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EXHIBIT 99.B5A
INVESTMENT ADVISORY AGREEMENT
This Agreement, made as of this 30th day of April, 1997, by
and between Voyageur Mutual Funds III, Inc., a Minnesota corporation (the
"Company"), on behalf of each Fund represented by a series of shares of common
stock of the Fund that adopts this Agreement (each a "Fund" and, collectively,
the "Funds") (the Funds, together with the date each Fund adopts this Agreement,
are set forth in Exhibit A hereto, which shall be updated from time to time to
reflect additions, deletions or other changes thereto), and Delaware Management
Company, Inc., a Delaware corporation ("Adviser").
WITNESSETH
WHEREAS, the Company has been organized and operates as an investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, Adviser is an investment adviser registered under the
Investment Advisers Act of 1940, as amended, and engages in the business of
providing investment management services;
WHEREAS, a subsidiary of Adviser's indirect parent company completed as
of the date of this Agreement a merger transaction (the "Merger") with the
indirect parent company of the investment adviser to the Company, Voyageur Fund
Managers, Inc. ("VFM"), which resulted in a change of control of VFM and the
assignment (as defined under the 0000 Xxx) and automatic termination of the
investment advisory agreement that was in effect between VFM and the Company at
the time of the Merger; and
WHEREAS, the Board of Directors of the Company and the shareholders of
the Company have determined that the Company should enter into an investment
advisory agreement with Adviser to be effective upon consummation of the Merger;
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. INVESTMENT ADVISORY SERVICES.
a. The Company hereby engages Adviser on behalf
of the Funds, and Adviser hereby agrees to act, as investment adviser for, and
to manage the investment of the assets of, the Funds.
b. The investment of the assets of each Fund
shall at all times be subject to the applicable provisions of the Articles of
Incorporation, the Bylaws, the Registration Statement, and the current
Prospectus and the Statement of Additional Information, if any, of the Company
and each Fund and shall conform to the policies and purposes of each Fund as set
forth in such documents and as interpreted from time to time by the Board of
Directors of the Company. Within the framework of the investment policies of
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each Fund, and subject to such other limitations and directions as the Board of
Directors may from time to time prescribe, Adviser shall have the sole and
exclusive responsibility for the management of each Fund's assets and the making
and execution of all investment decisions for each Fund, except as set forth in
the following paragraph. Adviser shall report to the Board of Directors
regularly at such times and in such detail as the Board may from time to time
determine appropriate, in order to permit the Board to determine the adherence
of Adviser to the investment policies of the Funds.
c. Adviser may, at its expense, select and contract with one
or more registered investment advisers ("Sub-Adviser") for any of the Funds to
perform some or all of the services for such Funds. Such Sub-Adviser shall be
responsible for executing orders for the purchase and sale of portfolio
securities. Adviser will compensate any Sub-Adviser for its services to the
Funds. Adviser may terminate the services of any Sub-Adviser at any time in its
sole discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected.
d. Adviser shall, at its own expense, furnish all office
facilities, equipment and personnel necessary to discharge its responsibilities
and duties hereunder. Adviser shall arrange, if requested by the Company, for
officers or employees of Adviser to serve without compensation from any Fund as
directors, officers, or employees of the Company if duly elected to such
positions by the shareholders or directors of the Company (as required by law).
e. Adviser hereby acknowledges that all records pertaining to
each Fund's investments are the property of the Company, and in the event that a
transfer of investment advisory services to someone other than Adviser should
ever occur, Adviser will promptly, and at its own cost, take all steps necessary
to segregate such records and deliver them to the Company.
f. Subject to the primary objective of obtaining the best
available prices and execution, Adviser will place orders for the purchase and
sale of portfolio securities with such broker/dealers who provide statistical,
factual and financial information and services to the Funds, Adviser or to any
other fund for which Adviser provides investment advisory services and/or with
broker/dealers who sell shares of the Funds or who sell shares of any other fund
for which Adviser provides investment advisory services. Broker/dealers who sell
shares of the funds of which Adviser is investment manager, shall only receive
orders for the purchase or sale of portfolio securities to the extent that the
placing of such orders is in compliance with the Rules of the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
g. Notwithstanding the provisions of subparagraph (f) above,
and subject to such policies and procedures as may be adopted by the Board of
Directors and officers of the Company, Adviser may ask the Funds and the Funds
may agree to pay a
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member of an exchange, broker or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission another member of
an exchange, broker or dealer would have charged for effecting that transaction,
in such instances where it and Adviser have determined in good faith that such
amount of commission was reasonable in relation to the value of the brokerage
and research services provided by such member, broker or dealer, viewed in terms
of either that particular transaction or Adviser's overall responsibilities with
respect to the Funds and to other funds and other advisory accounts for which
Adviser exercises investment discretion.
2. COMPENSATION FOR SERVICES.
In payment for the investment advisory and management services
to be rendered by Adviser hereunder, each Fund shall pay to Adviser a monthly
fee, which fee shall be paid to Adviser not later than the fifth business day of
the month following the month in which said services were rendered. The monthly
fee payable by each Fund shall be as set forth in Exhibit A hereto, which may be
updated from time to time to reflect amendments, if any, to Exhibit A. The
monthly fee payable by each Fund shall be based on the average of the net asset
values of all of the issued and outstanding shares of the Fund as determined as
of the close of each business day of the month pursuant to the Articles of
Incorporation, Bylaws, and currently effective Prospectus and Statement of
Additional Information of the Company and the Fund. For purposes of calculating
each Fund's average daily net assets, as such term is used in this Agreement,
each Fund's net assets shall equal its total assets minus (a) its total
liabilities and (b) its net orders receivable from dealers.
3. ALLOCATION OF EXPENSES.
a. In addition to the fee described in Section 2 hereof, each
Fund shall pay all its costs and expenses which are not assumed by Adviser.
These Fund expenses include, by way of example, but not by way of limitation,
all expenses incurred in the operation of the Fund and any public offering of
its shares, including, among others, fees (if any) associated with a plan of
distribution adopted pursuant to Rule 12b-1 under the 1940 Act ("Plan of
Distribution"), interest, taxes, brokerage fees and commissions, fees of the
directors who are not employees of Adviser or the principal underwriter of the
Fund's shares (the "Underwriter"), or any of their affiliates, expenses of
directors' and shareholders' meetings, including the cost of printing and
mailing proxies, expenses of insurance premiums for fidelity and other coverage,
expenses of redemption of shares, expenses of issue and sale of shares (to the
extent not borne by the Underwriter under its agreement with the Fund), expenses
of printing and mailing stock certificates representing shares of the Fund,
association membership dues, charges of custodians, transfer agents, dividend
disbursing agents, accounting services agents, investor servicing agents, and
bookkeeping, auditing, and legal expenses. Each Fund will also pay the fees and
bear the expense of registering and maintaining the registration of the Fund and
its shares with the Securities and Exchange Commission and registering or
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qualifying its shares under state or other securities laws and the expense of
preparing and mailing prospectuses and reports to shareholders.
b. The Underwriter shall bear all advertising and promotional
expenses in connection with the distribution of each Fund's shares, including
paying for prospectuses for new shareholders, except as provided in the
following sentence. No Fund shall use any of its assets to finance costs
incurred in connection with the distribution of its shares except pursuant to a
Plan of Distribution.
4. FREEDOM TO DEAL WITH THIRD PARTIES.
Adviser shall be free to render services to others similar to
those rendered under this Agreement or of a different nature except as such
services may conflict with the services to be rendered or the duties to be
assumed hereunder.
5. REPORTS TO DIRECTORS OF THE FUND.
Appropriate officers of Adviser shall provide the directors of
the Company with such information as is required by any Plan of Distribution
adopted by the Company on behalf of any Fund pursuant to Rule 12b-1 under the
1940 Act.
6. STANDARD OF CARE.
In the absence of willful misfeasance, bad faith, gross
negligence or a reckless disregard of the performance of duties of the Adviser
to the Funds, the Adviser shall not be subject to liabilities to the Funds or to
any shareholders of the Funds 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.
7. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
a. The effective date of this Agreement with respect to each
Fund shall be the date set forth on Exhibit A hereto.
b. Unless sooner terminated as hereinafter provided, this
Agreement shall continue in effect with respect to each Fund for a period of two
years from the date of its execution, and thereafter shall continue in effect
only so long as such continuance is specifically approved at least annually by
(i) the Board of Directors of the Company or by the vote of a majority of the
outstanding voting securities of the applicable Fund, and (ii) by the vote of a
majority of the directors of the Company who are not parties to this Agreement
or "interested persons," as defined in the 1940 Act, of Adviser or of the
Company cast in person at a meeting called for the purpose of voting on such
approval.
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c. This Agreement may be terminated with respect to any Fund
at any time, without the payment of any penalty, by the Board of Directors of
the Company or by the vote of a majority of the outstanding voting securities of
such Fund, or by Adviser, upon 60 days' written notice to the other party.
d. This agreement shall terminate automatically in the event
of its "assignment" (as defined in the 1940 Act).
e. No amendment to this Agreement shall be effective with
respect to any Fund until approved by the vote of: (i) a majority of the
directors of the Company who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of Adviser or of the Company cast in
person at a meeting called for the purpose of voting on such approval; and (ii)
a majority of the outstanding voting securities of the applicable Fund.
f. Wherever referred to in this Agreement, the vote or
approval of the holders of a majority of the outstanding voting securities or
shares of a Fund shall mean the lesser of (i) the vote of 67% or more of the
voting securities of such Fund present at a regular or special meeting of
shareholders duly called, if more than 50% of the Fund's outstanding voting
securities are present or represented by proxy, or (ii) the vote of more than
50% of the outstanding voting securities of such Fund.
8. NOTICES.
Any notice under this Agreement shall be in writing,
addressed, delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Company and Adviser have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
VOYAGEUR MUTUAL FUNDS III, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxx
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Its: Senior Vice President
DELAWARE MANAGEMENT COMPANY, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Its: Chairman of the Board, President and
Chief Executive Officer
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Exhibit A
to
Investment Advisory Agreement
between
Delaware Management Company, Inc.
and
Voyageur Mutual Funds III, Inc.
EQUIVALENT
MONTHLY ANNUAL
ADVISORY FEE ADVISORY FEE
(as % of average (as % of average
FUND EFFECTIVE DATE daily net assets) daily net assets)
---- -------------- ----------------- -----------------
Series A - Voyageur May 1, 1997 1.00%/12 1.00%
Growth Stock Fund
Fund
Series C -Voyageur May 1, 1997 1.00%/12 1.00%
Aggressive Growth
Fund
Series E - Voyageur May 1, 1997 1.00%/12 1.00%
Tax Efficient Equity
Fund
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