SUB-ADVISORY AGREEMENT
AGREEMENT, made by and between DELAWARE MANAGEMENT COMPANY, a series of
Delaware Management Business Trust ("Investment Manager"), and VANTAGE GLOBAL
ADVISORS, INC. ("Sub-Adviser").
WITNESSETH:
WHEREAS, DELAWARE GROUP EQUITY FUNDS II, a Delaware business trust
("Trust"), has been organized and operates as an investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Investment Manager and the Trust on behalf of the DELAWARE
BLUE CHIP FUND ("Fund") have entered into an agreement ("Investment Management
Agreement") whereby the Investment Manager will provide investment advisory
services to the Trust on behalf of the Fund; and
WHEREAS, the Investment Management Agreement permits the Investment
Manager to hire one or more sub-advisers to assist the Investment Manager in
providing investment advisory services to the Trust on behalf of the Fund; and
WHEREAS, the Investment Manager and the Sub-Adviser are registered
investment advisers under the Investment Advisers Act of 1940, as amended, and
engage in the business of providing investment management services.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it is
agreed as follows:
1. The Investment Manager hereby employs the Sub-Adviser, subject
always to the Investment Manager's control and supervision, to manage the
investment and reinvestment of that portion of the Fund's assets as the
Investment Manager shall designate from time to time and to furnish the
Investment Manager with investment recommendations, asset allocation advice,
research, economic analysis and other investment services with respect to
securities in which the Fund may invest, subject to the direction of the Board
and officers of the Trust for the period and on the terms hereinafter set forth.
The Sub-Adviser hereby accepts such employment and agrees during such period to
render the services and assume the obligations herein set forth for the
compensation herein provided. The Sub-Adviser shall for all purposes herein be
deemed to be an independent contractor, and shall, unless otherwise expressly
provided and authorized, have no authority to act for or represent the Trust in
any way, or in any way be deemed an agent of the Trust. The Sub-Adviser shall
regularly make decisions as to what securities to purchase and sell on behalf of
the Fund with respect to that portion of the Fund's assets designated by the
Investment Manager, shall effect the purchase and sale of such investments in
furtherance of the Fund's objectives and policies and shall furnish the Board of
Trustees of the Trust with such information and reports regarding its activities
as the Investment Manager deems appropriate or as the Trustees of the Trust may
reasonably request in the performance of its duties and obligations under this
Agreement. The Sub-Adviser shall act in conformity with the Articles of
Incorporation, By-Laws and Prospectus of the Trust and with the instructions and
directions of the Investment Manager and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986 and all other applicable federal and state laws
and regulations consistent with the provisions of Section 15(c) of the 1940 Act.
2. Under the terms of the Investment Management Agreement, the Trust
shall conduct its own business and affairs and shall bear the expenses and
salaries necessary and incidental thereto including, but not in limitation of
the foregoing, the costs incurred in: the maintenance of its corporate
existence; the maintenance of its own books, records and procedures; dealing
with its own shareholders; the payment of dividends; transfer of stock,
including issuance and repurchase of shares; preparation of share certificates;
reports and notices to shareholders; calling and holding of shareholders'
meetings; miscellaneous office expenses; brokerage commissions; custodian fees;
legal and accounting fees; taxes; and federal and state registration fees.
Without limiting the foregoing, except as the Investment Manager and the
Sub-Adviser may agree in writing from time to time, the Sub-Adviser shall have
no responsibility for record maintenance and preservation obligations under
Section 31 of the 1940 Act.
Trustees, officers and employees of the Sub-Adviser may be directors,
officers and employees of other funds which have employed the Sub-Adviser as
sub-adviser or investment manager. Trustees, officers and employees of the
Sub-Adviser who are Trustees, officers and/or employees of the Trust, shall not
receive any compensation from the Trust for acting in such dual capacity.
In the conduct of the respective business of the parties hereto and in
the performance of this Agreement, the Trust, the Investment Manager and the
Sub-Adviser may share facilities common to each, which may include legal and
accounting personnel, with appropriate proration of expenses between and among
them.
3. (a) Subject to the primary objective of obtaining the best
execution, the Sub-Adviser may place orders for the purchase and sale of
portfolio securities and other instruments with such broker/dealers who provide
statistical, factual and financial information and services to the Trust, to the
Investment Manager, to the Sub-Adviser or to any other fund for which the
Investment Manager or Sub-Adviser provides investment advisory services and/or
with broker/dealers who sell shares of the Trust or who sell shares of any other
fund for which the Investment Manager or Sub-Adviser provides investment
advisory services. Broker/dealers who sell shares of the funds for which the
Investment Manager or Sub-Adviser provides advisory services shall only receive
orders for the purchase or sale of portfolio securities to the extent that the
placing of such orders is in compliance with the rules of the Securities and
Exchange Commission and NASD Regulation, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above and
subject to such policies and procedures as may be adopted by the Board of
Trustees and officers of the Trust, the Sub-Adviser may cause the Trust to pay a
member of an exchange, broker or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission another member of
an exchange, broker or dealer would have charged for effecting that transaction,
in such instances where the Sub-Adviser has determined in good faith that such
amount of commission was reasonable in relation to the value of the brokerage
and research services provided by such member, broker or dealer, viewed in terms
of either that particular transaction or the Sub-Adviser's overall
responsibilities with respect to the Trust on behalf of the Fund and to other
funds and other advisory accounts for which the Investment Manager or the
Sub-Adviser exercises investment discretion.
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4. As compensation for the services to be rendered to the Company for
the benefit of the Fund by the Sub-Adviser under the provisions of this
Agreement, the Investment Manager shall pay to the Sub-Adviser a fee equal to,
on an annual basis, 0.15% on average daily net assets averaging one year old or
less; 0.20% on average daily net assets averaging two years old or less, but
greater than one year old; 0.35% on average daily net assets averaging over two
years old; provided however, that the Sub-Adviser shall waive all or a portion
of the fees payable under this Agreement to the extent necessary to bear its
proportionate share of any management fee waiver undertaken by the Investment
Manager. The amount of such waiver by the Sub-Adviser shall be calculated by
multiplying the dollar amount of the management fees waived by the investment
manager by the percentage that the then-current sub-advisory fee rate represents
of the then-current investment management fee rate.
If this Agreement is terminated prior to the end of any calendar month,
the Sub-Advisory fee shall be prorated for the portion of any month in which
this Agreement is in effect according to the proportion which the number of
calendar days during which the Agreement is in effect bears to the number of
calendar days in the month, and shall be payable within 10 days after the date
of termination.
5. The services to be rendered by the Sub-Adviser to the Trust for the
benefit of the Fund under the provisions of this Agreement are not to be deemed
to be exclusive, and the Sub-Adviser shall be free to render similar or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby; provided, however,
except for advisory arrangements implemented prior to the date of this
Agreement, during the term of this Agreement the Sub-Adviser will not, without
the written consent of the Investment Manager, which consent will not be
unreasonably withheld, render such services to an investment company (or
portfolio thereof) which the Investment Manager reasonably determines would be
in competition with and which has investment policies similar to those of the
Trust.
6. Subject to the limitation set forth in Paragraph 5, the Sub-Adviser,
its directors, officers, employees, agents and shareholders may engage in other
businesses, may render investment advisory services to other investment
companies, or to any other corporation, association, firm or individual, and may
render underwriting services to the Trust or to any other investment company,
corporation, association, firm or individual.
The Investment Manager agrees that it shall not use the Sub-Adviser's
name or otherwise refer to the Sub-Adviser in any materials distributed to third
parties, including the Fund's shareholders, without the prior written consent of
the Sub-Adviser.
7. In the absence of willful misfeasance, bad faith, gross negligence,
or a reckless disregard of the performance of its duties as Sub-Adviser to the
Trust on behalf of the Fund, the Sub-Adviser shall not be subject to liability
to the Trust or to the Fund, to the Investment Manager or to any shareholder of
the Trust for any action or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security, or otherwise.
8. (a) This Agreement shall be executed and become effective as of the
date written below if approved by the vote of a majority of the outstanding
voting securities of the Fund. It shall continue in effect for a period of two
years and may be renewed thereafter only so long as such renewal and continuance
is specifically approved at least annually by the Board of Trustees or by the
vote of a majority of the outstanding voting securities of the Fund and only if
the terms and the renewal hereof have been approved by the vote of a majority of
the Trustees of the Trust who are not parties hereto or interested persons of
any such party ("Independent Trustees"), cast in person at a meeting called for
the purpose of voting on such approval.
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(b) No amendment to this Agreement shall be effective unless approved
by: (i) a majority of the Trustees of the Trust, including a majority of
Independent Trustees; and (ii) a majority of the outstanding voting securities
of the Fund. Notwithstanding the foregoing, the Agreement may be amended without
the approval of a majority of the outstanding voting securities of the Fund if
the amendment relates solely to a management fee reduction or other change that
is permitted or not prohibited under federal law, rule, regulation or SEC staff
interpretation thereof to be made without shareholder approval.
(c) This Agreement may be terminated by the Investment Manager or the
Trust at any time, without the payment of a penalty, on sixty days' written
notice to the Sub-Adviser, of the Investment Manager's or the Trust's intention
to do so, in the case of the Trust pursuant to action by the Board of Trustees
of the Trust or pursuant to the vote of a majority of the outstanding voting
securities of the Fund. The Sub-Adviser may terminate this Agreement at any
time, without the payment of a penalty on sixty days' written notice to the
Investment Manager and the Trust of its intention to do so. Upon termination of
this Agreement, the obligations of all the parties hereunder shall cease and
terminate as of the date of such termination, except for any obligation to
respond for a breach of this Agreement committed prior to such termination, and
except for the obligation of the Investment Manager to pay to the Sub-Adviser
the fee provided in Paragraph 4 hereof, prorated to the date of termination.
This Agreement shall automatically terminate in the event of its assignment.
This Agreement shall automatically terminate upon the termination of the
Investment Management Agreement.
9. This Agreement shall extend to and bind the successors of the
parties hereto.
10. For the purposes of this Agreement, the terms "vote of a majority
of the outstanding voting securities"; "interested person"; and "assignment"
shall have the meaning defined in the Investment Company Act of 1940.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their duly authorized officers and duly attested as of
the _____ day of ___________________, _____.
VANTAGE GLOBAL ADVISORS, INC. DELAWARE MANAGEMENT COMPANY,
a series of Delaware Management Business
Trust
By:______________________________ By:_____________________________________
Name: Name:
Title: Title:
Attest:__________________________ Attest:_________________________________
Agreed to and accepted as of the day and year first above written:
DELAWARE GROUP EQUITY FUNDS II
on behalf of the DELAWARE
BLUE CHIP FUND
By:_____________________________________
Attest:_________________________________
