DELAWARE GROUP EQUITY FUNDS III
DELAWARE TECHNOLOGY AND INNOVATION FUND
DISTRIBUTION AGREEMENT
Distribution Agreement (the "Agreement") made as of this 22nd day of
December, 1999 by and between DELAWARE GROUP EQUITY FUNDS III, a Delaware
business trust (the "Trust"), for the DELAWARE TECHNOLOGY AND INNOVATION 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 Trust desires to enter into an agreement with the
Distributor as of the date hereof, pursuant to which the Distributor shall serve
as the national distributor of the Series' Delaware Technology and Innovation
Fund A Class ("Class A Shares"), Delaware Technology and Innovation Fund B Class
("Class B Shares"), Delaware Technology and Innovation Fund C Class ("Class C
Shares"), and Delaware Technology and Innovation 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.
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(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
(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
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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 shareholders 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
By: /s/ J. Xxxxx Xxxxx
----------------------------
Name:
Title:
DELAWARE GROUP EQUITY FUNDS III
for the DELAWARE TECHNOLOGY AND
INNOVATION FUND series
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name:
Title:
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EXHIBIT A
DISTRIBUTION PLAN
DELAWARE GROUP EQUITY FUNDS III
DELAWARE TECHNOLOGY AND INNOVATION FUND
DELAWARE TECHNOLOGY AND INNOVATION 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 Technology and Innovation
Fund series (the "Series") on behalf of the Delaware Technology and Innovation
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.
December 22, 1999
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EXHIBIT B
DISTRIBUTION PLAN
DELAWARE GROUP EQUITY FUNDS III
DELAWARE TECHNOLOGY AND INNOVATION FUND
DELAWARE TECHNOLOGY AND INNOVATION 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 Technology and Innovation
Fund series (the "Series") on behalf of the Delaware Technology and Innovation
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.
December 22, 1999
B-2
EXHIBIT C
DISTRIBUTION PLAN
DELAWARE GROUP EQUITY FUNDS III
DELAWARE TECHNOLOGY AND INNOVATION FUND
DELAWARE TECHNOLOGY AND INNOVATION 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 Technology and Innovation
Fund series (the "Series) on behalf of the Delaware Technology and Innovation
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 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.
C-1
(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.
December 22, 1999
C-2
