DELAWARE GROUP EQUITY FUNDS III
FIRST AMENDED AND RESTATED SHAREHOLDERS SERVICES AGREEMENT
THIS AGREEMENT, made as of this ____ day of December, 1999 by and
between DELAWARE GROUP EQUITY FUNDS III (the "Trust"), a Delaware business
trust, for the DELAWARE TREND FUND series, the DELAWARE AMERICAN SERVICES FUND
series, the DELAWARE LARGE CAP GROWTH FUND series, the DELAWARE RESEARCH FUND
series and the DELAWARE TECHNOLOGY AND INNOVATION FUND series (collectively the
"Series"), and DELAWARE SERVICE COMPANY, INC. ("DSC"), a Delaware Corporation,
each having its principal office and place of business at 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Investment Management Agreement between the Trust and
Delaware Management Company, a series of Delaware Management Business Trust,
provide that 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; transfers of stock,
including issuance and redemption of shares; reports and notices to
shareholders; calling and holding of shareholder meetings; miscellaneous office
expenses; brokerage commissions; legal and accounting fees; taxes; and federal
and state registration fees; and
WHEREAS, the Trust and DSC desire to have a written agreement
concerning the performance of the foregoing services and providing compensation
therefor; and
WHEREAS, DSC previously served as the Shareholder Services Agent for
the predecessor to the Trust and the Trust has designated DSC to act as
Shareholders Services Agent for the Trust on behalf of Delaware Trend Fund as of
August 27, 1999; and
WHEREAS, the Trust and DSC desire to amend and restate their
Shareholder Services Agreement dated as of December ___, 1999 to include the
Trust's four new series, the Delaware American Services Fund series, the
Delaware Large Cap Growth Fund series, the Delaware Research Fund series and the
Delaware Technology and Innovation Fund series; and
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, and intending legally to be bound, it is agreed:
I. APPOINTMENT AS AGENT
1.1 The Trust hereby appoints DSC Shareholder Services Agent for the
Series to provide as agent for the Trust services as Transfer Agent, Dividend
Disbursing Agent and Shareholder Servicing Agent and DSC hereby accepts such
appointment and agrees to provide the Trust, as its agent, the services
described herein.
1
1.2 The Trust shall pay DSC and DSC shall accept, for the services
provided hereunder, the compensation provided for in Section VIII hereof. The
Trust also shall reimburse DSC for expenses incurred or advanced by it for the
Trust in connection with its services hereunder.
II. DOCUMENTATION
2.1 The Trust represents that it has provided or made available to DSC
(or has given DSC an opportunity to examine) copies of, and DSC represents that
it has received from the Trust (or is otherwise familiar with), the following
documents:
(a) The Agreement and Declaration of Trust or other documents
evidencing the Trust's form of organization and any current amendments or
supplements thereto.
(b) The By-Laws of the Trust;
(c) Any resolution or other action of the Trust or the Board
of Trustees of the Trust establishing or affecting the rights, privileges or
other status of each class or series of shares of the Trust, including those
relating to the Series or altering or abolishing each such class or series;
(d) A certified copy of a resolution of the Board of Trustees
of the Trust appointing DSC as Shareholder Services Agent for the Series and
authorizing the execution of this Agreement;
(e) The forms of share certificates of the Series in the forms
approved by the Board of Trustees of the Trust;
(f) A copy of the Trust's currently effective Prospectuses and
Statement of Additional Information under the Securities Act of 1933, if
effective;
(g) Copies of all account application forms and other
documents relating to shareholder accounts in the Series;
(h) Copies of documents relating to Plans of the Trust for the
purchase, sale or repurchase of its shares, including periodic payment or
withdrawal plans, reinvestment plans or retirement plans;
(i) Any opinion of counsel to the Trust relating to the
authorization and validity of the shares of the Series issued or proposed to be
issued under the law of the State of the Trust's organization, including the
status thereof under any applicable securities laws;
(j) A certified copy of any resolution of the Board of
Trustees of the Trust authorizing any person to give instructions to DSC under
this Agreement (with a specimen signature of such person if not already
provided), setting forth the scope of such authority; and
(k) Any amendment, revocation or other documents altering,
adding, qualifying or repealing any document or authority called for under this
Section 2.1.
2
2.2 The Trust and DSC may consult as to forms or documents that may be
required in performing services hereunder.
2.3 The Trust shall provide or make available to DSC a certified copy
of any resolution of the shareholders or the Board of Trustees of the Trust
providing for a dividend, capital gains distribution, distribution of capital,
stock dividend, stock split or other similar action affecting the authorization
or issuance of shares of the Trust or the payment of dividends.
2.4 In the case of any recapitalization or other capital adjustment
requiring a change in the form of stock certificates or the books recording the
same, the Trust shall deliver or make available to DSC:
(a) A certified copy of any document authorizing or effecting
such change;
(b) Written instructions from an authorized officer
implementing such change; and
(c) An opinion of counsel to the Trust as to the validity of
such action, if requested by DSC.
2.5 The Trust warrants the following:
(a) The Trust is, or will be, a properly registered investment
company under the Investment Company Act of 1940 and any and all Series' shares
which it issues will be properly registered and lawfully issued under applicable
federal and state laws.
(b) The provisions of this contract do not violate the terms
of any instrument by which the Trust is bound; nor do they violate any law or
regulation of any body having jurisdiction over the Trust or its property.
2.6 DSC warrants the following:
(a) DSC is and will be properly registered as a transfer agent
under the Securities and Exchange Act of 1934 and is duly authorized to serve,
and may lawfully serve as such.
(b) The provisions of this contract do not violate the terms
of any instrument by which DSC is bound; nor do they violate any law or
regulation of any body having jurisdiction over DSC or its property.
3
III. STOCK CERTIFICATES
3.1 The Trust shall furnish or authorize DSC to obtain, at the Trust's
expense, a sufficient supply of blank stock certificates for the Series, and
from time to time will replenish such supply upon the request of DSC. The Trust
agrees to indemnify and exonerate, save and hold DSC harmless, from and against
any and all claims or demands that may be asserted against DSC concerning the
genuineness of any stock certificate supplied to DSC pursuant to this Section.
3.2 DSC shall safeguard, and shall account to the Trust, upon its
demand for, all such stock certificates: (a) as issued, showing to whom issued,
or (b) as unissued, establishing the safekeeping, cancellation or destruction
thereof.
3.3 The Trust shall promptly inform DSC in writing of any change in the
officers authorized to sign stock certificates or in the form thereof. If an
officer whose manual or facsimile signature is affixed to any blank share
certificate shall die, resign or be removed prior to the issuance of such
certificate, DSC may nevertheless issue such certificate notwithstanding such
death, resignation or removal, and the Trust shall with respect thereto promptly
provide to DSC any approval, adoption or ratification as may be required by DSC.
IV. TRANSFER AGENT
4.1 As Transfer Agent for the Trust, DSC shall issue, redeem and
transfer shares of the Series, and, in connection therewith but not in
limitation thereof, it shall:
(a) Upon receipt of authority to issue shares, determine the total
shares to be issued and issue such shares by crediting shares to accounts
created and maintained in the registration forms provided; as applicable,
prepare, issue and deliver stock certificates.
(b) Upon proper transfer authorization, transfer shares by debiting
transferor-shareholder accounts and crediting such shares to accounts created
and/or maintained for transferee-shareholders; if applicable, issue and/or
cancel stock certificates.
(c) Upon proper redemption authorization, determine the total
shares redeemed and to be redeemed; determine the total redemption payments made
and to be made; redeem shares by debiting shareholder accounts; as applicable
receive and cancel stock certificates for shares redeemed; and remit or cause to
be remitted the redemption proceeds to shareholders.
(d) Create and maintain accounts; reconcile and control cash due
and paid, shares issued and to be issued, cash remitted and to be remitted and
shares debited and credited to accounts; provide such notices, instructions or
authorizations as the Trust may require.
4.2 DSC shall not be required to issue, transfer or redeem Series'
shares upon receipt of DSC from the Trust, or from any federal or state
regulatory agency or authority, written notice that the issuance, transfer or
redemption of Series' shares has been suspended or discontinued.
4
V. DIVIDEND DISBURSING AGENT
5.1 As Dividend Disbursing Agent for the Series, DSC shall disburse and
cause to be disbursed to shareholders of the Series dividends, capital gains
distributions or any payments from other sources as directed by the Trust. In
connection therewith, but not in the limitation thereof, DSC shall:
(a) Calculate the total disbursement due and payable and the
disbursement to each shareholder as to shares owned, in accordance with the
Trust's authorization.
(b) Calculate the total disbursements for each shareholder, as
aforesaid, to be disbursed in cash; prepare and mail checks therefor.
(c) Calculate the total disbursement for each shareholder of the
Series, as aforesaid, for which Series' shares are to be issued and authorized
and instruct the issuance of Series' shares therefor in accordance with Section
IV hereof.
(d) Prepare and mail or deliver such forms and notices pertaining
to disbursements as required by federal or state authority.
(e) Create and maintain records, reconcile and control
disbursements to be made and made, both as to cash and shares, as aforesaid;
provide such notices, instruction or authorization as the Trust may require.
5.2 DSC shall not be required to make any disbursement upon the receipt
of DSC from the Trust, or from any federal or state agency or authority, written
notice that such disbursement shall not be made.
VI. SHAREHOLDER SERVICING AGENT
6.1 As Shareholder Servicing Agent for the Series, DSC shall provide
those services ancillary to, but in implementation of, the services provided
under Sections I through V hereof, and those generally defined and accepted as
shareholder services. In connection therewith, but not in limitation thereof,
DSC shall:
(a) Except where instructed in writing by the Trust not to do so,
and where in compliance with applicable law, accept orders on behalf of the
Trust; receive and process investments and applications; remit to the Trust or
its custodian payments for shares acquired and to be issued; and direct the
issuance of shares in accordance with Section IV hereof.
(b) Receive, record and respond to communications of shareholders
and their agents.
(c) As instructed by the Trust, prepare and mail shareholder
account information, mail Series shareholder reports and Series prospectuses.
(d) Prepare and mail proxies and material for Trust
shareholder meetings, receive and process proxies from shareholders, and deliver
such proxies as directed by the Trust.
(e) Administer investment plans offered by the Trust to investors
and shareholders of each Series, including retirement plans, including
activities not otherwise provided in Section I through V of this Agreement.
5
VII. PERFORMANCE OF DUTIES
7.1 The parties hereto intend that Series shareholders and their
stockholdings shall be confidential, and any information relating thereto shall
be released by DSC only to those persons or authorities who DSC has reason to
believe are authorized to receive such information; or, as instructed by the
Trust.
7.2 DSC may, in performing this Agreement, require the Trust or the
Trust's distributor to provide it with an adequate number of copies of
prospectuses, reports or other documents required to be furnished to investors
or shareholders.
7.3 DSC may request or receive instructions from the Trust and may, at
the Trust's expense, consult with counsel for the Trust or its own counsel with
respect to any matter arising in connection with the performance of its duties
hereunder, and shall not be liable for any action taken or omitted by it in good
faith in accordance with such instructions or opinions of counsel.
7.4 DSC shall maintain reasonable insurance coverage for errors and
omissions and reasonable bond coverage for fraud.
7.5 Upon notice thereof to the Trust, DSC may employ others to provide
services to DSC in its performance of this Agreement.
7.6 Personnel and facilities of DSC used to perform services hereunder
may be used to perform similar services to other funds in the Delaware
Investments family and to others, and may be used to perform other services for
the Trust, the other funds in the Delaware Investments family and to others.
7.7 DSC shall provide its services as transfer agent hereunder in
accordance with Section 17 of the Securities Exchange Act of 1934, and the rules
and regulations thereunder. Further, the parties intend that the processes,
procedures, safeguards and controls employed should be those generally applied
and accepted for the type services provided hereunder by other institutions
providing the same or similar services, and, those which should provide
efficient, safe and economical services so as to promote promptness and accuracy
and to maintain the integrity of the Trust's records.
7.8 The Trust and DSC may, from time to time, set forth in writing
Guidelines For Selective Procedures to be applicable to the services hereunder.
6
VIII. COMPENSATION
8.1 The Trust and DSC acknowledge that because DSC has common ownership
and close management ties with the Trust's investment adviser and the Trust's
distributor and serves the other funds in the Delaware Investments family (DSC
having been originally established to provide the services hereunder for the
funds in the Delaware Investments family), advantages and benefits to the Trust
in the employment of DSC hereunder can be available which may not generally be
available to it from others providing similar services.
8.2 The Trust and DSC further acknowledge that the compensation by the
Trust to DSC is intended to induce DSC to provide services under this Agreement
of a nature and quality which the Board of Trustees of the Trust, including a
majority who are not parties to this Agreement or interested person of the
parties hereto, has determined after due consideration to be necessary for the
conduct of the business of the Trust, in the best interests of the Trust, the
Series and their shareholders.
8.3 Compensation by the Trust to DSC hereunder shall be determined in
accordance with Schedule A hereto as it shall be amended from time to time as
provided for herein and which is incorporated herein as a part hereof.
8.4 Compensation as provided in Schedule A shall be reviewed and
approved in the manner set forth in Section 10.1 hereof by the Board of Trustees
of the Trust at least annually and may be reviewed and approved more frequently
at the request of either party. The Board may request, and DSC shall provide,
such information as the Board may reasonably require to evaluate the basis of
and approve the compensation.
IX. STANDARD OF CARE
9.1 The Trust acknowledges that DSC shall not be liable for, and in the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of the performance of its duties under this Agreement, agrees to
indemnify DSC against, any claim or deficiency arising from the performance of
DSC's duties hereunder, including DSC's costs, counsel fees and expenses
incurred in investigation or defending any such claim or any administrative or
other proceeding, and acknowledges that any risk of loss or damage arising from
the conduct of the Trust's affairs in accordance herewith or in accordance with
Guidelines or instructions given hereunder, shall be borne by the Trust.
7
X. CONTRACTUAL STATUS
10.1 This Agreement shall be executed and become effective on the date
first written above if approved by a vote of the Board of Trustees of the Trust,
including an affirmative vote of a majority of the non-interested members of the
Board, cast in person at a meeting called for the purpose of voting on such
approval. It shall continue in effect for an indeterminate period, and is
subject to termination on sixty (60) days' notice by either party unless earlier
terminated or amended by agreement among the parties. Compensation under this
Agreement shall require approval by a majority vote of the Board of Trustees of
the Trust, including an affirmative vote of the majority of the non-interested
members of the Board cast in person at a meeting called for the purpose of
voting on such approval.
10.2 This Agreement may not be assigned without the approval of the
Trust.
10.3 This Agreement shall be governed by the laws of the Commonwealth
of Pennsylvania.
DELAWARE SERVICE COMPANY, INC.
ATTEST:______________________________ By:_________________________________
Name: Name:
Title: Title:
DELAWARE GROUP EQUITY FUNDS III
for its DELAWARE TREND FUND series,
DELAWARE AMERICAN SERVICES FUND
series,
DELAWARE LARGE CAP GROWTH FUND
series,
DELAWARE RESEARCH FUND series and
DELAWARE TECHNOLOGY AND INNOVATION
FUND series
ATTEST:______________________________ By:_________________________________
Name: Name:
Title: Title:
8
