SCHEDULE 14A INFORMATION
PROXY PURSUANT TO SECTION14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c)
or ss. 240.14a-12
VOYAGEUR MUTUAL FUNDS III, INC.
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(Name of Registrant as Specified in its Charter)
NOT APPLICABLE
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
[X] Fee paid with filing of preliminary proxy statement
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction :
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(5) Total fee paid:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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VOYAGEUR INTERNATIONAL EQUITY FUND
A SERIES OF VOYAGEUR MUTUAL FUNDS III, INC.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 15, 1996
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of Voyageur
International Equity Fund (the "Fund"), a series of Voyageur Mutual Funds III,
Inc. (the "Company"), will be held at 9:30 a.m. on Thursday, August 15, 1996 at
the Fund's office, 90 South Seventh Street, Suite 4400, Minneapolis, Minnesota
55402. The purposes of the meeting are as follows:
1. To approve a Sub-Advisory Agreement pursuant to which Voyageur
International Asset Managers Ltd would manage the assets of the Fund.
2. To transact such other business as may properly come before the
meeting.
Shareholders of record on July 18, 1996 are the only persons entitled to
notice of and to vote at the meeting.
Your attention is directed to the attached Proxy Statement. We hope you can
attend. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE UPCOMING MEETING, PLEASE
FILL IN, SIGN, DATE AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER
TO SAVE THE FUND FURTHER SOLICITATION EXPENSE. WE RESPECTFULLY ASK FOR YOUR
COOPERATION IN RETURNING YOUR PROXY PROMPTLY. A stamped return envelope is
included for your convenience. If you are present at the meeting, you may then
revoke your proxy and vote in person, as explained in the Proxy Statement in the
section entitled "SPECIAL MEETING OF SHAREHOLDERS--AUGUST 15, 1996."
Dated: August 5, 1996 Thomas J. Abood
Secretary
VOYAGEUR INTERNATIONAL EQUITY FUND
A SERIES OF VOYAGEUR MUTUAL FUNDS III, INC.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
SPECIAL MEETING OF SHAREHOLDERS--AUGUST 15, 1996
The enclosed proxy is solicited by the Board of Directors of Voyageur
International Equity Fund (the "Fund") in connection with a special meeting of
shareholders of the Fund to be held on August 15, 1996, and at any adjournments
thereof. The purpose of this special meeting is to recommend the approval of a
Sub-Advisory Agreement pursuant to which Voyageur International Asset Managers
Ltd would act as sub-adviser for the International Equity Fund. The costs of
solicitation, including the cost of preparing and mailing the Notice of Meeting
of Shareholders and this Proxy Statement, will be paid by the Fund, and the
mailing will take place on approximately August 5, 1996. Representatives of the
Fund or Voyageur Fund Managers, Inc. (the "Adviser" or "VFM"), the investment
adviser and manager of the Fund, may, without cost to the Fund, solicit proxies
on behalf of management of the Fund by means of mail, telephone or personal
calls. The address of the Adviser is that of the Fund as provided above.
A proxy may be revoked before the meeting by giving written notice of
revocation to the Secretary of the Fund, or at the meeting prior to voting.
Unless revoked, properly executed proxies in which a choice is not specified by
the shareholders will be voted "for" the amended Investment Advisory Agreement,
in accordance with the recommendation of the Fund's Board of Directors. In
instances where a choice is specified by the shareholders in the proxy, those
proxies will be voted in accordance with the shareholder's choice. Abstentions
may be specified on the proposal and will be counted as present for purposes of
determining whether a quorum of shares is present at the meeting, but will be
counted as a vote "against" the Sub-Advisory Agreement. Under the Rules of the
New York Stock Exchange, the proposal to approve an amended Investment Advisory
Agreement is considered a "non-discretionary" proposal, which means that brokers
who hold Fund shares in street name for customers are not authorized to vote on
such proposal on behalf of their customers who have not furnished the broker
specific voting instructions. If a broker returns a "non-vote" proxy, indicating
a lack of authority to vote on such matter, then the shares covered by such
non-vote shall be deemed present at the meeting for purposes of determining a
quorum but shall not be deemed to be represented at the meeting for purposes of
calculating the vote with respect to such matter. So far as the Board of
Directors of the Fund is aware, no matters other than those described in this
Proxy Statement will be acted upon at the meeting. Should any other matters
properly come before the meeting calling for a vote of shareholders, it is the
intention of the persons named as proxies in the enclosed proxy to vote upon
such matters according to their best judgment.
Only shareholders of record on July 18, 1996, may vote at the meeting or
any adjournment thereof. As of July 18, 1996, there were issued and outstanding
281,848 common shares of the Fund with a par value of $.01.
Each shareholder of the Fund is entitled to one vote for each share held.
None of the matters to be presented at the meeting will entitle any shareholder
to cumulative voting or appraisal rights. Except as disclosed below, no person,
to the knowledge of Fund management, was the beneficial owner of more than 5% of
any class of voting shares of the Fund as of July 18, 1996. Ownership of shares
greater than 5% by class is as follows: Class A - Dougherty Financial Group,
Inc., Money Purchase Pension Plan, Minneapolis MN 55402 - 26%; Murray Johnstone
International Ltd, Glasgow, Scotland - 17%; OLCOBA Company - Reinvest,
Minneapolis, MN 55480 - 11%; Dougherty Financial Group, Inc., 401-K Salary
Reduction Plan, Minneapolis, MN 55402 - 11%. Class B - William G. & Margaret E.
Chapman TTEES, William G. & Margaret Elaine Chapman REV TR, Albuquerque, NM
87114 - 100%; Class C - Christian L. Mazzola TTEE, Christian L. Mazzola Trust,
Miami, FL - 41.6%; Ronald G. Sourwine, Reta Jean Sourwine JT TEN, Burlington, IA
- - 12.8%; Ronald E. Anderson CUST, Russell Anderson UGMA/IA, West Burlington, IA
- - 9.7%; Kathleen M. Gauby, Apple Valley, MN - 8.7%; Ronald E. Anderson CUST,
Ryan Anderson UGMA/IA, West Burlington, IA - 7.1%; Wayne C. Voeltz, Darlene L.
Voeltz JT TEN, Rochester, MN 55904 - 6.5%; Dirk M. Miller, TOD Sandra L. Miller,
Burlington, IA - 5.6%.
In the event that sufficient votes are not received for the adoption of
either proposal, an adjournment or adjournments of the meeting may be sought.
Any adjournment would require a vote in favor of the adjournment by the holders
of a majority of the shares present at the meeting (or any adjournment thereof)
in person or by proxy. The persons named as proxies will vote all shares
represented by proxies which they are required to vote in favor of the
proposals, in favor of an adjournment and will vote all shares which they are
required to vote against the proposals, against the adjournment.
A COPY OF THE FUND'S MOST RECENT ANNUAL REPORT IS AVAILABLE TO SHAREHOLDERS
UPON REQUEST. IF YOU WOULD LIKE TO RECEIVE A COPY, PLEASE CONTACT THE FUND AT 90
SOUTH SEVENTH STREET, SUITE 4400, MINNEAPOLIS, MINNESOTA 55402 OR CALL
1-800-545-3863 AND ONE WILL BE SENT, WITHOUT CHARGE, BY FIRST-CLASS MAIL WITH
THREE BUSINESS DAYS OF YOUR REQUEST.
PROPOSAL TO APPROVE A SUB-ADVISORY AGREEMENT
PURSUANT TO WHICH
VOYAGEUR INTERNATIONAL ASSET MANAGERS
WOULD MANAGE THE ASSETS OF INTERNATIONAL EQUITY FUND
THE PROPOSED SUB-ADVISORY AGREEMENT
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Murray Johnstone International, Ltd. ("Murray Johnstone") currently acts as
the sub-adviser to the Fund pursuant to a sub-advisory agreement between Murray
Johnstone and VFM. Both Murray Johnstone and VFM wish to terminate this
sub-advisory relationship. Therefore, VFM recommended to the Board of Directors
that Voyageur International Asset Managers Ltd. ("Voyageur International"), an
affiliate of VFM, act as sub-adviser to the Fund. A form of Sub- Advisory
Agreement that would be entered into with respect to managing the assets of the
Fund is attached as Exhibit A to this proxy statement. The following discussion
is qualified in its entirety by reference to the text of the Sub-Advisory
Agreement.
Under the terms of the Sub-Advisory Agreement, and subject to the
supervision of VFM, Voyageur International will direct the investment of the
Fund's assets and will be responsible for the formulation and implementation of
a continuing program for the management of the Fund's assets and resources.
Voyageur International will make all determinations with respect to the
investment of the assets of the Fund and will take all steps as may be necessary
to implement the determinations, including the placement of purchase and sale
orders on behalf of the Fund.
The Sub-Advisory Agreement provides that the Adviser shall pay Voyageur
International a monthly management fee at an annual rate of .50% of the Fund's
average daily net assets during each month. This fee is the same fee as is
currently being paid to Murray Johnstone under its sub-advisory agreement with
VFM. Voyageur International's fee will be paid by the Adviser, not by the Fund.
The Sub-Advisory Agreement will terminate automatically in the event of its
assignment. In addition, the Sub-Advisory Agreement is terminable at any time,
without penalty, by the Board of Directors of the Fund or by a vote of a
majority of the Fund's outstanding voting securities on 60 days' written notice
to the Adviser and Voyageur International, by the Adviser on 60 days' written
notice to Voyageur International, or by Voyageur International on 60 days'
written notice to the Adviser. The Sub-Advisory Agreement shall continue in
effect only so long as such continuance is specifically approved at least
annually by either the Board of Directors of the Fund, or by a vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the Fund, provided that, in either event, such continuance is also approved by a
vote of a majority of the directors who are not parties to such Agreement, or
interested persons of such parties, cast in person at a meeting called for the
purpose of voting on such approval.
BOARD DELIBERATIONS
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The Sub-Advisory Agreement was approved by the Fund's Board of Directors,
subject to shareholder approval, at a meeting held May 14, 1996. The
Sub-Advisory Agreement became effective May 16, 1994 and was originally approved
by the sole shareholder of the Fund prior to May, 1994. Prior to approving the
Sub-Advisory Agreement, the Board considered a variety of factors, including (in
the order of relative importance and weight accorded to such factors by the
Directors, from most important to less important) (a) the historical performance
of the Fund; (b) the nature, quality and extent of the services proposed to be
provided by Voyageur International; (c) Voyageur International's investment
philosophy and process with respect to international equity securities; and (d)
model portfolio results. The Board also considered the reasonableness of the
proposed fee allocation between the Adviser and Voyageur International. In
making its determination, the Board reviewed, among other things, background
information provided by Voyageur International. In addition, a representative of
Voyageur International reviewed with the Board Voyageur International's proposed
investment strategy for International Fund and responded to questions from Board
members.
VOTE REQUIRED
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THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT THE SHAREHOLDERS OF THE
FUND VOTE TO APPROVE THE PROPOSED SUB-ADVISORY AGREEMENT. Adoption of the
proposal requires the favorable vote of a majority of the outstanding shares of
the Fund, as defined in the 1940 Act, which means the lesser of the vote of (a)
67% of the shares of the Fund present at a meeting where more than 50% of the
outstanding shares are present in person or by proxy, or (b) more than 50% of
the outstanding shares of the Fund. Unless otherwise instructed, the proxies
will vote for the approval of the proposed Sub-Advisory Agreement.
ADDITIONAL INFORMATION ABOUT THE ADVISER
The Adviser is a wholly-owned subsidiary of Voyageur Asset Management
Group, Inc. which, in turn, is a wholly owned subsidiary of Voyageur Companies,
Inc. Voyageur Companies, Inc. is a wholly-owned subsidiary of Dougherty
Financial Group, Inc. ("DFG"), which is owned approximately 49% by Michael E.
Dougherty, 49% by Pohlad Companies and less than 1% by certain retirement plans
for the benefit of DFG employees. Mr. Dougherty co-founded the predecessor of
DFG in 1977 and has served as DFG's Chairman of the Board and Chief Executive
Officer since inception. Pohlad Companies is a holding company owned in equal
part by each of James O. Pohlad, Robert C. Pohlad and William M. Pohlad. The
address of Voyageur Asset Management Group, Inc., Voyageur Companies, Inc. and
DFG is the same as that of the Fund. The address of Pohlad Companies is 3880
Dain Bosworth Plaza, 60 South Sixth Street, Minneapolis, Minnesota 55402.
The name and principal occupation of the principal executive officer and
each director of the Adviser is set forth below. The address of each person is
same as that of the Adviser and the Fund.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
Michael E. Dougherty Chairman of the Adviser, the Underwriter and Dougherty
Dawkins, Inc.; Chairman of the Board, President and Chief
Executive Officer of Dougherty Financial Group, Inc.
John G. Taft Director and President of the Adviser; Executive Vice
President and Director of the Underwriter.
Jane M. Wyatt Director and Chief Investment Officer of the Adviser;
Director of the Underwriter.
Frank C. Tonnemaker Director and Executive Vice President of the Adviser;
Director and President of the Underwriter.
Edward J. Kohler Director and Executive Vice President of the Adviser;
Director of the Underwriter.
</TABLE>
The officers and directors of the Fund who are officers, directors, or
employees of the Adviser are listed below.
<TABLE>
<CAPTION>
NAME POSITION WITH THE FUND POSITION WITH THE ADVISER
- ---- ---------------------- -------------------------
<S> <C> <C>
John G. Taft President President and Director
Andrew M. McCullagh, Jr. Executive Vice President Portfolio Manager
Jane M. Wyatt Executive Vice President Chief Investment Officer
and Director
Steven P. Eldredge Vice President Senior Vice President and
Portfolio Manager
Elizabeth Howell Vice President Portfolio Manager
James C. King Vice President Portfolio Manager
Kenneth R. Larsen Treasurer Treasurer
Thomas J. Abood Secretary General Counsel
</TABLE>
ADDITIONAL INFORMATION ABOUT THE SUB-ADVISER
Voyageur International is an indirect majority owned subsidiary of DFG. in
addition, Mr. Edward J. Kohler and Mr. Neil Dunn each own approximately 17.5% of
Voyageur International. Voyageur International is organized as a corporation
under the laws of England, and its offices are located at 133 Rose Street Lane
South, Edinburgh, Scotland, EH2 4BB. Voyageur International provides investment
services for various managed accounts and a closed-end investment company listed
on the Luxembourg exchange and as of March 31, 1996 had approximately $25.9
million of assets under management.
The names and principal occupations of the principal executive officer and
each director of Voyageur International are set forth below. Unless otherwise
noted, the address of each individual is 133 Rose Street Lane South, Edinburgh,
Scotland, EH2 4BB.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
Neil Dunn Managing Director of Voyageur International since 1995;
prior thereto, Managing Director of Voyageur International's
predecessor, Piper International Asset Management Ltd.,
since 1994; Senior Partner of N. Dunn & Co., a consultancy
company and the predecessor of Piper International Asset
Management Ltd., from 1989 to 1994.
Andrew Millar Law Investment Director of Voyageur International since 1995;
director of Piper International Asset Management Ltd. from
1994 to 1995; Portfolio Manager of N. Dunn & Co. from 1992
to 1994, founder and joint managing director of Law Dempsey
and Company Ltd., an investment management company Ltd., an
investment management company, from 1988 to 1991.
Amanda Swanson Director of Voyageur International since 1995; director of
Piper International Asset Management Ltd. from 1994 to 1995;
Consultant with N. Dunn & Co. from 1989 to 1994.
Michael E. Dougherty*# Chairman and Director of Voyageur International since 1995.
John G. Taft*# Director of Voyageur International since 1995.
Edward J. Kohler*# Director of Voyageur International since 1995.
* See "Additional Information About the Adviser".
# Address: 90 South Seventh Street, Suite 4300, Minneapolis, MN 55402
</TABLE>
SHAREHOLDER PROPOSALS
Pursuant to its Bylaws, the Company is not required to hold annual meetings
of shareholders. The date of the next shareholders' meeting cannot be determined
at this time. In the future, if a shareholder has a proposal which he or she
feels should be presented to all shareholders for consideration, such
shareholder should send the proposal to the Fund's offices, to the attention of
the Fund's Secretary. The proposal will be considered at a meeting of the Board
of Directors of the Company as soon as practicable after the proposal is
received. Should such proposal be deemed by the Board to be a matter which
should be considered by all Fund shareholders, such proposal will be submitted
to shareholders at a regular or special meeting called and scheduled by the
Board in its discretion.
Dated: August 5, 1996 Thomas J. Abood, Secretary
EXHIBIT A
SUB-ADVISORY AGREEMENT
Agreement, dated ________, 1996, by and between Voyageur Fund Managers,
Inc. (the "Adviser"), a Minnesota corporation, and Voyageur International Asset
Managers, Ltd, a corporation organized under the laws of England, (the
"Sub-Adviser").
WHEREAS, Voyageur Mutual Funds III, Inc., a Minnesota corporation (the
"Company"), on behalf of Voyageur International Equity Fund, a separately
managed series of the Company (the "Fund"), has appointed the Adviser as the
Fund's investment adviser pursuant to an Investment Advisory Agreement dated
November 1, 1993, as amended (the "Advisory Agreement"); and
WHEREAS, pursuant to the terms of the Advisory Agreement, the Adviser
desires to appoint the Sub-Adviser as its sub-adviser for the Fund, and the
Sub-Adviser is willing to act in such capacity upon the terms set forth herein;
and
WHEREAS, pursuant to the terms of the Advisory Agreement, the Company has
approved the appointment of the Sub-Adviser as the sub-adviser for the Fund.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Adviser and the Sub-Adviser agree as follows:
1. The Adviser hereby employs the Sub-Adviser to serve as sub-adviser for,
and to manage the investment of the assets of, the Fund as set forth herein. The
Sub-Adviser hereby accepts such employment and agrees, for the compensation
herein provided, to assume all obligations herein set forth and to bear all
expenses of its performance of such obligations (but no other expenses). The
Sub-Adviser shall not be required to pay expenses of the Fund, including, but
not limited to (a)brokerage and commission expenses; (b)federal, state, local
and foreign taxes, including issue and transfer taxes incurred by or levied on
the Fund; (c)interest charges on borrowings; (d)the Fund's organizational and
offering expenses, whether or not advanced by the Adviser; (e)the cost of other
personnel providing services to the Fund; (f)fees and expenses of registering or
otherwise qualifying the shares of the Fund under applicable state securities
laws; (g)expenses of printing and distributing reports to shareholders; (h)costs
of shareholders' meetings and proxy solicitation; (i)charges and expenses of the
Fund's custodian and registrar, transfer agent and dividend disbursing agent;
(j)compensation of the Company's officers, directors and employees that are not
Affiliated Persons or Interested Persons (as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended (the "1940 Act") and the rules,
regulations and releases relating thereto) of the Adviser; (k)legal and auditing
expenses; (l)costs of certificates representing common shares of the Fund;
(m)costs of stationery and supplies; (n)insurance expenses; (o)association
membership dues; (p)the fees and expenses of registering the Fund and its shares
with the Securities and Exchange Commission; (q)travel expenses of officers and
employees of the Sub-Adviser to the extent such expenses relate to the
attendance of such persons at meetings at the request of the Board of Directors
of the Company; and (r)all other charges and costs of the Fund's operation
unless otherwise explicitly provided herein. The Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor and shall, except as
expressly provided or authorized (whether herein or otherwise) have no authority
to act for or on behalf of the Fund in any way or otherwise be deemed an agent
of the Fund.
2. The Sub-Adviser shall direct the Company's investments in accordance
with applicable law and the investment objective, policies and restrictions set
forth in the Fund's then-effective Registration Statement under the Securities
Act of 1933, as amended, including the Prospectus and Statement of Additional
Information of the Fund contained therein, subject to the supervision of the
Company, its officers and directors, and the Adviser and in accordance with the
investment objectives, policies and restrictions from time to time prescribed by
the Board of Directors of the Company and communicated by the Adviser to the
Sub-Adviser and subject to such further limitations as the Adviser may from time
to time impose by written notice to the Sub-Adviser.
3. The Sub-Adviser shall formulate and implement a continuing program for
managing the investment of the Fund's assets, and shall amend and update such
program from time to time as financial and other economic conditions warrant.
The Sub-Adviser shall make all determinations with respect to managing the
investment of the Fund's assets and shall take such steps as may be necessary to
implement the same, including the placement of purchase and sale orders on
behalf of the Fund.
4. The Sub-Adviser shall furnish such reports to the Adviser as the Adviser
may reasonably request for the Adviser's use in discharging its obligations
under the Advisory Agreement, including any reports required pursuant to Rule
17f-5 under the 1940 Act, which reports may be distributed by the Adviser to the
Company's Board of Directors at periodic meetings of the Board of Directors and
at such other times as may be reasonably requested by the Board of Directors.
Copies of all such reports shall be furnished to the Adviser for examination and
review within a reasonable time prior to the presentation of such reports to the
Company's Board of Directors.
5. The Sub-Adviser shall select the brokers and dealers that will execute
the purchases and sales of securities for the Fund and markets on or in which
such transactions will be executed and shall place, in the name of the Fund or
its nominee, all such orders.
(a) When placing such orders, the Sub-Adviser shall use its best efforts to
obtain the best available price and most favorable and efficient execution for
the Fund. Where best price and execution may be obtained from more than one
broker or dealer, the Sub-Adviser may, in its discretion, purchase and sell
securities through brokers or dealers who provide research, statistical and
other information to the Sub-Adviser. It is understood that such services may be
used by the Sub-Adviser for all of its investment advisory accounts and
accordingly, not all such services may be used by the Sub-Adviser in connection
with the Fund.
It is understood that certain other clients of the Sub-Adviser may have
investment objectives and policies similar to those of the Fund, and that the
Sub-Adviser may, from time to time, make recommendations that result in the
purchase or sale of a particular security by its other clients simultaneously
with the Fund. If transactions on behalf of more than one client during the same
period increase the demand for securities being purchased or the supply of
securities being sold, there may be an adverse effect on price or quantity. In
such event, the Sub-Adviser shall allocate advisory recommendations and the
placing of orders in a manner that is deemed equitable by the Sub-Adviser to the
accounts involved, including the Fund. When two or more of the clients of the
Sub-Adviser (including the Fund) are purchasing or selling the same security on
a given day from the same broker or dealer, such transactions may be averaged as
to price.
(b) The Sub-Adviser agrees that it will not purchase or sell securities for
the Fund in any transaction in which it, the Adviser or any "affiliated person"
of the Company, the Adviser or Sub-Adviser or any affiliated person of such
"affiliated person" is acting as principal; provided, however, that the
Sub-Adviser may effect transactions pursuant to Rule 17a-7 under the 1940 Act in
compliance with the Fund's then-effective policies concerning such transactions.
(c) The Sub-Adviser agrees that it will not execute any portfolio
transactions for the Fund with a broker or dealer or futures commission-merchant
which is an "affiliated person" of the Company, the Adviser or the Sub-Adviser
or an "affiliated person" of such an "affiliated person" without the prior
written consent of the Adviser. In effecting any such transactions with the
prior written consent of the Adviser, the Sub-Adviser shall comply with Section
17(e)(1) of the 1940 Act, other applicable provisions of the 1940 Act, if any,
the then-effective Registration Statement of the Fund under the Securities Act
of 1933, as amended and the Fund's then-effective policies concerning such
transactions.
(d) The Sub-Adviser shall promptly communicate to the Adviser and, if
requested by the Adviser, to the Company's Board of Directors, such information
relating to portfolio transactions as the Adviser may reasonably request. The
parties understand that the Fund shall bear all brokerage commissions in
connection with the purchases and sales of portfolio securities for the Fund and
all ordinary and reasonable transaction costs in connection with purchases of
such securities in private placements and subsequent sales thereof.
6. The Sub-Adviser may (at its cost except as contemplated by paragraph 5
of this Agreement) employ, retain or otherwise avail itself of the services and
facilities of persons and entities within its own organization or any other
organization for the purpose of providing the Sub-Adviser, the Adviser or the
Fund with such information, advice or assistance, including but not limited to
advice regarding economic factors and trends and advice as to transactions in
specific securities, as the Sub-Adviser may deem necessary, appropriate or
convenient for the discharge of its obligations hereunder or otherwise helpful
to the Adviser or the Fund, or in the discharge of the Sub-Adviser's overall
responsibilities with respect to the other accounts for which it serves as
investment manager or investment adviser.
7. The Sub-Adviser shall cooperate with and make available to the Adviser,
the Fund and any agents engaged by the Fund, the Sub-Adviser's expertise
relating to matters affecting the Fund.
8. For the services to be rendered under this Agreement, and the facilities
to be furnished for each fiscal year of the Fund, the Adviser shall pay to the
Sub-Adviser a monthly management fee at the annual rate of .50% of the Fund's
average daily net assets. This fee will be computed based on net assets at the
beginning of each day and will be paid to the Sub-Adviser monthly on or before
the fifteenth day of the month next succeeding the month for which the fee is
paid. The fee shall be prorated for any fraction of a fiscal year at the
commencement and termination of this Agreement.
Pursuant to the Advisory Agreement, the Adviser receives monthly from the
Company compensation at the annual rate of 1.00% of the Fund's average daily net
assets. If the Adviser has undertaken in the Company's Registration Statement as
filed under the 1940 Act or elsewhere to waive all or part of its fee under the
Advisory Agreement or to reduce such fee upon order of the Board of Directors or
the vote of a majority of the outstanding voting securities of the Company, the
Sub-Adviser's fee payable under this Agreement will be proportionately waived in
whole or part.
9. The Sub-Adviser represents, warrants and agrees that:
(a) The Sub-Adviser is registered as an "investment adviser" under the
Investment Advisers Act of 1940 ("Advisers Act") and is currently in
compliance and shall at all times continue to comply with the requirements
imposed upon it by the Advisers Act and other applicable laws and
regulations. The Sub-Adviser agrees to (i)supply the Adviser with such
documents as the Adviser may reasonably request to document compliance with
such laws and regulations and (ii)immediately notify the Adviser of the
occurrence of any event which would disqualify the Sub-Adviser from serving
as an investment adviser of an investment company pursuant to any
applicable law or regulation.
(b) The Sub-Adviser will maintain, keep current and preserve on behalf
of the Company all records required or permitted by the 1940 Act in the
manner provided by such Act. The Sub-Adviser agrees that copies of such
records are the property of the Company, and will be surrendered to the
Company promptly upon request.
(c) The Sub-Adviser will complete such reports concerning purchases or
sales of securities on behalf of the Sub-Adviser as the Adviser may from
time to time require to document compliance with the 1940 Act, the Advisers
Act, the Internal Revenue Code, applicable state securities laws and other
applicable laws and regulations or regulatory and taxing authorities in
countries other than the United States.
(d) After filing with the Securities and Exchange Commission any
amendment to its Form ADV, the Sub-Adviser will promptly furnish a copy of
such amendment to the Adviser.
(e) The Sub-Adviser will immediately notify the Adviser of the
occurrence of any event which would disqualify the Sub-Adviser from serving
as an investment adviser of an investment company pursuant to Section 9 of
the 1940 Act or any other applicable statute or regulation.
10. This Agreement shall become effective as of the date of approval of
shareholders of the Fund. Wherever referred to in this Agreement, the vote or
approval of the holders of a majority of the outstanding voting securities or
shares of the Fund shall mean the vote of 67% or more of such shares if the
holders of more than 50% of such shares are present in person or by proxy or the
vote of more than 50% of such shares, whichever is less.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect for a period of two years from the date of its execution, and
thereafter shall continue in effect only so long as such continuance is
specifically approved at least annually (a)by the Board of Directors of the
Company or by the vote of a majority of the outstanding voting securities of the
Fund, and (b)by the vote of a majority of the directors who are not parties to
this Agreement or Interested Persons of the Adviser, the Sub-Adviser or the
Company, cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated at any time without the payment of any
penalty (a)by the vote of the Board of Directors of the Company or by the vote
of the holders of a majority of the outstanding voting securities of the Fund,
upon 60 days' written notice to the Adviser and the Sub-Adviser, or (b) by the
Adviser, upon 60 days' written notice to the Sub-Adviser; or (c) by the
Sub-Adviser, upon 60 days' written notice to the Adviser. This Agreement shall
automatically terminate in the event of its assignment as defined in the 1940
Act and the rules thereunder, provided, however, the such automatic termination
shall be prevented in a particular case by an order of exemption from the
Securities and Exchange Commission or a no-action letter of the staff of the
Commission to the effect that such assignment does not require termination as a
statutory or regulatory matter. This Agreement shall automatically terminate
upon completion of the dissolution, liquidation or winding up of the Fund.
11. No amendment to or modification of this Agreement shall be effective
unless and until approved by the vote of a majority of the outstanding shares of
the Fund.
12. This Agreement shall be binding upon, and inure to the benefit of, the
Adviser and the Sub-Adviser, and their respective successors.
13. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
14. To the extent that state law is not preempted by the provisions of any
law of the United States heretofore or hereafter enacted, as the same may be
amended from time to time, this Agreement shall be administered, construed and
enforced according to the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers thereunto duly authorized in multiple counterparts,
each of which shall be an original but all of which shall constitute one of the
same instrument.
VOYAGEUR FUND MANAGERS, INC.
By___________________________
Name: John G. Taft
Title: President
VOYAGEUR INTERNATIONAL ASSET
MANAGERS, LTD
By___________________________
Name: Neil Dunn
Title: Managing Director
VOYAGEUR INTERNATIONAL EQUITY FUND
THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT
The undersigned appoints John G. Taft, Kenneth R. Larsen and Thomas J.
Abood, and each of them, with power to act without the other and with the right
of substitution in each, the proxies of the undersigned to vote all shares of
Voyageur International Equity Fund (the "Fund"), held by the undersigned at a
special meeting of shareholders of the Fund to be held on August 15, 1996, and
at any adjournments thereof, with all the powers the undersigned would possess
if present in person. All previous proxies given with respect to the meeting are
revoked.
THE PROXIES ARE INSTRUCTED:
To vote: FOR_____ AGAINST_____ ABSTAIN_____ the approval of the
sub-advisory agreement with Voyageur International Asset Managers Ltd as
sub-adviser for the Fund.
In their discretion the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
postponement thereof.
THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE ABOVE MATTER. IT IS
UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" THE
ABOVE ITEM. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE
BEST INTERESTS OF THE FUND. RECEIPT OF NOTICE OF MEETING AND PROXY STATEMENT IS
ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY. SIGN, DATE, AND RETURN IN THE
ADDRESSED ENVELOPE-NO POSTAGE REQUIRED. PLEASE MAIL PROMPTLY TO SAVE THE FUND
FURTHER SOLICITATION EXPENSE.
Dated:________________________________________________, 1996
____________________________________________________________
____________________________________________________________
IMPORTANT: Please date and sign this proxy. If the stock is
held jointly, signature should include both names.
Executors, administrators, trustees, guardians, and others
signing in a representative capacity should give their full
title as such.
