DELAWARE GROUP EQUITY FUNDS III
DELAWARE LARGE CAP GROWTH FUND
DISTRIBUTION AGREEMENT
Distribution Agreement (the "Agreement") made as of this ____ day of
December, 1999 by and between DELAWARE GROUP EQUITY FUNDS III, a Delaware
business trust (the "Trust"), for the DELAWARE LARGE CAP GROWTH FUND series (the
"Series"), and DELAWARE DISTRIBUTORS, L.P. (the "Distributor"), a Delaware
limited partnership.
WITNESSETH
WHEREAS, the Trust is an investment company regulated by Federal and
State regulatory bodies, and
WHEREAS, the Distributor is engaged in the business of promoting the
distribution of the securities of investment companies and, in connection
therewith and acting solely as agent for such investment companies and not as
principal, advertising, promoting, offering and selling their securities to the
public, and
WHEREAS, the Distributor previously served as the national distributor
for the predecessor to the Trust and the Trust has designated the Distributor to
act as the national distributor for the Trust as of the date of this Agreement;
and
WHEREAS, the Trust desires to enter into a new agreement with the
Distributor as of the date hereof, pursuant to which the Distributor shall
continue to be the national distributor of the Series' Delaware Large Cap Growth
Fund A Class ("Class A Shares"), Delaware Large Cap Growth Fund B Class ("Class
B Shares"), Delaware Large Cap Growth Fund C Class ("Class C Shares"), and
Delaware Large Cap Growth Fund Institutional Class ("Institutional Class
Shares"), which Trust, Series and classes may do business under these or such
other names as the Board of Trustees may designate from time to time, on the
terms and conditions set forth below.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. The Trust hereby engages the Distributor to promote the
distribution of the Series' shares and, in connection
therewith and as agent for the Trust and not as principal, to
advertise, promote, offer and sell the Series' shares to the
public.
2. (a) The Distributor agrees to serve as distributor of the
Series' shares and, as agent for the Trust and not as
principal, to advertise, promote and use its best efforts
to sell the Series' shares wherever their sale is legal,
either through dealers or otherwise, in such places and
in such manner, not inconsistent with the law and the
provisions of this Agreement and the Trust's Registration
Statement under the Securities Act of 1933, including the
Prospectuses contained therein and the Statement of
Additional Information contained therein, as may be
mutually determined by the Trust and the Distributor from
time to time.
(b) For the Institutional Class Shares, the Distributor will
bear all costs of financing any activity which is
primarily intended to result in the sale of that class of
shares, including, but not necessarily limited to,
advertising, compensation of underwriters, dealers and
sales personnel, the printing and mailing of sales
literature and distribution of that class of shares.
(c) For its services as agent for the Class A Shares, Class B
Shares, and Class C Shares, the Distributor shall be
entitled to compensation on each sale or redemption, as
appropriate, of shares of such classes equal to any
front-end or deferred sales charge described in the
Prospectus from time to time and may allow concessions to
dealers in such amounts and on such terms as are therein
set forth.
(d) For the Class A Shares, Class B Shares, and Class C
Shares, the Trust shall, in addition, compensate the
Distributor for its services as provided in the
Distribution Plan as adopted on behalf of the Class A
Shares, Class B Shares, and Class C Shares, respectively,
pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the "Plans"), copies of which as presently in
force are attached hereto as, respectively, Exhibit "X,"
"X," and "C."
3. (a) The Trust agrees to make available for sale by the Trust
through the Distributor all or such part of the
authorized but unissued shares of beneficial interest of
the Series as the Distributor shall require from time to
time and, except as provided in Paragraph 3(b) hereof,
the Trust will not sell Series' shares other than through
the efforts of the Distributor.
(b) The Trust reserves the right from time to time (1) to
sell and issue shares other than for cash; (2) to issue
shares in exchange for substantially all of the assets of
any corporation or trust, or in exchange of shares of any
corporation or trust; (3) to pay stock dividends to its
shareholders, or to pay dividends in cash or shares of
beneficial interest at the option of its shareholders, or
to sell shares of beneficial interest to existing
shareholders to the extent of dividends payable from time
to time in cash, or to split up or combine its
outstanding shares; (4) to offer shares for cash to its
shareholders as a whole, by the use of transferable
rights or otherwise, and to sell and issue shares
pursuant to such offers; and (5) to act as its own
distributor in any jurisdiction in which the Distributor
is not registered as a broker-dealer.
4. The Trust warrants the following:
(a) The Trust is, or will be, a properly registered
investment company, and any and all Series' shares which
it will sell through the Distributor are, or will be,
properly registered with the Securities and Exchange
Commission ("SEC").
(b) The provisions of this Agreement 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.
5. (a) The Trust will supply to the Distributor a conformed copy
of the Registration Statement and all amendments thereto,
including all exhibits and each Prospectus and Statement
of Additional Information.
(b) The Trust will register or qualify the Series' shares for
sale in such states as is deemed desirable.
(c) The Trust, without expense to the Distributor:
(1) will give and continue to give such financial
statements and other information as may be required
by the SEC or the proper public bodies of the
states in which the Series' shares may be
qualified;
(2) from time to time, will furnish to the Distributor
as soon as reasonably practicable true copies of
its periodic reports to shareholders;
(3) will promptly advise the Distributor in person or
by telephone or telegraph, and promptly confirm
such advice in writing, (a) when any amendment or
supplement to the Registration Statement becomes
effective, (b) of any request by the SEC for
amendments or supplements to the Registration
Statement or the Prospectuses or for additional
information, and (c) of the issuance by the SEC of
any Stop Order suspending the effectiveness of the
Registration Statement, or the initiation of any
proceedings for that purpose;
(4) if at any time the SEC shall issue any Stop Order
suspending the effectiveness of the Registration
Statement, will make every reasonable effort to
obtain the lifting of such order at the earliest
possible moment;
(5) will from time to time, use its best effort to keep
a sufficient supply of Series' shares authorized,
any increases being subject to the approval of
shareholders as may be required;
(6) before filing any further amendment to the
Registration Statement or to any Prospectus, will
furnish to the Distributor copies of the proposed
amendment and will not, at any time, whether before
or after the effective date of the Registration
Statement, file any amendment to the Registration
Statement or supplement to any Prospectus of which
the Distributor shall not previously have been
advised or to which the Distributor shall
reasonably object (based upon the accuracy or
completeness thereof) in writing;
(7) will continue to make available to its shareholders
(and forward copies to the Distributor) of such
periodic, interim and any other reports as are now,
or as hereafter may be, required by the provisions
of the Investment Company Act of 1940; and
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(8) will, for the purpose of computing the offering
price of Series' shares, advise the Distributor
within one hour after the close of the New York
Stock Exchange (or as soon as practicable
thereafter) on each business day upon which the New
York Stock Exchange may be open of the net asset
value per share of the Series' shares of beneficial
interest outstanding, determined in accordance with
any applicable provisions of law and the provisions
of the Agreement and Declaration of Trust, as
amended, of the Trust as of the close of business
on such business day. In the event that prices are
to be calculated more than once daily, the Trust
will promptly advise the Distributor of the time of
each calculation and the price computed at each
such time.
6. The Distributor agrees to submit to the Trust, prior to its
use, the form of all sales literature proposed to be generally
disseminated by or for the Distributor, all advertisements
proposed to be used by the Distributor, all sales literature
or advertisements prepared by or for the Distributor for such
dissemination or for use by others in connection with the sale
of the Series' shares, and the form of dealers' sales contract
the Distributor intends to use in connection with sales of the
Series' shares. The Distributor also agrees that the
Distributor will submit such sales literature and
advertisements to the NASD, SEC or other regulatory agency as
from time to time may be appropriate, considering practices
then current in the industry. The Distributor agrees not to
use such form of dealers' sales contract or to use or to
permit others to use such sales literature or advertisements
without the written consent of the Trust if any regulatory
agency expresses objection thereto or if the Trust delivers to
the Distributor a written objection thereto.
7. The purchase price of each share sold hereunder shall be the
offering price per share mutually agreed upon by the parties
hereto and, as described in the Trust's Prospectuses, as
amended from time to time, determined in accordance with any
applicable provision of law, the provisions of its Agreement
and Declaration of Trust and the Conduct Rules of NASD
Regulation, Inc.
8. The responsibility of the Distributor hereunder shall be
limited to the promotion of sales of Series' shares. The
Distributor shall undertake to promote such sales solely as
agent of the Trust, and shall not purchase or sell such shares
as principal. Orders for Series' shares and payment for such
orders shall be directed to the Trust's agent, Delaware
Service Company, Inc. for acceptance on behalf of the Trust.
The Distributor is not empowered to approve orders for sales
of Series' shares or accept payment for such orders. Sales of
Series' shares shall be deemed to be made when and where
accepted by Delaware Service Company, Inc. on behalf of the
Trust.
9. With respect to the apportionment of costs between the Trust
and the Distributor of activities with which both are
concerned, the following will apply:
(a) The Trust and the Distributor will cooperate in
preparing the Registration Statements, the
Prospectuses, the Statement of Additional
Information, and all amendments, supplements and
replacements thereto. The Trust will pay all costs
incurred in the preparation of the Trust's
Registration Statement, including typesetting, the
costs incurred in printing and mailing Prospectuses
and Annual, Semi-Annual and other financial reports
to its own shareholders and fees and expenses of
counsel and accountants.
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(b) The Distributor will pay the costs incurred in
printing and mailing copies of Prospectuses to
prospective investors.
(c) The Distributor will pay advertising and promotional
expenses, including the costs of literature sent to
prospective investors.
(d) The Trust will pay the costs and fees incurred in
registering or qualifying the Series' shares with the
various states and with the SEC.
(e) The Distributor will pay the costs of any additional
copies of Trust financial and other reports and other
Trust literature supplied to the Distributor by the
Trust for sales promotion purposes.
10. The Distributor may engage in other business, provided such
other business does not interfere with the performance by the
Distributor of its obligations under this Agreement.
11. The Trust agrees to indemnify, defend and hold harmless from
the assets of the Series the Distributor and each person, if
any, who controls the Distributor within the meaning of
Section 15 of the Securities Act of 1933, from and against any
and all losses, damages, or liabilities to which, jointly or
severally, the Distributor or such controlling person may
become subject, insofar as the losses, damages or liabilities
arise out of the performance of its duties hereunder, except
that the Trust shall not be liable for indemnification of the
Distributor or any controlling person thereof for any
liability to the Trust or its security holders to which they
would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of their
duties under this Agreement.
12. Copies of financial reports, Registration Statements and
Prospectuses, as well as demands, notices, requests, consents,
waivers, and other communications in writing which it may be
necessary or desirable for either party to deliver or furnish
to the other will be duly delivered or furnished, if delivered
to such party at its address shown below during regular
business hours, or if sent to that party by registered mail or
by prepaid telegram filed with an office or with an agent of
Western Union or another nationally recognized telegraph
service, in all cases within the time or times herein
prescribed, addressed to the recipient at 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, or at such other address as
the Trust or the Distributor may designate in writing and
furnish to the other.
13. This Agreement shall not be assigned, as that term is defined
in the Investment Company Act of 1940, by the Distributor and
shall terminate automatically in the event of its attempted
assignment by the Distributor. This Agreement shall not be
assigned by the Trust without the written consent of the
Distributor signed by its duly authorized officers and
delivered to the Trust. Except as specifically provided in the
indemnification provision contained in Paragraph 11 herein,
this Agreement and all conditions and provisions hereof are
for the sole and exclusive benefit of the parties hereto and
their legal successors and no express or implied provision of
this Agreement is intended or shall be construed to give any
person other than the parties hereto and their legal
successors any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provisions herein
contained.
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14. (a) This Agreement shall remain in force for a period of two
years from the date hereof and from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually by the Board of
Trustees or by vote of a majority of the outstanding
voting securities of the Series and only if the terms
and the renewal thereof 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,
cast in person at a meeting called for the purpose of
voting on such approval.
(b) The Distributor may terminate this Agreement on written
notice to the Trust at any time in case the
effectiveness of the Registration Statement shall be
suspended, or in case Stop Order proceedings are
initiated by the SEC in respect of the Registration
Statement and such proceedings are not withdrawn or
terminated within thirty days. The Distributor may also
terminate this Agreement at any time by giving the Trust
written notice of its intention to terminate the
Agreement at the expiration of three months from the
date of delivery of such written notice of intention to
the Trust.
(c) The Trust may terminate this Agreement at any time on at
least thirty days' prior written notice to the
Distributor (1) if proceedings are commenced by the
Distributor or any of its partners for the Distributor's
liquidation or dissolution or the winding up of the
Distributor's affairs; (2) if a receiver or trustee of
the Distributor or any of its property is appointed and
such appointment is not vacated within thirty days
thereafter; (3) if, due to any action by or before any
court or any federal or state commission, regulatory
body, or administrative agency or other governmental
body, the Distributor shall be prevented from selling
securities in the United States or because of any action
or conduct on the Distributor's part, sales of the
shares are not qualified for sale. The Trust may also
terminate this Agreement at any time upon prior written
notice to the Distributor of its intention to so
terminate at the expiration of three months from the
date of the delivery of such written notice to the
Distributor.
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15. The validity, interpretation and construction of this
Agreement, and of each part hereof, will be governed by the
laws of the Commonwealth of Pennsylvania.
16. In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect
the remainder of the Agreement, which shall continue to be in
force.
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.,
General Partner
Attest:
By:
-------------------------------- -------------------------------
Name: Name:
Title: Title:
DELAWARE GROUP EQUITY FUNDS III
for the DELAWARE LARGE CAP
GROWTH FUND series
Attest:
By:
-------------------------------- -------------------------------
Name: Name:
Title: Title:
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EXHIBIT A
DISTRIBUTION PLAN
DELAWARE GROUP EQUITY FUNDS III
DELAWARE LARGE CAP GROWTH FUND
DELAWARE LARGE CAP GROWTH FUND A CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule l2b-l under the Investment Company Act of 1940 (the "Act") by Delaware
Group Equity Funds III (the "Trust"), for the Delaware Large Cap Growth Fund
series (the "Series") on behalf of the Delaware Large Cap Growth Fund A Class
("Class"), which Trust, Series and Class may do business under these or such
other names as the Board of Trustees of the Trust may designate from time to
time. The Plan has been approved by a majority of the Board of Trustees,
including a majority of the Trustees who are not interested persons of the Trust
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested Trustees"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the Trustees included a determination that in the exercise of reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Series and shareholders of the Class.
[The Plan has been adopted prior to any public offering of the Class.]
The Trust is a business trust organized under the laws of the State of
Delaware, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
Management Company, a series of Delaware Management Business Trust, serves as
the Series' investment adviser and manager pursuant to an Investment Management
Agreement. Delaware Service Company, Inc. serves as the Series' shareholder
servicing, dividend disbursing and transfer agent. Delaware Distributors, L.P.
(the "Distributor") is the principal underwriter and national distributor for
the Series' shares, including shares of the Class, pursuant to the Distribution
Agreement between the Distributor and the Trust on behalf of the Series
("Distribution Agreement").
The Plan provides that:
l. The Trust shall pay to the Distributor a monthly fee not to exceed
0.30% (3/10 of l%) per annum of the Series' average daily net assets represented
by shares of the Class (the "Maximum Amount") as may be determined by the
Trust's Board of Trustees from time to time. Such monthly fee shall be reduced
by the aggregate sums paid by the Trust on behalf of the Series to persons other
than broker-dealers (the "Service Providers") who may, pursuant to servicing
agreements, provide to the Series services in the Series' marketing of shares of
the Class.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph l above to furnish, or cause or encourage others to furnish, services
and incentives in connection with the promotion, offering and sale of Class
shares and, where suitable and appropriate, the retention of Class shares by
shareholders.
A-1
(b) The Service Providers shall use the monies paid
respectively to them to reimburse themselves for the actual costs they have
incurred in confirming that their customers have received the Prospectus and
Statement of Additional Information, if applicable, and as a fee for (l)
assisting such customers in maintaining proper records with the Trust, (2)
answering questions relating to their respective accounts, and (3) aiding in
maintaining the investment of their respective customers in the Class.
3. The Distributor shall report to the Trust at least monthly on the
amount and the use of the monies paid to it under the Plan. The Service
Providers shall inform the Trust monthly and in writing of the amounts each
claims under the Plan; both the Distributor and the Service Providers shall
furnish the Board of Trustees of the Trust with such other information as the
Board may reasonably request in connection with the payments made under the Plan
and the use thereof by the Distributor and the Service Providers, respectively,
in order to enable the Board to make an informed determination of the amount of
the Trust's payments and whether the Plan should be continued.
4. The officers of the Trust shall furnish to the Board of Trustees of
the Trust, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Trust in writing of the commencement of the Plan (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more than
one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of Trustees of
the Trust, and of the non-interested Trustees, cast in person at a meeting
called for the purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Trustees or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the
amount to be spent for distribution pursuant to paragraph l hereof without
approval by the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Trustees in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Trust's non-interested Trustees shall be committed to the discretion of such
non-interested Trustees.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
August 27, 1999
A-2
EXHIBIT B
DISTRIBUTION PLAN
DELAWARE GROUP EQUITY FUNDS III
DELAWARE LARGE CAP GROWTH FUND
DELAWARE LARGE CAP GROWTH FUND B CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Equity Funds III (the "Trust"), for the Delaware Large Cap Growth Fund
series (the "Series") on behalf of the Delaware Large Cap Growth Fund B Class
(the "Class"), which Trust, Series and Class may do business under these or such
other names as the Board of Trustees of the Trust may designate from time to
time. The Plan has been approved by a majority of the Board of Trustees,
including a majority of the Trustees who are not interested persons of the Trust
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested Trustees"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the Trustees included a determination that in the exercise of reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Series and shareholders of the Class.
[The Plan has been adopted prior to any public offering of the Class.]
The Trust is a business trust organized under the laws of the State of
Delaware, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
Management Company, a series of Delaware Management Business Trust, serves as
the Series' investment adviser and manager pursuant to an Investment Management
Agreement. Delaware Service Company, Inc. serves as the Series' shareholder
servicing, dividend disbursing and transfer agent. Delaware Distributors, L.P.
(the "Distributor") is the principal underwriter and national distributor for
the Series' shares, including shares of the Class, pursuant to the Distribution
Agreement between the Distributor and the Trust on behalf of the Series
("Distribution Agreement").
The Plan provides that:
1. (a) The Trust shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the Series' average daily net assets
represented by shares of the Class as may be determined by the Trust's Board of
Trustees from time to time.
(b) In addition to the amounts described in (a) above, the
Trust shall pay (i) to the Distributor for payment to dealers or others, or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
Series' average daily net assets represented by shares of the Class, as a
service fee pursuant to dealer or servicing agreements.
B-1
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above
shall be used to pay dealers or others for, among other things, furnishing
personal services and maintaining shareholder accounts, which services include
confirming that customers have received the Prospectus and Statement of
Additional Information, if applicable; assisting such customers in maintaining
proper records with the Trust; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Class.
3. The Distributor shall report to the Trust at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Trust monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of Trustees of
the Trust with such other information as the Board may reasonably request in
connection with the payments made under the Plan and the use thereof by the
Distributor and others in order to enable the Board to make an informed
determination of the amount of the Trust's payments and whether the Plan should
be continued.
4. The officers of the Trust shall furnish to the Board of Trustees of
the Trust, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Trust of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of Trustees of the Trust, and
of the non-interested Trustees, cast in person at a meeting called for the
purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Trustees or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the
amount to be spent for distribution pursuant to paragraph 1 hereof without
approval by the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Trustees in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Trust's non-interested Trustees shall be committed to the discretion of such
non-interested Trustees.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
August 27, 1999
B-2
EXHIBIT C
DISTRIBUTION PLAN
DELAWARE GROUP EQUITY FUNDS III
DELAWARE LARGE CAP GROWTH FUND
DELAWARE LARGE CAP GROWTH FUND C CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Equity Funds III (the "Trust"), for the Delaware Large Cap Growth Fund
series (the "Series) on behalf of the Delaware Large Cap Growth Fund C Class
(the "Class"), which Trust, Series and Class may do business under these or such
other names as the Board of Trustees of the Trust may designate from time to
time. The Plan has been approved by a majority of the Board of Trustees,
including a majority of the Trustees who are not interested persons of the Trust
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested Trustees"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the Trustees included a determination that in the exercise of reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Series and shareholders of the Class.
[The Plan has been adopted prior to any public offering of the Class.]
The Trust is a business trust organized under the laws of the State of
Delaware, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
Management Company, a series of Delaware Management Business Trust, serves as
the Series' investment adviser and manager pursuant to an Investment Management
Agreement. Delaware Service Company, Inc. serves as the Series' shareholder
servicing, dividend disbursing and transfer agent. Delaware Distributors, L.P.
(the "Distributor") is the principal underwriter and national distributor for
the Series' shares, including shares of the Class, pursuant to the Distribution
Agreement between the Distributor and the Trust on behalf of the Series
("Distribution Agreement").
The Plan provides that:
1. (a) The Trust shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the Series' average daily net assets
represented by shares of the Class as may be determined by the Trust's Board of
Trustees from time to time.
(b) In addition to the amounts described in paragraph 1(a)
above, the Trust shall pay: (i) to the Distributor for payment to dealers or
others or (ii) directly to others, an amount not to exceed 0.25% (1/4 of 1%) per
annum of the Series' average daily net assets represented by shares of the
Class, as a service fee pursuant to dealer or servicing agreements.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales
C-1
and marketing personnel, and holding special promotions. In addition, such fees
may be used to pay for advancing the commission costs to dealers with respect to
the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above
shall be used to pay dealers or others for, among other things, furnishing
personal services and maintaining shareholder accounts, which services include
confirming that customers have received the Prospectus and Statement of
Additional Information, if applicable; assisting such customers in maintaining
proper records with the Trust; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Class.
3. The Distributor shall report to the Trust at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Trust monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of Trustees of
the Trust with such other information as the Board may reasonably request in
connection with the payments made under the Plan and the use thereof by the
Distributor and others in order to enable the Board to make an informed
determination of the amount of the Trust's payments and whether the Plan should
be continued.
4. The officers of the Trust shall furnish to the Board of Trustees of
the Trust, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Trust of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of Trustees of the Trust, and
of the non-interested Trustees, cast in person at a meeting called for the
purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Trustees or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the
amount to be spent for distribution pursuant to paragraph 1 hereof without
approval by the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Trustees in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Trust's non-interested Trustees shall be committed to the discretion of such
non-interested Trustees.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
August 27, 1999
C-2
