EX-99.B9C
DELAWARE GROUP OF FUNDS
FUND ACCOUNTING AGREEMENT
THIS AGREEMENT, made as of this 19th day of August, 1996 by and
between the registered investment companies in the Delaware Group listed on
Schedule A, which Schedule may be amended from time to time as provided in
Section 8 hereof (each corporation or common law or business trust,
hereinafter referred to as a "Company," and all such entities collectively
hereinafter referred to as, the "Companies"), on behalf of the portfolio(s) of
securities of such Companies listed on Schedule A, which Schedule may be
amended from time to time (when used in this Agreement in the context of a
Company that offers only a single portfolio/series of shares, the term
"Portfolio" shall be a reference to such Company, and when used in the context
of a Company that offers multiple portfolios/series of shares, shall be a
reference to each portfolio/series of such Company) and DELAWARE SERVICE
COMPANY, INC. ("DSC"), a Delaware corporation, 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 Agreements between the Companies
with respect to each Portfolio and either Delaware Management Company, Inc. or
its U.K. affiliate, Delaware
International Advisers Ltd., provide, in part, that each Portfolio shall
conduct its business and affairs and shall bear the expenses necessary and
incidental thereto including, but not in limitation of the foregoing, the
costs incurred with respect to accounting services; and
WHEREAS, the services to be provided under this agreement previously
were provided by employees of the Companies; and
WHEREAS, the Companies and DSC desire to have a written agreement
concerning the performance of accounting services for each Portfolio and
providing compensation therefor;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, and intending legally to be bound, it is agreed:
I. APPOINTMENT AS AGENT
Section 1.1 The Companies hereby appoint DSC the accounting agent
("Accounting Agent") for all of the classes of each Portfolio, to provide such
accounting services as are set forth herein and DSC hereby accepts such
appointment and agrees to provide the Companies, as their agent, the services
described herein.
Section 1.2 The Companies shall pay DSC and DSC shall accept, for the
services provided hereunder, the compensation provided for in Section VI
hereof. The Companies also shall
-2-
reimburse DSC for expenses incurred or advanced by it for the Companies in
connection with its services hereunder.
II. DOCUMENTATION
Section 2.1 Each Company 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 Companies (or is otherwise
familiar with), the following documents:
A. The Articles of Incorporation or Agreement and
Declaration of Trust or other document, as relevant, evidencing each Company's
form of organization and any current amendments thereto;
B. The By-Laws or Procedural Guidelines of each Company;
C. Any resolution or other action of each Company or the
Board of Directors or Trustees of each Company establishing or affecting the
rights, privileges or other status of any class of shares of a Portfolio, or
altering or abolishing any such class;
D. A certified copy of a resolution of the Board of
Directors or Trustees of each Company appointing DSC as Accounting Agent for
each Portfolio and authorizing the execution of this Agreement or an amendment
to Schedule A of this Agreement;
-3-
E. A copy of each Company's currently effective
prospectus[es] and Statement[s] of Additional Information under the Securities
Act of 1933, if effective;
F. A certified copy of any resolution of the Board of
Directors or Trustees of each Company 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
G. Any amendment, revocation or other document altering,
adding, qualifying or repealing any document or authority called for under
this Section 2.1.
Section 2.2 Each Company and DSC may consult as to forms or documents
that may be required in performing services hereunder.
Section 2.3 Each Company warrants the following:
A. The Company is, or will be, a properly registered
investment company under the Investment Company Act of 1940 (the "1940 Act")
and any and all shares of a Portfolio 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 Company or the Company on behalf of a Portfolio
is bound; nor do they violate any law or regulation of any body having
jurisdiction over the Company or its property.
Section 2.4 DSC warrants the following:
-4-
A. 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.
III. SERVICES TO BE PROVIDED BY DSC
Section 3.1 Daily Net Asset Value ("NAV") Calculation. As Accounting
Agent for each Portfolio of the Companies, DSC will perform all functions
necessary to provide daily Portfolio NAV calculations, including:
A. Maintaining each Portfolio's securities portfolio history
by:
1. recording portfolio purchases and sales;
2. recording corporate actions and capital changes
relating to portfolio securities;
3. accruing interest, dividends and expenses; and
4. maintaining the income history for securities
purchased by a Portfolio.
B. Determining distributions to Portfolio shareholders;
C. Recording and reconciling shareholder activity including:
1. recording subscription, liquidations and
dividend reinvestments;
-5-
2. recording settlements of shareholder activity;
and
3. reconciling Portfolio shares outstanding to the
records maintained by DSC, as transfer agent of the Portfolio.
Valuing a Portfolio's securities portfolio which
includes determining the NAVs for all classes of the Portfolio;
D. Disseminating Portfolio NAVs and dividends to interested
parties (including the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), the Investment Company Institute ("ICI"),
Morningstar, and Lipper Analytical Services, Inc. ("Lipper")); and
E. Resolving pricing and/or custody discrepancies.
Section 3.2 Financial Reporting. As Accounting Agent, DSC shall
perform financial reporting services for each Portfolio, which shall include:
A. The preparation of semi-annual and annual reports for
shareholders which involves the performance of the following functions:
1. preparing all statements of net assets,
statements of operations and statements of changes in net assets for the
Portfolio;
2. preparing footnotes to financial statements for
the Portfolio;
3. preparing workpapers for each Company's annual
audit by its independent public accountants; and
-6-
4. coordinating the annual audit by each Company's
independent public accountants.
B. Reporting to the ICI in response to requests for monthly
and other periodic information;
C. Performing statistical reporting, which includes daily,
monthly, quarterly and annual reports for Lipper, Xxxxxxxxxxxx and other third
party reporting agencies; and
D. Furnishing financial information for any additional
required SEC reporting, such as the preparation of financial information for
each Company's reporting on Form N-SAR, the furnishing of financial
information for each Company's prospectus[es] and statement[s] of additional
information, and the financial information required for each Company's annual
Rule 24f-2 notice filing;
Section 3.3 Compliance Testing. DSC will monitor, test and prepare
and maintain supporting schedules which evidence compliance with the
definitional and distribution requirements under the Internal Revenue Code of
1986, as amended ("IRC"), including the following:
A. The requirement to be registered at all times during the
taxable year under the 0000 Xxx (XXX Section 851(a));
B. The annual ninety percent gross income test (IRC Section
851(b)(2));
C. The short/short (thirty percent) gross income test (IRC
Section 851(b)(3));
-7-
D. The quarterly IRC industry diversification tests (IRC
Sections 851(b)(4) and 817(h)); and
E. The 90% distribution requirements (IRC Section 852(a)).
Section 3.4 Other Services. In addition to the above, DSC, in its
capacity as Accounting Agent for the Company, will perform the following
services:
A. The calculation of required Portfolio monthly yields and
total return calculations in accordance with the prescribed rules of the U.S.
Securities and Exchange Commission;
B. Providing the financial information necessary for the
preparation of all federal and state tax returns and ancillary schedules,
including:
1. year-end excise tax distributions; and
2. compliance with Subchapter M and Section 4982 of
the IRC;
C. Performing special tax reporting to shareholders,
including the preparation of reports which reflect income earned by each
Portfolio by state, exempt income and distributions that qualify for the
corporate dividends received deduction;
D. The preparation of expense and budget figures for each
Portfolio, including the maintenance of detailed records pertaining to expense
accruals and payments and adjusting reports to reflect accrual adjustments;
E. The preparation of reports for Board of Directors' or
Trustees' meetings;
-8-
F. Coordination of the custody relationships;
G. Facilitating security settlements; H. Performance of
required foreign security accounting functions;
I. Performance of daily cash reconciliations for each
Portfolio;
J. Providing identified reports to portfolio managers
including:
1. providing portfolio holdings and security
valuation reports;
2. preparing cash forecasts and reconciliations as
mutually agreed upon; and
3. preparing income projections.
IV. PERFORMANCE OF DUTIES
Section 4.1 DSC may request or receive instructions from a Company
and may, at a Portfolio's expense, consult with counsel for the Company 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.
Section 4.2 DSC shall maintain reasonable insurance coverage for
errors and omissions and reasonable bond coverage for fraud.
-9-
Section 4.3 Upon notice thereof to a Company, DSC may employ others
to provide services to DSC in its performance of this Agreement.
Section 4.4 Personnel and facilities of DSC used to perform services
hereunder may be used to perform similar services to all Companies of the
Delaware Group and their Portfolios and to others, and may be used to perform
other services for all of the Companies of the Delaware Group and others.
Section 4.5 The Companies and DSC may, from time to time, set forth
in writing at the Companies' expense certain guidelines to be applicable to
the services hereunder.
V. ACCOUNTS AND RECORDS
Section 5.1 The parties hereto agree and acknowledge that the
accounts and records maintained by DSC with respect to a Portfolio shall be
the property of such Portfolio, and shall be made available to the relevant
Company promptly upon request and shall be maintained for the periods
prescribed in Rule 31a-2 under the Investment Company Act of 1940 or such
longer period as shall be agreed to by the parties hereto, at such Portfolio's
expense.
-10-
VI. COMPENSATION
Section 6.1 The Companies and DSC acknowledge that the compensation
to be paid hereunder to DSC is intended to induce DSC to provide services
under this Agreement of a nature and quality which the Boards of Directors or
Trustees of the Companies, including a majority who are not parties to this
Agreement or interested person of the parties hereto, have determined after
due consideration to be necessary for the conduct of the business of a
Portfolio in the best interests of a Portfolio and its shareholders.
Section 6.2 Compensation by a Portfolio hereunder shall be determined
in accordance with Schedule B hereto as it shall be amended from time to time
as provided for herein and which is incorporated herein as a part hereof.
Section 6.3 Compensation as provided in Schedule B shall be reviewed
and approved for each Portfolio in the manner set forth in Section 8.1 hereof
by the Boards of Directors or Trustees of the Companies at least annually and
may be reviewed and approved more frequently at the request of either party.
The Boards may request and DSC shall provide such information as the Boards
may reasonably require to evaluate the basis of and approve the compensation.
-11-
VII. STANDARD OF CARE
Section 7.1 The Companies on behalf of each Portfolio acknowledge
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 contract, agree 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 investigating or defending
any such claim or any administrative or other proceeding, and acknowledge that
any risk of loss or damage arising from the conduct of a Portfolio's affairs
in accordance herewith or in accordance with guidelines or instructions given
hereunder, shall be borne by the Portfolio. The indemnification provided for
in this Section 7.1 shall be made Portfolio by Portfolio so that DSC is only
entitled to indemnification from a Company on behalf of a Portfolio for
actions arising from the performance of DSC's duties as to that Portfolio.
VIII. CONTRACTUAL STATUS
Section 8.1 This Agreement shall be executed and become effective as
to a Company with regard to a Portfolio listed on Schedule A as of the date
first written above if approved by a vote of such Company's Board of Directors
or Trustees, including an affirmative vote of a majority of the non-interested
members of the Board of such Company, 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
-12-
as to a Company on behalf of a Portfolio or DSC, as the case may be, on sixty
(60) days notice by either that Company or DSC, unless earlier terminated or
amended by agreement among the parties. A Company shall be permitted to
terminate this Agreement as to a Portfolio on sixty (60) days notice to DSC.
Compensation under this Agreement by a Portfolio shall require approval by a
majority vote of the Board of Directors or Trustees of such Portfolio's
Company, including an affirmative vote of the majority of the non-interested
members of such Board cast in person at a meeting called for the purpose of
voting such approval.
Section 8.2 This Agreement shall become effective as to any Company
or Portfolio not included on Schedule A as of the date first written above,
but desiring to participate in this Agreement, on such date as an amended
Schedule A adding such new Company or Portfolio to such Schedule is executed
by DSC and such new Company or a Company on behalf of a new Portfolio
following approval by the Company or by the Company on behalf of a new
Portfolio desiring to be included in this Agreement in accordance with the
method specified in Section 8.1. Any such amended Schedule A shall not affect
the validity of this Agreement as between DSC and the other Companies which
have executed this Agreement or any subsequent amendment to Schedule A of this
Agreement.
Section 8.3 This Agreement may not be assigned by DSC without the
approval of all of the Companies.
-13-
Section 8.4 This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania.
DELAWARE SERVICE COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx
Senior Vice President/Chief
Administrative Officer/Chief
Financial Officer
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP DECATUR FUND, INC.
DELAWARE GROUP DELAWARE FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT
FUNDS, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP DELCHESTER HIGH-YIELD
BOND FUND, INC.
DMC TAX-FREE INCOME TRUST - PENNSYLVANIA
DELAWARE GROUP VALUE FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL
FUNDS, INC.
DELAWARE GROUP DELCAP FUND, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
By: /s/Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx
Chairman, President and
Chief Executive Officer
DELAWARE POOLED TRUST, INC.
By: /s/Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx, Chairman
-14-
SCHEDULE A
COMPANIES AND PORTFOLIOS COMPRISING THE DELAWARE GROUP*
Delaware Group Cash Reserve, Inc.
Delaware Group Decatur Fund, Inc.
Decatur Income Fund
Decatur Total Return Fund
Delaware Group Delaware Fund, Inc.
Delaware Fund
Devon Fund
Delaware Group Tax-Free Fund, Inc.
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U.S. Government Money Fund
Delaware Group Trend Fund, Inc.
--------
* Except as otherwise noted, all Portfolios included on this Schedule A
are Existing Portfolios for purposes of the compensation described on Schedule
B to that Fund Accounting Agreement between Delaware Service Company, Inc. and
the Delaware Group of Funds dated as of August 19, 1996 ("Agreement"). All
Portfolios added to this Schedule A by amendment executed by a Company on
behalf of such Portfolio hereof shall be a New Portfolio for purposes of
Schedule B to the Agreement.
-15-
Delaware Group Delchester High-Yield Bond Fund, Inc.
DMC Tax-Free Income Trust - Pennsylvania
Delaware Group Value Fund, Inc.
Delaware Group Global & International Funds, Inc.
International Equity Fund
Global Bond Fund
Global Assets Fund
Emerging Markets Fund (New)
Delaware Group DelCap Fund, Inc.
Delaware Pooled Trust, Inc.
The Defensive Equity Portfolio
The Aggressive Growth Portfolio
The International Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (New)
The Labor Select International Equity Portfolio
The Real Estate Investment Trust Portfolio
The Fixed Income Portfolio
The Limited-Term Maturity Portfolio (New)
The Global Fixed Income Portfolio
The International Fixed Income Portfolio (New)
The High-Yield Bond Portfolio (New)
Delaware Group Premium Fund, Inc.
Equity/Income Series
High Yield Series
Capital Reserves Series
Money Market Series
Growth Series
Multiple Strategy Series
International Equity Series
Value Series
Emerging Growth Series
Global Bond Series (New)
-16-
Delaware Group Government Fund, Inc.
Delaware Group Adviser Funds, Inc.
Enterprise Fund
U.S. Growth Fund
World Growth Fund
New Pacific Fund
Federal Bond Fund
Corporate Income Fund
Dated as of: August 19, 1996
-17-
SCHEDULE B
COMPENSATION
Fee Schedule for The Delaware Group of Funds
Part 1 -- Fees for Existing Portfolios
Existing Portfolios are those so designated on Schedule A to the Fund
Accounting Agreement between Delaware Service Company, Inc. and the Delaware
Group of Funds dated as of August 19, 1996 ("Agreement").
Annual Asset Based Fees
First $10 Billion of Aggregate
Complex Net Assets 2.5 Basis Points
Aggregate Complex Net Assets
over $10 Billion 2.0 Basis Points
Annual asset based fees will be charged at a rate of 2.5 basis points for the
first $10 Billion of Aggregate Complex Net Assets. Aggregate Complex Net
Assets over $10 Billion will be charged at a rate of 2.0 basis points. These
fees will be charged to a Portfolio on an aggregated pro rated basis.
Annual Minimum Fees
Domestic Equity Portfolio $35,000
Domestic Fixed Income Portfolio $45,000
International Series Portfolio $70,000
Per Class of Share Fee $ 4,000
There is an annual minimum fee that will be charged only if the annual asset
based fee is less than the calculation for the minimum fee. This fee is based
on the type and the number of classes per Portfolio. For an equity Portfolio
$35,000 will be charged; for a fixed income Portfolio $45,000 will be charged,
and for an international Portfolio $70,000 will be charged. For each class of
shares, $4,000 will be charged, such amount to be prorated over a period of
less than a year for any classes added after April 30, 1996. A total of all
minimum fees will be compared to the total asset based fee to determine which
fee is higher and, subsequently, will be used to xxxx the Companies.
-18-
Part 2 -- Fees for New Portfolios
For each Portfolio designated as a New Portfolio on Schedule A to the
Agreement, there will be a fee of 2.0 basis points, providing that the
Delaware complex net assets are above $10 Billion (the rate would be 2.5 basis
points if under $10 Billion and then 2.0 basis points once the net assets
cross $10 Billion), or an annual minimum fee calculated in the manner
described above, whichever is higher. This new fee would be added to the total
of Existing Portfolio fees and then pro rated. Fees shall not be charged for
New Portfolios included on Schedule A until such Portfolios shall have
commenced operations.
Dated as of: August 19, 1996
-19-
