for 90 calendar days or less from the date of purchase.


WRITTEN REQUESTS

Shareholders  may make a redemption  in any amount by sending a written  request
to:

    Delafield Fund, Inc.
    c/o Reich & Tang Funds
    600 Fifth Avenue - 8th Floor
    New York, New York 10020

All  written  requests  for  redemption  must be signed by the  shareholder  and
signature guaranteed, unless otherwise indicated on the Fund application or in a
subsequent written  authorization.  The redemption proceeds are normally paid by
check and mailed to the shareholder of record.

SYSTEMATIC WITHDRAWAL PLAN

Any  shareholder  who  owns  shares  of the  Fund  may  establish  a  Systematic
Withdrawal  Plan under  which  he/she  offers to sell to the Fund,  at net asset
value,  the number of full and fractional  shares which will produce the monthly
or quarterly  payments  specified  (minimum $50 per  payment).  Depending on the
amounts withdrawn,  systematic withdrawals may deplete the investor's principal.
Investors  contemplating  participation  in this plan should  consult  their tax
advisers.

Shareholders wishing to utilize this plan may do so by completing an application
which may be obtained by writing or calling the Fund.  No  additional  charge to
the shareholder is made for this service.

TELEPHONE

The Fund accepts  telephone  requests for redemption from shareholders who elect
this option on their Fund  application.  The proceeds of a telephone  redemption
will be sent to the  shareholder  at their  address  of record or to their  bank
account  as set  forth  in the Fund  application  or in a  subsequent  signature
guaranteed written  authorization.  Redemptions following an investment by check
will not be  processed  until the check has  cleared,  which could take up to 15
days after  investment.  The Fund may accept telephone  redemption  instructions
from any person with respect to accounts of shareholders who elect this service,
and  thus  shareholders  risk  possible  loss of  dividends  in the  event  of a
telephone  redemption  which was not  authorized  by them.  The Fund will employ
reasonable  procedures to confirm that  telephone  redemption  instructions  are
genuine, and will require that shareholders  electing such option provide a form
of personal  identification at the time of such redemption requests. The failure
by the Fund to employ such reasonable procedures may cause the Fund to be liable
for any losses  incurred by investors  due to telephone  redemptions  based upon
unauthorized or fraudulent instructions.

A shareholder making a telephone withdrawal should call the Fund at 212.830.5341
or toll free at 800.221.3079 and state (i) the name of the shareholder appearing
on the Fund's  records;  (ii) the  shareholder's  account  number with the Fund;
(iii) the amount to be withdrawn; (iv) whether such amount is to be forwarded to
the shareholder's designated bank account or address of record; and (v) the name
of the person requesting the redemption.  Usually,  the proceeds are sent to the
designated bank account or address of record on the next Fund Business Day after
the redemption is processed.  The Fund reserves the right to terminate or modify
the telephone redemption service in whole or in part at any time and will notify
shareholders accordingly.

RETIREMENT PLANS AND COVERDELL EDUCATION SAVINGS ACCOUNTS

A shareholder may invest their shares in a "Traditional"  Individual  Retirement
Account ("IRA") or a "Roth" IRA. The  application  for either  investment may be
obtained from the Transfer Agent. The minimum investment required to open an IRA
for investment in shares of the Fund is $250. There is no minimum for additional
investments in an IRA.  Investors who are  self-employed  may purchase shares of
the  Fund  through   tax-deductible   contributions   to  retirement  plans  for
self-employed  persons, known as Keogh or HR 10 plans. Fund shares may also be a
suitable investment for other types of qualified pension or profit-sharing plans
which  are   employer-sponsored,   including  deferred  compensation  or  salary
reduction plans known as "401(k) Plans",  which give  participants  the right to
defer portions of their  compensation  for  investment on a  tax-deferred  basis
until distributions are made from the plans.

                                      -11-
<PAGE>

Under the Internal  Revenue Code of 1986, as amended (the  "Code"),  individuals
may make wholly,  partly, or non-tax deductible traditional IRA contributions of
up to  $5,000  annually  (married  individuals  filing  joint  returns  may each
contribute up to $5,000 ($10,000 in the aggregate), even where one spouse is not
working,  if certain other  conditions  are met),  depending on whether they are
active participants in an employer-sponsored retirement plan and on their income
level.  If you are age 50 or older,  you may make  wholly,  partly,  or  non-tax
deductible  traditional  IRA  contributions  of up to $6,000  annually  (married
individuals  filing  jointly  may  contribute  up to $11,000 if one spouse is 50
years of age or older or $12,000 if both  spouses are 50 years of age or older).
Dividends and distributions held in the account are not taxed until withdrawn in
accordance with the provisions of the Code.

Investors satisfying statutory income level requirements may make non-deductible
contributions of up to $5,000 annually to a Roth IRA. If you are 50 years of age
or older, you may make non-deductible  contributions of up to $6,000 annually to
a Roth IRA.  Distributions from a Roth IRA are not subject to tax if a statutory
five-year  holding period  requirement is satisfied and if the distributions are
made (i) on or after the owner attains age 59 1/2, (ii) to a beneficiary  or the
estate  of the  owner on or after  the  owner's  death,  (iii)  due to the owner
becoming  disabled,  or (iv)  for  certain  first-time  home  purchases.  If you
contribute to both a traditional  IRA and a Roth IRA, the combined  contribution
limit is $5,000 ($6,000 if you are 50 years of age or older).

The Fund also makes available Coverdell  education savings accounts  ("Coverdell
ESAs") which permit eligible  individuals  satisfying  certain  statutory income
level requirements to make non-deductible contributions of up to $2,000 per year
per beneficiary under 18 years old or a special needs beneficiary,  depending on
the individual's income level.  Distributions from a Coverdell ESA are generally
excluded from the beneficiary's  income when used for qualified higher education
expenses and certain  qualified  elementary  and secondary  education  expenses.
Consult your tax adviser.

Investors  should be aware that they may be subject to additional  tax penalties
on  contributions  or withdrawals  from IRAs or other retirement plans which are
not  permitted  by the  applicable  provisions  of the  Code.  Persons  desiring
information concerning investments through IRAs or other retirement plans should
write or telephone  the Fund's  transfer  agent at 600 Fifth Avenue - 8th Floor,
New York, New York 10020, 212.830.5341, or toll free at 800.221.3079.

EXCHANGE PRIVILEGE

Shareholders of the Fund are entitled to exchange some or all of their shares in
the  Fund  for  Class B  shares  (or  other  appropriate  class  of  shares,  as
applicable) of certain other investment companies that retain Reich & Tang Asset
Management,  LLC as  investment  manager and that  participate  in the  exchange
privilege  program with the Fund.  If only one Class of shares is available in a
particular  exchange fund, the shareholders of the Fund are entitled to exchange
their  shares for the shares  available in that  exchange  fund.  Currently  the
exchange privilege program has been established  between the Fund and California
Daily Tax Free Income Fund, Inc.,  Connecticut Daily Tax Free Income Fund, Inc.,
Daily  Income  Fund,  Florida  Daily  Municipal  Income  Fund,  New Jersey Daily
Muniscipal  Income Fund,  Inc. and New York Daily Tax Free Income Fund, Inc. For
an exchange of an IRA, the exchange privilege only applies to the Investor Class
Shares of the Money Market  Portfolio of Daily Income Fund.  In the future,  the
exchange  privilege  program may be extended to other investment  companies that
retain Reich & Tang Asset Management, LLC as investment adviser or manager.

The Fund will provide  shareholders  with 60 days'  written  notice prior to any
modification or discontinuance of the exchange privilege.  An exchange of shares
in the Fund pursuant to the exchange  privilege  is, in effect,  a redemption of
Fund  shares (at net asset  value)  followed  by the  purchase  of shares of the
investment company into which the exchange is made (at net asset value) and will
result in a shareholder  realizing a taxable gain or loss for federal income tax
purposes.

There is no charge for the exchange  privilege or  limitation as to frequency of
exchanges.  However,  a 2% redemption  fee is charged on shares held 90 calendar
days or less.  The  minimum  amount  for an  exchange  is  $1,000,  except  that
shareholders  who are  establishing  a new account  with an  investment  company
through the exchange  privilege  must insure that a sufficient  number of shares
are exchanged to meet the minimum initial investment required for the investment
company into which the exchange is being made. Shares are exchanged at their net
asset value. The exchange privilege is available to shareholders resident in any
state in which shares of the  investment  company being  acquired may legally be
sold.  Before  making an  exchange,  the  investor  should  review  the  current
prospectus  of the  investment  company  into which the  exchange is being made.
Prospectuses  may be obtained by  contacting  the Fund's  transfer  agent at the
address or telephone number listed on the cover of this Prospectus.

Instructions  for exchange  may be made in writing to the Transfer  Agent at the
appropriate  address  listed herein or, for  shareholders  who have elected that
option,  by  telephone.  The Fund  reserves  the  right to reject  any  exchange
request.

                                      -12-
<PAGE>
FREQUENT TRADING

The Reich & Tang family of funds  discourages  short-term  or excessive  trading
("frequent  trading") of their  shares by  shareholders  (including  by means of
exchanges) and maintains procedures reasonably designed to detect and deter such
frequent  trading,  except with  respect to their money market  funds.  Frequent
trading is sometimes  referred to as market timing.  Market timing may take many
forms but commonly  refers to arbitrage  activity  involving the frequent buying
and selling of mutual fund  shares in order to take  advantage  of the fact that
there may be a lag  between a change in the value of a mutual  fund's  portfolio
securities and the reflection of that change in the fund's share price. Frequent
trading  may dilute the value of fund  shares  held by  long-term  shareholders.
Frequent  trading may also interfere  with the efficient  management of a fund's
portfolio,  as it may result in a fund maintaining  higher cash balances than it
otherwise  would  or  cause  a fund to sell  portfolio  securities  at a time it
otherwise would not. Frequent trading may further result in increased  portfolio
transaction (or brokerage) costs,  administrative  and other operating costs and
may cause a fund to realize taxable capital gains or harvest capital losses at a
time that it otherwise would not. For these reasons,  frequent trading poses the
risk  of  lower  returns  for  long-term  shareholders  of a fund.  There  is no
guarantee that these policies and procedures  will be effective in detecting and
preventing frequent trading in whole or in part.

In addition,  while the Fund has no present  intention  to invest a  significant
portion of its assets in foreign  securities,  to the extent that it does invest
in foreign  securities  traded primarily on markets that close prior to the time
the Fund  determines  its NAV,  frequent  trading by some  shareholders  may, in
certain   circumstances,   dilute  the  value  of  Fund  shares  held  by  other
shareholders. This may occur when an event that affects the value of the foreign
security takes place after the close of the primary foreign  market,  but before
the time that the Fund  determines its NAV.  Certain  investors may seek to take
advantage of the fact that there will be a delay in the adjustment of the market
price for a  security  caused by this event  until the  foreign  market  reopens
(referred to as price arbitrage). If this occurs, market timers who attempt this
type of price  arbitrage may dilute the value of the Fund's shares to the extent
they receive shares or proceeds based upon NAVs that have been calculated  using
the closing market prices for foreign securities,  if those prices have not been
adjusted to reflect a change in the fair value of the foreign securities.  In an
effort to prevent price  arbitrage,  the Fund has procedures  designed to adjust
closing market prices of foreign  securities  before the Fund calculates its NAV
when it believes such an event has occurred. Prices are adjusted to reflect what
the Fund  believes are the fair values of these  foreign  securities at the time
the Fund  determines  its NAV (called fair value  pricing).  Fair value pricing,
however, involves judgments that are inherently subjective and inexact, since it
is not  possible to always be sure when an event will affect a market  price and
to what extent.  As a result,  there can be no assurance that fair value pricing
will always eliminate the risk of price  arbitrage.  The risk of price arbitrage
also exists with  thinly-traded  securities in the United  States,  such as some
small cap equity securities.  Such securities are typically less liquid and more
thinly-traded  that  securities of large  capitalization  issuers.  Developments
affecting  issuers  of  thinly-traded  or less  liquid  securities  will  not be
reflected  in  their  market  price  until  the  security  trades  again  in the
marketplace.  Frequent  traders  may seek to exploit  this delay by  engaging in
price  arbitrage,  in this case by buying or selling shares of the Fund prior to
the time of the  adjustment of the market price of securities in its  portfolio.
This may result in the dilution of the value of the Fund's shares.  The Fund may
employ fair value pricing to these types of securities if it determines that the
last quoted market price no longer represents the fair value of the security.

Shareholders  seeking  to engage in  frequent  trading  may  employ a variety of
strategies to avoid  detection and despite the efforts of the Fund,  there is no
guarantee  that  the  Fund's  procedures  will in fact be able to  identify  all
frequent trading or that such activity can be completely eliminated. The ability
of the Fund and its agents to detect and curtail frequent  trading  practices is
limited by operational  systems and technological  limitations.  For example,  a
significant  portion  of the  assets in the Fund may be  invested  by  financial
intermediaries  on behalf of their  clients,  often in  omnibus  accounts  where
individual  shareholder  investments  are aggregated by the  intermediary  and a
single  account is opened  with the Fund.  Omnibus  accounts  are  common  among
financial  intermediaries  and may be  established  for a variety of  legitimate
purposes,  including  promoting  efficiency  of account  administration  and the
privacy  of  customer  financial  information.  When  a  financial  intermediary
maintains  an omnibus  account  with the Fund,  the  identity of the  particular
shareholders that make up the omnibus account is often not known to the Fund.

The Fund does not  always  know and cannot  always  reasonably  detect  frequent
trading  which  may  occur  or  be  facilitated  by  financial   intermediaries,
particularly with regard to trading by shareholders in omnibus  accounts.  There
may exist multiple tiers of omnibus  accounts  within a financial  intermediary,
which  may  further  compound  the  difficulty  to the  Fund and its  agents  of
detecting  frequent  trading in omnibus  accounts.  In addition,  some financial
intermediaries, particularly with respect to group retirement plans, do not have
the ability to apply the Fund's frequent  trading policies and procedures to the
underlying  shareholders  investing in the Fund, either because they do not have
the  systems  capability  to monitor  such  trades or they do not have access to
relevant  information  concerning the underlying  accounts.  In these cases, the
Fund will not be able to determine  whether  frequent  trading by the underlying
shareholders is occurring.  Accordingly,  the ability of the Fund to monitor and
detect frequent trading through omnibus accounts is extremely limited, and there
is no guarantee that the Fund will be able to identify  shareholders  who may be
engaging in frequent trading through omnibus accounts or to curtail

                                      -13-
<PAGE>
such  trading.  In seeking to identify and prevent  frequent  trading in omnibus
accounts,  the Fund will consider the information that is actually  available to
them at the time and  attempt to  identify  suspicious  trading  patterns on the
omnibus account level.

As indicated above under "How to Purchase and Redeem Shares" and under "Exchange
Privilege"  the Fund reserves the right to refuse any purchase or exchange order
for its  shares for any  reason,  including  transactions  deemed by the Fund to
represent  frequent trading activity.  The Fund may change its policies relating
to frequent trading at any time without prior notice to shareholders.

DIVIDENDS, DISTRIBUTIONS AND TAX CONSEQUENCES

The Fund has  elected  to be  treated  as and  intends  to  continue  to qualify
annually as a regulated  investment  company under the Code. By qualifying,  the
Fund  generally  will not be subject to federal income tax to the extent that it
distributes  its investment  company taxable income and net capital gains in the
manner required under the Code.

The Fund  intends to  distribute  substantially  all of its  investment  company
taxable income (which  includes,  among other items,  dividends and interest and
the excess,  if any, of net short-term  capital gains over net long-term capital
losses). The Fund will normally pay dividends  semi-annually.  Generally,  under
current  law,  dividends  from net  investment  income will be taxed as dividend
income  eligible for the maximum  federal income tax rate of 15% for individuals
if certain  holding  period  requirements  are satisfied.  Distributions  of net
realized  short-term  gains generally are taxable as ordinary  income,  which is
taxed at a maximum federal rate of 35%. The Fund intends to distribute, at least
annually,  substantially  all net  capital  gains (the  excess of net  long-term
capital gains over net short-term capital losses).  Capital gains  distributions
designated as capital gains dividends by the Fund within 60 days after the close
of its taxable year are taxable to the shareholders as long-term  capital gains,
irrespective of the length of time a shareholder may have held its stock.  Under
current law,  capital gain dividends are generally  taxable at a maximum federal
rate of 15% for individual shareholders.

You may choose  whether to receive  dividends  and  distributions  in cash or to
reinvest  in  additional  shares  of the Fund at the next  determined  net asset
value, but you will be subject to tax in the manner described herein even if you
choose to have your dividends and distributions reinvested in additional shares.
If you make no election the Fund will make the distribution in shares.  There is
no fixed dividend rate, and there can be no assurance that the Fund will pay any
dividends or realize any capital gains.

You will  recognize a gain or loss when you sell shares of the Fund. The gain or
loss is the difference  between the proceeds of the sale (the net asset value of
the Fund on the date of the sale  times  the  number  of  shares  sold) and your
adjusted tax basis.  Any loss  realized on a taxable  sale of shares  within six
months of the purchase will be treated as a long-term capital loss to the extent
of any net capital gain  distributions  with respect to the shares.  If you sell
shares of a fund at a loss and  purchase  shares of the same fund within 30 days
before or after the sale, a deduction for the loss is generally disallowed.

If the Fund  acquires  futures  contracts,  forward  contracts,  and  options on
futures  contracts,  special tax rules may affect  whether gains and losses from
such  transactions are considered to be short-term or long-term and may have the
effect of deferring  losses  and/or  accelerating  the  recognition  of gains or
losses.

A portion of the ordinary income  dividends paid by the Fund may qualify for the
dividends-received deduction available to corporations.  Long-term capital gains
distributions are not eligible for the dividends-received  deduction.  Corporate
shareholders  will be  notified  at the end of the year as to the  amount of the
dividends that qualify for the  dividends-received  deduction.  A  corporation's
dividends-received  deduction will be disallowed  unless the  corporation  holds
shares in the Fund at least 45 days during the 90 day period  beginning  45 days
before a share of the Fund becomes  ex-dividend  with respect to such  dividend.
Furthermore, a corporation's  dividends-received deduction will be disallowed to
the extent a  corporation's  investment  in shares of the Fund is financed  with
indebtedness.

Any dividend or  distribution  received by a  shareholder  on shares of the Fund
shortly  after the purchase of those shares will have the effect of reducing the
net asset  value of the shares by the amount of the  distribution.  Furthermore,
such  dividend  or  distribution,  although  in effect a return of  capital,  is
subject to  applicable  taxes (to the  extent  that the  investor  is subject to
taxes) regardless of the length of time the investor may have held the stock.

The  Fund  may  be  required  to  withhold  for  federal   income  tax  ("backup
withholding") at a current rate of 28% of the  distributions and the proceeds of
redemptions  payable  to  shareholders  who fail to  provide a correct  taxpayer
identification  number,  to make  required  certifications,  or  where a Fund or
shareholder  has  been  notified  by  the  Internal  Revenue  Service  that  the
shareholder is subject to backup withholding. Corporate shareholders and certain
other  shareholders  specified  in the Code are exempt from backup  withholding.
Backup  withholding  is not an  additional  tax and any amounts  withheld may be
credited against a shareholder's ultimate federal income tax liability if proper
documentation is provided.

If the Fund  invests  in  securities  of foreign  issuers,  it may be subject to
withholding and other similar income taxes imposed by a foreign country.

                                      -14-
<PAGE>

Dividends and distributions  may be subject to state and local taxes.  Dividends
paid or credited to accounts maintained by non-resident shareholders may also be
subject to U.S.  non-resident  withholding  taxes.  You should  consult your tax
adviser regarding specific  questions as to federal,  state and local income and
withholding taxes.  Investors should also review the information regarding taxes
in the Statement of Additional Information.

Notice as to the tax status of your dividends and distributions is mailed to you
annually. You also will receive periodic summaries of your account.

V. DISTRIBUTION ARRANGEMENTS
--------------------------------------------------------------------------------
RULE 12B-1 FEES

Investors do not pay a sales charge to purchase shares of the Fund. However, the
Fund  pays  fees in  connection  with the  distribution  of  shares  and for the
provision of servicing to shareholders. The Fund pays these fees from its assets
on an ongoing  basis and  therefore,  over time,  the payment of these fees will
increase  the cost of your  investment  and may cost you more than paying  other
types of sales charges.

The Fund's Board of Directors has adopted a Rule 12b-1  distribution and service
plan (the "Plan") and, pursuant to the Plan, the Fund and Natixis  Distributors,
L.P. (the "Distributor") have entered into a Distribution Agreement.

Under the Distribution  Agreement,  the Distributor serves as distributor of the
Fund's shares and provides servicing to shareholders and receives a fee of 0.25%
per annum of the Fund's  average daily net assets.  The fee is accrued daily and
paid monthly. The Distributor, at its discretion, may voluntarily waive all or a
portion of the annual 12b-1 fee. Any portion of the fee may be deemed to be used
by the Distributor for payments to Participating Organizations. As agent for the
Fund, the Distributor solicits orders for the purchase of the Fund's shares.

The Plan  provides that the Manager may make payments from time to time from its
own resources, which may include the management fee, administrative services fee
and past  profits  for the  following  purposes:  (i) to pay the costs of and to
compensate  others,   including   Participating   Organizations  with  whom  the
Distributor  has entered into written  agreements,  for  performing  shareholder
servicing  on behalf  of the  Fund;  (ii) to  compensate  certain  Participating
Organizations  for providing  assistance in distributing the shares of the Fund;
and (iii) to pay the costs of the  preparation  and  printing of  brochures  and
other promotional materials, mailings to prospective shareholders,  advertising,
and other promotional  activities,  including the salaries and/or commissions of
sales  personnel of the  Distributor  and other persons,  in connection with the
distribution of the Fund's shares. The Distributor, which is an affiliate of the
Manager, may also make payments from time to time from its own resources,  which
may  include  the fee it  receives  under  the  Distributor  Agreement  and past
profits,  for the purposes  enumerated above. The Distributor will determine the
amount of such payments  made pursuant to the Plan,  provided that such payments
will not  increase  the amount  which the Fund is required to pay to the Manager
and  Distributor  for any fiscal  year under  either the  Investment  Management
Contract or  Administrative  Services  Contract in effect for that year or under
the Distribution Agreement in effect for that year.

The Distributor or an affiliate may, out of its own resources (a source of which
may be the 12b-1  fees paid by the Fund under the Plan) and  without  additional
cost to the  Fund or its  shareholders,  provide  additional  cash  payments  or
non-cash  compensation  to  some  but not all  Participating  Organizations  for
shareholder  services,  as an  incentive  to sell  shares of the Fund  and/or to
promote  retention of their customers' assets in the Fund. These payments may be
referred to as "revenue  sharing"  but do not change the price paid by investors
to purchase the Fund's  shares or the amount the Fund  receives as proceeds from
such sales. Revenue sharing payments may be made to Participating  Organizations
that  provide  services  to the  Fund or its  shareholders,  including  (without
limitation) shareholder servicing, administration,  accounting, transfer agency,
distribution services,  marketing support and/or access to sales meetings, sales
representatives   and   management    representatives   of   the   Participating
Organization.  The Distributor  negotiates the level of payments described above
to any particular  Participating  Organization  with each firm,  based on, among
other things,  the nature and level of services  provided by such  Participating
Organization   and  the   significance  of  the  overall   relationship  of  the
Participating  Organization  to the Manager  and its  affiliates.  Payments  may
result in the Fund's inclusion on a sales list,  including a preferred or select
sales list,  or in other sales  programs;  however,  the  payments  are not made
strictly for the purpose of  achieving  such  inclusion.  Payments may also vary
based on net sales, the length of time assets of a Participating  Organization's
clients  have  remained  in the  Fund,  or other  factors.  The  amount of these
payments may be  significant  and may create an incentive for the  Participating
Organization  to sell shares of the Fund to you or to recommend one fund complex
over another.  Please speak with your  Participating  Organization to learn more
about  payments made to them by the  Distributor or its  affiliates.  Additional
information  regarding  these  payments can be found in the Fund's  Statement of
Additional Information.

                                      -15-
<PAGE>
VI. FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

This financial highlights table is intended to help you understand the financial
performance  of the  shares  of the  Fund  for  the  last  five  years.  Certain
information  reflects  financial  results  for a single  Fund  share.  The total
returns in the table  represent the rate that an investor  would have earned (or
lost) on an investment in the Fund (assuming  reinvestment  of all dividends and
distributions).  This  information  has been derived  from the Fund's  financial
statements audited by  PricewaterhouseCoopers  LLP, whose report, along with the
Fund's  financial  statements,  is  included  in the  annual  report,  which  is
available upon request.

                                                                                YEAR ENDED
                                                                                DECEMBER 31,
                                                       --------------------------------------------------------------
<S>                                                       <C>          <C>          <C>          <C>          <C>
                                                          2007         2006         2005         2004         2003
                                                       ---------     --------     --------     ---------    ---------
PER SHARE OPERATING PERFORMANCE:
(for a share outstanding throughout the year)
Net asset value, beginning of year...............      $  25.64      $ 23.63      $ 25.21      $ 23.17      $ 18.23
                                                       ---------     --------     --------     ---------    ---------
Income from investment operations:
    Net investment income (loss).................          0.16         0.19         0.03        (0.02)       (0.03)
Net realized and unrealized
    gains (losses) on investments................          1.10         4.64         1.49         4.84         7.35
                                                       ---------     --------     --------     ---------    ---------
Total from investment operations.................          1.26         4.83         1.52         4.82         7.32
                                                       ---------     --------     --------     ---------    ---------

Redemption fees received.........................          0.01         0.00  (a)    0.00  (a)    0.00  (a)    0.00  (a)
                                                       ---------     ---------    ---------    ---------    ---------

Less distributions:

    Dividends from net investment income.........         (0.16)       (0.19)       (0.03)          --           --
    Distributions from net realized gains
        on investments...........................         (2.42)       (2.63)       (3.07)       (2.78)       (2.38)
                                                       --------------  ---------    ---------    ---------    -------
Total distributions..............................         (2.58)       (2.82)       (3.10)       (2.78)       (2.38)
                                                       --------------  ---------    ---------    ---------    -------
Net asset value, end of year.....................      $  24.33      $ 25.64      $ 23.63      $ 25.21      $ 23.17
                                                       =========     ========     ========     ========     ========
TOTAL RETURN.....................................          4.90%       20.38%        6.00%       20.85%       40.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's)..................      $ 656,999     $532,108     $372,467    $ 344,605    $ 247,859
Ratios to average net assets:
    Expenses, net of fees waived (b).............          1.28%        1.32%        1.33%        1.32%        1.32%
    Net investment income (loss).................          0.57%        0.82%        0.11%       (0.10%)      (0.32%)
    Shareholder servicing fees waived............          0.05%        0.08%        0.11%        0.14%        0.14%
    Expenses paid indirectly.....................          0.00%        0.00%        0.00%         --          0.00%
    Portfolio turnover rate......................           61%           72%          71%          55%          78%
<FN>
(a) Represents less than $0.01

(b) Includes expenses paid indirectly, if applicable.
</FN>
</TABLE>

                                      -16-
<PAGE>

NATIXIS  DISTRIBUTORS,  L.P.  (THE  "DISTRIBUTOR")  IS A MEMBER OF THE FINANCIAL
INDUSTRY REGULATORY  AUTHORITY ("FINRA").  AS A SERVICE TO INVESTORS,  THE FINRA
HAS ASKED THAT WE INFORM  YOU OF THE  AVAILABILITY  OF A BROCHURE  ON ITS PUBLIC
DISCLOSURE PROGRAM.  THE PROGRAM PROVIDES ACCESS TO INFORMATION ABOUT SECURITIES
FIRMS AND THEIR  REPRESENTATIVES.  INVESTORS MAY OBTAIN A COPY BY CONTACTING THE
FINRA AT 800.289.9999 OR BY VISITING ITS WEBSITE AT WWW.FINRA.ORG.

THE  DISTRIBUTOR  DISTRIBUTES  THE DELAFIELD  FUND, INC. IF YOU HAVE A COMPLAINT
CONCERNING THE DISTRIBUTOR OR ANY OF ITS  REPRESENTATIVES OR ASSOCIATED PERSONS,
PLEASE DIRECT IT TO NATIXIS  DISTRIBUTORS,  L.P., ATTN:  DIRECTOR OF COMPLIANCE,
399 BOYLSTON STREET, BOSTON, MA 02116 OR CALL 800.283.1155, EXT. 2828.


                                 PRIVACY POLICY

--------------------------------------------------------------------------------

We (1) do not disclose to third parties  nonpublic  personal  information  about
current or former customers,  clients or mutual fund shareholders  other than as
described below.

We collect nonpublic personal information about you, such as your name, address,
social security number,  account activity and account balances from your account
application and other forms that you may deliver to us. We use this  information
to provide advisory services to you, to open an account for you, or to process a
transaction  for your account.  In order to service your account and effect your
transactions,  we provide your nonpublic personal  information to our affiliates
and to unaffiliated firms to effect or process transactions for you or to assist
us in servicing your account.

We may also disclose nonpublic  personal  information about you to other service
providers who agree to protect the  confidentiality  of your  information and to
use the information only for the purpose for which the disclosure is made. We do
not otherwise provide nonpublic personal information about you to outside firms,
organizations or individuals except as permitted by law.

We  restrict  access  to  nonpublic  personal  information  about  you to  those
employees who need to know that  information to provide  products or services to
you. We maintain physical, electronic and procedural safeguards that comply with
federal standards to guard your personal information.

--------------------

(1)  For purposes of this notice the term "we"  includes:  the  Delafield  Fund,
     Inc., Reich & Tang Asset Management,  LLC, Reich & Tang Services,  Inc. and
     Natixis Distributors, L.P.


                       THIS IS NOT PART OF THE PROSPECTUS


<PAGE>
A Statement  of  Additional  Information  (SAI) dated April 29,  2008,  includes
additional information about the Fund and its investments and is incorporated by
reference into this Prospectus.  Further  information  about Fund investments is
available in the annual and semi-annual  shareholder  reports. The annual report
includes a discussion of the market  conditions and investment  strategies  that
significantly  affected the Fund's  performance during its last fiscal year. You
may obtain the SAI and the annual and  semi-annual  reports  and other  material
incorporated by reference  without charge by calling the Fund at 212.830.5341 or
toll  free at  800.221.3079.  You may also  obtain  the SAI and the  annual  and
semi-annual shareholder reports without charge by visiting the Fund's website at
HTTP://WWW.DELAFIELDFUND.COM.  To  request  other  information  about  the Fund,
please call your financial intermediary or the Fund.

A current  SAI has been  filed  with the  Securities  and  Exchange  Commission.
Information about the Fund (including the SAI) is also available from the Public
Reference  Room of the Securities  and Exchange  Commission.  Information on the
operation of the Public Reference Room may be obtained by calling the Commission
at 202.551.8090. Fund reports and other information about the Fund are available
on the EDGAR Database on the Commission's  Internet site at  http://www.sec.gov.
Copies of this  information may be obtained,  after paying a duplicating fee, by
electronic request at publicinfo@sec.gov,  or by writing the Commission's Public
Reference Section, Washington, D.C. 20549-0104.


Investment Company No. 811-8054

Delafield Fund, Inc.

600 Fifth Avenue
New York, New York 10020

800.221.3079

[GRAPHIC OMITTED]
Delafield Fund, Inc.

Delafield Fund is distributed by
Natixis Distributors, L.P. (member FINRA, SIPC)              DF4/08P
399 Boylston Street, Boston, MA  02116, 800.862.4863         48566



<PAGE>

                                                       Rule 497(c)
                                                       Registration No. 33-69760
================================================================================
DELAFIELD FUND, INC.                        600 FIFTH AVENUE, NEW YORK, NY 10020
                                                                  (212) 830-5341
                                                       (800) 221-3079 (TOLL FREE
================================================================================
                       STATEMENT OF ADDITIONAL INFORMATION

                                 APRIL 29, 2008
                      RELATING TO THE DELAFIELD FUND, INC.
                         PROSPECTUS DATED APRIL 29, 2008


This Statement of Additional Information (SAI) is not a Prospectus. The SAI
expands upon and supplements the information contained in the current Prospectus
of the Delafield Fund, Inc. (the "Fund"), and should be read in conjunction with
the Fund's Prospectus.

A Prospectus may be obtained from any Participating Organization or by writing
or calling the Fund toll free at (800) 221-3079. The audited Financial
Statements of the Fund have been incorporated by reference into the SAI from the
Fund's Annual Report. The Annual Report is available, without charge, upon
request by calling the toll free number provided. The material relating to the
purchase, redemption and pricing of shares has been incorporated by reference
into the SAI from the Fund's Prospectus.


This SAI is incorporated by reference into the Fund's Prospectus in its
entirety.

<TABLE>
<CAPTION>
<S>                                                   <C>    <C>                                                <C>
                                                 TABLE OF CONTENTS
--------------------------------------------------------------------------------------------------------------------
Fund History......................................... 2      Portfolio Managers..................................13
Description of the Fund and Its Investments and              Brokerage Allocation and Other Practices............15
  Risks...............................................2      Capital Stock and Other Securities..................16
Management of the Fund............................... 5      Purchase, Redemption and Pricing of Shares..........16
Control Persons and Principal Holders of                     Taxation of the Fund................................17
  Securities..........................................9      Underwriters........................................19
Investment Advisory and Other Services............... 9      Financial Statements................................19

-------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

I.  FUND HISTORY

The Fund was incorporated on October 12, 1993 in the state of Maryland.

II.  DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS

The Fund is an open-end, diversified management investment company. The Fund's
investment objectives are to seek long-term preservation of capital (sufficient
growth to outpace inflation over an extended period of time) and growth of
capital. There can be no assurance that the Fund will achieve its investment
objectives. Although not principal strategies, Reich & Tang Asset Management,
LLC (the "Manager") may enter into the following types of transactions or invest
in the following types of instruments as part of its investment strategies. The
Delafield Asset Management division of the Manager ("Delafield") provides the
investment advisory services to the Fund on behalf of the Manager.

(i) Warrants: The Fund may invest in warrants which entitle the holder to buy
equity securities at a specific price for a specific period of time. Warrants
may be considered more speculative than certain other types of investments in
that they do not entitle a holder to dividends or voting rights with respect to
the securities which may be purchased nor do they represent any rights in the
assets of the issuing company. Moreover, the value of a warrant does not
necessarily change with the value of the underlying securities. Also, a warrant
ceases to have value if it is not exercised prior to the expiration date.

(ii) Convertible Securities: The Fund may invest in convertible securities which
may include corporate notes or preferred stock but are ordinarily long-term debt
obligations of the issuer convertible at a stated exchange rate into common
stock of the issuer. As with all debt securities, the market value of
convertible securities tends to decline as interest rates increase and,
conversely, to increase as interest rates decline. Convertible securities
generally offer lower interest or dividend yields than non-convertible
securities of similar quality. However, when the market price of the common
stock underlying a convertible security exceeds the conversion price, the price
of the convertible security tends to reflect the value of the underlying common
stock. As the market price of the underlying common stock declines, the
convertible security tends to trade increasingly on a yield basis, and thus may
not depreciate to the same extent as the underlying common stock. Convertible
securities rank senior to common stocks on an issuer's capital structure and are
consequently of higher quality and generally entail less risk than the issuer's
common stock.

(iii) Foreign Securities: Investments may be made in both domestic and foreign
companies. While the Fund has no present intention to invest any significant
portion of its assets in foreign securities, it reserves the right to invest not
more than 15% of the value of its total assets (at the time of purchase and
after giving effect thereto) in the securities of foreign issuers and obligors.

Investments in foreign companies involve certain considerations which are not
typically associated with investing in domestic companies. An investment may be
affected by changes in currency rates and in exchange control regulations. There
may be less publicly available information about a foreign company than about a
domestic company. Foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards comparable to those
applicable to domestic companies. Foreign stock markets have substantially less
volume than the major U.S. markets and securities of some foreign companies may
be less liquid and more volatile than securities of comparable domestic
companies. There is generally less government regulation of stock exchanges,
brokers and listed companies in foreign countries than in the United States. In
addition, with respect to certain foreign countries, there is a possibility of
expropriation or confiscatory taxation, political or social instability or
diplomatic developments which could affect investments in those countries.
Individual foreign economies may differ favorably or unfavorably from the United
States economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position. There may also be certain valuation issues relating to
foreign securities (see "Purchase, Redemption and Pricing of Shares").

(iv) Corporate Reorganizations: The Fund may invest in securities for which a
tender or exchange offer has been made or announced and in securities of
companies for which a merger, consolidation, liquidation or reorganization
proposal has been announced if, in the judgment of the Manager, there is
reasonable prospect of capital appreciation significantly greater than the
brokerage and other transaction expenses involved. The primary risk of such
investments is that if the contemplated transaction is abandoned, revised,
delayed or becomes subject to unanticipated uncertainties, the market price of
the securities may decline below the purchase price paid by the Fund.

                                       2
<PAGE>

In general, securities which are the subject of such an offer or proposal sell
at a premium to their historic market price immediately prior to the
announcement of the offer or proposal. However, the increased market price of
such securities may also discount what the stated or appraised value of the
security would be if the contemplated transaction were approved or consummated.
Such investments may be advantageous when the discount significantly overstates
the risk of the contingencies involved; significantly undervalues the
securities, assets or cash to be received by shareholders of the prospective
company as a result of the contemplated transaction; or fails adequately to
recognize the possibility that the offer or proposal may be replaced or
superseded by an offer or proposal of greater value. The evaluation of such
contingencies requires unusually broad knowledge and experience on the part of
the Manager which must appraise not only the value of the issuer and its
component businesses, but also the financial resources and business motivation
of the offeror as well as the dynamics of the business climate when the offer or
proposal is in process.

(v) Money Market Instruments: The Fund may invest in "money market instruments,"
which include, among other things, obligations issued or guaranteed by the
United States Government, its agencies or instrumentalities, commercial paper
rated in the highest grade by any nationally recognized rating agency, and
certificates of deposit and bankers' acceptances issued by domestic banks having
total assets in excess of one billion dollars. Commercial paper may include
variable and floating rate instruments. While there may be no active secondary
market with respect to a particular instrument purchased by the Fund, the Fund
may, from time to time as specified in the instrument, demand payment of the
principal of the instrument or may resell the instrument to a third party. The
absence of an active secondary market, however, could make it difficult for the
Fund to dispose of the instrument if the issuer defaulted on its payment
obligation or during periods when the Fund is not entitled to exercise its
demand rights, and the Fund could, for this or other reasons, suffer a loss with
respect to such instrument.

(vi) Investments in Other Investment Companies: The Fund may invest in other
investment companies, which may be affiliated with the Fund. As a shareholder in
any investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees.

(vii) Repurchase Agreements: When the Fund enters into a repurchase agreement,
the Fund requires the continual maintenance of collateral (to be held by a
custodian designated by the Fund, in a segregated account) in an amount equal
to, or in excess of, the vendor's repurchase agreement commitment. The
underlying securities are ordinarily U.S. Treasury or other governmental
obligations or high quality money market instruments. In the event that a vendor
defaults on its repurchase obligation, the Fund might suffer a loss to the
extent that the proceeds from the sale of the collateral are less than the
repurchase price. If the vendor becomes bankrupt, the Fund might be delayed, or
may incur costs or possible losses of principal and income in selling the
collateral. Repurchase agreements may be entered into with member banks of the
Federal Reserve System and other entities the Manager has determined are
creditworthy.

(viii) Investment in Small Unseasoned Companies: The Fund may invest up to 5% of
its total assets in small, less well known companies, which (including
predecessors) have operated less than three years. The securities of such
companies may have limited liquidity.

(ix) Short Sales: The Fund may make short sales of securities. A short sale is a
transaction in which the Fund sells a security it does not own in anticipation
that the market price of that security will decline. The Fund expects to make
short sales both to obtain capital gains from anticipated declines in securities
and as a form of hedging to offset potential declines in long positions in the
same or similar securities. The short sale of a security is considered a
speculative investment technique. When the Fund makes a short sale, it must
borrow the security sold short and deliver it to the broker-dealer through which
it made the short sale in order to satisfy its obligation to deliver the
security upon conclusion of the sale. The Fund may have to pay a fee to borrow
particular securities and is often obligated to pay over any payments received
on such borrowed securities. The Fund's obligation to replace the borrowed
security will be secured by collateral deposited with the broker-dealer, usually
cash, U.S. Government securities or other liquid high grade debt obligations.
The Fund will also be required to deposit in a segregated account established
and maintained with the Fund's custodian, liquid assets to the extent necessary
so that the value of both collateral deposits in the aggregate is at all times
equal to the greater of the price at which the security is sold short or 100% of
the current market value of the security sold short. Depending on arrangements
made with the broker-dealer from which it borrowed the security, the Fund may
not receive any payments (including interest) on its collateral deposited with
such broker-dealer. If the price of the security sold short increases between
the time of the short sale and the time the Fund replaces the borrowed security,
the Fund will incur a loss. Although the Fund's gain is limited to the price at
which it sold the security short, its potential loss is theoretically

                                       3
<PAGE>

unlimited. The market value of the securities sold short of any one issuer will
not exceed either 5% of the Fund's total assets or 5% of such issuer's voting
securities. The Fund will not make a short sale if, after giving effect to such
sale, the market value of all securities sold short exceeds 20% of the value of
its assets or the Fund's aggregate short sales of a particular class of
securities exceeds 20% of the outstanding securities of that class. The Fund may
also make short sales "against the box" without respect to such limitations. In
this type of short sale, at the time of the sale, the Fund owns or has the
immediate and unconditional right to acquire at no additional cost the security.

(x) Restricted Securities: The Fund may invest in securities issued as part of
privately negotiated transactions between an issuer and one or more purchasers.
Except with respect to certain exceptions, these securities are not readily
marketable and are therefore considered illiquid securities. The price the Fund
paid for illiquid securities, and any price received upon resale, may be lower
than the price paid or received for similar securities with a more liquid
market. The Fund will not invest more then 15% of the market value of its net
assets in illiquid securities.

(xi) Lower Rated Securities: The Fund may invest in fixed-income securities,
rated BB or lower by S&P or Ba or lower by Moody's, and comparable unrated
securities. Such securities are of below investment grade quality and are
considered high yield, high risk securities, commonly known as junk bonds.

Investment Restrictions

The Fund has adopted the following fundamental investment restrictions. These
restrictions may not be changed unless approved by a majority of the outstanding
shares of the Fund. The term "majority of the outstanding shares of the Fund"
means the vote of the lesser of (i) 67% or more of the shares of the Fund
present at a meeting, if the holders of more than 50% of the outstanding shares
of the Fund are present or represented by proxy, or (ii) more than 50% of the
outstanding shares of the Fund. The Fund may not:

(1) Issue senior securities, except insofar as the Fund may be deemed to have
    issued a senior security in connection with any permitted borrowing.

(2) Borrow money. This restriction shall not apply to: (i) short-term credits
    from banks as may be necessary for the clearance of purchases and sales of
    securities, and (ii) borrowings from banks for temporary or emergency (not
    leveraging) purposes, including the meeting of redemption requests that
    might therwise require the untimely disposition of securities, in an amount
    up to 15% of the value of the Fund's total assets (including the amount
    borrowed) less liabilities (not including the amount borrowed) at the time
    the borrowing was made. While borrowings exceed 5% of the value of the
    Fund's total assets, the Fund will not make any investments. Interest paid
    on borrowings will reduce net income.

(3) Underwrite the securities of other issuers, except insofar as the Fund may
    be deemed an underwriter under the Securities Act of 1933 in disposing of a
    portfolio security.

(4) Invest more than 25% of its assets in the securities of issuers in any
    single industry.

(5) Purchase or otherwise acquire interests in real estate, real estate mortgage
    loans, commodities or commodity contracts, or interest in oil, gas or other
    mineral exploration or development programs.

(6) Make loans, except through the purchase of debt securities, and by entry
    into repurchase agreements.

(7) Acquire securities that are not readily marketable or repurchase agreements
    calling for resale within more than seven days if, as a result thereof, more
    than 15% of the value of its net assets would be invested in such illiquid
    securities.

(8) Invest in securities of other investment companies, except (i) the Fund may
    purchase unit investment trust securities where such unit trusts meet the
    investment objectives of the Fund and then only up to 5% of the Fund's net
    assets, except as they may be acquired as part of a merger, consolidation or
    acquisition of assets and (ii) further excepted as permitted by section
    12(d) of the Investment Company Act of 1940, as amended (the "40 Act").

(9) Pledge, mortgage, assign or encumber any of the Fund's assets except to the
    extent necessary to secure a borrowing permitted by clause (2) made with
    respect to the Fund.

(10) Purchase the securities of any one issuer, other than the U.S. Government
     or any of its agencies or instrumentalities, if immediately after such
     purchase more than 5% of the value of its total assets would be invested in
     such issuer or

                                       4
<PAGE>

     the Fund would own more than 10% of the outstanding voting securities of
     such issuer, except that up to 25% of the value of the Fund's total assets
     may be invested without regard to such 5% and 10% limitations.

(11) Invest in puts, calls, straddles, spreads or combination thereof.

(12) Participate on a joint or a joint and several basis in any securities
     trading account.

If a percentage restriction is adhered to at the time of an investment, a later
increase or decrease in percentage resulting from a change in values of
portfolio securities or in the amount of the Fund's assets will not constitute a
violation of such restriction.

Disclosure of Portfolio Holdings

The Fund's Board of Directors has adopted the Manager's policies and procedures
relating to the disclosure of Fund portfolio holdings information (the
"Policy"). The Policy prohibits the disclosure of portfolio holdings unless: (1)
the disclosure is in response to a regulatory request and the Chief Compliance
Officer ("CCO") of the Fund has authorized such disclosure; (2) the disclosure
is to a mutual fund rating or statistical agency or person performing similar
functions where there is a legitimate business purpose for such disclosure and
such entity has signed a confidentiality or similar agreement, where available,
with the Fund or its agents and the CCO of the Fund has authorized such
disclosure (procedures to monitor the use of any non-public information by these
entities may include (a) annual certifications relating to the confidentiality
of such information or (b) the conditioning of the receipt of such information
upon the entity agreeing to maintain the confidentiality of the information,
along with other representations, where such representations accompany the
transmittal of the information); (3) the disclosure is made to parties involved
in the investment process, administration or custody of the Fund, including its
Board of Directors; (4) the disclosure is in connection with (a) a quarterly,
semi-annual or annual report that is available to the public or (b) other
periodic disclosure that is publicly available; or (5) the disclosure is made
pursuant to prior written approval of the CCO of the Fund. The Manager shall not
accept on behalf of itself, its affiliates or the Fund any compensation or other
consideration in connection with the disclosure of portfolio holdings of such
Fund. Any disclosure made pursuant to Item 5 above is reported to the Board at
the next quarterly meeting. This Policy may change at any time without prior
notice to shareholders.

Subject to the Fund's policies described in Item 2 above, the Manager and/or the
Fund maintains ongoing arrangements with the following rating or statistical
agencies or agencies providing similar functions pursuant to which non-public
information about the Fund's portfolio securities holdings, including
information derived from such holdings (e.g., breakdown of portfolio holdings by
securities type) may be provided:

<TABLE>
<CAPTION>
ENTITY AND TYPE OF INFORMATION                          FREQUENCY                  LAG TIME
------------------------------                          ---------                  --------
<S>                                                    <C>                        <C>
Investment Company Institute
(information derived from the portfolio)                Monthly                   10 business day lag
</TABLE>

In addition, portfolio holdings information may be provided to the Fund's
service providers on an as-needed basis in connection with the services provided
to the Fund by such service providers. Information may be provided to these
parties without a time lag. Service providers that may be provided with
information concerning the Fund's portfolio holdings include the Manager and its
affiliates, legal counsel, independent registered public accounting firm,
custodian, fund accounting agent, financial printers, proxy voting service
providers and broker-dealers who are involved in executing portfolio
transactions on behalf of the Fund. Portfolio holdings information may also be
provided to the Fund's Board of Directors.

The entities to whom the Fund provides portfolio holdings information, either by
explicit arrangement or by virtue of their respective duties to the Fund, are
required to maintain the confidentiality of the information provided. Neither
the Fund nor the Manager or its affiliates receives any compensation or other
consideration in connection with these ongoing arrangements. There can be no
guarantee that the Policy will be effective in preventing the potential misuse
of confidential information regarding the Fund's portfolio holdings by
individuals or entities in possession of such information.

                                       5
<PAGE>

III.  MANAGEMENT OF THE FUND

The Fund's Board of Directors, which is responsible for the overall management
and supervision of the Fund, employs the Manager to serve as investment manager
of the Fund. Due to the services performed by the Manager, the Fund currently
has no employees and its officers are not required to devote their full time to
the affairs of the Fund.


The Board has an Audit Committee that meets at least annually to assist the
Board in selecting, overseeing and setting the compensation of the Fund's
independent registered public accounting firm. The Audit Committee is
responsible for pre-approving all audit or non-audit services performed by the
independent registered public accounting firm for the Fund and for pre-approving
certain non-audit services performed by the independent registered public
accounting firm for the Manager and certain control persons of the Manager. The
Audit Committee also meets with the Fund's independent registered public
accounting firm to review the Fund's financial statements and to report on its
findings to the Board, and to provide the independent registered public
accounting firm the opportunity to report on various other matters. The members
of the Audit Committee are Edward A. Kuczmarski, Dr. W. Giles Mellon, Robert
Straniere and Dr. Yung Wong. The Audit Committee met five times during the
fiscal year ended December 31, 2007.

The Board has also formed a Nominating Committee comprised of Edward A.
Kuczmarski, Dr. W. Giles Mellon, Robert Straniere and Dr. Yung Wong to whose
discretion the selection and nomination of directors who are not "interested
persons," as defined in the 1940 Act, of the Fund is committed. The Nominating
Committee did not meet during the fiscal year ended December 31, 2007. Nominees
recommended by shareholders are considered by the Nominating Committee to the
extent required by applicable law.

The following table shows the Directors and Executive Officers of the Fund and
their principal occupations during the past five years are set forth below.
Unless otherwise specified, the address of each of the following persons is 600
Fifth Avenue, New York, New York 10020.

<TABLE>
<CAPTION>
<S>                       <C>          <C>        <C>                    <C>                           <C>              <C>
                                                  Directors and Officers Information
---------------------- ----------- ---------------- ------------------------------------------------ --------------  -------------
  Name, Address,       Position(s) Term of Office                 Principal Occupation(s)           Number of         Other
     and Age            Held with   and Length of                       During Past                Portfolios       Directorships
                          Fund     Time Served (1)                        5 Years                   in Fund           held by
                                                                                                    Complex          Director
                                                                                                   Overseen by
                                                                                                    Director
-------------------------------   ------------- ------------------------------------------------  --------------    ---------------
Disinterested Directors:
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------

Edward A. Kuczmarski,  Director    Since 2006   Certified Public Accountant and Partner of Hays &  Director/Trustee  Trustee of the
Age 58                                          Company LLP since 1980.                              of eleven        Empire Builder
                                                                                                     Portfolios      Tax Free Bond
                                                                                                                        Fund and
                                                                                                                     Director of ISI
                                                                                                                         Funds.
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Dr. W. Giles Mellon,   Director    Since 1993   Professor Emeritus of Business Administration in   Director/Trustee     N/A
Age 77                                          the Graduate School of Management, Rutgers              of ten
                                                University with which he hasbeen associated          Portfolios
                                                since 1966.
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Robert Straniere, Esq., Director   Since 1993   Owner, Straniere Law Firm since 1980, NYS           Director/Trustee Director of
Age 67                                          Assemblyman since 1981 to 2004.  Partner,               of ten       Sparx Japan
                                                Hantor-Davidoff law firm since May, 2006.  Partner,   Portfolios        Funds.
                                                Gotham Global Group since June, 2005.  President,
                                                NYC Hot Dog Co., since November, 2005.  Counsel at
                                                Fisher & Fisher from 1995 to 2006.
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Dr. Yung Wong,         Director    Since 1993   Managing Director of Abacus Associates, an          Director/Trustee     N/A
Age 69                                          investment firm, since 1996.                            of ten
                                                                                                     Portfolios

---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
</TABLE>
                                       6
<PAGE>

<TABLE>
<CAPTION>
<S>                       <C>          <C>        <C>                    <C>                           <C>              <C>
                                                  Directors and Officers Information (Cont'd)
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Interested Director/Officers:
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
J. Dennis Delafield,   Chairman    Since 1993   Managing Director of Reich & Tang Asset                 One              None
Age 72                 and                      Management, LLC (the "Manager") since 1991.
                       Director(2)              Mr. Delafield is the Chief Executive Officer and
                                                a Portfolio Manager/Analyst for the Delafield
                                                division of the Manager and has been associated
                                                with the Manager in an investment advisory
                                                capacity since December 1991.
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Christopher Brancazio,   Chief     Since 2007   Vice President, Chief Compliance Officer, AML            N/A            N/A
Age 42                Compliance                Officer and Secretary of the Manager since
                        Officer                 September 2007.    Mr. Brancazio is also Chief
                                                Compliance Officer and AML Officer of eight other
                                                funds in the Reich & Tang Fund Complex.  From
                                                February 2007 to August 2007, Mr. Brancazio was a
                                                Compliance Officer at Bank of New York Asset
                                                Management.  From March 2002 to February 2007 Mr.
                                                Brancazio served as Vice President, Chief
                                                Compliance Officer, and AML Officer of Trainer
                                                Wortham & Co. Inc., and the Trainer Wortham
                                                Mutual Funds.  Mr. Brancazio also serves as Vice
                                                President, Chief Compliance Officer, AML Officer
                                                and Secretary of Reich & Tang Services, Inc. and
                                                Reich & Tang Distributors, Inc.
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Richard De Sanctis,     Vice       Since 2005   Executive Vice President and Chief Operating             N/A            N/A
Age 51                President                 Officer of the Manager and of Reich & Tang
                                                Services, Inc.  Associated with the Manager since
                                                1990. Mr. De Sanctis is also Vice President of
                                                eight other funds in the Reich & Tang Fund
                                                Complex and serves as Executive Vice President
                                                and Chief Financial Officer of Reich & Tang
                                                Distributors, Inc.  Prior to December 2004, Mr.
                                                De Sanctis was Treasurer and Assistant Secretary
                                                of eleven funds in the Reich & Tang Fund Complex
                                                and Vice President, Treasurer and Assistant
                                                Secretary of Cortland Trust, Inc.
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Joseph Jerkovich,        Vice      Since 2008   Senior Vice President and Chief Financial Officer        N/A            N/A
Age 40                President                 of the Manager and of Reich & Tang Services, Inc.
                                                Associated with the Manager since September 2004.
                                                Mr. Jerkovich is Vice President of eight other
                                                funds in the Reich & Tang Fund Complex and is also
                                                Senior Vice President and Controller of Reich & Tang
                                                Distributors, Inc.
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Cleo Kotis,               Chief                 Vice President of the Manager. Ms. Kotis is             N/A            N/A
Age 32                 Operations               also Chief Operations Officer and Vice
                         Officer   Since 2005   President of the Delafield division of the
                                                Manager.  Ms. Kotis has been associated with
                          Vice     Since 2001   Delafield and the Manager since 1993.
                        President
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Michael Lydon,         President   Since 2007   Executive Vice President of the Manager and             N/A            N/A
Age 44                  and                     President and Chief Executive Officer of the
                       Director                 Mutual Funds division of the Manager.  Mr. Lydon
                                                was Vice President at Automatic Data Processing
                                                from July 2000 to December 2004.   Mr. Lydon is
                                                also President and Director/Trustee of four other
                                                funds in the Reich & Tang Fund Complex, President
                                                to New York Daily Tax Free Income Fund, Inc.,
                        Vice                    Director of Pax World Money Market Fund, Inc.,
                      President   2005 to 2007  Principal Executive Officer of Delafield Fund,
                                                Inc. and President and Chief Executive Officer of
                                                Tax Exempt Proceeds Fund, Inc.  Mr. Lydon also
                                                serves as President and Chief Executive Officer
                                                for Reich & Tang Services, Inc.  Prior to
                                                December 2007, Mr. Lydon was Vice President of
                                                eleven other Funds in the Reich & Tang Fund
                                                Complex.

---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
</TABLE>
                                       7
<PAGE>

<TABLE>
<CAPTION>
<S>                       <C>          <C>        <C>                    <C>                           <C>              <C>
                                                 Directors and Officers Information (Cont'd)
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Christine Manna,       Secretary   Since 2007   Vice President and Assistant Secretary of the           N/A            N/A
Age 38                                          Manager. Ms. Manna is also Secretary of eight
                                                other funds in the Reich & Tang Complex.  Ms.
                                                Manna has been associated with the Manager
                                                and its predecessors since June 1995.  Ms.
                                                Manna is also Vice President and Assistant
                                                Secretary of Reich & Tang Services, Inc. and
                                                Reich & Tang Distributors, Inc.
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Anthony Pace,          Treasurer   Since 2004   Vice President of the Manager since September           N/A            N/A
Age 42                     and                  2004.  Mr. Pace was a Director of a Client
                       Assistant                Service Group at GlobeOp Financial Services, Inc.
                       Secretary                from May 2002 to August 2004 and Controller/Director
                                                of Mutual Fund Administration for Smith Barney Funds
                                                Management LLC and Solomon Brothers Asset Management
                                                Inc. from 1998 to May 2002.  Mr. Pace is also
                                                Treasurer and Assistant Secretary of eight other
                                                funds in the Reich & Tang Fund Complex.
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Robert Rickard,       Vice         Since 2007   Senior Vice President of the Manager. Associated        N/A            N/A
Age 39                President                 with the Manager since December 1991. Mr. Rickard
                                                is also Vice President of eight other funds in the
                                                Reich & Tang Fund Complex and is also Senior Vice
                                                President of Reich & Tang Distributors, Inc.
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------
Vincent Sellecchia,    President   Since 1993   Managing Director of the Manager since                  N/A             N/A
Age 56                                          1998.  Associated with the Manager in an
                                                investment advisory capacity since December
                                                1991. Mr. Sellecchia is  also Chief Investment
                                                Officer and Chief Operating Officer of the
                                                Delafield division of the Manager.
---------------------- --------   ------------- ------------------------------------------------  --------------    ---------------

<FN>
(1)  Each Director will hold office for an indefinite term until the earliest of
     (i) the next meeting of shareholders, if any, called for the purpose of
     considering the election or re-election of such Director and until the
     election and qualification of his or her successor, if any, elected at such
     meeting, or (ii) the date a Director resigns or retires, or a Director is
     removed by the Board of Directors or shareholders, in accordance with the
     Fund's Articles of Incorporation, as amended, and Amended and Restated
     By-Laws. Each officer will hold office for an indefinite term until the
     date he or she resigns or retires or until their successor is elected and
     qualifies.

(2)  J. Dennis Delafield is deemed an interested person of the Fund, as defined
     in the 1940 Act, due to his affiliation with the Manager.
</FN>
</TABLE>

<TABLE>
<CAPTION>
The following table shows the dollar range of Fund shares beneficially owned by
each director as of December 31, 2007:

----------------------------------------------- --------------------------------------- --------------------------------------------
                                                                                             AGGREGATE DOLLAR RANGE OF EQUITY
               NAME OF DIRECTOR                         DOLLAR  RANGE                     SECURITIES IN ALL FUNDS OVERSEEN OR TO BE
                                                   OF EQUITY SECURITIES IN THE FUND      OVERSEEN BY DIRECTOR OR NOMINEE IN FAMILY
                                                                                                  OF INVESTMENT COMPANIES
----------------------------------------------- --------------------------------------- --------------------------------------------
DISINTERESTED DIRECTORS:
----------------------------------------------- --------------------------------------- --------------------------------------------
<S>                                                       <C>                                        <C>
Edward A. Kuczmarski                                      $10,001 - $50,000                          $10,001 - $50,000
Dr. W. Giles Mellon                                       $10,001 - $50,000                            Over $100,000
Robert Straniere                                          $50,001 - $100,000                         $50,001 - $100,000
Dr. Yung Wong                                               Over $100,000                              Over $100,000

----------------------------------------------- --------------------------------------- --------------------------------------------
INTERESTED DIRECTOR:
----------------------------------------------- --------------------------------------- --------------------------------------------
J. Dennis Delafield                                         Over $100,000                              Over $100,000
----------------------------------------------- --------------------------------------- --------------------------------------------
</TABLE>

                                       8
<PAGE>

The Fund paid an aggregate remuneration of $51,000 to its directors with respect
to the period ended December 31, 2007, all of which consisted of directors fees
paid to the four disinterested directors, pursuant to the terms of the
Investment Management Contract (See "Investment Advisory and Other Services"
herein).

Effective January 1, 2008, Directors of the Fund not affiliated with the Manager
receive from the Fund an annual retainer of $10,000 and a fee of $1,000 for each
Board of Directors meeting attended and are reimbursed for all out-of-pocket
expenses relating to attendance at such meetings. In addition, the Audit
Committee chairman receives an additional annual fee of $1,000 and the Lead
Independent Director will receives an additional annual fee of $2,000, both fees
paid quarterly. Directors who are affiliated with the Manager do not receive
compensation from the Fund. (See "Compensation Table".)

<TABLE>
<CAPTION>
                               COMPENSATION TABLE
                           AGGREGATE COMPENSATION    PENSION OR RETIREMENT       ESTIMATED ANNUAL       TOTAL COMPENSATION FROM
     NAME OF PERSON,            FROM THE FUND      BENEFITS ACCRUED AS PART  BENEFITS UPON RETIREMENT  FUND AND FUND COMPLEX PAID
         POSITION                                      OF FUND EXPENSES                                      TO DIRECTORS*

<S>                                <C>                        <C>                      <C>                 <C>
Edward A. Kuczmarski               $13,000                     0                        0                  $105,375 (10 Fund)
Director

Dr. W. Giles Mellon,               $12,000                     0                        0                  $82,500 (9 Funds)
Director

Robert Straniere,                  $12,000                     0                        0                  $82,500 (9 Funds)
Director

Dr. Yung Wong,                     $14,000                     0                        0                  $96,500 (9 Funds)
Director

<FN>
*    The total compensation paid to such persons by the Fund and Fund Complex
     for the fiscal year ending December 31, 2007. The parenthetical number
     represents the number of investment companies (including the Fund) from
     which such director receive compensation. A Fund is considered to be part
     of the same complex if, among other things, it shares a common investment
     adviser with the Fund.
</FN>

</TABLE>

Proxy Voting Policies

The Board of Directors has delegated responsibility to vote proxies to the
Manager, subject to the Board's oversight. The Manager's proxy voting policies
and procedures, attached as Appendix A to the Statement of Additional
Information, are reviewed periodically, and accordingly are subject to change.
Information regarding the Fund's proxy voting record for the 12 month period
ending June 30 of each year is filed with the Securities and Exchange Commission
("SEC") on Form N-PX no later than August 31 of each year. The Fund's Form N-PX
is available without charge, upon request, by calling the Fund at (800) 221-3079
and on the SEC's website (http//www.sec.gov).

Code of Ethics

The Fund, the Manager and the Distributor have each adopted a Code of Ethics
under Rule 17j-1 of the 1940 Act. These codes of ethics restrict the personal
investing by certain access persons of the Fund in securities that may be
purchased or held by the Fund to ensure that such investments do not
disadvantage the Fund. These codes of ethics are filed as exhibits to the Fund's
registration statement and instructions concerning how these documents can be
obtained may be found on the back cover of the Fund's Prospectus.

                                       9
<PAGE>

IV.  CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

On March 31, 2008 there were 25,283,398 shares of the Fund outstanding. As of
March 31, 2008, the amount of shares owned by all officers and directors of the
Fund, as a group, was 4.43% of the outstanding shares. Set forth below is
certain information as to persons who owned 5% or more of the Fund's outstanding
shares as of March 31, 2008:



<TABLE>
<CAPTION>

NAME AND ADDRESS                                                       % OF CLASS                    NATURE OF OWNERSHIP

<S>                                                                      <C>                               <C>
Charles Schwab and Company                                               22.49%                            Record
Special Custody Account for the
Exclusive Benefit of Customers
101 Montgomery Street
Attn:  Mutual Funds
San Francisco,  CA  94104-4151

National Financial Services Corp.                                        13.85%                            Record
Exclusive Benefit Of Our Customers
One World Financial Center
200 Liberty Street
Attn:  Mutual Fund 5th Floor
New York,  NY  10281-1003

Ameritrade                                                                6.01%                            Record
P.O. Box 2226
Omaha, NE 68103-2226

Charles Schwab and  Company Special Custody Account for the               5.17%                            Record
Exclusive Benefit of Customers
101 Montgomery Street
Attn:  Mutual Funds
San Francisco,  CA  94104-4151

</TABLE>

V.  INVESTMENT ADVISORY AND OTHER SERVICES

The investment manager for the Fund is the Delafield Asset Management Division
of Reich & Tang Asset Management, LLC, a Delaware limited liability company with
principal offices at 600 Fifth Avenue, New York, New York, 10020. The Manager
was as of March 31, 2008, investment manager, adviser, or sub-adviser with
respect to assets aggregating in excess of $17.8 billion. The Manager has been
an investment adviser since 1970 and currently is manager or sub-adviser of
seventeen portfolios of registered investment companies, of which it acts as
administrator for twelve. The Manager also advises high net worth individuals,
private funds, pension trusts, profit-sharing trusts and endowments.

The Manager is a direct subsidiary of Natixis Global Asset Management, L.P.
(formerly IXIS Asset Management US Group, L.P.) which owns, in addition to the
Manager, a number of other asset management and distribution and service
entities. Natixis Global Asset Management, L.P. is part of Natixis Global Asset
Management (formerly IXIS Asset Management Group), an international asset
management group based in Paris, France, that is ultimately owned principally,
directly or indirectly, by three large French financial services entities:
Natixis, an investment banking and financial services firm; the Caisse Nationale
des Caisses d'Epargne ("CNCE"), a financial institution owned by French regional
savings banks known as the Caisses d'Epargne; and Banque Federale des Banques
Populaires ("BFBP"), a financial institution owned by regional cooperative banks
known as the Banques Populaires. Natixis, CNCE and BFBP (the "Affiliated
Owners") each owns, directly or indirectly, other investment advisers
established in various jurisdictions. Natixis Global Asset Management, L.P.,
which owns the Manager and is indirectly owned by the Affiliated Owners, is the
direct and indirect owner of various investment advisers.

                                       10
<PAGE>

The fifteen affiliated asset management firms of Natixis Global Asset
Management, L.P. collectively, have more than $291.4 billion in assets under
management or administration as of March 31, 2008.

The Board of Directors, including a majority of the directors who are not
interested persons (as defined in the 1940 Act) of the Fund or the Manager, most
recently approved the Investment Management Contract on June 7, 2007, for a term
extending until June 30, 2008. The contract may be continued in force for
successive twelve-month periods beginning each July 1, provided that such
contract is approved by a majority vote of the Fund's outstanding voting
securities or by a majority of the directors who are not parties to the
Investment Management Contract or interested persons of any such party, by votes
cast in person at a meeting called for the purpose of voting on such matter.

Pursuant to the Investment Management Contract, the Manager manages the Fund's
portfolio of securities and makes decisions with respect to the purchase and
sale of investments, subject to the general control of the Board of Directors of
the Fund. The Manager also provides persons satisfactory to the Board of
Directors of the Fund to serve as officers of the Fund.

The Investment Management Contract is terminable without penalty by the Fund on
sixty days' written notice when authorized either by majority vote of its
outstanding voting shares or by a vote of a majority of its Board of Directors,
or by the Manager on sixty days' written notice, and will automatically
terminate in the event of its assignment. The Investment Management Contract
provides that in the absence of willful misfeasance, bad faith or gross
negligence on the part of the Manager, or of reckless disregard of its
obligations thereunder, the Manager shall not be liable for any action or
failure to act in accordance with its duties thereunder.

Under the Investment Management Contract, the Fund will pay a management fee at
an annual rate of 0.80% on the first $250 million of net assets of the Fund;
0.75% on the next $250 million of net assets of the Fund; 0.70% on the next $500
million of net assets of the Fund; and 0.65% on all net assets of the Fund over
$1 billion. The fees are accrued daily and paid monthly. Any portion of the
total fees received by the Manager may be used by the Manager to provide
shareholder services and for distribution of Fund shares. For the fiscal years
ended December 31, 2007, December 31, 2006 and December 31, 2005, the Manager
received management fees as set forth in the table below:

<TABLE>
<CAPTION>
                                 Management Fees

<S>                                      <C>                                <C>                 <C>
 FISCAL YEAR ENDED                       PAYABLE                            WAIVED              PAID
----------------------------------------------------------------------------------------------------------
 December 31, 2007                       $5,081,616                         $0                  $5,081,616
----------------------------------------------------------------------------------------------------------
 December 31, 2006                       $3,422,020                         $0                  $3,422,020
----------------------------------------------------------------------------------------------------------
 December 31, 2005                       $2,836,766                         $0                  $2,836,766
----------------------------------------------------------------------------------------------------------

</TABLE>

The Fund's net assets at the close of business on December 31, 2007 totaled
$656,999,369.

Pursuant to the Administrative Services Contract with the Fund, the Manager also
performs clerical, accounting supervision, office service and related functions
for the Fund and provides the Fund with personnel to (i) supervise the
performance of accounting related services by The Bank of New York, the Fund's
accounting agent, (ii) prepare reports to and filings with regulatory
authorities, and (iii) perform such other services as the Fund may from time to
time request of the Manager. The personnel rendering such services may be
employees of the Manager, of its affiliates or of other organizations. The
Manager, at its discretion, may voluntarily waive all or a portion of the
administrative services fee. For its services under the Administrative Services
Contract, the Manager receives from the Fund a fee equal to 0.21% per annum of
the Fund's average daily net assets. For the fiscal years ended December 31,
2007, December 31, 2006 and December 31, 2005, the Manager received the
administrative fees as set forth in the table below:

                                       11
<PAGE>

<TABLE>
<CAPTION>

                               Administrative Fees

<S>                                       <C>                              <C>                  <C>
 FISCAL YEAR ENDED                        PAYABLE                          WAIVED               PAID
---------------------------------------- ------------------------------- -----------------------------------
 December 31, 2007                       $1,411,985                        $0                  $1,411,985
---------------------------------------- ------------------------------- ---------------------------- ------
 December 31, 2006                        $923,166                         $0                   $923,166
------------------------------ ------------------------------- ---------------------------- ----------------
 December 31, 2005                        $759,295                         $0                   $759,295
        ------------------------------ ------------------------------- ---------------------------- --------
</TABLE>

The Manager at its discretion may waive its rights to any portion of the
management fee or the administrative services fee and may use any portion of
these fees for purposes of shareholder and administrative services and for
distribution of the Fund's shares. There can be no assurance that such fees will
be waived in the future.

Additional expenses for shareholder services and distribution services provided
by Participating Organizations to Fund shareholders may be compensated for by
the Fund's distributor from its own resources which includes the fee it receives
under the Distribution Agreement and by the Manager from its own resources which
includes the management and/or administrative services fee and past profits.
"Participating Organizations" include securities brokers, banks and financial
institutions or other industry professionals or organizations which have entered
into agreements with the Fund's distributor with respect to investment of their
customer accounts in the Fund.

Distribution and Service Plan

The Fund's distributor is Natixis Distributors, L.P. (the "Distributor"), a
Delaware limited partnership with principal offices at 399 Boylston Street,
Boston, Massachusetts 02116. Pursuant to Rule 12b-1 under the 1940 Act, the SEC
has required that an investment company which bears any direct or indirect
expense of distributing its shares must do so only in accordance with a plan
permitted by the Rule. The Fund's Board of Directors has adopted a distribution
and service plan (the "Plan") and, pursuant to the Plan, the Fund has entered
into a Distribution Agreement with the Distributor.


Under the Distribution Agreement, the Distributor serves as distributor of the
Fund's shares and provides servicing to shareholders and receives a fee of 0.25%
per annum of the Fund's average daily net assets. The fee is accrued daily and
paid monthly. Any portion of the fee may be deemed to be used by the Distributor
for payments to Participating Organizations.


The following table provides the total fees paid by the Fund pursuant to the
Plan and the manner in which payments were made pursuant to the Plan for certain
types of activities for the fiscal year ended December 31, 2007:

<TABLE>
<CAPTION>
------------------------------------------------------------------------ -------------------
<S>                                                                             <C>
TOTAL FEES PAID BY THE FUND UNDER THE PLAN:                                     $1,340,430
------------------------------------------------------------------------ -------------------
PAYMENTS MADE BY THE MANAGER AND DISTRIBUTOR TO OR ON BEHALF OF                 $1,439,854
PARTICIPATING ORGANIZATIONS:
------------------------------------------------------------------------ -------------------
BREAKDOWN OF PAYMENTS MADE PURSUANT TO THE PLAN FOR CERTAIN TYPES OF ACTIVITIES:
------------------------------------------------------------------------ -------------------
    ADVERTISING:                                                                $0
------------------------------------------------------------------------ -------------------
    PRINTING AND MAILING OF PROSPECTUSES TO OTHER THAN CURRENT
    SHAREHOLDERS:                                                               $4,971
------------------------------------------------------------------------ -------------------
    COMPENSATION TO UNDERWRITERS:                                               $0
------------------------------------------------------------------------ -------------------
    COMPENSATION TO BROKER-DEALERS:                                             $1,439,854
------------------------------------------------------------------------ -------------------
    COMPENSATION TO SALES PERSONNEL:                                            $0
------------------------------------------------------------------------ -------------------
    INTEREST, CARRYING OR OTHER FINANCING CHARGES:                              $0
------------------------------------------------------------------------ -------------------
    TRAVEL AND ENTERTAINMENT FOR SALES PERSONNEL:                               $0
------------------------------------------------------------------------ -------------------
    MISCELLANEOUS EXPENSES:                                                     $0

------------------------------------------------------------------------ -------------------
</TABLE>

                                       12
<PAGE>

For the fiscal year ended December 31, 2007, the total amount spent pursuant to
the Plan was 0.22% of the average daily net assets of the Fund, of which 0.20%
of the average daily net assets was paid by the Fund to the Distributor,
pursuant to the Shareholder Servicing Agreement, and an amount representing
0.02% was paid by the Manager (which may be deemed an indirect payment by the
Fund).

The Plan provides that the Manager may make payments from time to time from its
own resources, which may include the management fee, administrative services fee
and past profits for the following purposes: (i) to pay the costs of and to
compensate others, including Participating Organizations with whom the
Distributor has entered into written agreements, for performing shareholder
servicing on behalf of the Fund; (ii) to compensate certain Participating
Organizations for providing assistance in distributing the shares of the Fund;
and (iii) to pay the costs of the preparation and printing of brochures and
other promotional materials, mailings to prospective shareholders, advertising,
and other promotional activities, including the salaries and/or commissions of
sales personnel of the Distributor and other persons in connection with the
distribution of the Fund's shares. The Distributor, which is an affiliate of the
Manager, may also make payments from time to time from its own resources, which
may include the fee it receives under the Distribution Agreement and past
profits, for the purposes enumerated above. The Distributor will determine the
amount of such payments made pursuant to the Plan, provided that such payments
will not increase the amount which the Fund is required to pay to the Manager
and Distributor for any fiscal year under either the Investment Management
Contract or Administrative Services Contract in effect for that year or under
the Distribution Agreement in effect for that year.

The Distributor or an affiliate may, out of its own resources (a source of which
may be the 12b-1 fees paid by the Fund under the Plan), and without additional
cost to the Fund or its shareholders provide additional cash payments or
non-cash compensation to some but not all Participating Organizations for
shareholder services, as an incentive to sell shares of the Fund and/or to
promote retention of their customers' assets in the Fund. These payments may be
referred to as "revenue sharing," but do not change the price paid by investors
to purchase the Fund's shares or the amount the Fund receives as proceeds from
such sales. Revenue sharing payments may be to Participating Organizations that
provide services to the Fund or its shareholders, including (without limitation)
shareholder servicing, administration, accounting, transfer agency and/or
distribution services, marketing support and/or access to sales, meetings, sales
representatives and management representatives of the Participating
Organization. The Distributor negotiates the level of payments described above
to any particular Participating Organization with each firm, based on, among
other things, the nature and level of services provided by such Participating
Organization and the significance of the overall relationship of the
Participating Organization to the Manager and its affiliates. Payments may
result in the Fund's inclusion on a sales list, including a preferred or select
sales list, or in other sales programs; however, the payments are not made
strictly for the purpose of achieving such inclusion. Payments may also vary
based on net sales, the length of time assets of a Participating Organization's
clients have remained in the Fund, or other factors. In some cases where the
Participating Organization provides shareholder services to Fund shareholders,
cash compensation may be paid to Participating Organizations as an expense
reimbursement. From time to time, the Distributor or an affiliate may also pay
non-cash compensation to sales representatives of the Participating Organization
in the form of (i) occasional gifts; (ii) occasional meals, tickets or other
entertainment; and/or (iii) sponsorship support of regional or national events
of Participating Organizations. In addition, the Distributor or an affiliate may
conduct and/or pay for training and education meetings for sales representatives
of unaffiliated broker-dealers that sell the Fund, and may pay or reimburse for
associated meals, lodging and transportation. The amount of these payments may
be significant and may create an incentive for the Participating Organization to
sell shares of the Fund to you or to recommend one fund complex over another.
Please speak with your Participation Organization to learn more about payments
made to them by the Distributor or its affiliates.

In accordance with the Rule, the Plan requires the Fund and the Distributor to
prepare, at least quarterly, written reports setting forth all amounts expended
pursuant to the Plan and identifying the servicing and distribution activities
for which those expenditures were made.

The Plan provides that it may continue in effect for successive annual periods
provided it is approved by the Fund's shareholders or by the Board of Directors,
including a majority of directors who are not interested persons of the Fund

                                       13
<PAGE>

and who have no direct or indirect interest in the operation of the Plan or in
the agreements related to the Plan. The Plan was most recently approved by the
Board of Directors on June 7, 2007 and will remain in effect until June 30,
2008. The Plan further provides that it may not be amended to increase
materially the amounts which may be spent by the Fund pursuant to the Plan
without shareholder approval, and that other material amendments must be
approved by the Board of Directors in the manner described in the preceding
sentence. The Plan may be terminated at any time by a vote of a majority of the
disinterested directors of the Fund or the Fund's shareholders.

Custodian and Transfer Agent

The Bank of New York Mellon, 2 Hanson Place - 7th Floor, Brooklyn, NY 11217, is
custodian for the Fund's cash and securities. Reich & Tang Services, Inc.
("Reich & Tang"), an affiliate of the Fund's Manager, located at 600 Fifth
Avenue, New York, NY 10020, is transfer agent and dividend agent for the shares
of the Fund. As transfer agent, Reich & Tang performs various functions
including the processing of shareholder purchase, redemption and exchange
transactions and the maintenance of shareholder records regarding such
transactions. As dividend agent, Reich & Tang makes dividend payments to Fund
shareholders on behalf of the Fund and performs certain recordkeeping and
reporting functions regarding such payments. Pursuant to the Transfer Agency
Agreement between Reich & Tang and the Fund, Reich & Tang, as transfer agent and
dividend agent, receives a fee of $17.40 per account per year or a minimum of
0.05% of the monthly average net assets of the shares of the Fund. The custodian
and transfer agent do not assist in, and are not responsible for, investment
decisions involving assets of the Fund.

Counsel and Independent Registered Public Accounting Firm

Legal matters in connection with the issuance of shares of stock of the Fund are
passed upon by Paul, Hastings, Janofsky & Walker LLP, 75 East 55th Street, New
York, NY 10022. PricewaterhouseCoopers LLP, PricewaterhouseCoopers Center, 300
Madison Avenue, New York, NY 10017, independent registered public accounting
firm, have been selected as the independent registered public accountants for
the Fund.

VI.  PORTFOLIO MANAGERS

Other Accounts Managed

The following table provides information relating to other accounts managed by
Mr. Delafield and Mr. Sellecchia, the Fund's portfolio managers, as of December
31, 2007:

<TABLE>
<CAPTION>
                 Number of Other Accounts Managed and Total     Number of Accounts and Total Assets for
Name of                    Assets by Account Type               Which Advisory Fee is Performance Based
Portfolio
Manager

---------------- -------------------------------------------- ------------------------------------------
                  Registered    Other Pooled                   Registered    Other Pooled
                  Investment     Investment        Other       Investment     Investment        Other
                   Companies      Vehicles       Accounts       Companies      Vehicles       Accounts
---------------- -------------- -------------- -------------- -------------- -------------- ------------
<S>                  <C>             <C>            <C>            <C>           <C>             <C>
J. Dennis
Delafield              2              5             78              0             0              1
                  $88,949,384    $80,671,190    $357,858,799     $0.00          $0.00        $73,054,388
---------------- -------------- -------------- -------------- -------------- -------------- ------------
Vincent
Sellecchia             2              5             78              0             0              1
                  $88,949,384    $80,671,190    $357,858,799     $0.00          $0.00        $73,054,388

---------------- -------------- -------------- -------------- -------------- -------------- ------------
</TABLE>

                                       14
<PAGE>

Compensation

The compensation of Messrs. Delafield and Sellecchia in connection with their
management of the Fund includes the following components, each of which is
defined below: (1) base salary, (2) profit interest in the Delafield division of
the Manager and (3) unit appreciation rights.

Base Salary:

The  Portfolio  Managers  each receive a fixed  annual base salary.  Base salary
amounts are determined by the Manager and approved by the compensation committee
of the Manager's  parent  company  Natixis  Global Asset  Management,  L.P. (the
"Compensation  Committee" and "Natixis," respectively) based  upon  a  number
of  factors  including  each Portfolio Manager's experience, overall
performance,  responsibilities,  and the competitive market place.

Delafield Asset Management Profit Interest:

Each Portfolio Manager receives a percentage of the profits generated on an
annual basis by the Delafield division. The Delafield division's income and
profits consist primarily of the fees that it receives for managing
discretionary equity assets for individual and institutional clients, including
the Fund.

Unit Appreciation Rights:

Each Portfolio Manager receives unit appreciation rights ("UARs") under Natixis'
Long-Term Incentive Plan ("LTIP"). A UAR is a hypothetical equity interest in
Natixis. The value of a UAR will generally rise based on the financial
performance of Natixis. The number of UARs granted is determined by the
Compensation Committee on an annual basis. The Portfolio Managers participate in
the LTIP on the same terms as non-portfolio manager employees and the number of
UARs granted to each of the Portfolio Managers is not directly related to
investment performance.

Potential Conflicts of Interest

As indicated in the table above, Mr. Delafield and Mr. Sellecchia (the
"Portfolio Managers") manage other accounts in addition to the Fund. The
Portfolio Managers' management of these other accounts may give rise to
potential conflicts of interest. These potential conflicts include those that
may arise as a result of the structure of the Portfolio Managers' compensation
as well as conflicts relating to the selection and allocation of investment
opportunities. The Manager has adopted policies and procedures that are designed
to identify and minimize the effects of these potential conflicts. However,
there can be no guarantee that these policies and procedures will be effective
in detecting potential conflicts or in eliminating the effects of any such
conflicts.

Certain components of the Portfolio Managers' compensation structure (or that of
the Manager) may give rise to potential conflicts of interest to the extent that
the Portfolio Managers may have an incentive to favor or devote more effort in
managing an account or accounts that impact, or impact to a larger degree, their
overall compensation or the overall compensation of the Manager. In particular,
Mr. Delafield and Mr. Sellecchia manage accounts for which the Manager is paid a
fee based on the performance of such accounts. In comparison, the Manager does
not receive a performance-based fee in connection with the management of the
Fund. Although neither Mr. Delafield nor Mr. Sellecchia is directly compensated
on the basis of the performance fee, they may have an incentive to favor those
accounts to the disadvantage of the Fund. In addition, as described above, both
Portfolio Managers receive a portion of the profits generated by the Delafield
division and such profits are generally derived from the fees the Delafield
division receives from managing the Fund and other accounts. To the extent that
certain accounts have the potential to generate more profits for the Delafield
division than does the Fund, the Portfolio Managers may have an incentive to
favor such other accounts.

                                       15
<PAGE>

Due to the fact that the Portfolio Managers manage multiple accounts with
similar objectives, and thus frequently purchase and sell the same securities
for such accounts, certain allocation issues may arise. In particular, if a
Portfolio Manager identifies a limited investment opportunity which may be
suitable for the accounts, the Fund may not be able to take full advantage of
that opportunity due to an allocation of filled purchase or sale orders across
all eligible accounts. In addition, in the event a Portfolio Manager determines
to purchase a security for more than one account in an aggregate amount that may
influence the market price of the security, accounts that purchased or sold the
security first may receive a more favorable price than accounts that made
subsequent transactions. The less liquid the market for the security, or the
greater the percentage that the proposed aggregate purchases or sales represent
of average daily trading volume, the greater the potential for accounts that
make subsequent purchases or sales to receive a less favorable price.

When consistent with the Manager's duty to seek best execution on behalf of its
clients, orders for multiple accounts, including the Fund, may be aggregated for
execution. To the extent that equity trades are aggregated, securities purchased
or sold are allocated to the participating accounts in the manner the Manager
determines to be the most fair and equitable consistent with its fiduciary
duties to its clients.

The Manager will allocate investment opportunities, including the opportunity of
investment in initial public offerings, based on a number of considerations,
including cash availability and/or liquidity requirements, investment objectives
and restrictions, tax considerations and relative size of portfolio holdings of
the same or comparable securities. The Manager may allocate a disproportionate
amount of a trade to one or more accounts. When the Manager is trading in a very
liquid security, the Manager may allocate trades pro rata on the basis of the
orders placed.

When trade orders are aggregated, each account that participates in such order
will generally receive the average price paid for such securities. Orders for
certain accounts may, due to cash availability, investment restrictions or
otherwise, not be eligible to participate in such aggregate transactions and
could therefore potentially receive a less favorable price or allocation than
the accounts for which such orders were aggregated. The Manager's policies and
procedures are designed to minimize the risk that an account could be
systematically advantaged or disadvantaged in connection with the allocation of
investment opportunities and aggregation of trade orders. Nevertheless, there
can be no assurance that such policies and procedures will be effective in
preventing instances where one account is advantaged or disadvantage over
another.

Ownership of Fund Securities

As of December 31, 2007, Mr. Delafield and Mr. Sellecchia each beneficially
owned more than $1,000,001 worth of equity securities in the Fund.

VII. BROKERAGE ALLOCATION AND OTHER PRACTICES

The Manager makes the Fund's portfolio decisions and determines the broker to be
used in each specific transaction with the objective of negotiating a
combination of the most favorable commission and the best price obtainable on
each transaction (generally defined as best execution). When consistent with the
objective of obtaining best execution, brokerage may be directed to persons or
firms supplying investment information to the Manager or portfolio transactions
may be effected by the Manager. To the extent that such persons or firms supply
investment information to the Manager for use in rendering investment advice to
the Fund, such information may be supplied at no cost to the Manager and,
therefore, may have the effect of reducing the expenses of the Manager in
rendering advice to the Fund. While it is impossible to place an actual dollar
value on such investment information, its receipt by the Manager probably does
not reduce the overall expenses of the Manager to any material extent.

The investment information provided to the Manager is of the type described in
Section 28(e) of the Securities Exchange Act of 1934 and is designed to augment
the Manager's own internal research and investment strategy capabilities.
Research services furnished by brokers through which the Fund effects securities
transactions are used by the Manager in carrying out its investment management
responsibilities with respect to all its client

                                       16
<PAGE>

accounts. There may be occasions where the transaction cost charged by a broker
may be greater than that which another broker may charge if the Manager
determines in good faith that the amount of such transaction cost is reasonable
in relation to the value of brokerage and research services provided by the
executing broker.

The Fund may deal in some instances in securities which are not listed on a
national securities exchange but are traded in the over-the-counter market.
Where transactions are executed in the over-the-counter market, the Fund will
seek to deal with the primary market maker. However, such over-the-counter
transactions may be effected through a brokerage firm and a commission will be
paid if necessary in order for the Fund to obtain best execution. In general,
there may be no stated commission on principal transactions in over-the-counter
securities, but the prices of such securities usually include undisclosed
commissions or markups. In all cases, the Fund will attempt to negotiate best
execution.

Reich & Tang Distributors, Inc. and certain other affiliated brokers may from
time to time effect transactions in the Fund's portfolio securities. In such
instances, the placement of orders with these brokers would be consistent with
the Fund's objective of obtaining best execution. With respect to orders placed
with affiliated brokers for execution on a national securities exchange,
commissions received must conform to Section 17(e)(2)(A) of the 1940 Act and
Rule 17e-1 thereunder, which permit an affiliated person of a registered
investment company (such as the Fund) to receive brokerage commissions from such
registered investment company provided that such commissions are reasonable and
fair compared to commissions received by other brokers in connection with
comparable transactions involving similar securities during a comparable period
of time. Transactions in portfolio securities placed with Reich & Tang
Distributors, Inc. and certain other affiliated brokers which are executed on a
national securities exchange must be effected in accordance with procedures
adopted by the Board of Directors of the Fund pursuant to Rule 17e-1.

No portfolio transactions are executed with the Manager or its affiliates acting
as principal to the extent prohibited by applicable law. In addition, the Fund
will not buy bankers acceptances, certificates of deposit or commercial paper
from the Manager or its affiliates.

For the fiscal years ended December 31, 2005, 2006 and 2007 the Fund paid
aggregate brokerage commissions of $839,833, $1,156,670 and $1,633,977,
respectively. Of those amounts $236,198, $26,811 and $0, respectively, was paid
to Reich & Tang Distributors, Inc., an affiliated person of the Manager who is
an affiliated person of the Fund. For the fiscal year ended December 31, 2007,
Reich & Tang Distributors, Inc. did not receive any brokerage commissions from
the Fund. In addition, for the fiscal years ended December 31, 2005, 2006 and
2007, amounts of $8,300, $0 and $0 were paid to Delafield Hambrecht, Inc., an
affiliated person of J. Dennis Delafield who, as a director and officer of the
Fund, is an affiliated person of the Fund. J. Dennis Delafield is an affiliated
person of Delafield Hambrecht, Inc. by virtue of his ownership interest in this
entity. For the fiscal year ended December 31, 2007, Delafield Hambrecht, Inc.
did not receive any brokerage commissions from the Fund. During the last fiscal
year ended December 31, 2007, the Fund allocated $738,742,931 of transactions
and paid $1,610,910 in related brokerage commission to broker-dealers that
provided the Manager with certain research services. During the last fiscal year
ended December 31, 2007, the Fund purchased securities issued by Bank of America
Securities Inc., which is a "regular" broker-dealer of the Fund. As of December
31, 2007, the Fund no longer held any Bank of America Securities Inc. Repurchase
Agreements.

VIII.  CAPITAL STOCK AND OTHER SECURITIES

The authorized capital stock of the Fund consists of twenty billion shares of
stock having a par value of one tenth of one cent ($.001) per share. The Fund's
Board of Directors is authorized to divide the shares into separate series of
stock, one for each of the portfolios that may be created. Except as noted
below, each share when issued will have equal dividend, distribution and
liquidation rights within the series for which it was issued, and each
fractional share has rights in proportion to the percentage it represents of a
whole share. Generally, all shares will be voted in the aggregate, except if
voting by Class is required by law or the matter involved affects only one
Class, in which case shares will be voted separately by Class. Shares of all
series have identical voting rights, except where, by law, certain matters must
be approved by a majority of the shares of the affected series.

                                       17
<PAGE>

There are no conversion or preemptive rights in connection with any shares of
the Fund. All shares when issued in accordance with the terms of the offering
will be fully paid and non-assessable. Shares of the Fund are redeemable at net
asset value, at the option of the shareholders.

Under its Articles of Incorporation the Fund has the right to redeem, for cash,
shares of the Fund owned by any shareholder to the extent and at such times as
the Fund's Board of Directors determines to be necessary or appropriate to
prevent any concentration of share ownership which would cause the Fund to
become a personal holding company for federal income tax purposes. In this
regard, the Fund may also exercise its right to reject purchase orders.

The shares of the Fund have non-cumulative voting rights, which means that the
holders of more than 50% of the shares outstanding voting for the election of
directors can elect 100% of the directors if the holders choose to do so, and,
in that event, the holders of the remaining shares will not be able to elect any
person or persons to the Board of Directors. The Fund's By-laws provide the
holders of one-third of the outstanding shares of the Fund present at a meeting
in person or by proxy will constitute a quorum for the transaction of business
at all meetings.

As a general matter, the Fund will not hold annual or other meetings of the
Fund's shareholders. This is because the By-Laws of the Fund provide for annual
meetings only (i) as required by the 1940 Act, and (ii) upon the written request
of holders of shares entitled to cast not less than 10% of all the votes
entitled to be cast at such meeting. Annual and other meetings may be required
with respect to such additional matters relating to the Fund as may be required
by the 1940 Act, any registration of the Fund with the SEC or any state, or as
the Directors may consider necessary or desirable. Each Director serves until
the next meeting of shareholders called for the purpose of considering the
re-election of such Director or the election of a successor to such Director.

IX.  PURCHASE, REDEMPTION AND PRICING OF SHARES

The material relating to the purchase, redemption and pricing of shares is
located in the Shareholder Information section of the Prospectus and is hereby
incorporated by reference.

Net Asset Value

The Fund determines the net asset value of the shares of the Fund as of the
close of regular trading on the New York Stock Exchange ("NYSE") (normally at
4:00 p.m., Eastern time) on each day that the NYSE is open for business (a "Fund
Business Day"). It is expected that the NYSE will be closed on New Year's Day,
Martin Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Fund
calculates its net asset value by dividing the value of the Fund's net assets
(i.e., the value of its securities and other assets less its liabilities,
including expenses payable or accrued but excluding capital stock and surplus)
by the number of shares outstanding of the Fund at the time the determination is
made. Purchases and redemptions will be effected at the time of determination of
net asset value next following the receipt of any purchase or redemption order.

The Fund may have portfolio securities that are primarily listed on foreign
exchanges that trade on weekdays or other days when the Fund does not price its
shares, and thus the value of the Fund's shares may change on days when
shareholders will not be able to purchase or redeem the Fund's shares. In
addition, with regard to foreign securities and certain domestic securities
(e.g., domestic securities traded on an exchange that closes early), a
significant event occurring after the close of trading but before the
calculation of the Fund's net asset value may mean that the closing price for
the security may not constitute a readily available market quotation and may
accordingly require that the security be priced at its fair value in accordance
with the fair value procedures established by the Fund. The Manager will
continuously monitor for significant events that may call into question the
reliability of market quotations. Such events may include: situations relating
to a single issue in a market sector; significant fluctuations in U.S. or
foreign markets; natural disasters, armed conflicts, governmental actions or
other developments not tied directly to the securities markets. Where the
Manager determines that an adjustment should be made in the security's value
because significant intervening events have caused the Fund's net asset value to
be materially inaccurate, the Manager will seek to have the security "fair
valued" in accordance

                                       18
<PAGE>

with the Fund's fair value procedures. Fair value pricing involves judgments
that are inherently subjective and inexact and it is not possible to determine
with certainty when, and to what extent, an event will affect a market price. As
a result, there can be no assurance that fair value pricing will reflect actual
market value and it is possible that the fair value determined for a security
may differ materially from the value that could be realized upon the sale of the
security.

X.  TAXATION OF THE FUND

Federal Income Taxes

The Fund has elected and intends to continue to qualify to be treated as a
regulated investment company under the Internal Revenue Code of 1986, as amended
(the "Code"). To qualify as a regulated investment company, the Fund must
distribute to shareholders at least 90% of its investment company taxable income
(which includes, among other items, dividends, taxable interest and the excess
of net short-term capital gains over net long-term capital losses), and meet
certain diversification of assets, source of income, and other requirements of
the Code. By meeting these requirements, the Fund generally will not be subject
to federal income tax on its investment company taxable income distributed to
shareholders and net capital gains (the excess of net long-term capital gains
over net short-term capital losses) designated by the Fund as capital gain
dividends and distributed to shareholders. If the Fund does not meet all of
these Code requirements, it will be taxed as an ordinary corporation and its
distributions will generally be taxed to shareholders as ordinary income. In
determining the amount of net capital gains to be distributed, any capital loss
carryover from prior years will be applied against capital gains to reduce the
amount of distributions paid.

Amounts,  other than tax-exempt  interest,  not distributed on a timely basis in
accordance  with a calendar year  distribution  requirement  may be subject to a
nondeductible  4% excise tax. To prevent  imposition of the excise tax, the Fund
must distribute for the calendar year an amount equal to the sum of (i) at least
98% of its  ordinary  income  (excluding  any  capital  gains or losses) for the
calendar year, (ii) at least 98% of the excess of its capital gains over capital
losses  (adjusted for certain  losses) for the one-year period ending October 31
of such year (unless the Fund elects to calculate  its net capital gain for this
purpose  using the  one-year  period  ending  December 31, the end of the Fund's
fiscal  year) , and  (iii) all  ordinary  income  and  capital  gain net  income
(adjusted  for  certain  ordinary  losses)  for  previous  years  that  were not
distributed or taxed during such years.

Distributions of investment company taxable income will be taxable to
shareholders as ordinary income to the extent of our current or accumulated
earnings and profits. Distributions from the Fund may be eligible for the
dividends-received deduction available to corporations. However, dividends
received by the Fund that are attributable to foreign corporations will not be
eligible for the dividends-received deduction, since that deduction is generally
available only with respect to dividends paid by domestic corporations. In
addition, the dividends-received deduction will be disallowed for shareholders
who do not hold their shares in the Fund for at least 45 days during the 90 day
period beginning 45 days before a share in the Fund becomes ex dividend with
respect to such dividend.

Distributions of net capital gains, if any, designated by the Fund as capital
gain dividends, are taxable to shareholders as long-term capital gains,
regardless of the length of time the Fund's shares have been held by the
shareholder.

Distributions in excess of our earnings and profits first will reduce a
shareholder's adjusted tax basis in such shareholder's shares and, after the
adjusted basis is reduced to zero, will constitute capital gains to such
shareholder.

All distributions are taxable to the shareholder whether reinvested in
additional shares or received in cash. Shareholders will be notified annually as
to the Federal tax status of distributions.

Investors should be careful to consider the tax implications of buying shares
just prior to a distribution by the Fund. The price of shares purchased at that
time includes the amount of the forthcoming distribution. Distributions by the
Fund reduce the net asset value of the Fund's shares, and if a distribution
reduces the net asset value below a

                                       19
<PAGE>

stockholders cost basis, such distribution, nevertheless, will be taxable to the
shareholder as ordinary income or capital gain as described above, even though,
from an investment standpoint, it may constitute a partial return of capital.

Upon the taxable disposition (including a sale or redemption) of shares of the
Fund, a shareholder may realize a gain or loss depending upon its basis in the
shares. Such gain or loss will be treated as capital gain or loss if the shares
are capital assets in the shareholder's hands. Such gain or loss will be
long-term or short-term, generally depending upon the shareholders holding
period for the shares. Non-corporate shareholders are currently subject to tax
at a maximum rate of 15% on capital gains resulting from the disposition of
shares held for more than 12 months. However, a loss realized by a shareholder
on the disposition of Fund shares with respect to which capital gains dividends
have been paid will, to the extent of such capital gain dividends, also be
treated as long-term capital loss if such shares have been held by the
shareholder for six months or less. Further, a loss realized on a disposition
will be disallowed to the extent the shares disposed of are replaced (whether by
reinvestment of distributions or otherwise) within a period of 61 days beginning
30 days before and ending 30 days after the shares are disposed of. In such a
case, the basis of the shares acquired will be adjusted to reflect the
disallowed loss. Shareholders receiving distributions in the form of additional
shares will have a cost basis for Federal income tax purposes in each share
received equal to the net asset value of a share of the Fund on the reinvestment
date.

Under certain circumstances, the sales charge incurred in acquiring shares of
the Fund may not be taken into account in determining the gain or loss on the
disposition of those shares. This rule applies where shares of the Fund are
exchanged within 90 days after the date they were purchased and new shares of
the Fund are acquired without sales charge or at a reduced sales charge. In that
case, the gain or loss recognized on the exchange will be determined by
excluding from the tax basis of the shares exchanged all or a portion of the
sales charge incurred in acquiring those shares. This exclusion applies to the
extent that the otherwise applicable sales charge, with respect to the newly
acquired shares, is reduced as a result of having incurred the sales charge
initially. Instead, the portion of the sales charge affected by this rule will
be treated as a sales charge paid for the new shares.

Gains or losses attributable to fluctuations in exchange rates which occur
between the time the Fund accrues interest or other receivables or accrues
expenses or other liabilities denominated in a foreign currency and the time the
Fund actually collects such receivables or pays such liabilities generally are
treated as ordinary income or ordinary loss. Similarly, on disposition of debt
securities denominated in a foreign currency and on disposition of certain
forward contracts, gains or losses attributable to fluctuations in the value of
foreign currency between the date of acquisition of the security or contract and
the date of disposition also are treated as ordinary gain or loss. These gains
or losses, referred to under the Code as Section 988 gains or losses, may
increase, decrease, or eliminate the amount of the Fund's investment company
taxable income to be distributed to its shareholders as ordinary income.

Income received by the Fund from sources within foreign countries may be subject
to withholding and other similar income taxes imposed by the foreign country.
The Fund does not expect to be eligible to elect to allow shareholders to claim
such foreign taxes or a credit against their U.S. tax liability.

The Fund is required to report to the Internal Revenue Service (IRS) all
distributions to shareholders except in the case of certain exempt shareholders.
Distributions by the Fund (other than distributions to exempt shareholders) are
generally subject to withholding of Federal income tax currently at a rate of
28% (backup withholding) if (i) the shareholder fails to furnish the Fund with
and to certify the shareholder's correct taxpayer identification number or
social security number, (ii) the IRS notifies the Fund or a shareholder that the
shareholder has failed to report properly certain interest and dividend income
to the IRS and to respond to notices to that effect, or (iii) when required to
do so, the shareholder fails to certify that he or she is not subject to backup
withholding. If the withholding provisions are applicable, any such
distributions (whether reinvested in additional shares or taken in cash) will be
reduced by the amounts required to be withheld.

                                       20
<PAGE>

The foregoing discussion relates only to Federal income tax law as applicable to
U.S. persons (i.e., U.S. citizens and residents and U.S. domestic corporations,
partnerships, trusts and estates). Distributions by the Fund also may be subject
to state and local taxes, and the treatment of distributions under state and
local income tax laws may differ from the Federal income tax treatment.
Shareholders should consult their tax advisors with respect to particular
questions of Federal, state and local taxation. Shareholders who are not U.S.
persons should consult their tax advisors regarding U.S. foreign tax
consequences of ownership of shares of the Fund, including the likelihood that
distributions to them would be subject to withholding of U.S. tax at a rate of
30% (or at a lower rate under a tax treaty, if one is applicable).

XI.  UNDERWRITERS

The Fund sells and redeems its shares on a continuing basis at their net asset
value. The Fund does not impose a charge for either purchases or redemptions,
except for a redemption fee imposed on shares held for 90 days or less. The
Distributor does not receive an underwriting commission. Pursuant to the
Distribution Agreement, the Distributor receives a fee of 0.25% per annum of the
Fund's average daily net assets for providing distribution assistance to the
Fund and for providing or arranging for others to provide servicing to
shareholders. For the fiscal year ended December 31, 2007, the Distributor
received distribution payments totalling $1,340,430.

The Glass-Steagall Act and other applicable laws and regulations prohibit banks
and other depository institutions from engaging in the business of underwriting,
selling or distributing most types of securities. On November 16, 1999,
President Clinton signed the Gramm-Leach-Bliley Act (the "Act"), repealing
certain provisions of the Glass-Steagall Act which have restricted affiliation
between banks and securities firms and amending the Bank Holding Company Act
thereby removing restrictions on banks and insurance companies. The Act grants
banks authority to conduct certain authorized activity through financial
subsidiaries. In the opinion of the Manager, however, based on the advice of
counsel, these laws and regulations do not prohibit such depository institutions
from providing other services for investment companies such as the shareholder
servicing and related administrative functions referred to above. The Fund's
Board of Directors will consider appropriate modifications to the Fund's
operations, including discontinuance of any payments then being made under the
Plan to banks and other depository institutions, in the event of any future
change in such laws or regulations which may affect the ability of such
institutions to provide the above-mentioned services. It is not anticipated that
the discontinuance of payments to such an institution will result in loss to
shareholders or change in the Fund's net asset value. In addition, state
securities laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.

XII.  FINANCIAL STATEMENTS

The audited financial statements for the Fund for the fiscal year ended December
31, 2007 and the report therein of PricewaterhouseCoopers LLP are herein
incorporated by reference to the Fund's Annual Report. The Annual Report is
available upon request and without charge.

                                       21
<PAGE>

                       Reich & Tang Asset Management, LLC
                       Proxy Voting Policies & Procedures

                                 August 1, 2003

I.      Policy

Proxy voting is an important right of shareholders and reasonable care and
diligence must be undertaken to ensure that such rights are properly and timely
exercised. When Reich & Tang Asset Management, LLC, ("RTAM") has discretion to
vote the proxies of its clients, it will vote those proxies in the best interest
of its clients and in accordance with these policies and procedures.

II.     Proxy Voting Procedures

(a)     All proxies received by RTAM will be sent to RTAM's Proxy Coordinator.
        RTAM's Proxy Coordinator will:

        (1)     Keep a record of each proxy received;

        (2)     Forward the proxy to the Analyst/Manager who follows
                the particular security and therefore is responsible
                for making the voting decision, and at the same time
                a copy to the Chief Compliance Officer for
                identification of conflicts of interest between RTAM
                and its clients;

        (3)     Absent material conflicts (see Section IV), the
                Analyst/ Manager will determine how RTAM should vote
                the proxy. The Analyst/ Manager will send its
                decision on how RTAM will vote the proxy to the Proxy
                Coordinator who utilizes a third party vendor to vote
                the proxy.

        (4)     RTAM retains a third party to assist in coordinating
                and voting proxies with respect to client securities.
                Portfolio Administration monitors the third party to
                assure that all proxies are being properly voted and
                appropriate records are being retained. The current
                service provider being used is Institutional
                Shareholder Services ("ISS"). ISS is responsible for
                receiving all proxy ballots from RTAM's client
                custodians, performing a reconciliation to ensure
                that all shares are accounted for and notifying RTAM
                of all upcoming meetings via their website. RTAM
                through its Proxy Coordinator is then able to cast
                the vote via the website by a deadline enforced by
                ISS to ensure ample time is allotted for the vote to
                be received by the company. ISS maintains all client
                proxy voting history, which is available upon request
                by RTAM.

III.     Voting Guidelines

In the absence of specific voting guidelines from the client, RTAM will vote
proxies in the best interests of each particular client, which may result in
different voting results for proxies for the same issuer. RTAM believes that
voting proxies in accordance with the following guidelines is in the best
interests of its clients.

>>   Generally, RTAM will vote in favor of corporate housekeeping proposals,
     including election of directors (where no corporate governance issues are
     implicated), selection of auditors, and increases in or reclassification of
     common stock.

>>   Generally, RTAM will vote against proposals that make it more difficult to
     replace members of the issuer's board of directors, including proposals to
     stagger the board, cause management to be over represented on the board,
     introduce unequal voting rights, and create supermajority voting.

>> Generally, for other proposals, RTAM will vote in accordance with
management's recommendations.

                                       22
<PAGE>

RTAM shall determine whether a proposal is in the best interests of its clients
and may take into account the following factors, among others:


         (1) whether the proposal was recommended by management and RTAM's
             opinion of management;

         (2) whether the proposal acts to entrench existing management; and

         (3) whether the proposal fairly compensates management for past and
             future performance.

IV.      Conflicts of Interest

         (4) (a) RTAM's Chief Compliance Officer will identify any conflicts
that exist between the interests of RTAM and its clients. This examination will
include a review of the relationship of RTAM and its affiliates with the issuer
of each security and any of the issuer's affiliates to determine if the issuer
is a client of RTAM or an affiliate of RTAM or has some other relationship with
RTAM or a client of RTAM. If a material conflict exists, RTAM will determine
whether voting in accordance with the voting guidelines and factors described
above is in the best interests of the client. RTAM will also determine whether
it is appropriate to disclose the conflict to the affected clients and, except
in the case of clients (the Board of Directors of registered investment company
clients that have adopted these policies and procedures) that are subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), give the
clients the opportunity to vote their proxies themselves. In the case of ERISA
clients, if the Investment Management Agreement reserves to the ERISA client the
authority to vote proxies when RTAM determines it has a material conflict that
affects its best judgment as an ERISA fiduciary, RTAM will give the ERISA client
the opportunity to vote the proxies themselves. Absent the client reserving
voting rights, RTAM will vote the proxies solely in accordance with the policies
outlined Section "III. Voting Guidelines" above.

V.       Limitations

In certain circumstances, in accordance with a client's investment advisory
contract (or other written directive) or where RTAM has determined that it is in
the client's best interest, RTAM will not vote proxies received. The following
are some circumstances where RTAM will limit its role in voting proxies received
on client securities:

        (a)       Limited Value: If RTAM concludes that the value of a client's
                  economic interest or the value of the portfolio holding is
                  indeterminable or insignificant, RTAM will abstain from voting
                  a client's proxies. RTAM does not vote proxies received for
                  securities that are no longer held by the client's account.

        (b)       Securities Lending Program: When securities are out on loan,
                  they are transferred into the borrower's name and are voted by
                  the borrower, in its discretion. However where RTAM determines
                  that a proxy vote (or shareholder action is materially
                  important to the client's account, RTAM may recall the
                  security).

        (c)       Unjustifiable Costs: In certain circumstances, after doing a
                  cost-benefit analysis, RTAM may abstain from voting where the
                  cost of voting a client's proxy would exceed any anticipated
                  benefits of the proxy proposal.

VI.      Disclosure

        (a)       RTAM will disclose in its Form ADV Part II that clients may
                  contact RTAM's Chief Compliance Officer, via e-mail or
                  telephone in order to obtain information on how RTAM voted
                  such client's proxies, and to request a copy of these policies
                  and procedures. If a client requests this information, RTAM"S
                  Chief Compliance Officer will prepare a written response to
                  the client that lists, with respect to each voted proxy that
                  the client has inquired about, (1) the name of the issuer;
                  (2) the proposal voted upon and (3) how RTAM voted the
                  client's proxy.

                                       23
<PAGE>

        (b)       A concise summary of these Proxy Voting Policies and
                  Procedures will be included in RTAM's Form ADV Part II, and
                  will be updated whenever these policies and procedures are
                  updated. RTAM's Chief Compliance Officer will arrange for a
                  copy of this summary to be sent to all existing clients who
                  previously received RTAM's Form ADV Part II, which is required
                  to be offered to clients annually either as a separate mailing
                  or along with a periodic account statement or other
                  correspondence sent to clients.

VII     Recordkeeping

The Proxy Coordinator, with the assistance of ISS, will maintain files relating
to RTAM's proxy voting procedures in an easily accessible place. Records will be
maintained and preserved for five years from the end of the fiscal year during
which the last entry was made on a record, with records for the first two years
kept in the offices of RTAM and ISS. Records of the following will be included
in the files:

        (a)     Copies of these proxy voting policies and procedures, and any
                amendments thereto.

        (b)     A copy of each proxy statement that RTAM receives provided
                however that RTAM might rely on obtaining a copy of proxy
                statements from the SEC's EDGAR system for those proxy
                statements that are so available.

        (c)     A record of each vote that RTAM casts.

        (d)     A copy of any document RTAM created that was material to
                making a decision how to vote proxies, or that memorializes
                that decision.

        (e)     A copy of each written client request for information on how
                RTAM voted such client's proxies, and a copy of any written
                response to any (written or oral) client request for
                information on how RTAM voted its proxies.

        (f)     A schedule comparing the proxy votes cast to the policy.


                                       24
<PAGE>

                                   Appendix A

Proxy Coordinator - Christine Thoma
Chief Compliance Officer- Christopher Brancazio



                                       25
<PAGE>