SUB-ADVISORY AGREEMENT
AGREEMENT, made by and between DELAWARE MANAGEMENT COMPANY, a series of
Delaware Management Business Trust ("Investment Manager"), and DELAWARE
INTERNATIONAL ADVISERS LTD. ("Sub-Adviser").
WITNESSETH:
WHEREAS, DELAWARE GROUP PREMIUM FUND, a Delaware Business Trust (the
"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 STRATEGIC INCOME SERIES of the Trust (the "Series")
engages in the business of investing and reinvesting its assets in securities;
and
WHEREAS, the Investment Manager and the Trust on behalf of the Series
have entered into an agreement ("Investment Management Agreement") whereby the
Investment Manager will provide investment advisory services to the Trust with
respect to the Series; 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 with respect to the Series;
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 Series' 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 Series 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 Series with respect to that portion of the Series' assets designated by the
Investment Manager, shall effect the purchase and sale of such investments in
furtherance of the Series' 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
Declaration of Trust, 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 shares,
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.
Directors, 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. Directors, 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 and to other funds and other advisory
accounts for which the Investment Manager or the Sub-Adviser exercises
investment discretion.
4. As compensation for the services to be rendered to the Trust for the
benefit of the Series by the Sub-Adviser under the provisions of this Agreement,
the Investment Manager shall pay to the Sub-Adviser an annual fee equal to
one-third of the management fees paid to the Investment Manager under the
Investment Management Agreement.
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 Series 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 investment company advisory 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 Series.
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 Series' 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
Company, the Sub-Adviser shall not be subject to liability to the Trust or to
the Series, 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. 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 Series. 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 Series 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. Notwithstanding the foregoing, 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 Series. 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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their duly authorized officers and duly attested as of
the 15th day of December, 1999.
DELAWARE INTERNATIONAL DELAWARE MANAGEMENT COMPANY,
ADVISERS LTD. a series of Delaware Management
Business Trust
By: /s/ Xxxxx X. Xxxxxx By: /s/Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Managing Director Title: President
Attest: /s/ Xxxx Xxxxxxxx Attest: /s/ Xxxxx X. X'Xxxxxx
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Agreed to and accepted as of the day and year first above written:
DELAWARE GROUP PREMIUM FUND
on behalf of the
STRATEGIC INCOME SERIES
By: : /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President
Attest: /s/ Xxxxx X. X'Xxxxxx
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