1
FORM OF AGREEMENT
SUBJECT TO BOARD APPROVAL
DELAWARE GROUP______________
___________________ FUND
ASSET ALLOCATION AGREEMENT
AGREEMENT, made by and between DELAWARE GROUP_______________ (the
"Fund"), a Delaware business trust, for the ___________________ FUND/SERIES
(the "Series"), and DELAWARE MANAGEMENT COMPANY, INC. (the "Investment
Manager"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 and engages in the
business of investing and reinvesting its assets in securities; and
WHEREAS, the Investment Manager is a registered Investment Adviser
under the Investment Advisers Act of 1940 and engages in the business of
providing investment management services; and
WHEREAS, the Investment Manager serves as the investment manager for
other portfolios of the Fund, known as ___________, pursuant to an Investment
Management Agreement dated as of ________, [and the Fund desires to retain the
Investment Manager to serve as the investment manager for this Series effective
as of the date of this Agreement.]
2
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 Fund hereby employs the Investment Manager to manage the
investment and reinvestment of the Series' assets and to administer its
affairs, subject to the direction of the Board and officers of the Fund for the
period and on the terms hereinafter set forth. The Investment Manager 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 Investment Manager 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 Fund in any way,
or in any way be deemed an agent of the Fund. The Investment Manager shall
regularly make decisions as to what securities to purchase and sell on behalf
of the Series, shall effect the purchase and sale of investments in furtherance
of the Series' objectives and policies, and shall furnish the Board of
Directors of the Fund with such information and reports regarding the Series'
investments as the Investment Manager deems appropriate or as the Directors of
the Fund may reasonably request.
2. The Fund 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 stock, including issuance, redemption and repurchase of shares;
-2-
3
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. The Series shall bear all of its own organizational
costs.
Directors, officers and employees of the Investment Manager
may be directors, officers and employees of the funds of which Delaware
Management Company, Inc. is Investment Manager. Directors, officers and
employees of the Investment Manager who are directors, officers and/or
employees of the funds shall not receive any compensation from the funds for
acting in such dual capacity.
In the conduct of the respective businesses of the parties
hereto and in the performance of this Agreement, the Fund and Investment
Manager may share facilities common to each, with appropriate proration of
expenses between them.
3. (a) The Fund shall place and execute its own orders for
the purchase and sale of domestic portfolio securities with broker/dealers.
Subject to the primary objective of obtaining the best available prices and
execution, the Fund will place orders for the purchase and sale of portfolio
securities with such broker/dealers selected from among those designated from
time to time by the Investment
-3-
4
Manager, who provide statistical, factual and financial information and
services to the Fund, to the Investment Manager, or to any other fund for which
the Investment Manager provides investment advisory services and/or with
broker/dealers who sell shares of the Fund or who sell shares of any other fund
for which the Investment Manager provides investment advisory services.
Broker/dealers who sell shares of the funds of which Delaware Management
Company, Inc. or Delaware International Advisers Ltd. is investment manager,
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 the National Association of
Securities Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a)
above and subject to such policies and procedures as may be adopted by the
Board of Directors and officers of the Fund, the Investment Manager may ask the
Fund, and the Fund may agree, 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 it, and the
Investment Manager, have 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 Investment Manager's overall
responsibilities with respect to the Fund and to other funds or other advisory
accounts for which the Investment Manager exercises investment discretion.
-4-
5
4. As compensation for the services to be rendered to the Fund by
the Investment Manager under the provisions of this Agreement, the Fund shall
pay to the Investment Manager monthly from the Series' assets a fee based on
the average daily net assets of the Series during the month. Such fee shall be
calculated in accordance with the following schedule.
Equivalent
Monthly Rate Annual Rate Average Daily Net Assets
------------ ----------- ------------------------
If this Agreement is terminated prior to the end of any
calendar month, the management 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 Investment Manager may, at its expense, select and
contract with one or more registered investment advisers (the "Sub- Adviser")
for the Fund to perform some or all of the services for the Series for which it
is responsible under this Agreement. Notwithstanding Paragraph 3 hereof, such
Sub-Adviser may be responsible for executing orders for the purchase and sale
of foreign portfolio securities. The Investment Manager will compensate any
Sub-Adviser for its services to the Fund. The Investment Manager may terminate
the services of any Sub-Adviser at any time in its sole discretion, and shall
at such time assume
-5-
6
the responsibilities of such Sub-Adviser unless and until a successor
Sub-Adviser is selected.
6. The services to be rendered by the Investment Manager to the
Fund under the provisions of this Agreement are not to be deemed to be
exclusive, and the Investment Manager 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.
7. The Investment Manager, 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
Fund or to any other investment company, corporation, association, firm or
individual.
8. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of duties of the
Investment Manager to the Fund, the Investment Manager shall not be subject to
liabilities to the Fund or to any shareholder of the Fund 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.
9. This Agreement shall be executed and become effective as of
the date written below. It shall continue in effect for a period of two years
from such date and may be renewed thereafter
-6-
7
only so long as such renewal and continuance is specifically approved at least
annually by the Board of Directors of the Fund or by 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 Directors of
the Fund 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.
Notwithstanding the foregoing, this Agreement may be terminated by the Fund at
any time, without the payment of a penalty, on sixty days' written notice to
the Investment Manager of the Fund's intention to do so, pursuant to action by
the Board of Directors of the Fund or pursuant to vote of a majority of the
outstanding voting securities of the Series. The Investment Manager may
terminate this Agreement at any time, without the payment of penalty, on sixty
days' written notice to the Fund 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 Fund to pay to the Investment Manager the fee
provided in paragraph 4 hereof, prorated to the date of termination. This
Agreement shall automatically terminate in the event of its assignment.
10. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
-7-
8
11. For the purposes of this Agreement, the terms "vote of a
majority of the outstanding voting securities;" "interested persons;" and
"assignment" shall have the meanings defined in the
Investment Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by having it signed by their duly authorized
officers as of the ____ day of _________, 199_.
DELAWARE GROUP ___________________
for the _____________________ FUND
By:_______________________________
Name: _______________________
Title: _______________________
Attest:___________________________
Name: ___________________
Title: ___________________
DELAWARE MANAGEMENT COMPANY, INC.
By:_______________________________
Name: _______________________
Title: _______________________
Attest:___________________________
Name: ___________________
Title: ___________________
-8-
