<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
DELAWARE POOLED TRUST, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
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):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] 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.
1. Amount Previously Paid:________________________________________________
2. Form, Schedule or Registration Statement No.:__________________________
3. Filing Party:__________________________________________________________
4. Date Filed:____________________________________________________________
<PAGE>
LOGO
January 8, 1998
Dear Shareholder:
A[n] Annual/Special Meeting of Shareholders of Delaware Pooled Trust, Inc. and
its various portfolios is being held in Philadelphia on March 17, 1999. We ask
that you take the time to review the enclosed proxy statement and provide us
with your vote on the important issues affecting the company and any portfolios
that you own.
The enclosed proxy statement describes seven separate proposals that either
affect the entire company or individual portfolios within the company. In
addition to the election of Board members and ratification of the selection of
auditors, the proposals include the approval of new, standardized investment
management and sub-advisory agreements. Some of the proposed management
agreements contain fee reductions, while others contain slight increases equal
to the dollar amount of the independent director fees.
Shareholders are also being asked to approve a change in the designation of
investment objectives from "fundamental" to "non-fundamental." Also, new
standardized "fundamental" investment restrictions are proposed for certain
portfolios and the current investment restrictions of those same portfolios are
proposed to be redesignated as "non-fundamental." These changes will allow the
Board of Directors to modify the investment objectives and "non-fundamental"
restrictions for the affected portfolios in the future without the delay and
expense of holding a shareholder meeting. Finally, shareholders are asked to
approve management's proposal to reorganize the company into a Delaware business
trust to take advantage of various advantages under Delaware law.
We realize that this proxy statement will take time to review, but your vote is
very important. Please familiarize yourself with the proposals presented and
mark, sign and return your proxy card (or cards) in the enclosed postage-paid
envelope. You may also call toll-free to vote by telephone, or you may vote
using the Internet. The insert accompanying this Proxy Statement describes how
to vote using these methods.
If we do not receive your completed proxy card(s) after several weeks, you may
be contacted by representatives of the company, who will remind you to vote your
shares and will review with you the various ways in which you can register your
vote.
Thank you for taking this matter seriously and participating in this important
process.
Sincerely,
LOGO
Jeffrey J. Nick, Chairman, President and
Chief Executive Officer
<PAGE>
QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT
We encourage you to read the attached proxy statement in full; however, the
following are some typical questions that shareholders might have regarding this
proxy statement.
Q: WHY IS DELAWARE INVESTMENTS SENDING ME THIS PROXY STATEMENT?
Investment companies are required to obtain shareholders' votes for certain
types of action. As a shareholder, you have a right to vote on certain major
policy decisions, such as those included here.
Q: WHAT ARE THE ISSUES CONTAINED IN THIS PROXY STATEMENT?
There are seven different proposals presented here and they are outlined in the
Notice at the beginning of the proxy statement. The Notice describes which
proposals apply to the entire company and which proposals apply to particular
portfolios within the company.
Q: HOW WOULD THE PROPOSALS AFFECT ME AS A SHAREHOLDER?
o Changing the designation of a portfolio's investment objective from
"fundamental" to "non-fundamental" would allow the Board of Directors,
without additional shareholder approval, to make future adjustments to the
investment objective to give greater flexibility to respond to market,
regulatory or industry changes. Approval of this proposal would not alter
any portfolio's current investment objective.
o Adopting a standardized list of "fundamental" investment restrictions for a
portfolio would help provide operational efficiencies and make it easier to
monitor compliance with these restrictions.
o Converting all existing investment restrictions to "non-fundamental" would
allow the Board of Directors to analyze and approve changes to a
portfolio's existing investment restrictions, without additional
shareholder approval, to further the goal of standardization of investment
restrictions.
o Approval of the proposed fee decreases for certain portfolios, or slight
fee increases for other portfolios, will ensure management fee levels that
will enable the portfolios to continue to receive high quality investment
management services.
o Approval of new standardized investment management agreements for each
portfolio (and standardized sub-advisory agreements where applicable) would
help provide operational efficiencies.
o The restructuring of the company from a Maryland corporation into a
Delaware business trust would provide both consistency across the Delaware
Investments family of funds and flexibility of operations.
Q: HOW DO THE BOARD MEMBERS RECOMMEND THAT I VOTE?
The Board members recommend that you vote in favor of, or FOR, all of the
proposals described above.
Q: WHOM DO I CALL FOR MORE INFORMATION ON HOW TO PLACE MY VOTE?
Please call the company at 1-800-523-1918 or call Shareholder Communications at
1-800-858-0073 for additional information on how to place your vote.
PLEASE VOTE
YOUR VOTE IS IMPORTANT
<PAGE>
LOGO
1818 Market Street
Philadelphia, PA 19103
Combined Proxy Statement and
Notice of Annual/Special Meeting of Shareholders
to be Held on March 17, 1999
To the Shareholders of the following portfolios of Delaware Pooled Trust, Inc.:
The Aggregate Fixed Income Portfolio
The Diversified Core Fixed Income Portfolio
The Global Equity Portfolio
The Emerging Markets Portfolio
The Global Fixed Income Portfolio
The Growth and Income Portfolio
The High-Yield Bond Portfolio
The Intermediate Fixed Income Portfolio
The International Equity Portfolio
The International Fixed Income Portfolio
The Labor Select International Equity Portfolio
The Large Cap Value Equity Portfolio
The Mid Cap Growth Equity Portfolio
The Real Estate Investment Trust Portfolio II
The Small-Cap Growth Equity Portfolio
The Small/Mid Cap Value Equity Portfolio
This is your official Notice that a[n] Annual/Special Meeting of Shareholders of
Delaware Pooled Trust, Inc. (the "Company"), will be held on Wednesday, March
17, 1999 at 10:00 a.m. at the Union League, 140 South Broad Street,
Philadelphia, Pennsylvania. Each separate portfolio within the Company that will
participate at the meeting is referred to as a "Portfolio." The purpose of the
meeting is to consider and act upon the following Proposals and Sub-Proposals
that apply either to the entire Company or particular Portfolios within the
Company and to transact any other business that properly comes before the
meeting and any adjournments thereof.
Proposal One: To Elect a Board of Directors for the Company
Proposal One applies to all Portfolios.
Proposal Two: To Approve the Redesignation of the Portfolio's
Investment Objective from Fundamental to Non-Fundamental.
Proposal Two applies to all Portfolios except the following:
The Growth and Income Portfolio
The Labor Select International Equity Portfolio
The Small-Cap Growth Equity Portfolio
Proposal Three: To Approve Standardized Fundamental Investment
Restrictions for the Portfolio (Includes Seven Sub-Proposals)
3A: Industry Concentration
3B: Borrowing Money and Issuing Senior Securities
3C: Underwriting of Securities
3D: Investing in Real Estate
3E: Investing in Commodities
3F: Making Loans
3G: Redesignation of all Current Fundamental
Investment Restrictions as Non-Fundamental
Proposal Three applies to all Portfolios except the following:
The Growth and Income Portfolio
The Labor Select International Equity Portfolio
The Small-Cap Growth Equity Portfolio
Proposal Four: To Approve a New Investment Management Agreement for the
Portfolio.
<PAGE>
Proposal Four applies to all Portfolios.
Proposal Five: To Approve a New Sub-Advisory Agreement for the Portfolio.
Proposal Five only applies to the following Portfolios:
The Diversified Core Fixed Income Portfolio
The Global Equity Portfolio
The Real Estate Investment Trust Portfolio II
Proposal Six: To Ratify the Selection of Ernst & Young LLP as Independent
Auditors for the Company.
Proposal Six applies to all Portfolios.
Proposal Seven: To Approve the Restructuring of the Company from a Maryland
corporation into a Delaware Business Trust.
Proposal Seven applies to all Portfolios.
Please note that a separate vote is required for each Proposal or Sub-Proposal
that applies to the Company or your Portfolio. Please vote your Proxy promptly
to avoid the need for further mailings. Your vote is important.
LOGO
Jeffrey J. Nick
Chairman, President and Chief Executive Officer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
NOTICE OF ANNUAL/SPECIAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
Proposal One: To Elect a Board of Directors for the Company 2
Proposal Two: To Approve the Redesignation of the Portfolio's Investment Objective
from Fundamental to Non-Fundamental 4
Proposal Three: To Approve Standardized Fundamental Investment Restrictions for the
Portfolio (Includes Seven Sub-Proposals) 5
3A: Industry Concentration 6
3B: Borrowing Money and Issuing Senior Securities 7
3C: Underwriting of Securities 8
3D: Investing in Real Estate 8
3E: Investing in Commodities 9
3F: Making Loans 9
3G: Redesignation of all Current Fundamental Investment Restrictions
as Non-Fundamental 9
Proposal Four: To Approve a New Investment Management Agreement for the Portfolio 10
Proposal Five: To Approve a New Sub-Advisory Agreement for the Portfolio 15
Proposal Six: To Ratify the Selection of Ernst & Young LLP as Independent Auditors for
the Company 16
Proposal Seven: To Approve the Restructuring of the Company from a Maryland
Corporation into a Delaware Business Trust 17
EXHIBITS
Exhibit A: Outstanding Shares as of Record Date A-1
Exhibit B: Shareholders Owning 5% or More of a Portfolio as of October 31, 1998 B-1
Exhibit C: Executive Officers of the Company C-1
Exhibit D: Shareholdings by Directors and Nominees in the Delaware
Investments Funds as of October 31, 1998 D-1
Exhibit E: Lists of Current Fundamental Investment Restrictions E-1
Exhibit F: Information Relating to Investment Management and
Sub-Advisory Agreements F-1
Exhibit G: Similar Funds Managed by Investment Managers and Sub-Advisers G-1
Exhibit H: Form of Investment Management Agreement H-1
Exhibit I: Form of Sub-Advisory Agreement I-1
Exhibit J: Form of Agreement and Plan of Reorganization J-1
Exhibit K: Differences in Legal Structures K-1
</TABLE>
<PAGE>
LOGO
1818 Market Street
Philadelphia, PA 19103
1-800-523-1918
PROXY STATEMENT
ANNUAL/SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 17, 1999
Meeting Information. The Board of Directors of Delaware Pooled Trust, Inc., an
open-end registered investment company within the Delaware Investments family
(the "Company"), is soliciting your proxy to be voted at the Annual/Special
Meeting of Shareholders to be held on Wednesday, March 17, 1999 at 10:00 a.m. at
the Union League, 140 South Broad Street, Philadelphia, Pennsylvania or any
adjournments of the meeting (hereafter, the "Meeting").
Purpose of Meeting. The purpose of the Meeting is to consider a number of
Proposals and Sub-Proposals that either apply to the Company as a whole, or to
individual portfolios within the Company (each a "Portfolio"). The accompanying
Notice describes which Proposals and Sub-Proposals apply to the Company and/or
its Portfolios.
The Board urges you to complete, sign and return the Proxy Card (or Cards)
included with this Proxy Statement, or use one of the other voting methods
described in the insert accompanying this Proxy Statement, whether or not you
intend to be present at the Meeting. It is important that you return the signed
Proxy Card(s) or use one of the other voting methods described in the insert
accompanying this Proxy Statement, promptly to help assure a quorum for the
Meeting.
General Voting Information. The persons designated on the Proxy Card as proxies
will vote your shares as you instruct on each Proxy Card. If your signed Proxy
Card is returned without any voting instructions, your shares will be voted
"FOR" each of the nominees for election as Director and "FOR" each other
Proposal or Sub-Proposal concerning the Company or your Portfolio. The persons
designated as proxies will also be authorized to vote in their discretion on any
other matters which may come before the Meeting. If you sign and return a Proxy
Card, you may still attend the Meeting to vote your shares in person. If your
shares are held of record by a broker-dealer and you wish to vote in person at
the Meeting, you should obtain a Legal Proxy from your broker of record and
present it at the Meeting. You may also revoke your proxy at any time before the
Meeting: (i) by notifying Delaware Investments in writing; (ii) by submitting a
later signed Proxy Card; or (iii) by voting your shares in person at the
Meeting.
Each shareholder may cast one vote for each full share and a partial vote for
each partial share of a Portfolio that they own on the record date, which is
December 21, 1998. Exhibit A shows the number of shares of each Portfolio and
the Company that were outstanding on the record date and Exhibit B lists the
shareholders who own 5% or more of each Portfolio. It is expected that this
Proxy Statement and the accompanying Proxy Card(s) will be mailed to
shareholders of record on or about January 8, 1999.
This proxy solicitation is being made largely by mail, but may also be made by
officers or employees of the Company or their investment managers or affiliates,
through telephone, facsimile, oral or other communications. Shareholders may
provide proxy instructions by returning their Proxy Card by mail or fax and may
also communicate proxy instructions through the Internet or by telephone via
touch-tone voting.
Votes Required to Approve each Proposal or Sub-Proposal. Three Proposals within
this Proxy Statement affect all shareholders of the Company, regardless of the
fact that the Company consists of a number of individual Portfolios. These
Proposals are the election of Directors, the ratification of the selection of
the independent auditors and the restructuring of the Company from a Maryland
corporation to a Delaware business trust. All shareholders of the Company vote
together on these Proposals. In addition to the Portfolios, The Real Estate
Investment Trust Portfolio is one of the portfolios within the Company. With
regard to the Proposals that apply to the entire Company, shareholders of The
Real Estate Investment Trust Portfolio have received a separate proxy statement
relating to the same proposals and their votes will be combined with the votes
of shareholders of the Portfolios who are voting at this meeting. The remaining
Proposals or Sub-Proposals contained in this Proxy Statement only affect
particular Portfolios and, therefore, only shareholders of those Portfolios are
permitted to vote on those Proposals or Sub-Proposals.
The amount of votes of the Company or a Portfolio that are needed to approve the
different Proposals or Sub-Proposals varies. The voting requirements are
described within each Proposal or Sub-Proposal.
1
<PAGE>
Abstentions and broker non-votes will be included for purposes of determining
whether a quorum is present at the Meeting. They will be treated as votes
present at the Meeting, but will not be treated as votes cast. They therefore
would have no effect on Proposals which require a plurality of votes cast for
approval, but would have the same effect as a vote "AGAINST" on Proposals
requiring a majority of votes present and/or entitled to vote for approval.
(These different voting standards are explained in the various Proposals.) DMC
or DIAL will reimburse banks, brokers or dealers for their reasonable expenses
in forwarding soliciting materials to shareholders.
Each Portfolio's most recent Annual Report and Semi-Annual Report to
Shareholders were previously mailed to shareholders. Copies of these reports are
available upon request, without charge, by writing or calling the Company at the
address and telephone number shown on the top of the previous page of the Proxy
Statement.
Proposal One: To Elect a Board of Directors for the Company
This Proposal applies to all Portfolios.
You are being asked to vote to elect each of the nominees to the Board. The
nominees are: Jeffrey J. Nick, Walter P. Babich, John H. Durham, Anthony D.
Knerr, Ann R. Leven, Thomas F. Madison, Charles E. Peck, Wayne A. Stork and Jan
R. Yeomans. With the exception of Jan R.Yeomans, each nominee is currently a
member of the Board. If elected, these persons will serve as Directors until the
next Annual or Special Meeting of Shareholders called for the purpose of
electing Directors, and/or until their successors have been elected and qualify
for office. It is not expected that any nominee will withdraw or become
unavailable for election, but in such a case, the power given by you in the
Proxy Card may be used to vote for a substitute nominee or nominees as
recommended by the existing Board.
Directors and Nominees. Presented below is information about the age, position
with the Company, principal occupation and past business experience of each
nominee and current Director.
Jeffrey J. Nick* (45), Chairman, President, Chief Executive Officer and Director
and/or Trustee of each of the 34 investment companies in the Delaware
Investments family; President and Director of Delaware Management Holdings,
Inc., 1997 to present; President, Chief Executive Officer and Director of
Lincoln National Investment Companies, Inc., 1996 to present; Director of
Delaware International Advisers Ltd., 1998 to present; Director of Vantage
Global Advisors, Inc., 1996 to present; Director of Lynch & Mayer Inc.
(investment adviser), 1997 to present; Managing Director of Lincoln National UK
plc, 1992-1996; Senior Vice President of Lincoln National Corporation
responsible for corporate planning and development, 1989-1992.
Walter P. Babich (71), Director and/or Trustee of each of the 34 investment
companies in the Delaware Investments family; Board Chairman of Citadel
Constructors, Inc. (commercial building construction), 1988 to present; Partner
of I&L Investors, 1988-1991; Partner of Irwin & Leighton Partnership (building
construction), 1986-1988.
John H. Durham (61), Director and/or Trustee of 19 investment companies in the
Delaware Investments family (including the Company). Consultant to Delaware
Investments, 1991-1997; Partner of Complete Care Services, 1995 to present;
Chairman of the Board of each investment company in the Delaware Investments
family from 1986 to 1991; Director Emeritus from 1995 through 1998, at which
time he was reappointed to the Boards; President of each company from 1977 to
1990; and Chief Executive Officer of each company from 1984 to 1990. Prior to
1992, with respect to Delaware Management Holdings, Inc., Delaware Management
Company, Delaware Distributors, Inc. and Delaware Service Company, Inc., Mr.
Durham served as a director and in various executive capacities at different
times within the Delaware Investments organization.
Anthony D. Knerr (59), Director and/or Trustee of each of the 34 investment
companies in the Delaware Investments family; Founder and Managing Director,
Anthony Knerr & Associates (strategic consulting company to major non-profit
institutions and organizations), 1991 to present; Founder and Chairman of the
Publishing Group, Inc. 1988-1990; Executive Vice President/Finance and Treasurer
of Columbia University, 1982-1988; Lecturer of English at Columbia University,
1987-1989.
Ann R. Leven (57), Director and/or Trustee of each of the 34 investment
companies in the Delaware Investments family; Treasurer, National Gallery of
Art, 1994 to present; Director of four investment companies sponsored by Acquila
Management Corporation, 1985 to February, 1998; Deputy Treasurer of the National
Gallery of Art, 1990 to 1994; Treasurer and Chief Fiscal Officer of the
Smithsonian Institution, 1984-1990; Adjunct Professor at Columbia Business
School, 1975-1992.
- ----------
*This nominee is considered to be an "interested person" of the Company, as that
term is defined in the Investment Company Act of 1940, as amended, because he
is affiliated with the investment manager and distributor of the Company.
2
<PAGE>
W. Thacher Longstreth* (77), Director and/or Trustee of each of the 34
investment companies in the Delaware Investments family; Philadelphia City
Councilman, 1984 to present; Consultant, Packard Press, 1988 to present; Senior
Partner, MLW Associates (business consulting), 1983 to present; Director,
Healthcare Services Group, 1983 to present; Director Emeritus, Tasty Baking
Company, 1991 to present; Director, MicroLeague Micromedia, Inc. (computer game
publisher), 1996 to present; Director, Tasty Baking Company, 1968-1991; Vice
Chairman, The Winchell Company (financial printing), 1983-1988.
Thomas F. Madison (62), Director and/or Trustee of each of the 34 investment
companies in the Delaware Investments family; President and Chief Executive
Officer of MLM Partners, Inc., 1993 to present; Chairman of the Board of
Communications Holdings, Inc., 1996 to present; Vice Chairman--Office of the CEO
of The Minnesota Mutual Life Insurance Company, February to September, 1994;
Director of Valmont Industries (irrigation systems and steel manufacturing),
1987 to present; Director of Eltrax Systems, Inc. (data communications
integration), 1993 to present; Director of Minnegasco, Span Link Communications
(software), 1995 to present; Director of ACI Telecentrics (outbound
telemarketing and telecommunications), 1997 to present; Director of Aon Risk
Services, 1996 to present; Director of Digital River, 1997 to present.
Charles E. Peck (72), Director and/or Trustee of each of the 34 investment
companies in the Delaware Investments family; Retired; Secretary/Treasurer,
Enterprise Homes, Inc., 1992 to present; Chairman and Chief Executive Officer of
The Ryland Group, Inc., 1981 to 1990.
Wayne A. Stork** (61), Director and/or Trustee of each of the 34 investment
companies in the Delaware Investments family and Delaware Capital Management,
Inc.; Chairman, President, Chief Executive Officer and Director of DMH Corp.,
Delaware Distributors, Inc. and Founders Holdings, Inc.; Chairman, President,
Chief Executive Officer, Chief Investment Officer and Director/Trustee of
Delaware Management Company, Inc. and Delaware Management Business Trust;
Chairman, President, Chief Executive Officer and Chief Investment Officer of
Delaware Management Company (a series of Delaware Management Business Trust);
Chairman, Chief Executive Officer and Chief Investment Officer of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Chairman,
Chief Executive Officer and Director of Delaware International Advisers Ltd.,
Delaware International Holdings Ltd. and Delaware Management Holdings, Inc.;
President and Chief Executive Officer of Delvoy, Inc.; Chairman of Delaware
Distributors, L.P.; Director of Delaware Service Company, Inc. and Retirement
Financial Services, Inc. During the past five years, Mr. Stork has served in
various executive capacities at different times within the Delaware Investments
organization.
Jan R. Yeomans (50), Vice President and Treasurer of the 3M Corporation, 1994 to
present; Director of Benefit Funds and Financial Markets for the 3M Corporation,
1987-1994; Manager of Benefit Fund Investments for the 3M Corporation,
1985-1987; Manager of Pension Funds for the 3M Corporation, 1983-1985;
Consultant - Investment Technology Group of Chase Econometrics, 1982-1983;
Consultant for Data Resources, 1980-1982; Programmer for the Federal Reserve
Bank of Chicago, 1970-1974.
Board and Committee Meetings. During the twelve months ended October 31, 1998,
the Company held [(Delaware to advise:) _________] Board meetings.
The Board has an Audit Committee for the purpose of meeting, at least annually,
with the Company's independent auditors and officers to oversee the quality of
financial reporting and the internal controls of the Company, and for such
purposes as the Board may from time to time direct. The Audit Committee of the
Company consists of the following four Directors, all of whom are considered to
be independent because they are not "interested persons" as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"): Ann R. Leven,
Chairperson, Walter P. Babich, Anthony D. Knerr and Thomas F. Madison. Members
of the Audit Committee are appointed by the Board and serve for three years or
until their successors have been appointed and qualified. The Audit Committee
held [(Delaware to advise:) ________] meetings during the twelve months ended
October 31, 1998.
The Board also has a Nominating Committee that meets for the purpose of
proposing nominees to serve as Directors. Nominees are considered by the full
Board and, when appropriate, by shareholders at annual or special shareholder
meetings. The Nominating Committee of the Company consists of the following
three Directors appointed by the Board, two of whom are considered to be
independent Directors: Wayne A. Stork, Anthony D. Knerr and W. Thacher
Longstreth. [(please confirm) This Committee met once during the past year for
the purpose of determining the proposed list of nominees for this Meeting.] The
selection and nomination of the independent Director nominees is committed to
the discretion of the present independent Directors. The Nominating Committee
will consider suggestions for Board nominations from shareholders. Shareholders
who wish to suggest candidates for nomination to the Boards of Directors at any
future annual meeting should identify the candidate and furnish a written
statement of the person's qualifications to the Nominating Committee at the
principal executive offices of the Company.
- ----------
*This Director is retiring from service on the Board on ________, and,
therefore, is not a nominee.
**This nominee is considered to be an "interested person" of the Company, as
that term is defined in the Investment Company Act of 1940, as amended,
because he is affiliated with the investment manager and distributor of the
Company.
3
<PAGE>
Board Compensation. The interested Directors are compensated by the investment
manager and do not receive compensation from the Company. Each independent
Director (other than John H. Durham) currently receives a total annual retainer
fee of $38,500 for serving as a Director for all 34 companies within the
Delaware Investments fund complex, plus $3,145 for each set of complex Board
meetings attended (usually seven regular meetings). John H. Durham re-joined the
Board of Directors of most of the companies in the Delaware Investments family
on April 16, 1998. He currently receives a total annual retainer fee of $31,000
for serving as a Director for 19 Companies within the Delaware Investments fund
complex, plus $1,757.50 for each set of Board meetings attended. Members of the
Audit Committee currently receive additional annual compensation of $5,000 from
all Companies, in the aggregate, with the exception of the chairperson, who
receives $6,000.
Under the terms of the Company's retirement plan for Directors, each independent
Director who, at the time of his or her retirement from the Board, has attained
the age of 70 and served on the Board for at least five continuous years, is
entitled to receive payments from the Company for a period of time equal to the
lesser of the number of years that such person served as a Director or the
remainder of such person's life. The annual amount of such payments will be
equal to the amount of the annual retainer that is paid to Directors of the
Company at the time of such person's retirement. W. Thacher Longstreth is
retiring from Board service and is entitled to annual payments in an amount
equal to the annual retainer fee noted in the previous paragraph. The following
table indicates the amount each Director received from the Company and from the
fund complex as a whole during
the last year.
<TABLE>
<CAPTION>
Wayne A. Jeffrey J. Walter P. John H. Anthony D. Ann R. W. Thacher Thomas F. Charles E.
Company Name Stork Nick Babich Durham(1) Knerr Leven Longstreth Madison(2) Peck
------------- ----- ---- ------ -------- ----- ----- ---------- --------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total Compensation from
Delaware Pooled Trust, during
the last fiscal year None None $ $ $ $ $ $ $
Total Compensation From All
Companies in the Delaware
Investments Family for the
12 months ended
[November 30, 1998] None None $ $ $ $ $ $ $
</TABLE>
(1) Mr. Durham re-joined the Board on April 16, 1998.
(2) Mr. Madison joined the Board on May 1, 1997.
Officers. The Board and the senior management of the Company appoint officers
each year, and from time to time as necessary. The following individuals are
executive officers of the Company: Wayne A. Stork, Jeffrey J. Nick, David K.
Downes, Richard G. Unruh, Paul E. Suckow, Michael P. Bishof, George M.
Chamberlain, Jr., Joseph H. Hastings, Patrick P. Coyne, Mitchell L. Conery, Paul
A. Matlack, Gary A. Reed, Babak Zenouzi, Gerald T. Nichols, Christopher S. Beck,
George H. Burwell, Robert L. Arnold, Gerald S. Frey, Roger A. Early, John B.
Fields, Paul Grillo, Cynthia L. Isom, Frank X. Morris, James F. Stanley and Paul
Dokas. Exhibit C includes biographical information and the past business
experience of such officers, except for Mr. Stork and Mr. Nick, whose
information is set forth above along with the other Directors and nominees. The
Exhibit also identifies which officers are also officers of DMC or DIAL. The
above officers of the Company own shares of common stock and/or options to
purchase shares of common stock of Lincoln National Corporation ("LNC"), the
ultimate parent of DMC and DIAL. As a result, they are considered to be
"interested persons" of the Company under the 1940 Act.
While in the employ of Oppenheimer Management Corporation, Mr. Paul E. Suckow
was the subject of an Administrative Proceeding brought by the U.S. Securities
and Exchange Commission ("SEC"). As a result of this proceeding, Mr. Suckow was
found to have violated Section 34(b) of the 1940 Act by failing properly to
disclose material facts in certain books and records by order of the SEC dated
December 1, 1992. Mr. Suckow was suspended from the business for 120 days.
Management's Ownership of the Portfolios. Attached to this Proxy Statement as
Exhibit D is a list of the Directors' and nominees' shareholdings of the various
funds within the Delaware Investments family on an individual basis. Exhibit A
lists the aggregate holdings by all of the Directors, nominees and executive
officers as a group.
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Required Vote. Each Director of the Company shall be elected by a plurality of
votes cast by shareholders of the Company. This means that the nominees
receiving the largest number of votes will be elected to fill the available
Board positions.
Proposal Two: To Approve the Redesignation of the Portfolio's Investment
Objective from Fundamental to Non-Fundamental
This Proposal applies all Portfolios except the following:
The Growth and Income Portfolio
The Labor Select International Equity Portfolio
The Small-Cap Growth Equity Portfolio
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The investment objective of each Portfolio to which this Proposal applies, like
many of the older Delaware Investments funds, is designated as "fundamental,"
which means that any changes, even those not resulting in significant changes in
the way a fund is managed or the risks to which it is subject, require
shareholder approval. Under the 1940 Act, a fund's investment objective is not
required to be "fundamental." However, many funds have elected to designate
their investment objectives as "fundamental." This practice arose largely as a
result of comments provided by state securities regulators in their review of
fund registration statements during the state registration process, as well as
because of historical drafting conventions.
In light of the enactment of National Securities Markets Improvement Act of 1996
("NSMIA"), which eliminated state review of fund registration statements, and in
order to provide the Board with enhanced flexibility to respond to market,
industry or regulatory changes, the Board has approved the redesignation from
"fundamental" to "non-fundamental" of each Portfolio's investment objective. A
"non-fundamental" investment objective may be changed at any time by the
Directors without the delay and expense of soliciting proxies and holding a
shareholder meeting.
For a complete description of the investment objective of your Portfolio, please
consult your Portfolio's prospectus. The redesignation from "fundamental" to
"non-fundamental" will not alter any Portfolio's current investment objective.
If this Proposal is approved, however, management intends to request that the
Directors consider a number of modifications to the language used to describe
certain Portfolios' investment objectives. The requested modifications are
designed to modernize and standardize the expression of such investment
objectives, but if these modifications are implemented, neither the principal
investment design nor the day-to-day management of the Portfolios would be
materially altered. If at any time in the future, the Directors approve a change
in a Portfolio's "non-fundamental" investment objective, either in connection
with the currently anticipated modernization and standardization or otherwise,
shareholders will be given notice of the change prior to its implementation.
Required Vote. Approval of this proposal for a Portfolio requires the vote of a
"majority of the outstanding voting securities" of the Portfolio, which means
the vote of: (i) more than 50% of the outstanding voting securities of the
Portfolio; or (ii) 67% or more of the voting securities of the Portfolio present
at a meeting, if the holders of more than 50% of the outstanding voting
securities are present or represented by proxy, whichever is less. If the
redesignation of any Portfolio's investment objective from "fundamental" to
"non-fundamental" is not approved by shareholders of a particular Portfolio,
that Portfolio's investment objective will remain "fundamental" and shareholder
approval (and its attendant costs and delays) will continue to be required prior
to any change in the investment objective.
At Board meetings held in July and September, 1998, the Directors considered the
enhanced flexibility to respond to market, industry or regulatory changes that
would accrue to the Board if each relevant Portfolio's "fundamental" investment
objective was redesignated as "non-fundamental" and the Board unanimously
approved the proposed change.
The Board unanimously recommends that you vote FOR the redesignation of the
investment objective of your Portfolio as "non-fundamental."
Proposal Three: To Approve Standardized Fundamental Investment Restrictions for
the Portfolio (This Proposal involves separate votes on Sub-Proposals 3A through
3G)
This Proposal applies to all Portfolios except the following:
The Growth and Income Portfolio
The Labor Select International Equity Portfolio
The Small-Cap Growth Equity Portfolio
Proposal Overview
Each Portfolio is subject to investment restrictions which establish percentage
and other limits that govern the Portfolio's investment activities. Under the
1940 Act, investment restrictions relating to certain activities are required to
be "fundamental," which means that any changes require shareholder approval.
Funds, in their discretion, are permitted to deem other restrictions
fundamental, and they may also adopt "non-fundamental" restrictions, which can
be changed by a fund without shareholder approval. Of course, any change in a
fund's investment restrictions, whether "fundamental" or not, would be approved
by the fund's Board and reflected in the fund's prospectus or other offering
documents.
Unlike investment objectives and policies, which are often different for each
fund, investment restrictions for funds tend to be the same or similar, because
they are based on legal or regulatory requirements that apply to all funds. Over
the years, however, as new funds were created or added to the Delaware
Investments family, investment restrictions relating to the same activities were
expressed in a variety of different ways. Many older Portfolios are subject to
investment restrictions that were adopted in response to regulatory, business or
industry conditions that no longer exist. In addition, a number of Portfolios
adopted "fundamental" restrictions in response to state laws and regulations
that no longer apply because they were preempted by NSMIA.
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As a result, a number of "fundamental" restrictions are no longer required to be
"fundamental," and some previously required restrictions are no longer required
at all.
The Directors, together with management of the Company and the investment
managers and sub-advisers, have analyzed the current "fundamental" investment
restrictions of each Portfolio, and have concluded that six new standardized
"fundamental" investment restrictions should be adopted for each Portfolio. The
proposed investment restrictions relate only to activities that are required
under the 1940 Act to be the subject of "fundamental" policies and restrictions.
Management believes that a modern, standardized list of restrictions will
enhance the ability of the Portfolios to achieve their objectives because the
Portfolios will have greater investment management flexibility to respond to
changes in market, industry or regulatory conditions. In addition, standardized
restrictions are expected to enable the Portfolios to operate more efficiently
and to more easily monitor compliance with investment restrictions.
Each Portfolio currently has "fundamental" investment restrictions that govern
the same activities covered by the proposed "fundamental" investment
restrictions, and a number of Portfolios currently have other "fundamental"
investment restrictions that govern additional activities. Management is
recommending that shareholders approve the redesignation of each Portfolio's
current "fundamental" investment restrictions as "non-fundamental," at the same
time that the six new standardized "fundamental" investment restrictions are
adopted for each Portfolio. If the current "fundamental" restrictions are
redesignated as "non-fundamental," the Directors would be able to modify or
eliminate the current restrictions without the costs or delays associated with a
shareholder vote.
The proposed changes will not affect any Portfolio's investment objective and
will not change the way any Portfolio is currently being managed or operated,
since all current investment restrictions will remain in place as
"non-fundamental" restrictions. If shareholders approve management's proposal to
redesignate the current "fundamental" investment restrictions as
"non-fundamental," at some point in the future management intends to recommend
that the Board approve certain modifications to the "non-fundamental"
restrictions. These modifications will result in a more modern and standardized
list of investment restrictions for the various Delaware Investments funds.
Whil emanagement's recommendations will likely involve the elimination of
certain current restrictions, the Board will determine separately for each
Portfolio whether elimination or modification of a common investment restriction
is appropriate for that Portfolio.
The six new proposed "fundamental" investment restrictions are described below
within the relevant Sub-Proposals. In addition, Exhibit E contains a list of the
current "fundamental" investment restrictions for each Portfolio which are
proposed to be redesignated as "non-fundamental." Unless all of the
Sub-Proposals are approved by shareholders of a Portfolio, none of the
Sub-Proposals will be adopted for that Portfolio.
Required Vote. Approval of each Sub-Proposal for a Portfolio requires the vote
of a "majority of the outstanding voting securities" of the Portfolio, which
means the vote of: (i) more than 50% of the outstanding voting securities of the
Portfolio; or (ii) 67% or more of the voting securities of the Portfolio present
at a meeting, if the holders of more than 50% of the outstanding voting
securities are present or represented by proxy, whichever is less.
The Directors have voted to adopt each of the proposed standardized
"fundamental" investment restrictions for the Portfolios, as well as to approve
the redesignation of the existing "fundamental" investment restrictions as
"non-fundamental," and unanimously recommend that you vote FOR each Sub-Proposal
3A through 3G for your Portfolio.
Sub-Proposal 3A: To adopt a new fundamental investment restriction concerning
the concentration of the Portfolio's investments in the same industry.
Under the 1940 Act, a Portfolio's policy of concentrating its investments in
securities of companies in the same industry must be fundamental. A mutual fund
concentrates its investments, for purposes of the SEC, if it invests more than
25% of its "net" assets (exclusive of cash, U.S. government securities and
tax-exempt securities) in a particular industry or group of industries. Having
the concentration policy apply to "net" assets represents a recent change by the
SEC staff from its previous concentration standard which applied to 25% of a
Portfolio's "total" assets. The change would slightly reduce a Portfolio's
ability to concentrate, since the "net" assets figure is lower than "total"
assets of a Portfolio because liabilities are subtracted.
Each Portfolio currently has a "fundamental" investment restriction prohibiting
it from concentrating its investments in the same industry. There are however,
variations in the way that the investment restriction is described in the
Portfolios' offering documents. In addition, The Real Estate Investment Trust
Portfolio II is permitted to concentrate its investments in securities of
issuers in the real estate industry. Lastly, most restrictions define
concentration in terms of a percentage of "total assets," rather than in
accordance with the new "net assets" standard.
The Board recommends that you approve the standardized "fundamental" investment
restriction set forth below. In approving the proposed investment restriction
and concluding that it would recommend the investment restriction to Portfolio
shareholders, the Directors considered that the proposed investment restriction
will standardize the concentration restriction for the Portfolios and is
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intended to provide flexibility for Portfolios to respond to changes in the SEC
staff's position on concentration of investments or to other relevant legal,
regulatory or market developments without the delay or expense of a shareholder
vote.
Adoption of the proposed "fundamental" restriction will not materially affect
the way the Portfolios are currently managed or operated because the existing
concentration restrictions will remain in place as non-fundamental policies
unless and until the Board modifies them in the future.
Proposed Concentration Restriction: The Portfolio will not make
investments that will result in the concentration (as that term may be
defined in the 1940 Act, any rule or order thereunder, or SEC staff
interpretation thereof) of its investments in the securities of issuers
primarily engaged in the same industry, provided that this restriction
does not limit the Portfolio from investing in obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities,
or in tax-exempt securities or certificates of deposit.
The Board has also approved a related "non-fundamental" policy for the
Portfolios, which will be adopted if the new "fundamental" restriction is
approved and which provides that, in applying the concentration restriction: (i)
utility companies will be divided according to their services, for example, gas,
gas transmission, electric and telephone will each be considered a separate
industry; (ii) financial service companies will be classified according to the
end users of their services, for example, automobile finance, bank finance and
diversified finance will each be considered a separate industry; and (iii) asset
backed securities will be classified according to the underlying assets securing
such securities. This "non-fundamental" policy is intended to keep the
concentration restriction from unnecessarily limiting a Portfolio's investments.
Sub-Proposal 3B: To adopt a new fundamental investment restriction concerning
borrowing money and issuing senior securities.
Introduction to Sub-Proposal. The 1940 Act imposes certain limits on investment
companies with respect to borrowing money and issuing senior securities. A
"senior security" is defined as an obligation of a fund with respect to its
earnings or assets that takes precedence over the claims of the fund's
shareholders with respect to the same earnings or assets. The 1940 Act generally
prohibits funds from issuing senior securities, in order to limit their ability
to use leveraging. In general, a fund uses leveraging when it enters into
securities transactions with borrowed money or money to which it has only a
temporary entitlement.
The limitations on borrowing and issuing senior securities are generally
designed to protect shareholders and their investments by restricting a fund's
ability to subject its assets to any claims of creditors or senior security
holders who would be entitled to dividends or rights on liquidation of the fund
that take precedence over the rights of shareholders. Borrowing money and
issuing senior securities are related activities under the 1940 Act in that, if
a fund fails to adhere to the restrictions applicable to borrowing, the fund
will be considered to have issued an impermissible senior security. Under the
1940 Act, a fund's investment restrictions relating to borrowing and senior
securities must be "fundamental."
The current investment restrictions concerning borrowing and senior securities
vary somewhat among the Portfolios and are set forth in Exhibit E. Shareholders
of each Portfolio are being asked to approve the new standardized "fundamental"
restriction that covers both borrowing and senior securities and which is
designed to reflect all current regulatory requirements.
Senior Securities. SEC staff interpretations under the 1940 Act allow open-end
funds to engage in a number of types of transactions which might be considered
to raise "senior securities" or "leveraging" concerns, so long as the funds meet
certain collateral requirements set by the SEC staff. These requirements are
designed to protect shareholders. For example, some of the transactions that may
raise senior security concerns include short sales, certain options and futures
transactions, reverse repurchase agreements and securities transactions that
obligate the fund to pay money at a future date (these transactions may be
referred to collectively as "Leveraging-Type Transactions"). Funds that engage
in Leveraging-Type Transactions must set aside money or securities or engage in
certain offsetting securities transactions, to meet the SEC staff's
collateralization requirements. Consistent with SEC staff positions, the senior
security restrictions for the Portfolios specifically permit the Portfolios to
engage in Leveraging-Type transactions.
Borrowing. Under the 1940 Act, an open-end fund is permitted to borrow up to 5%
of its total assets for temporary purposes from any person so long as the
borrowing is privately arranged, and to also borrow from banks, provided that if
such bank borrowings exceed 5%, the fund must have assets totaling at least 300%
of the borrowing when the amount of the borrowing is added to the fund's other
assets. The effect of this latter provision is to allow an open-end fund to
borrow from banks amounts up to one-third (33 1/3%) of its total assets
(including the amount borrowed). Open-end funds typically borrow money to meet
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redemptions so that they can avoid being forced to sell portfolio securities
before they would have otherwise been sold. This technique allows open-end funds
greater flexibility to buy and sell portfolio securities for investment or tax
considerations, rather than for cash flow considerations.
The borrowing restrictions for the Portfolios permit borrowing to the extent
allowed under the 1940 Act. However, a number of the Portfolios only permit
borrowing "as a temporary measure for extraordinary purposes," prevent the
Portfolios from purchasing securities while borrowings are outstanding and
prevent the Portfolios from pledging more than 10% of their net assets.
Effects of the Proposed Investment Restrictions. Since the proposed investment
restriction would provide greater flexibility for the Portfolios to engage in
borrowing and to engage in Leveraging-Type Transactions, the Portfolios may be
subject to additional costs and risks. For example, the costs of borrowing can
reduce a Portfolio's total return. Further, upon engaging in Leveraging-Type
Transactions, such Portfolios could experience increased risks due to the
effects of leveraging. The SEC staff's collateralization requirements are
designed to address such risks.
Board Recommendation. The Board recommends that shareholders approve the
proposed "fundamental" investment restriction for each Portfolio. The proposed
investment restriction will establish a standardized borrowing and senior
securities restriction which is written to provide flexibility for Portfolios to
respond to changes in legal, regulatory or market developments. Adoption of the
new restriction, however, will not affect the way such Portfolios are currently
managed or operated because the existing restrictions will remain as
"non-fundamental" policies unless and until the Board modifies them in the
future.
Proposed Borrowing and Senior Securities Restriction: The Portfolio may
not borrow money or issue senior securities, except as the 1940 Act,
any rule or order thereunder, or SEC staff interpretation thereof, may
permit.
Sub-Proposal 3C: To adopt a new fundamental investment restriction concerning
underwriting.
Each Portfolio is currently subject to a "fundamental" investment restriction
prohibiting it from acting as an underwriter of the securities of other issuers.
Under the 1940 Act, a fund's policy or restriction relating to underwriting must
be "fundamental." A person or company is generally considered an underwriter
under the federal securities laws if it participates in the public distribution
of securities of other issuers, usually by purchasing the securities from the
issuer and re-selling the securities to the public. Underwriters are subject to
stringent regulatory requirements and often are exposed to substantial
liability. Thus, virtually all funds operate in a manner that allows them to
avoid acting as underwriters.
From time to time, a fund may purchase a security for investment purposes which
it later sells or re-distributes to institutional investors or others under
circumstances where the fund could possibly be considered to be an underwriter
under the technical definition of underwriter contained in the securities laws.
The current underwriting restriction for each Portfolio specifically permits
such re-sales. Management, consistent with SEC staff interpretations, believes
that the Portfolios legally would not be regulated as underwriters in these
circumstances.
The Board recommends that shareholders of each Portfolio approve the
standardized "fundamental" investment restriction regarding underwriting set
forth below. The proposed restriction is substantially similar to the current
restriction for most Portfolios. The new restriction is proposed for each
Portfolio because it will help to achieve the goal of standardization of the
language of the investment restrictions among all Portfolios. Adoption of the
proposed restriction will not affect the way the Portfolios are currently
managed or operated.
Proposed Underwriting Restriction: The Portfolio may not underwrite the
securities of other issuers, except that the Portfolio may engage in
transactions involving the acquisition, disposition or resale of its
portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.
Sub-Proposal 3D: To adopt a new fundamental investment restriction concerning
investments in real estate.
Each Portfolio currently has a "fundamental" investment restriction prohibiting
the purchase or sale of real estate. The Real Estate Investment Trust Portfolio
II, however, may own real estate directly as a result of a default on securities
it owns. Most Portfolios' restrictions allow the Portfolios to invest in
companies that deal in real estate, or to invest in securities that are secured
by real estate. Under the 1940 Act, a Portfolio's policy or restrictions
regarding investments in real estate must be "fundamental."
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The Board recommends that shareholders of each Portfolio approve the
"fundamental" investment restriction concerning real estate set forth below. The
proposed investment restriction is designed to standardize the language of the
real estate restriction among the various Portfolios. The proposed investment
restriction will permit Portfolios to purchase securities whose payments of
interest or principal are secured by mortgages or other rights to real estate in
the event of default. The investment restriction will also enable the Portfolios
to invest in companies within the real estate industry, provided such
investments are consistent with the Portfolio's investment objectives and
policies. Adoption of the proposed restriction will not affect the way the
Portfolios are managed or operated because the current restrictions will remain
as "non-fundamental" policies unless and until the Board modifies them in the
future.
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Proposed Real Estate Restriction: The Portfolio may not purchase or
sell real estate unless acquired as a result of ownership of securities
or other instruments and provided that this restriction does not
prevent the Portfolio from investing in issuers which invest, deal, or
otherwise engage in transactions in real estate or interests therein,
or investing in securities that are secured by real estate or interests
therein.
Sub-Proposal 3E: To adopt a new fundamental investment restriction concerning
investments in commodities.
The Portfolios currently are subject to "fundamental" restrictions prohibiting
the purchase or sale of commodities or commodity contracts. Under the 1940 Act,
policies and restrictions regarding commodities must be "fundamental." The most
common types of commodities are physical commodities such as wheat, cotton, rice
and corn. However, under federal law, futures contracts are considered to be
commodities and, therefore, financial futures contracts, such as futures
contracts related to currencies, stock indices or interest rates are considered
to be commodities. If a fund buys a financial futures contract, it obtains the
right to receive (or, if the fund sells the contract, the fund is obligated to
pay) the cash difference between the contract price for an underlying asset or
index and the future market price, if the market price is higher. If the future
price is lower, the fund is obligated to pay (or, if the fund sold the contract,
the fund is entitled to receive) the amount of the decrease. Funds often desire
to invest in financial futures contracts and options related to such contracts
for hedging or other investment reasons.
The Board recommends that shareholders approve the "fundamental" investment
restriction concerning commodities set forth below for each Portfolio. The
proposed restriction would standardize the language of the restriction among the
various Portfolios and provide appropriate flexibility for the Portfolios to
invest in financial futures contracts and related options. As proposed, the
restriction is broad enough to permit investment in financial futures
instruments for either investment or hedging purposes, and, thus is broader than
many Portfolios' current restrictions. Using financial futures instruments can
involve substantial risks, and will be utilized only if the investment manager
determines that such investments are advisable and such practices are later
affirmatively authorized by the Board. Adoption of the restriction will not
affect the way the Portfolios are currently managed or operated because the
existing commodities restrictions will remain as "non-fundamental" policies
unless and until the Board modifies them in the future.
Proposed Commodities Restriction: The Portfolio may not purchase or
sell physical commodities, unless acquired as a result of ownership of
securities or other instruments and provided that this restriction does
not prevent the Portfolio from engaging in transactions involving
futures contracts and options thereon or investing in securities that
are secured by physical commodities.
Sub-Proposal 3F: To adopt a new fundamental investment restriction concerning
lending by the Portfolio.
Securities lending is a practice that has become common in the mutual fund
industry and involves the temporary loan of portfolio securities to parties who
use the securities for the settlement of securities transactions. The collateral
delivered to a Portfolio in connection with such a transaction is then invested
to provide the Portfolio with additional income. Each Portfolio is currently
subject to a "fundamental" investment restriction limiting its ability to make
loans. In order to ensure that the Portfolios may invest in certain debt
securities or repurchase agreements, which could be characterized as the making
of loans, most Portfolios' current "fundamental" restrictions specifically
permit such investments. In addition, a number of Portfolios' "fundamental"
restrictions explicitly permit Portfolios to lend their portfolio securities to
broker-dealers or institutional investors.
The Board recommends that shareholders approve the standardized "fundamental"
investment restriction concerning lending described below for each Portfolio.
The proposed restriction prohibits loans by the Portfolios except in the
circumstances described above and, in some cases, would provide more flexibility
than the current lending restriction because of the authority to engage in
securities lending. Although securities lending involves certain risks if the
borrower fails to return the securities, management believes that increased
flexibility to engage in securities lending does not materially increase the
risk to which the Portfolios are currently subject. Also, the adoption of the
restriction will not affect the way the Portfolios are currently managed or
operated, because the existing lending restrictions will remain in place as
"non-fundamental" policies unless and until the Board modifies them in the
future.
Proposed Lending Restriction: The Portfolio may not make loans,
provided that this restriction does not prevent the Portfolio from
purchasing debt obligations, entering into repurchase agreements,
loaning its assets to broker/dealers or institutional investors and
investing in loans, including assignments and participation interests.
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Sub-Proposal 3G: To redesignate all current fundamental investment restrictions
as non-fundamental.
Each Portfolio is currently subject to its own list of "fundamental" and
"non-fundamental" investment restrictions. Exhibit E lists the current
fundamental investment restrictions of each Portfolio. As described in the
previous Sub-Proposals, each Portfolio has a "fundamental" investment
restriction governing concentration, borrowing and senior securities,
underwriting, real estate,
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commodities and lending. Many of the Portfolios, especially the older
Portfolios, have additional "fundamental" investment restrictions governing
activities that are no longer required to be subject to "fundamental" investment
restrictions.
The Directors and management of the Portfolios recognize that many of the
current "fundamental" investment restrictions cover the same activities as the
proposed, standardized "fundamental" investment restrictions so that there will
be overlapping restrictions. However, rather than asking shareholders for
approval to eliminate the current restrictions at this time in favor of the new
standardized restrictions, the Board is recommending that all current
"fundamental" restrictions be redesignated as "non-fundamental". After the
current investment restrictions are made "non-fundamental", management and the
Directors will analyze and evaluate each Portfolio's investment restrictions on
an individual basis while considering the particular investment objective and
policies of the Portfolio. Over time, the Portfolios' investment restrictions
can be standardized, if appropriate. With the exception of a Portfolio's
classification as a diversified fund for purposes of the 1940 Act, the proposed
redesignation of the current investment restrictions as "non-fundamental" will
provide the Directors with the authority and ability to make such changes
without being required to seek an additional shareholder vote.
The conversion of investment restrictions to "non-fundamental" will provide
management of the Portfolios with the flexibility to respond to industry changes
and also to take advantage of unique pricing and distribution structures that
have developed over the past ten years. For example, eliminating certain
"fundamental" restrictions and redesignating them as "non-fundamental" would
permit the Portfolios to operate in a "master-feeder" structure at some point in
the future should management determine that such a structure were appropriate.
In a "master-feeder" structure, investors purchase shares of one or more feeder
funds which, in turn, invest all of their assets in corresponding master funds
which have identical investment objectives, policies and restrictions as the
feeder funds. The assets are collectively managed at the master fund level and
the different feeder funds can have varying distribution and expense structures.
The principal advantage of the master-feeder structure is the consolidation of
investment management of multiple identical investment pools into one investment
pool. The structure is also sufficiently flexible to permit offshore feeder
funds' assets to be managed at the master fund level.
By making the investment restrictions "non-fundamental," management will have
the flexibility to ensure that the investment restrictions of a Portfolio will
not limit the Portfolio's ability to operate in a master-feeder structure.
Before any existing Portfolio would convert to a master-feeder structure,
shareholders would be notified of such a change and the prospectus of the
particular Portfolio would be amended to disclose the ability to operate in a
master-feeder structure.
Proposal Four: To Approve a New Investment Management Agreement for the
Portfolio
This Proposal applies to all Portfolios.
Proposal Overview
Shareholders of each Portfolio are being asked to approve a new Investment
Management Agreement with their current investment manager, which is either
Delaware Management Company (previously defined as "DMC") or Delaware
International Advisers Ltd. (previously defined as "DIAL"). The New Investment
Management Agreements will reflect one or more of the following changes, all of
which are explained in further detail below.
o Management fee decrease.
o Slight management fee increase equal to the dollar amount of the
independent director fees.
o Elimination of a provision concerning shareholder approval of
amendments.
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o Elimination of a provision concerning a fund trading desk.
o Addition of a provision concerning the use of a sub-adviser.
To determine which proposed changes apply to your Portfolio, please check the
table at the end of this Proposal.
Required Vote. Approval of this Proposal for a Portfolio requires the vote of a
"majority of the outstanding voting securities" of the Portfolio, which means
the vote of: (i) more than 50% of the outstanding voting securities of the
Portfolio, or (ii) 67% or more of the voting securities of the Portfolio present
at a meeting, if the holders of more than 50% of the outstanding voting
securities are present or represented by proxy, whichever is less.
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If shareholders approve the new Agreements, any modified management fees will
take effect on [(Delaware to advise:) ____________], or at a later date if the
Meeting is postponed or adjourned. If a new Agreement is not approved for a
particular Portfolio, that Portfolio's current Agreement will continue in
effect. The Board for each Portfolio has unanimously approved the proposed
Agreements and recommends that you vote FOR the new Investment Management
Agreement for your Portfolio.
Proposed Changes in Management Fees
Purpose of Management Fees. Each Portfolio has hired either DMC or DIAL to serve
as its investment manager. Under the current Investment Management Agreements,
the portfolio management team for the Portfolio regularly decides which
securities or instruments to buy or sell for the Portfolio and the investment
manager directly or indirectly arranges for the placement and execution of
orders for the purchase or sale of such securities and instruments. The
investment manager is also responsible for each Portfolio's regulatory
compliance and general administrative operations and provides regular reports to
the Board. The management fees paid by a Portfolio are used by its investment
manager to pay for the personnel, equipment, office space and facilities that
are needed to manage the assets of the Portfolio and to administer its affairs.
Reasons for Proposed Changes in Management Fees. At the request of the Board,
management recently undertook a complete review of the level and structure of
the management fees for each fund within the Delaware Investments family. The
extensive review process was performed with the guidance of an outside
consultant to help ensure the accuracy of the results and conclusions. The
process involved the comparison of each fund with its own universe of
"competing" funds, which were identified based on investment objective, asset
type and distribution channel. Once competing funds were identified, management
compared fee rates at various asset sizes to evaluate both fee rates and
breakpoint structures. Management's goal was to establish a consistent fee
structure for the various categories of Delaware Investments funds that would be
competitive with funds with a similar investment objective, size and
distribution channel in the current marketplace.
Management believes that a competitive management fee structure is needed to
ensure that Delaware Investments will continue to be able to deliver funds with
competitive expense ratios and provide the increased investment opportunities
and service options that are now available to shareholders. Also, in recent
years, management has noticed increased competition for talented investment and
service professionals along with growing expenses in order to recruit and retain
such personnel. By establishing fee levels at competitive market rates,
management believes it can continue to attract talented professionals and
support high-quality, long-term investment management and shareholder services
to help maintain solid investment performance.
Description of Proposed Changes in Management Fees. As a result of its analysis,
management has identified a number of different management fee pricing levels to
be established for the funds in the Delaware Investments family, each reflecting
the dynamics and complexity of managing the assets of particular categories of
funds based on asset type (such as equity or fixed-income), sub-divisions within
asset type (such as "insured" or "non-insured" fixed-income securities) and
geography (such as domestic or international). Management also considered
differences in the market for, and management of, the Company's "institutional"
product compared to more retail-oriented funds, and the appropriate effect of
such differences on management fee levels. The meeting described in this Proxy
Statement is part of a series of shareholder meetings to be held at which the
standardized management fee pricing levels and schedules of breakpoints will be
put into place for many of the Delaware Investments funds.
The chart included in Exhibit F shows the current and proposed management fee
rates for each Portfolio and the dollar amounts paid to the investment manager
and its affiliates during the last fiscal year. The chart also shows whether DMC
or DIAL has waived any management fees and the effect that such waivers would
have had on the amounts paid under the proposed Agreement.
Board Consideration of Proposed Management Agreement Changes. In considering the
proposed management fee changes, the Directors reviewed extensive materials
concerning the methodology used by management to identify competitive peer
groups for comparison and to develop proposed management fee pricing levels for
the various categories of Delaware Investments funds and of the Portfolios. The
Directors reviewed separate reports for each Portfolio containing detailed
comparative management fee and expense information of each Portfolio and other
funds in the relevant peer group, as well as expense ratio comparisons with
relevant mutual fund indices. The Directors assessed how the management fee
changes would position each Portfolio within its peer group. The Directors also
reviewed and considered performance and ranking data for each Portfolio along
with other comparative funds within the investment objective category, as well
as a performance comparison to a relevant securities index for each Portfolio.
In addition to the expense and performance information, the Directors reviewed
the investment manager's historical profitability with respect to each Portfolio
and the anticipated effects of any management fee changes.
The Directors also considered the reasons presented by management with respect
to each proposed management fee change, including the anticipated impact of
management fee decreases on shareholders of the Portfolios. Following
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<PAGE>
consideration of all of the information and factors discussed above, the
Directors for each Portfolio, including all of the independent Directors,
unanimously approved the proposed management fee changes.
Other Proposed Changes to Investment Management Agreements
In addition to modifications to the management fee structure, certain other
changes to the Investment Management Agreements are proposed, one or more of
which may apply to a particular Portfolio. The proposed changes are designed to
eliminate provisions that appear in certain older Portfolios' Agreements and to
standardize the form of Agreement among all funds within the Delaware
Investments family. Please refer to the table below to determine whether the
changes are proposed for your Portfolio's Agreement.
Shareholder Approval of Amendments to Investment Management Agreements. Under
the 1940 Act, shareholder approval is normally required before any fund
investment management agreement can be materially amended. The purpose of this
requirement is to allow shareholders to make decisions concerning provisions of
an investment management agreement that could affect their investment.
Funds are, however, permitted to amend such agreements without shareholder
approval if the change involves a decrease in management fee rates or a
potential decrease due to the introduction or restructuring of breakpoints. In
such cases, the SEC staff believes that mutual funds should not be required to
experience the delay and costs of seeking shareholder approval, since
shareholders are generally assumed to be in favor of management fee decreases.
Certain current Investment Management Agreements of the Portfolios require
shareholder approval of any amendment to the Agreement, regardless of whether
shareholder approval would be required under federal law. Management proposes to
change the Agreements to permit amendments without shareholder approval in
appropriate circumstances like those described above.
Elimination of Fund Trading Desk. In order for the Portfolios to buy and sell
securities, written instructions must be provided to brokers or dealers who
execute portfolio transactions. Although most investment management agreements
in the mutual fund industry provide that the investment manager is responsible
for selecting and instructing brokers or dealers to effect such transactions,
the Agreements for certain Portfolios provide that the Company's employees are
responsible for providing instructions to brokers or dealers relating to the
execution of portfolio transactions. As a result, the Company maintains a
trading desk for these Portfolios staffed by Company personnel. Management
currently believes that the investment manager or sub-adviser should be
responsible for placing portfolio transactions rather than Company employees and
has concluded that the Agreements should be modified accordingly.
Authority to Use Sub-Advisers. As the investment management industry has grown
increasingly specialized, it has become increasingly common for mutual funds
whose portfolios include investments in a particular specialized asset class to
utilize the services of sub-investment advisers ("sub-advisers") with particular
expertise in managing the asset class. Typically, such sub-advisory arrangements
are established with contracts between the investment manager and the
sub-adviser, with the investment manager retaining supervision over the
portfolio. For example, DMC utilizes sub-advisers in managing funds that invest
primarily in foreign securities, real estate investment trusts and in managing
funds that engage in socially conscious investing.
The Investment Management Agreements for certain Portfolios do not contain a
provision authorizing the use of a sub-adviser. Therefore, management is
proposing that the new Agreements for these Portfolios contain the sub-adviser
provision, in order to standardize the Agreement with the other Delaware
Investments funds and authorize the use of sub-advisers if the Board desires to
approve the use of a sub-adviser in the future. Any future use of a sub-adviser
would also require approval by shareholders.
Miscellaneous Changes. In addition to the changes discussed above, there are
certain miscellaneous changes designed to standardize the form of Agreement
among all Delaware Investments funds. First, the Agreements for the Portfolios
will reflect non-material language and structural changes to conform to the
standard Delaware Investments model Agreement. Second, each new Agreement will
contain a provision permitting the names "Delaware," "Delaware Investments" or
"Delaware Group" to be used by other funds, series or classes, whether already
existing or to be created in the future, which are, or may be, sponsored or
advised by DMC or DIAL. The first Delaware Investments fund to use the word
"Delaware" in its name was the Delaware Balanced Fund (formerly Delaware Fund)
series of Delaware Group Equity Funds I, Inc., which was originally established
in 1938. DMC understands that Delaware Balanced Fund may have a claim to the use
of the name "Delaware." Without reaching any conclusion as to such claim, each
Agreement will recognize the ability of multiple Portfolios to use the words
described above in their names.
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Summary of Changes to Investment Management Agreements
The following table lists all of the Portfolios for which new Investment
Management Agreements are proposed, as well as the types of changes that are
proposed for each Agreement.
<TABLE>
<CAPTION>
Elimination of
Shareholder Elimination of Authority to
Approval for Fund Trading Use
Company/Portfolio Name Management Fee Change Amendments Desk Sub-Adviser
---------------------- --------------------- ---------- ---- -----------
<S> <C> <C> <C> <C>
Delaware Pooled Trust, Inc.
The Aggregate Fixed Income Portfolio None X X
The Diversified Core Fixed Income Portfolio None X
The Emerging Markets Portfolio .20% Decrease X
The Global Equity Portfolio None
The Global Fixed Income Portfolio None* X X
The Growth and Income Portfolio
The High-Yield Bond Portfolio None X X X
The Intermediate Fixed Income Portfolio None* X X X
The International Equity Portfolio None* X X
The International Fixed-Income Portfolio None X X
The Labor Select International Equity Portfolio None X X
The Large Cap Value Equity Portfolio None* X X X
The Mid-Cap Growth Equity Portfolio .05% decrease* X X X
The Real Estate Investment Trust Portfolio II None X
The Small-Cap Growth Equity Portfolio
The Small/Mid-Cap Value Equity Portfolio None X X X
</TABLE>
- -------------------------------
* The current Investment Management Agreement provides that the fees paid by the
Portfolio will be reduced by the amount of the independent Director fees. The
proposed Agreement does not provide for such a reduction. This change increases
the amount paid by the Portfolio, but has virtually no impact on reportable
expenses.
Information About the Investment Managers
DMC serves as investment manager for many of the Portfolios that are
participating in this meeting. DMC is registered as an investment adviser under
the Investment Advisers Act of 1940 (the "Advisers Act") and, together with its
predecessors, has been managing funds within the Delaware Investments family
since 1938. DMC is located at One Commerce Square, Philadelphia, Pennsylvania
19103.
DIAL serves as investment manager for certain Portfolios that are participating
in this meeting and as sub-adviser for others. DIAL is a United Kingdom
affiliate of DMC, is an investment adviser registered in the United States under
the Advisers Act and is a member of the Investment Management Regulatory
Organisation (IMRO) in the United Kingdom. Since 1990, DIAL has managed the
overseas assets of the funds within the Delaware Investments family. DIAL is
located at Third Floor, 80 Cheapside, London, England EC2V 6EE.
[(Delaware to advise:) On October 31, 1998, DMC was managing approximately $ [
__ ] billion in assets in various open-end and closed-end mutual fund accounts.
DIAL was managing approximately [$____] billion in institutional or separately
managed accounts (approximately [$___ ] billion) and mutual fund accounts
(approximately [$___ ] billion) on the same date. Other affiliates of DMC and
DIAL were managing additional institutional and separate account assets in the
amount of $ [ __ ] billion on that date.
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Both DMC and DIAL are indirect, wholly owned subsidiaries of Lincoln National
Corporation, also known as Lincoln Financial Group. Lincoln National
Corporation, with headquarters in Fort Wayne, Indiana, is a diversified
organization involved in many aspects of the financial services industry,
including insurance and investment management.
DMC and DIAL also provide investment management or sub-advisory services to
other funds within the Delaware Investments family which have investment
objectives that are similar to those of the Portfolios to which this Proxy
Statement applies. For the names of such other funds, together with their
current (and proposed, in some cases) management or sub-advisory fee rates for
such funds, see Exhibit G.
DMC is a series of Delaware Management Business Trust. The Trustees who operate
the business and their principal occupations (which are positions with DMC) are
as follows: Wayne A. Stork, Chairman, President, Chief Executive Officer and
Chief Investment Officer; Richard G. Unruh, Jr., Executive Vice President; David
K. Downes, Executive Vice President, Chief Operating Officer and Chief Financial
Officer; and George M. Chamberlain, Jr., Senior Vice President and Secretary;
and John B. Fields, Vice President/Senior Portfolio Manager.
Wayne A. Stork is the Chairman, Chief Executive Officer and a Director of DIAL.
David G. Tilles is the Managing Director, Chief Investment Officer and a
Director of DIAL. In addition to Mr. Stork and Mr. Tilles, the present directors
of DIAL and their principal occupations (unless noted in the paragraph above
relating to DMC) are as follows: Jeffrey J. Nick, President of Delaware
Management Holdings, Inc. and President and Chief Executive Officer of each of
the Companies comprising the Delaware Investments family of funds; G. Roger H.
Kitson, Vice Chairman of DIAL; Richard G. Unruh; David K. Downes; Richard J.
Flannery, Executive Vice President and General Counsel of DMC; George M.
Chamberlain, Jr.; John C. E. Campbell, Executive Vice President of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Hamish O.
Parker, Director of DIAL; Timothy W. Sanderson, Chief Investment Officer,
Equities of DIAL; Clive A. Gillmore, Regional Research Director of DIAL; Ian G.
Sims, Deputy Managing Director/Chief Investment Officer/Global Fixed Income of
DIAL; George E. Deming, Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); John
Emberson, Company Secretary and Finance Director of DIAL; Nigel G. May, Regional
Research Director of DIAL; Elizabeth A. Desmond, Regional Research Director of
DIAL.
Other Information Relevant to Approval of
Investment Management Agreements
The form of proposed Investment Management Agreement for the Portfolios is
attached as Exhibit H. Each Current and Proposed Agreement has an initial term
of two years and provides that it will thereafter continue in effect from year
to year only if such continuation is specifically approved at least annually
with respect to each Portfolio by (i) a vote of a majority of the Board, or (ii)
a vote of a majority of the outstanding voting securities of the Portfolio, and
(iii) in either case, separately by a majority of the Directors who are not
"interested persons" (as defined in the 1940 Act). Each current and proposed
Agreement may be terminated without penalty by (i) the Portfolio, by a vote of a
majority of the Board, or (ii) by a vote of a majority of the outstanding voting
securities of a Portfolio, or (iii) by DMC or DIAL, as relevant, at any time on
60 days' written notice. Each Agreement will also terminate automatically upon
its "assignment," as that term is defined in the 1940 Act.
Under each of the current and proposed Agreements, best efforts are used to
obtain the best available price and most favorable execution for portfolio
transactions. Orders may be placed with brokers or dealers who provide brokerage
and research services to the investment manager or their advisory clients. To
the extent consistent with the requirements of the rules of the SEC and the
National Association of Securities Dealers, Inc., these orders may be placed
with brokers who sell shares of the Portfolios. The services provided may
include advice, either directly or through publications or writings, as to the
value of securities, the advisability of investing in, purchasing or selling
securities, and the availability of securities or purchasers or sellers of
securities; furnishing of analyses and reports concerning issuers, securities or
industries; providing information on economic factors and trends; assisting in
determining portfolio strategy; providing computer software and hardware used in
security analyses; and providing portfolio performance evaluation and technical
market analyses. Such services are used by the investment manager in connection
with their investment decision-making process with respect to one or more funds
or accounts that they manage, and need not be used exclusively with respect to
the Portfolio or account generating the brokerage.
As provided in the Securities Exchange Act of 1934 and the current and proposed
Agreements, higher commissions are permitted to be paid to broker/dealers who
provide brokerage and research services than to broker/dealers who do not
provide such services, if such higher commissions are deemed reasonable in
relation to the value of the brokerage and research services provided. In some
instances, services provided constitute in some part brokerage and research
services used in connection with the investment decision-making process and
constitute in some part services used in connection with administrative or other
functions not related to the investment decision-making process. In such cases,
the investment manager will make a good faith allocation of brokerage and
research services and will pay out of their own resources for services used by
them in connection with administrative or other functions not related to the
investment decision-making process.
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<PAGE>
The current and proposed Agreements provide that, in the absence of willful
misfeasance, bad faith, gross negligence or a reckless disregard to the
performance of its duties to a Portfolio, the investment manager or sub-adviser
shall not be liable to the Portfolio or any shareholder of the Portfolio for any
action or omission in the course of, or in connection with, rendering services
under a current or proposed Agreement, or for any losses that may be sustained
in the purchase, holding or sale of any security or otherwise.
Other Agreements with the Company
The Company is currently party to a Distribution Agreement relating to the
Portfolios with Delaware Distributors, L.P. (the "Distributor"), an affiliate of
DMC and DIAL. The Distributor's principal address is 1818 Market Street,
Philadelphia, PA 19103. Pursuant to the Distribution Agreement, the Distributor
provides underwriting, distribution and marketing services to the Portfolios.
The Company is also a party to a Shareholders Services Agreement and a Fund
Accounting Agreement with Delaware Service Company, Inc. ("DSC"), an affiliate
of DMC and DIAL, pursuant to which DSC provides fund accounting, shareholder
servicing, dividend disbursing and transfer agency services. Exhibit F to this
Proxy Statement lists the amount of any payments made to the affiliates such as
the Distributor and DSC pursuant to service agreements, for each Portfolio's
most recently completed fiscal year.
Proposal Five: To Approve a New Sub-Advisory Agreement for the Portfolio
This Proposal only applies to the following Portfolios:
The Diversified Core Fixed Income Portfolio
The Global Equity Portfolio
The Real Estate Investment Trust Portfolio II
Shareholders of each of the Portfolios listed above are being asked to approve a
new Sub-Advisory Agreement with their Portfolio's existing sub-adviser. The
sub-advisers for each Portfolio, together with information about the current
Sub-Advisory Agreement, is included on Exhibit F to this Proxy Statement. New
Agreements are required at this time because the existing Agreements will
terminate if new Investment Management Agreements are approved as described in
Proposal Four.
The proposed Sub-Advisory Agreements do not contain any changes in sub-advisory
fee rates and are largely identical to the current Sub-Advisory Agreements.
There are a number of minor changes in language and in the form of the
Agreement, which are designed to result in a single, standardized Agreement
among all Delaware Investments funds that utilize sub-advisers.
One new provision is proposed for Portfolios which have Sub-Advisory Agreements
that provide for the calculation of the sub-advisory fees based on a percentage
of assets of the Portfolio. The new provision would require the sub-adviser to
share in any fee waiver or expense limitation arrangement entered into by the
Portfolio's investment manager. This provision does not affect the amounts to be
paid by the Portfolio, but the sub-adviser may receive less, depending on
management fee waivers or expense limitations.
The proposed Sub-Advisory Agreement for any Portfolio will not take effect until
shareholders approve a new Investment Management Agreement for the Portfolio.
[(Delaware to confirm:)] If a proposed Sub-Advisory Agreement is not approved
for a Portfolio, the investment manager will take responsibility for all aspects
of investment management until such time as a new sub-advisory arrangement is
approved by the Board and by shareholders.
Required Vote. Approval of this Proposal for a Portfolio requires the vote of a
"majority of the outstanding voting securities" of the Portfolio, which means
the vote of: (i) more than 50% of the outstanding voting securities of the
Portfolio; or (ii) 67% or more of the voting securities of the Portfolio present
at a meeting, if the holders of more than 50% of the outstanding voting
securities are present or represented by proxy, whichever is less.
The Board has unanimously approved the proposed Sub-Advisory Agreements and
recommends that you vote FOR the new Sub-Advisory Agreement for your Portfolio.
Information About the Sub-Advisers
DMC and DIAL. Both DMC and DIAL serve in a sub-adviser capacity for certain
Portfolios. The background of each firm, along with the professionals
responsible for operating each business, are described above in connection with
the proposed new Investment Management Agreements. Please refer to the prior
Proposal for that information.
Lincoln Investment Management, Inc. ("LIM"). LIM serves as sub-adviser for the
Real Estate Investment Trust Portfolio II. LIM is a wholly owned subsidiary of
Lincoln National Corporation and an affiliate of DMC and DIAL. The firm is
registered as an investment adviser under the Advisers Act and is located at 200
E. Berry Street, Fort Wayne, Indiana 46802.
LIM's primary activity is institutional fixed-income investment management and
consulting. Such activity includes fixed-income portfolios, private placements,
real estate debt and equity management and asset/liability management. On
November 30, 1998 LIM was managing approximately $40,966,661,373 in assets.
15
<PAGE>
H. Thomas McMeekin serves as President, Chief Investment Officer and a Board
Member of LIM. In addition to Mr. McMeekin, the present directors of LIM and
their principal occupations are as follows: J. Michael Keeter, Vice President
and General Counsel; and Steven R. Brody, Vice President.
Other Information Relevant to Approval of
Sub-Advisory Agreements
The form of proposed Sub-Advisory Agreement for the Portfolios listed above is
attached as Exhibit I. Each Current and Proposed Agreement has an initial term
of two years and provides that it will thereafter continue in effect from year
to year only if such continuation is specifically approved at least annually
with respect to each Portfolio by (i) a vote of a majority of the Board, or (ii)
a vote of a majority of the outstanding voting securities of the Portfolio, and
(iii) in either case, separately by a majority of the Directors who are not
"interested persons" (as defined in the 1940 Act). Each current and proposed
Agreement may be terminated without penalty by (i) the Company, by a vote of a
majority of the Board, or (ii) by a vote of a majority of the outstanding voting
securities of a Portfolio, or (iii) by the sub-adviser at any time on 60 days'
written notice. Each Agreement will also terminate automatically upon its
"assignment," as that term is defined in the 1940 Act.
Under each of the current and proposed Agreements, best efforts are used to
obtain the best available price and most favorable execution for portfolio
transactions. Orders may be placed with brokers or dealers who provide brokerage
and research services to the investment manager, sub-adviser or their advisory
clients. To the extent consistent with the requirements of the rules of the SEC
and the National Association of Securities Dealers, Inc., these orders may be
placed with brokers who sell shares of the Portfolios. The services provided may
include advice, either directly or through publications or writings, as to the
value of securities, the advisability of investing in, purchasing or selling
securities, and the availability of securities or purchasers or sellers of
securities; furnishing of analyses and reports concerning issuers, securities or
industries; providing information on economic factors and trends; assisting in
determining portfolio strategy; providing computer software and hardware used in
security analyses; and providing portfolio performance evaluation and technical
market analyses. Such services are used by the investment manager or sub-adviser
in connection with their investment decision-making process with respect to one
or more Portfolios or accounts that they manage, and need not be used
exclusively with respect to the Portfolio or account generating the brokerage.
As provided in the Securities Exchange Act of 1934 and the current and proposed
Agreements, higher commissions are permitted to be paid to broker/dealers who
provide brokerage and research services than to broker/dealers who do not
provide such services, if such higher commissions are deemed reasonable in
relation to the value of the brokerage and research services provided. In some
instances, services provided constitute in some part brokerage and research
services used in connection with the investment decision-making process and
constitute in some part services used in connection with administrative or other
functions not related to the investment decision-making process. In such cases,
the sub-adviser will make a good faith allocation of brokerage and research
services and will pay out of their own resources for services used by them in
connection with administrative or other functions not related to the investment
decision-making process.
The current and proposed Agreements provide that, in the absence of willful
misfeasance, bad faith, gross negligence or a reckless disregard to the
performance of its duties to a Portfolio, the sub-adviser shall not be liable to
the Portfolio or any shareholder of the Portfolio for any action or omission in
the course of, or in connection with, rendering services under a current or
proposed Agreement, or for any losses that may be sustained in the purchase,
holding or sale of any security or otherwise.
Proposal Six: To Ratify the Selection of Ernst & Young LLP as Independent
Auditors for the Company
This Proposal applies all Portfolios.
The Board has selected Ernst & Young LLP as independent auditors of the Company
for the current fiscal year and shareholders are asked to ratify this selection.
Ernst & Young LLP's principal address is Two Commerce Square, Philadelphia, PA
19103. A representative from Ernst & Young LLP is expected to be present at the
meeting. The representative of Ernst & Young LLP will have an opportunity to
make a statement if he or she desires to do so and will be available to respond
to appropriate questions. The Company's Audit Committee meets periodically with
the representatives of Ernst & Young LLP to receive reports from Ernst & Young
LLP and plan for the Company's audits.
Required Vote. A simple majority (more than 50%) of the outstanding voting
securities of the Company, regardless of individual Portfolios within the
Company, is required to ratify the selection of Ernst & Young LLP as independent
auditor for the Company.
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The Board unanimously recommends that you ratify the selection of Ernst & Young
LLP as independent auditors for such Company for the current fiscal year.
Proposal Seven: To Approve the Restructuring of the Company from a Maryland
Corporation into a Delaware Business Trust.
This Proposal applies all Portfolios.
The Board of Directors of the Company (the "Current Board") has approved an
Agreement and Plan of Reorganization (the "Plan") substantially in the form
attached to this Proxy Statement as Exhibit J. The Plan provides for a
reorganization (a "Reorganization") pursuant to which the Company will change
its state and form of organization from a Maryland corporation into a Delaware
business trust. The Company may be referred to in this Proposal as the "Current
Fund." The Series of the Company are referred to in this Proposal as the
"Current Series."
The Reorganization involves the continuation of the Current Fund in the form of
a newly created Delaware business trust. The newly created Delaware business
trust is referred to in this Proposal as the "New Fund." Separate series of
shares of the Delaware business trust that correspond to the series of shares of
the Current Fund will carry on the business of the Current Fund. The series of
shares of the New Fund that correspond to the Current Series of shares of the
Current Fund are referred to in this Proposal as the "New Series." The New Fund
and each New Series will have substantially the same name as the Current Fund
and each corresponding Current Series.
Under the Reorganization, the investment objectives of each New Series will be
the same as those of its corresponding Current Series; the portfolio securities
of each Current Series will be transferred to its corresponding New Series; and
shareholders will own interests in the New Fund that are equivalent to their
interests in the Current Fund on the closing date of the Reorganization. The
directors, officers, and employees of the Current Fund on the effective date of
the Reorganization will become the trustees, officers and employees,
respectively, of the New Fund and will operate the New Fund in the same manner
as they previously operated the Current Fund. The investment manager responsible
for the investment management of each New Series will be the same as the
investment manager to the Current Series. For those Current Series with
sub-advisory arrangements, the sub-adviser for each New Series will be the same
as the sub-adviser to the Current Series. In essence, a shareholder's investment
in the Current Fund will not change for all practical purposes. The investment
manager of each Current Series is referred to as the "Current Adviser" and, for
those Current Series with sub-advisory arrangements, the sub-adviser to each
Current Series is referred to as the "Current Sub-Adviser."
Background and Reasons for the Reorganization. The Current Board unanimously
recommends conversion of the Current Fund into a Delaware business trust because
it has determined that the Delaware business trust form of organization is an
inherently flexible form of organization and provides certain administrative
advantages to the Company. Delaware trust law contains provisions specifically
designed for mutual funds. Those provisions take into account the unique
structure and operation of mutual funds and allow mutual funds to simplify their
operations by reducing administrative burdens so that, in general, they may
operate more efficiently. For example, mutual funds organized as Delaware
business trusts are not required to hold annual shareholders' meetings and may
create new series or classes of shares without obtaining the approval of
shareholders at a meeting.
Under Delaware business trust law, the New Fund will have the flexibility to
respond to future business contingencies. For example, the New Fund will have
the power to consolidate with another entity, to cause each New Series to become
a separate trust, and to change the New Fund's domicile all without a
shareholder vote, unless such vote is required under the1940 Act or other
applicable law. This flexibility could help to assure that the New Fund operates
under the most advanced form of organization and could help reduce the expense
and frequency of future shareholders' meetings for non-investment related
issues.
The Reorganization also will increase uniformity among the mutual funds within
the Delaware Investments family. Increased uniformity among the mutual funds,
many of which share common directors, trustees, officers and service providers,
is expected to reduce the costs and resources devoted to compliance with varying
state corporate or trust laws and also reduce administrative burdens.
Another advantage that is afforded to a mutual fund organized as a Delaware
business trust is that there is a well established body of corporate precedent
that may be relevant in deciding issues pertaining to the trust.
For these reasons, the Current Board believes it is in the interests of the
shareholders of the Current Fund to reorganize the Current Fund into a Delaware
business trust. At present, it appears that the most advantageous time to
17
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consummate the Reorganization is on or before ________________, 1999. This date,
however, may be modified by the Current Fund and the New Fund. The Current Board
reserves the right to abandon the Reorganization if it determines that such
action is in the best interests of the Current Fund.
Consequences and Procedures of the Reorganization. Upon consummation of the
Reorganization, the New Fund will continue the Current Fund's business with the
same investment objectives, policies and restrictions that are in effect for the
Current Series at the time of the consummation of the Reorganization (see the
discussion under "Investment Policies and Restrictions" below). The net asset
value of the shares of each Current Series will not be affected by the
Reorganization. The New Fund has been organized specifically for the purpose of
effecting the Reorganization. Immediately prior to the effective date of the
Reorganization (as defined in the Plan), the New Fund will have outstanding only
one share of beneficial interest of each New Series corresponding to the shares
of each Current Series. The Current Fund will be the sole holder of the shares
of beneficial interest. The Plan contemplates that the directors serving at the
time of the Reorganization will serve as the trustees of the New Fund, with
comparable responsibilities. The officers of the Current Fund will become
officers of the New Fund with comparable responsibilities. The Reorganization
will not result in the recognition of income, gain or loss for Federal income
tax purposes to the Current Fund, the New Fund, or the holders of shares of the
Current Fund. (See "Federal and State Income Tax Consequences of the Plan.")
To accomplish the Reorganization, the Plan provides that the Current Fund will
transfer all of the assets of the Current Series, subject to its related
liabilities, to the New Fund and to each of its corresponding New Series. The
New Fund will establish an account for each shareholder and will credit to that
account the exact number of full and fractional shares of the New Series that
such shareholder previously held in the corresponding Current Series on the
effective date of the Reorganization. Each shareholder will retain the right to
any declared but undistributed dividends or other distributions payable on the
shares of the Current Series that he or she owned. On the date of the
Reorganization, the net asset value per share of each Current Series will be the
same as the net asset value per share of its corresponding New Series. The New
Fund will assume all liabilities and obligations of the Current Fund. As soon as
practicable after the effective date of the Reorganization, the Current Fund
will be dissolved and its existence terminated.
On the effective date of the Reorganization, each certificate representing
shares of the Current Series will represent an identical number of shares of the
corresponding New Series. Shareholders will have the right to exchange their
certificates of the Current Fund for certificates of the New Fund. A
shareholder, however, is not required to make this exchange of certificates.
The Plan provides that the effective date of the Reorganization will be (i) the
next business day after the later of the receipt of all necessary regulatory
approvals and the final adjournment of the meeting of shareholders of the
Current Fund at which the Plan will be considered, or (ii) such later date as
the Current Fund and the New Fund may mutually agree. It is expected that this
will be on ________________, 1999, or such earlier time as the Current Board
deems advisable and in the best interests of the Current Fund and its
shareholders. The Plan may be terminated and the Reorganization abandoned at any
time prior to the effective date of the Reorganization by the Current Board. If
the Reorganization is not so approved or if the Current Board determines to
terminate or abandon the Reorganization, the Current Fund will continue to
operate as a Maryland corporation.
Capitalization and Structure. The New Fund was established pursuant to an
Agreement and Declaration of Trust ("Trust Document") under the laws of the
State of Delaware. The New Fund is organized as a series company. The Trust
Document permits the Trustees to issue an unlimited number of shares of
beneficial interest, with no par value. The Board of Trustees of the New Fund
has the power to divide such shares into an unlimited number of series or
classes of beneficial interest without shareholder approval. The New Fund has
designated the same number of series as the Current Fund. Each share of a New
Series represents an equal proportionate interest in the assets and liabilities
belonging to that series (or class) as declared by the Board of Trustees.
Shares of the New Series have substantially the same dividend, redemption,
voting, exchange and liquidation rights, and terms of conversion as the shares
of the corresponding Current Series. Please see Exhibit K, "Comparison and
Significant Differences For Delaware Business Trusts and Maryland Corporations."
Shares of the Current Series and the corresponding New Series are fully paid,
non-assessable, and freely transferable and have no preemptive or subscription
rights.
Prior to the Reorganization, the New Fund will have nominal assets and no
liabilities. The sole shareholder of the New Fund will be the Current Fund. Each
New Series will have the same investment objective and policies as the Current
Fund and its corresponding Current Series at the time of the Reorganization.
(See the discussion under "Investment Policies and Restrictions" below.) The
Current Adviser will provide investment management services to the New Series as
it does to the Current Series. For the New Series that have sub-advisory
arrangements, the Current Sub-Adviser will provide sub-advisory services to the
New Series as it does to the Current Series. The New Fund will have the same
fiscal year as the Current Fund.
18
<PAGE>
Subsequent to the closing of the Reorganization, shares of the Current Series
will be exchanged for an identical number of shares of the corresponding New
Series. Thereafter, shares of the New Series will be available for issuance at
their net asset value applicable at the time of sale. The New Fund will adopt
the Current Fund's existing registration statement under the Securities Act of
1933 and the 1940 Act.
Effects of Shareholder Approval of the Reorganization. An investment company
registered under the 1940 Act is required to: (1) submit the selection of the
company's independent auditors to all shareholders for their ratification; (2)
call a special meeting to elect directors (trustees) within 60 days if, at any
time, less than one half of the directors (trustees) holding office have been
elected by all shareholders; and (3) submit any proposed investment management
agreement and sub-advisory agreement relating to a particular series of the
investment company to the shareholders of that series for approval.
The Current Board believes that it is in the best interest of the shareholders
of the Current Fund (who will become the shareholders of the New Fund if the
Reorganization is approved) to avoid the considerable expense of another
shareholders' meeting to obtain the shareholder approvals described above
shortly after the closing of the Reorganization. The Current Board also believes
that it is not in the best interest of the shareholders to carry out the
Reorganization if the surviving New Fund would not have a Board of Trustees,
independent auditors, and investment management agreements or sub-advisory
agreements complying with the 1940 Act.
The Current Board will, therefore, consider approval of the Reorganization by
the requisite vote of the shareholders of the Current Fund to constitute the
approval of the Plan contained in Exhibit J, and also to constitute, for the
purposes of the 1940 Act: (1) ratification of the independent auditors for the
Current Fund at the time of the Reorganization as the New Fund's independent
auditors (please see Proposal Six); (2) election of the Directors of the Current
Fund who are in office at the time of the Reorganization as the trustees of the
New Fund after the closing of the Reorganization (please see Proposal One); (3)
approval by the shareholders of each Current Series of the investment management
agreement between the New Fund on behalf of the New Series and the Current
Adviser, which will be substantially identical to the agreement that is in place
between the Current Fund and the Current Adviser for the corresponding Current
Series on the effective date of the Reorganization (please see Proposal Four);
and (4) for those Current Series subject to a sub-advisory agreement, approval
by the shareholders of the Current Series of the sub-advisory agreement between
the Current Adviser and the Current Sub-Adviser, which will be substantially
identical to the agreement that is in place between the Current Adviser and the
Current Sub-Adviser on the effective date of the Reorganization (please see
Proposal Five).
The New Fund will issue a single share of each New Series to the Current Fund,
and, assuming approval of the Reorganization by shareholders of the Current
Fund, the officers of the Current Fund, prior to the Reorganization, will cause
the Current Fund, as the sole shareholder of the New Fund, to vote such shares
"FOR" the matters specified in the above paragraph. The Current Fund will then
consider the requirements of the 1940 Act referred to above to have been
satisfied.
The mailing address and telephone number of the principal executive offices of
both the Current Fund and New Fund are 1818 Market Street, Philadelphia, PA
19103, and 1-800-523-1918, respectively.
Investment Policies and Restrictions. If the investment policies and
restrictions for the Current Series as proposed and set forth in Proposal Two
and Sub-Proposals 3A-3G are approved by the shareholders, the investment
policies and restrictions of the corresponding New Series will be the policies
and restrictions of the Current Series as amended by the provisions set forth in
such Proposals. For each Current Series for which the investment policies and
restrictions set forth in Proposal Two and Sub-Proposals 3A-3G are not approved,
the investment policies and restrictions of the corresponding New Series after
the Reorganization will be the investment policies and restrictions of that
Current Series immediately prior to the Reorganization.
Investment Management Agreements. If the proposed new investment management
agreement relating to the Current Series as proposed and described in Proposal
Four (a "New Agreement") is approved by the shareholders of the Current Series,
the terms of the investment management agreement for the corresponding New
Series will be substantially identical to the New Agreement for the Current
Series. For each Current Series for which the New Agreement described in
Proposal Four is not approved, if any, the investment management agreement for
the corresponding New Series will be substantially identical to the existing
investment management agreement currently in place for that Current Series.
Sub-Advisory Agreements. For each Current Series with sub-advisory arrangements,
if the proposed new sub-advisory agreement relating to the Current Series, as
proposed and described in Proposal Five (a "New Sub-Advisory Agreement"), is
approved by the shareholders of the Current Series, the terms of the
sub-advisory agreement for the corresponding New Series will be substantially
identical to the New Sub-Advisory Agreement for the Current Series. For each
Current Series for which the New Sub-Advisory Agreement described in Proposal
Five is not approved, if any, the sub-advisory agreement for the corresponding
New Series will be substantially identical to the existing sub-advisory
agreement currently in place for that Current Series.
19
<PAGE>
Federal and State Income Tax Consequences of the Plan. It is anticipated that
the transactions contemplated by the Plan will be tax-free for federal income
tax purposes. Consummation of the Reorganization is subject to receipt of a
legal opinion from the law firm of Stradley, Ronon, Stevens & Young, LLP,
counsel to the Current Fund and the New Fund, that, under the Internal Revenue
Code of 1986, as amended (the "Internal Revenue Code"), the exchange of assets
of the Current Fund for the shares of the New Fund, the transfer of such shares
to the holders of shares of the Current Fund, and the liquidation and
dissolution of the Current Fund pursuant to the Plan will not give rise to the
recognition of a gain or loss for federal income tax purposes to the Current
Fund, the New Fund, or shareholders of the Current Fund or the New Fund. A
shareholder's adjusted basis for tax purposes in the shares of the New Fund
after the exchange and transfer will be the same as his adjusted basis for tax
purposes in the shares of the Current Fund immediately before the exchange. Each
shareholder should consult his or her own tax adviser with respect to the
details of these tax consequences and with respect to state and local tax
consequences of the proposed transaction.
Distribution Plans and Shareholder Servicing Arrangements. The New Fund will
enter into agreements with DSC for transfer agency, dividend disbursing and
shareholder servicing and fund accounting services that are substantially
identical to the agreements currently in effect for the Current Fund for such
services. Delaware Distributors, L.P. ("DDLP") will serve as the national
distributor for the shares of the New Series under a separate distribution
agreement between DDLP and the New Fund that is substantially identical to the
distribution agreement currently in effect for the Current Series.
Requests for Redemption of the Current Fund. Any request to redeem shares of the
Current Fund that is received and processed prior to the Reorganization will be
treated as a redemption of shares of the Current Fund. Any request to redeem
shares of the Current Fund received or processed after the Reorganization will
be treated as a request for the redemption of shares of the corresponding New
Fund.
Expenses of the Reorganization. Because the Reorganization will benefit solely
the Current Fund and its shareholders, the Current Board has authorized that the
expenses incurred by the Current Fund in the Reorganization or arising out of
the Reorganization shall be paid by the Current Fund, whether or not the
Reorganization is approved by the shareholders.
Comparison of Legal Structures. A comparison of the Delaware Business Trust Act
with the Maryland General Corporation Law, including a comparison of relevant
provisions of the governing documents of the Current Fund and the New Fund, is
included in Exhibit K, which is entitled "Comparison And Significant Differences
For Delaware Business Trusts And Maryland Corporations."
Required Vote. The Plan and the transactions contemplated thereby, including the
liquidation and dissolution of the Current Fund, requires the approval of a
majority of all votes entitled to be cast.
The Current Board unanimously recommends that you vote FOR the Reorganization.
20
<PAGE>
EXHIBIT A
OUTSTANDING SHARES AS OF RECORD DATE (December 21, 1998)
<TABLE>
<CAPTION>
Shares Owned by Directors and Executive
Shares Outstanding on Officers as a Group as of
Record Date* October 31, 1998
---------------------- ---------------------------------------
<S> <C> <C>
Delaware Pooled Trust, Inc.
The Aggregate Fixed Income Portfolio
The Diversified Core Fixed Income Portfolio
The Emerging Markets Portfolio
The Global Equity Portfolio
The Global Fixed-Income Portfolio
The Growth & Income Portfolio
The High-Yield Bond Portfolio
The Intermediate Fixed-Income Portfolio
The International Equity Portfolio
The International Fixed-Income Portfolio
The Labor Select International Equity Portfolio
The Large Cap Value Equity Portfolio
The Mid-Cap Growth Equity Portfolio (formerly
The Aggressive Growth Portfolio)
The Real Estate Investment Trust Portfolio II
The Small-Cap Growth Equity Portfolio
The Small/Mid-Cap Value Equity Portfolio
</TABLE>
* The Shares outstanding on the record date included all shares purchased in
transactions that have settled by the record date.
A-1
<PAGE>
EXHIBIT B
SHAREHOLDERS OWNING 5% OR MORE OF A PORTFOLIO AS OF OCTOBER 31, 1998
<TABLE>
<CAPTION>
Number of Percent of Percent of
Name and Address Shares Portfolio Company
---------------- ------ --------- -------
<S> <C> <C> <C> <C>
Delaware Pooled Trust, Inc.
The Aggregate Fixed Income Portfolio
The Diversified Core Fixed Income Portfolio
The Emerging Markets Portfolio
The Global Equity Portfolio
The Global Fixed-Income Portfolio
The Growth & Income Portfolio
The High-Yield Bond Portfolio
The Intermediate Fixed-Income Portfolio
The International Equity Portfolio
The International Fixed-Income Portfolio
The Labor Select International Equity Portfolio
The Large Cap Value Equity Portfolio
The Mid-Cap Growth Equity Portfolio (formerly
The Aggressive Growth Portfolio)
The Real Estate Investment Trust Portfolio II
The Small-Cap Growth Equity Portfolio
The Small/Mid-Cap Value Equity Portfolio
</TABLE>
B-1
<PAGE>
EXHIBIT C
EXECUTIVE OFFICERS OF THE COMPANY
David K. Downes (58) Executive Vice President, Chief Operating Officer, Chief
Financial Officer of each of the 34 investment companies in the Delaware
Investments family, Delaware Management Holdings, Inc, Founders CBO Corporation,
Delaware Capital Management, Inc., Delaware Management Company (a series of
Delaware Management Business Trust), Delaware Investment Advisers (a series of
Delaware Management Business Trust) and Delaware Distributors, L.P.; Executive
Vice President, Chief Operating Officer, Chief Financial Officer and Trustee of
Delaware Management Business Trust; Executive Vice President, Chief Operating
Officer, Chief Financial Officer and Director of Delaware Management Company,
Inc., DMH Corp., Delaware Distributors, Inc., Founders Holdings, Inc. and
Delvoy, Inc.; President, Chief Executive Officer, Chief Financial Officer and
Director of Delaware Service Company, Inc.; President, Chief Operating Officer,
Chief Financial Officer and Director of Delaware International Holdings Ltd.;
Chairman and Director of Delaware Management Trust Company; Chairman, Chief
Executive Officer and Director of Retirement Financial Services, Inc. During the
past five years, Mr. Downes has served in various executive capacities at
different times in the Delaware Investments organization.
Richard G. Unruh (59) Executive Vice President of each of the 34 investment
companies in the Delaware Investments family, Delaware Management Holdings,
Inc., Delaware Management Company (a series of Delaware Management Business
Trust) and Delaware Capital Management, Inc.; President of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Executive Vice
President and Director/Trustee of Delaware Management Company, Inc. and Delaware
Management Business Trust; Director of Delaware International Advisers Ltd.
During the past five years, Mr. Unruh has served in various executive capacities
at different times within the Delaware Investments organization.
Paul E. Suckow (51) Executive Vice President/Chief Investment Officer, Fixed
Income of each of the 34 investment companies in the Delaware Investments
family, Delaware Management Company, Inc., Delaware Management Business Trust,
Delaware Management Company (a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware Management Business Trust)
and Delaware Management Holdings, Inc.; Executive Vice President and Director of
Founders Holdings, Inc.; Executive Vice President of Delaware Capital
Management, Inc.; Director of Founders CBO Corporation; Director of HYPPCO
Finance Company Ltd. During the past five years, Mr. Suckow has served in
various executive capacities at different times within the Delaware Investments
organization.
Michael P. Bishof (36) Senior Vice President/Treasurer of each of the 34
investment companies in the Delaware Investments family and Founders Holdings,
Inc.; Senior Vice President/Investment Accounting of Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust) and Delaware Service Company,
Inc.; Senior Vice President and Treasurer/Manager of Investment Accounting of
Delaware Distributors, L.P. and Delaware Investment Advisers (a series of
Delaware Management Business Trust); Senior Vice President and Manager of
Investment Accounting of Delaware International Holdings Ltd.; Senior Vice
President and Assistant Treasurer of Founders CBO Corporation. Before joining
Delaware Investments in 1995, Mr. Bishof was a Vice President for Bankers Trust,
New York, NY, from 1994 to 1995, a Vice President for CS First Boston Investment
Management, New York, NY, from 1993 to 1994, and an Assistant Vice President for
Equitable Capital Management Corporation, New York, NY, from 1987 to 1993.
George M. Chamberlain, Jr. (51) Senior Vice President, Secretary and General
Counsel of each of the 34 investment companies in the Delaware Investments
family; Senior Vice President and Secretary of Delaware Distributors, L.P.,
Delaware Management Company (a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware Management Business Trust)
and Delaware Management Holdings, Inc.; Senior Vice President, Secretary and
Director/Trustee of DMH Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Service Company, Inc., Founders Holdings, Inc.,
Retirement Financial Services Inc., Delaware Capital Management, Inc., Delvoy,
Inc. and Delaware Management Business Trust; Executive Vice President, Secretary
and Director of Delaware Management Trust Company.
C-1
<PAGE>
Joseph H. Hastings (48) Senior Vice President/Corporate Controller of each of
the 34 investment companies in the Delaware Investments family and Founders
Holdings, Inc.; Senior Vice President/Corporate Controller and Treasurer of
Delaware Management Holdings, Inc., DMH Corp., Delaware Management Company,
Inc., Delaware Management Business Trust, Delaware Management Company (a series
of Delaware Management Business Trust), Delaware Distributors, L.P., Delaware
Distributors, Inc., Delaware Service Company, Inc., Delaware Capital Management,
Inc., Delaware International Holdings Ltd. and Delvoy, Inc.; Chief Financial
Officer/Treasurer of Retirement Financial Services, Inc.; Executive Vice
President/Chief Financial Officer/Treasurer of Delaware Management Trust
Company; Senior Vice President/Assistant Treasurer of Founders CBO Corporation.
During the past five years, Mr. Hastings has served in various executive
capacities at different times within the Delaware Investments organization.
Patrick P. Coyne (35) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), Delaware
Capital Management, Inc., and of the fixed-income funds in the Delaware
Investments family. During the past five years, Mr. Coyne has served in various
capacities at different times within the Delaware Investments organization.
Mitchell L. Conery (39) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and of the
fixed-income funds in the Delaware Investments family. Before joining Delaware
Investments in 1997, Mr. Conery was an investment officer with Travelers
Insurance from 1995 through 1996, and a research analyst with CS First Boston
from 1992 to 1995.
Paul A. Matlack (39) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust) and of the
fixed-income funds in the Delaware Investments family; Vice President of
Founders Holdings, Inc.; President and Director of Founders CBO Corporation.
During the past five years, Mr. Matlack has served in various capacities at
different times within the Delaware Investments organization.
Gary A. Reed (43) Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business Trust), and Delaware Capital
Management, Inc.; and an officer of the fixed-income funds in the Delaware
Investments family. During the past five years, Mr. Reed has served in various
capacities at different times within the Delaware Investments organization.
Babak Zenouzi (35) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and of the
equity funds in the Delaware Investments family. During the past five years, Mr.
Zenouzi has served in various capacities at different times within the Delaware
Investments organization.
Gerald T. Nichols (39) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 23
investment companies in the Delaware Investments family and of Delaware
Management Company, Inc.; Vice President of Founders Holdings, Inc.; Assistant
Secretary, Treasurer and Director of Founders CBO Corporation. During the past
five years, Mr. Nichols has served in various capacities at different times
within the Delaware organization.
Christopher S. Beck (40) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 10
investment companies in the Delaware Investments family and of Delaware
Management Company, Inc. Before joining the Delaware Investments in 1997, Mr.
Beck managed the small cap value fund for two years at Pitcairn Trust Company.
Prior to 1995, he was Director of Research at Cypress Capital Management in
Wilmington and Chief Investment Officer of the University of Delaware Endowment
Fund.
George H. Burwell (36)Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 8
investment companies in the Delaware Investments and of Delaware Management
Company. Before joining Delaware Investments in 1992, Mr. Burwell was a
portfolio manager for Midlantic Bank, New Jersey. In addition, he was a security
analyst for Balis & Zorn, New York and for First Fidelity Bank, New Jersey.
C-2
<PAGE>
Robert L. Arnold (34) Vice President/Portfolio Manager Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business Trust), of 3 investment companies in
the Delaware Group. During the past five years, Mr. Arnold has served in various
capacities at different times within the Delaware organization.
Gerald S. Frey (52) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 8
investment companies in the Delaware Group and of Delaware Management Company,
Inc. Before joining the Delaware Group in 1996, Mr. Frey was a Senior Director
with Morgan Grenfell Capital Management, New York, NY from 1986 to 1995.
Roger A. Early (43) Vice President and Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and each
of the tax-exempt and the fixed income funds in the Delaware Group and Delaware
Management Company, Inc. Before joining The Delaware Group, Mr. Early was a
portfolio manager for Federated Investment Counseling's fixed-income group, with
over $1 billion in assets.
John B. Fields(52) Vice President and Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 10
equity investment companies in the Delaware Group and of Delaware Management
Company, Inc. Before joining the Delaware Group in 1992, Mr. Fields served as a
director of domestic equity risk management for Dupont, Wilmington, DE.
Paul Grillo(38) Vice President and Portfolio Manager of Income Funds, Inc.
Delaware Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and 12
investment companies in the Delaware Group. During the last five years, Mr.
Grillo has served in various capacities at different times within the Delaware
organization.
Cynthia I. Isom(44) Vice President and Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business Trust), and 18 investment companies in
the Delaware Investments family, Delaware Management Company, Inc. and Delaware
Management Company (a series of Delaware Management Business Trust).
Frank X. Morris (37) Vice President and Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business Trust), and Delaware Pooled Trust,
Inc. Before joining the Delaware Group in 1997, he served as vice president and
director of equity research at PNC asset Management. Mr. Morris is president of
the Financial Analysis Society of Philadelphia and is a member of the
Association of Investment Management and Research and the National Association
of Petroleum Investment Analysts.
James F. Stanley (30) Vice President and Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust), and
Delaware Pooled Trust, Inc. Before joining the Delaware Group in 1997, Mr.
Stanley served as a senior managing equity analyst covering the chemical,
building products, and housing industries at Dreyfus Corporation.
Paul Dokas (39) Vice President and Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Business Trust, Delaware Management Company
(a series of Delaware Management Business Trust), Delaware Investment Advisers
(a series of Delaware Management Business Trust), Delaware Pooled Trust, Inc and
Delaware Group Foundation Funds. Before joining the Delaware Group in 1997, he
was Director of Trust Investments for Bell Atlantic Corporation in Philadelphia.
C-3
<PAGE>
EXHIBIT D
SHAREHOLDINGS BY DIRECTORS AND NOMINEES IN THE
DELAWARE INVESTMENTS FUNDS AS OF OCTOBER 31, 1998
<TABLE>
<CAPTION>
Percentage of
Company Shares Owned Fund/Company Owned
------- ------------ ------------------
<S> <C> <C>
WAYNE A. STORK
Delaware Group Equity Funds I, Inc.
Devon Fund ................................................ 65,720.574 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Income Fund........................................ 1,125.446 Less than 1%/Less than 1%
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund....................................... 142,009.027 Less than 1%/Less than 1%
Delaware Group Income Funds, Inc.
Delchester Fund............................................ 619,259.389 Less than 1%/Less than 1%
Delaware Group Income Funds, Inc.
High-Yield Opportunities Fund.............................. 1,091,608.340 ------/Less than 1%
Delaware Group Government Fund, Inc.
U.S. Government Fund........................................ 5,322.055 Less than 1%/Less than 1%
Delaware Group Cash Reserve, Inc. .......................... 3,760,011.960 Less than 1%/Less than 1%
Delaware Group Tax-Free Money Fund, Inc..................... 1,081.950 Less than 1%/Less than 1%
Delaware Group State Tax-Free Income Trust
Tax-Free Pennsylvania Fund................................. 887,532.832 ----/----
Delaware Group Global & International Funds, Inc.
International Equity Fund.................................. 11,838.599 Less than 1%/Less than 1%
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund..................................... 9,273.539 Less than 1%/Less than 1%
JEFFREY J. NICK
Delaware Group Equity Funds II, Inc.
Decatur Total Return Fund................................... 1,270.806 Less than 1%/Less than 1%
Delaware Group Cash Reserve, Inc............................ 31,403.410 Less than 1%/Less than 1%
Delaware Group State Tax-Free Income Trust
Tax-Free New Jersey Fund ................................... 19,012.257 ----/----
WALTER P. BABICH
Delaware Group Cash Reserve, Inc............................ 7,869.800 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Total Return Fund.................................. 9,651.044 Less than 1%/Less than 1%
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund........................................ 4,314.040 Less than 1%/Less than 1%
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund..................................... 6,938.292 Less than 1%/Less than 1%
JOHN H. DURHAM
Delaware Group Cash Reserve, Inc............................ 63,271.060 Less than 1%/Less than 1%
Delaware Pooled Trust, Inc.
The Real Estate Investment Trust Portfolio................. 1,971.351 Less than 1%/Less than 1%
ANTHONY D. KNERR
None
</TABLE>
D-1
<PAGE>
<TABLE>
<CAPTION>
Percentage of
Company Shares Owned Fund/Company Owned
------- ------------ ------------------
<S> <C> <C>
ANN R. LEVEN
Delaware Group Equity Funds I, Inc.
Delaware Fund........................................... 750.665 Less than 1%/Less than 1%
Delaware Group Equity Funds I, Inc.
Devon Fund.............................................. 254.789 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Income Fund..................................... 2,025.428 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Total Return Fund............................... 2,036.432 Less than 1%/Less than 1%
Delaware Group Equity Funds III, Inc.
Trend Fund............................................... 2,527.037 Less than 1%/Less than 1%
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund.................................... 994.566 Less than 1%/Less than 1%
Delaware Group Global & International Funds, Inc.
International Equity Fund............................... 1,174.926 Less than 1%/Less than 1%
W. THACHER LONGSTRETH
Delaware Group Equity Funds I, Inc.
Delaware Fund .......................................... 40,815.95 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Income Fund..................................... 67,652.453 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Total Return Fund............................... 4,161.893 Less than 1%/Less than 1%
Delaware Group Equity Funds III, Inc.
Trend Fund.............................................. 5,296.988 Less than 1%/Less than 1%
Delaware Group Equity Funds IV, Inc.
DelCap Fund............................................. 1,942.898 Less than 1%/Less than 1%
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund.................................... 934.814 Less than 1%/Less than 1%
Delaware Group Income Funds, Inc.
Delchester Fund......................................... 60,197.084 Less than 1%/Less than 1%
Delaware Group Government Fund, Inc.
U.S. Government Fund...................................... 96.057 Less than 1%/Less than 1%
Delaware Group Limited-Term Government Funds, Inc.
U.S. Government Money Fund.............................. 90.100 Less than 1%/Less than 1%
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund............................ 25,648.646 Less than 1%/Less than 1%
Delaware Group Cash Reserve, Inc............................ 40,105.860 Less than 1%/Less than 1%
Delaware Group Tax-Free Fund, Inc.
Tax-Free USA Fund....................................... 40,050.721 Less than 1%/Less than 1%
Delaware Group State Tax-Free Income Trust
Tax-Free Pennsylvania Fund.............................. 221.143 Less than 1%/Less than 1%
Delaware Group Tax-Free Money Fund, Inc..................... 470.830 Less than 1%/Less than 1%
</TABLE>
D-2
<PAGE>
<TABLE>
<CAPTION>
Percentage of
Company Shares Owned Fund/Company Owned
------- ------------ ------------------
<S> <C> <C>
THOMAS F. MADISON
Delaware Group Equity Funds I, Inc.
Devon Fund............................................... 246.327 Less than 1%/Less than 1%
Delaware Group Global & International Funds, Inc.
International Equity Fund................................ 159.373 Less than 1%/Less than 1%
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund................................... 132.162 Less than 1%/Less than 1%
CHARLES E. PECK
Delaware Group Equity Funds I, Inc.
Delaware Fund............................................ 16,151.178 Less than 1%/Less than 1%
Delaware Group Equity Funds I, Inc.
Devon Fund............................................... 12,876.107 Less than 1%/Less than 1%
Delaware Group Equity Funds II, Inc.
Decatur Total Return Fund................................ 9,633.481 Less than 1%/Less than 1%
Delaware Group Equity Funds III, Inc.
Trend Fund............................................... 21,771.736 Less than 1%/Less than 1%
Delaware Group Equity Funds IV, Inc.
DelCap Fund.............................................. 7,583.990 Less than 1%/Less than 1%
Delaware Group Equity Funds V, Inc.
Small Cap Value Fund..................................... 7,248.518 Less than 1%/Less than 1%
Delaware Group Adviser Funds, Inc.
U.S. Growth Fund......................................... 17,898.466 Less than 1%/Less than 1%
Delaware Group Income Funds, Inc.
Delchester Fund.......................................... 67,477.705 Less than 1%/Less than 1%
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund............................. 16,939.372 Less than 1%/Less than 1%
Delaware Group Global & International Funds, Inc.
International Equity Fund................................ 8,691.150 Less than 1%/Less than 1%
</TABLE>
D-3
<PAGE>
EXHIBIT E
LISTS OF CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Delaware Pooled Trust Inc.
The Aggregate Fixed Income Portfolio................................................................................E2
The Diversified Core Fixed Income Portfolio.........................................................................E2
The Emerging Markets Portfolio......................................................................................E2
The Global Equity Portfolio.........................................................................................E4
The Global Fixed-Income Portfolio...................................................................................E6
The High-Yield Bond Portfolio.......................................................................................E8
The Intermediate Fixed-Income Portfolio.............................................................................E6
The International Equity Portfolio..................................................................................E6
The International Fixed-Income Portfolio...........................................................................E10
The Large Cap Value Equity Portfolio................................................................................E6
The Mid-Cap Growth Equity Portfolio (formerly The Aggressive Growth Portfolio).....................................E12
The Real Estate Investment Trust Portfolio II......................................................................E10
The Small/Mid-Cap Value Equity Portfolio............................................................................E2
</TABLE>
E-1
<PAGE>
The Aggregate Fixed Income Portfolio
The Diversified Core Fixed Income Portfolio
The Emerging Markets Portfolio
The Small/Mid-Cap Value Equity Portfolio
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Fund shall not as to 75% of its total assets,
invest more than 5% of its total assets in the
securities of any one issuer (other than
obligations issued, or guaranteed by, the U.S.
government, its agencies or instrumentalities).
Concentration The Fund shall not invest 25% or more of its total
assets in any one industry provided that there is
no limitation with respect to investments in
obligations issued or guaranteed as to principal
or interest by the U.S. Government, its agencies
or instrumentalities.
Borrowing* The Fund shall not borrow money or issue senior
securities, except to the extent permitted by the
Investment Company Act of 1940 or any rule or
order thereunder or interpretation thereof.
Subject to the foregoing, the Fund may engage in
short sales, purchase securities on margin, and
write put and call options.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* See "Borrowing."
Underwriting The Fund shall not engage in underwriting of
securities of other issuers, except that portfolio
securities, including securities purchased in
private placements, may be acquired under
circumstances where, if sold, the Fund might be
deemed to be an underwriter under the Securities
Act of 1933. No limit is placed on the proportion
of a Fund's assets which may be invested in such
securities.
Real Estate The Fund shall not purchase or sell real estate;
provided that the Fund may invest in securities
secured by real estate or interests therein or
issued by companies which invest in real estate or
interests therein.
Commodities The Portfolio shall not purchase or sell physical
commodities or physical commodity contracts,
including physical commodity options or futures
contracts in a contract market or other futures
market.
Lending The Portfolio shall not make loans other than by
the purchase of all or a portion of a publicly or
privately distributed issue of bonds, debentures
or other debt securities of the types commonly
offered publicly or privately and purchased by
financial institutions (including repurchase
agreements), whether or not the purchase was made
upon the original issuance of the securities, and
except that the Portfolio may loan its assets to
qualified broker/dealers or institutional
investors.
Illiquid Securities None.
Investment Companies None.
Control or Management None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
E-2
<PAGE>
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Options See "Borrowing."
Futures See "Commodities."
Unseasoned Issuers None.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
E-3
<PAGE>
The Global Equity Portfolio
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Portfolio shall not, as to 75% of its
respective total assets, invest more than 5% of
its respective total assets in the securities of
any one issuer (other than obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities).
Concentration The Portfolio shall not invest 25% or more of its
total assets in any one industry provided that
there is no limitation with respect to investments
in obligations issued or guaranteed as to
principal or interest by the U.S. Government, its
agencies or instrumentalities.
Borrowing* The Portfolio shall not borrow money or issue
senior securities, except to the extent permitted
by the Investment Company Act of 1940 or any rule
or order thereunder or interpretation thereof.
Subject to the foregoing, the Portfolio may engage
in short sales, purchase securities on margin, and
write put and call options.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* See "Borrowing."
Underwriting The Portfolio shall not engage in underwriting of
securities of other issuers, except that portfolio
securities, including securities purchased in
private placements, may be acquired under
circumstances where, if sold, the Portfolio might
be deemed to be an underwriter under the
Securities Act of 1933. No limit is placed on the
proportion of the Portfolio's assets which may be
invested in such securities.
Real Estate The Portfolio shall not purchase or sell real
estate; provided that the Portfolio may invest in
securities secured by real estate or interests
therein or issued by companies which invest in
real estate or interests therein.
Commodities The Portfolio shall not purchase or sell physical
commodities or physical commodity contracts,
including physical commodity options or futures
contracts in a contract market or other futures
market.
Lending The Portfolio shall not make loans other than by
the purchase of all or a portion of a publicly or
privately distributed issue of bonds, debentures
or other debt securities of the types commonly
offered publicly or privately and purchased by
financial institutions (including repurchase
agreements), whether or not the purchase was made
upon the original issuance of the securities, and
except that the Portfolio may loan its assets to
qualified broker/dealers or institutional
investors.
Illiquid Securities The Portfolio shall not invest more than 10% of
its respective total assets in repurchase
agreements maturing in more than seven days and
other illiquid assets.
Investment Companies The Portfolio shall not invest in securities of
other investment companies, except by purchase in
the open market involving only customary brokers'
commissions or in connection with a merger,
consolidation or other acquisition or as may
otherwise be permitted by the Investment Company
Act of 1940.
Control or Management The Portfolio shall not purchase more than 10% of
the outstanding voting securities of any issuer,
or invest in companies for the purpose of
exercising control or management.
- ----------
*These activities will be covered by the proposed standard restriction
concering Senior Securities and Borrowing.
E-4
<PAGE>
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Options The Portfolio shall not write, purchase or sell
options, puts, calls or combinations thereof with
respect to securities.
Futures See "Commodities."
Unseasoned Issuers The Portfolio shall not invest more than 5% of the
value of its respective total assets in securities
of companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants None.
Holdings by Affiliates None.
Oil or Gas None.
Miscellaneous None.
E-5
<PAGE>
The Global Fixed Income Portfolio
The International Equity Portfolio
The Intermediate Fixed-Income Portfolio
The Large-Cap Value Equity Portfolio
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Portfolio shall not as to 75% of its
respective total assets, (50% for Global Fixed
Income) invest more than 5% of its respective
total assets in the securities of any one issuer
(other than obligations issued or guaranteed by
the U.S. government, its agencies or
instrumentalities).
Concentration The Portfolio shall not make any investment which
would cause more than 25% of the market or other
fair value of its respective total assets to be
invested in the securities of issuers all of which
conduct their principal business activities in the
same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Portfolio shall not borrow money, except as a
temporary measure for extraordinary purposes or to
facilitate redemptions. Any borrowing will be done
from a bank and to the extent that such borrowing
exceeds 5% of the value of its respective net
assets, asset coverage of at least 300% is
required. In the event that such asset coverage
shall at any time fall below 300%, the Portfolio
shall, within three days thereafter (not including
Sunday or holidays) or such longer period as the
Securities and Exchange Commission may prescribe
by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset
coverage of such borrowings shall be at least
300%. No investment securities will be purchased
while the Portfolio has an outstanding borrowing.
The Portfolio will not pledge more than 10% of its
respective net assets. The Portfolio will not
issue senior securities as defined in the
Investment Company Act of 1940 except for notes to
banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Portfolio shall not make short sales of
securities, or purchase securities on margin.
Underwriting The Portfolio shall not engage in the underwriting
of securities of other issuers, except that in
connection with the disposition of a security, the
Portfolio may be deemed to be an "underwriter" as
that term is defined in the Securities Act of
1933.
Real Estate The Portfolio shall not purchase or sell real
estate or real estate limited partnerships, but
this shall not otherwise prevent a Portfolio from
investing in securities secured by real estate or
interests therein.
Commodities The Portfolio shall not purchase or sell
commodities or commodity contracts.
Lending The Portfolio shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements), in accordance
with the Portfolio's investment objective and
policies, are considered loans, and except that
the Portfolio may loan up to 25% of its assets to
qualified broker/dealers or institutional
investors for their use relating to short sales or
other security transactions.
Illiquid Securities The Portfolio shall not invest more than 10% of
its total assets in repurchase agreements maturing
in more than seven days and other illiquid assets.
- ----------
*These activities will be covered by the proposed standard restriction
concering Senior Securities and Borrowing.
E-6
<PAGE>
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Investment Companies The Portfolio shall not invest in securities of
other investment companies, except by purchase in
the open market involving only customary brokers'
commissions or in connection with a merger,
consolidation or other acquisition or as may
otherwise be permitted by the Investment Company
Act of 1940.
Control or Management The Portfolio shall not purchase more than 10% of
the outstanding voting securities of any issuer,
or invest in companies for the purpose of
exercising control or management.
Options The Portfolio shall not write, purchase or sell
options, puts, calls or combinations thereof with
respect to securities.
Futures The Portfolio shall not enter into futures
contracts or options thereon.
Unseasoned Issuers The Portfolio shall not invest more than 5% of the
value of its respective total assets in securities
of companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants The Portfolio shall not in addition to the
restrictions set forth above, in connection with
the qualification of the Portfolio's shares for
sale in certain states, invest in warrants if such
warrants, valued at the lower of cost or market,
would exceed 5% of the value of the Portfolio's
net assets. Included within such amount, but not
to exceed 2% of the Portfolio's net assets may be
warrants which are not listed on the New York
Stock Exchange or American Stock Exchange.
Warrants acquired by the Portfolio in units or
attached to securities may be deemed to be without
value.
Holdings by Affiliates The Portfolio shall not purchase or retain the
securities of any issuer which has an officer,
director or security holder who is a director or
officer of Delaware Pooled Trust, Inc. or of
either of the investment advisers if or so long as
the directors and officers of Delaware Pooled
Trust, Inc. and of the investment advisers
together own beneficially more than 5% of any
class of securities of such issuer.
Oil or Gas The Portfolio shall not invest in interests in
oil, gas and other mineral leases or other mineral
exploration or development programs.
Miscellaneous None.
E-7
<PAGE>
The High-Yield Bond Portfolio
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Portfolio shall not, as to 75% of its
respective total assets, invest more than 5% of
its respective total assets in the securities of
any one issuer (other than obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities).
Concentration The Portfolio shall not make any investment which
would cause more than 25% of the market or other
fair value of its respective total assets to be
invested in the securities of issuers all of which
conduct their principal business activities in the
same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Portfolio shall not borrow money, except as a
temporary measure for extraordinary purposes or to
facilitate redemptions. Any borrowing will be done
from a bank and to the extent that such borrowing
exceeds 5% of the value of its respective net
assets, asset coverage of at least 300% is
required. In the event that such asset coverage
shall at any time fall below 300%, the Portfolio
shall, within three days thereafter (not including
Sunday or holidays) or such longer period as the
Securities and Exchange Commission ("Commission")
may prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that
the asset coverage of such borrowings shall be at
least 300%. No investment securities will be
purchased while the Portfolio has an outstanding
borrowing. The Portfolio will not pledge more than
10% of its respective net assets. The Portfolio
will not issue senior securities as defined in the
Investment Company Act of 1940, except for notes
to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Portfolio shall not make short sales of
securities, or purchase securities on margin.
Underwriting The Portfolio shall not engage in the underwriting
of securities of other issuers, except that in
connection with the disposition of a security, the
Portfolio may be deemed to be an "underwriter" as
that term is defined in the Securities Act of
1933.
Real Estate The Portfolio shall not purchase or sell real
estate or real estate limited partnerships, but
this shall not otherwise prevent the Portfolio
from investing in securities secured by real
estate or interests therein.
Commodities The Portfolio shall not purchase or sell
commodities or commodity contracts.
Lending The Portfolio shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements), in accordance
with the Portfolio's investment objective and
policies, are considered loans, and except that
each Portfolio may loan up to 25% of its
respective assets to qualified broker/dealers or
institutional investors for their use relating to
short sales or other security transactions.
Illiquid Securities None.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
E-8
<PAGE>
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Investment Companies None.
Control or Management None.
Options None.
Futures The Portfolio shall not enter into futures
contracts or options thereon.
Unseasoned Issuers None.
Warrants The Portfolio shall not in addition to the
restrictions set forth above, in connection with
the qualification of a Portfolio's shares for sale
in certain states, the Portfolio may not invest in
warrants if such warrants, valued at the lower of
cost or market, would exceed 5% of the value of a
Portfolio's net assets. Included within such
amount, but not to exceed 2% of a Portfolio's net
assets may be warrants which are not listed on the
New York Stock Exchange or American Stock
Exchange. Warrants acquired by a Portfolio in
units or attached to securities may be deemed to
be without value.
Holdings by Affiliates The Portfolio shall not purchase or retain the
securities of any issuer which has an officer,
director or security holder who is a director or
officer of Delaware Pooled Trust, Inc. or of
either of the investment advisers if or so long as
the directors and officers of Delaware Pooled
Trust, Inc. and of the investment advisers
together own beneficially more than 5% of any
class of securities of such issuer.
Oil or Gas The Portfolio shall not invest in interests in
oil, gas and other mineral leases or other mineral
exploration or development programs.
Miscellaneous None.
E-9
<PAGE>
The International Fixed Income Portfolio
The Real Estate Investment Trust Portfolio II
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification None.
Concentration The Portfolio shall not make any investment which
would cause more than 25% of the market or other
fair value of its total assets to be invested in
the securities of issuers all of which conduct
their principal business activities in the same
industry except that the Real Estate Investment
Trust Portfolios shall invest in excess of 25% of
its total assets in securities of issuers in the
real estate industry. This restriction does not
apply to obligations issued or guaranteed by the
U.S. government, its agencies or
instrumentalities.
Borrowing* The Portfolio shall not borrow money, except as a
temporary measure for extraordinary purposes or to
facilitate redemptions. Any borrowing will be done
from a bank and to the extent that such borrowing
exceeds 5% of the value of its respective net
assets, asset coverage of at least 300% is
required. In the event that such asset coverage
shall at any time fall below 300%, the Portfolio
shall, within three days thereafter (not including
Sunday or holidays) or such longer period as the
Securities and Exchange Commission may prescribe
by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset
coverage of such borrowings shall be at least
300%. No investment securities will be purchased
while a Portfolio has an outstanding borrowing.
The Portfolio will not pledge more than 10% of its
respective net assets. The Portfolio will not
issue senior securities as defined in the
Investment Company Act of 1940, except for notes
to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Portfolio shall not make short sales of
securities, or purchase securities on margin. The
Portfolio may satisfy margin requirements with
respect to futures transactions.
Underwriting The Portfolio shall not engage in the underwriting
of securities of other issuers, except that in
connection with the disposition of a security, the
Portfolio may be deemed to be an "underwriter" as
that term is defined in the Securities Act of
1933.
Real Estate The Portfolio shall not purchase or sell real
estate or real estate limited partnerships, but
this shall not otherwise prevent the Portfolio
from investing in securities secured by real
estate or interests therein, except that the Real
Estate Investment Trust Portfolios may each own
real estate directly as a result of a default on
securities the Portfolio owns.
Commodities The Portfolio shall not purchase or sell
commodities or commodity contracts. The Portfolio
may enter into futures contracts and may purchase
and sell options on futures contracts in
accordance with the related prospectus subject to
the investment restrictions listed under
"Futures."
Lending The Portfolio shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements), in accordance
with the Portfolio's investment objective and
policies, are considered loans, and except that
the Portfolio may loan up to 25% of its respective
assets to qualified broker/dealers or
institutional investors for their use relating to
short sales or other security transactions.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
E-10
<PAGE>
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Illiquid Securities None.
Investment Companies None.
Control or Management None.
Options None.
Futures The Portfolio may enter into futures contracts and
options thereon to the extent that not more than
5% of its assets are required as futures contract
margin deposits and premiums on options and only
to the extent that obligations under such
contracts and transactions represent not more than
20% of its total assets.
See also "Short Sales/Margin" and "Commodities."
Unseasoned Issuers None.
Warrants The Portfolio shall not in addition to the
restrictions set forth above, in connection with
the qualification of its shares for sale in
certain states, the Portfolio may not invest in
warrants if such warrants, valued at the lower of
cost or market, would exceed 5% of the value of
the Portfolio's net assets. Included within such
amount, but not to exceed 2% of the Portfolio's
net assets may be warrants which are not listed on
the New York Stock Exchange or American Stock
Exchange. Warrants acquired by the Portfolio in
units or attached to securities may be deemed to
be without value.
Holdings by Affiliates The Portfolio shall not purchase or retain the
securities of any issuer which has an officer,
director or security holder who is a director or
officer of Delaware Pooled Trust, Inc. or of
either of the investment advisers if or so long as
the directors and officers of Delaware Pooled
Trust, Inc. and of the investment advisers
together own beneficially more than 5% of any
class of securities of such issuer.
Oil or Gas The Portfolio shall not invest in interests in
oil, gas and other mineral leases or other mineral
exploration or development programs.
Miscellaneous None.
E-11
<PAGE>
The Mid-Cap Growth Equity Portfolio
(formerly The Aggressive Growth Portfolio)
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Diversification The Portfolio shall not, as to 75% of its
respective total assets, invest more than 5% of
its respective total assets in the securities of
any one issuer (other than obligations issued or
guaranteed by the U.S. government, its agencies or
instrumentalities).
Concentration The Portfolio shall not make any investment which
would cause more than 25% of the market or other
fair value of its respective total assets to be
invested in the securities of issuers all of which
conduct their principal business activities in the
same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Borrowing* The Portfolio shall not borrow money, except as a
temporary measure for extraordinary purposes or to
facilitate redemptions. Any borrowing will be done
from a bank and to the extent that such borrowing
exceeds 5% of the value of its respective net
assets, asset coverage of at least 300% is
required. In the event that such asset coverage
shall at any time fall below 300%, the Portfolio
shall, within three days thereafter (not including
Sunday or holidays) or such longer period as the
Securities and Exchange Commission may prescribe
by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset
coverage of such borrowings shall be at least
300%. No investment securities will be purchased
while the Portfolio has an outstanding borrowing.
The Portfolio will not pledge more than 10% of its
respective net assets. The Portfolio will not
issue senior securities as defined in the
Investment Company Act of 1940, except for notes
to banks.
Issuing Senior Securities* See "Borrowing."
Short Sales/Margin* The Portfolio shall not make short sales of
securities, or purchase securities on margin,
except that the Portfolio may satisfy margin
requirements with respect to futures transactions.
Underwriting The Portfolio shall not engage in the underwriting
of securities of other issuers, except that in
connection with the disposition of a security, the
Portfolio may be deemed to be an "underwriter" as
that term is defined in the Securities Act of
1933.
Real Estate The Portfolio shall not purchase or sell real
estate or real estate limited partnerships, but
this shall not otherwise prevent the Portfolio
from investing in securities secured by real
estate or interests therein.
Commodities The Portfolio shall not purchase or sell
commodities or commodity contracts, except that
the Portfolio may enter into futures contracts and
may purchase and sell options on futures contracts
in accordance with the related Prospectus, subject
to the investment restrictions under "Futures."
<PAGE>
Lending The Portfolio shall not make loans, except to the
extent that purchases of debt obligations
(including repurchase agreements), in accordance
with the Portfolio's investment objective and
policies, are considered loans, and except that
the Portfolio may loan up to 25% of its assets to
qualified broker/dealers or institutional
investors for their use relating to short sales or
other security transactions.
Illiquid Securities The Portfolio shall not invest more than 10% of
its total assets in repurchase agreements maturing
in more than seven days and other illiquid assets.
- ----------
*These activities will be covered by the proposed standard restriction
concerning Senior Securities and Borrowing.
E-12
<PAGE>
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Investment Companies The Portfolio shall not invest in securities of
other investment companies, except by purchase in
the open market involving only customary brokers'
commissions or in connection with a merger,
consolidation or other acquisition or as may
otherwise be permitted by the Investment Company
Act of 1940.
Control or Management The Portfolio shall not purchase more than 10% of
the outstanding voting securities of any issuer,
or invest in companies for the purpose of
exercising control or management.
Options The Portfolio shall not write, purchase or sell
options, puts, calls or combinations thereof with
respect to securities, except that the Portfolio
may: (a) write covered call options with respect
to any or all parts of its portfolio securities;
(b) purchase call options to the extent that the
premiums paid on all outstanding call options do
not exceed 2% of the Portfolio's total assets; (c)
write secured put options; and (d) purchase put
options, if the Portfolio owns the security
covered by the put option at the time of purchase,
and provided that premiums paid on all put options
outstanding do not exceed 2% of its total assets.
The Portfolio may sell call or put options
previously purchased and enter into closing
transactions with respect to the activities noted
above.
Futures The Portfolio shall not enter into futures
contracts or options thereon, except that the
Portfolio may enter into futures contracts and
options thereon to the extent that not more than
5% of its assets are required as futures contract
margin deposits and premiums on options and only
to the extent that obligations under such
contracts and transactions represent not more than
20% of its total assets.
Unseasoned Issuers The Portfolio shall not invest more than 5% of the
value of its respective total assets in securities
of companies less than three years old. Such
three-year period shall include the operation of
any predecessor company or companies.
Warrants The Portfolio shall not in addition to the
restrictions set forth above, in connection with
the qualification of its shares for sale in
certain states, the Portfolio may not invest in
warrants if such warrants, valued at the lower of
cost or market, would exceed 5% of the value of
the Portfolio's net assets. Included within such
amount, but not to exceed 2% of the Portfolio's
net assets may be warrants which are not listed on
the New York Stock Exchange or American Stock
Exchange. Warrants acquired by the Portfolio in
units or attached to securities may be deemed to
be without value.
Holdings by Affiliates The Portfolio shall not purchase or retain the
securities of any issuer which has an officer,
director or security holder who is a director or
officer of Delaware Pooled Trust, Inc. or of
either of the investment advisers if or so long as
the directors and officers of Delaware Pooled
Trust, Inc. and of the investment advisers
together own beneficially more than 5% of any
class of securities of such issuer.
E-13
<PAGE>
Category Current Fundamental Investment Restriction
- -------- ------------------------------------------
Oil or Gas The Portfolio shall not invest in interests in
oil, gas and other mineral leases or other mineral
explorations or development programs.
Miscellaneous None.
E-14
<PAGE>
EXHIBIT F
INFORMATION RELATING TO INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Current
Management (or
Asset Sub-Advisory)
Investment Size as Fee Rate Based
Manager or Date of of On Average Daily
Delaware Pooled Trust, Inc. Portfolios Sub-Adviser Agreement 10/31/98 Net Assets
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Aggregate Fixed Income Portfolio Delaware 12/24/97(1) 0.40% per year
Management
Company, Inc.
("DMC")
- -------------------------------------------------------------------------------------------------------
The Diversified Core Fixed Income DMC 12/24/97(1) 0.43% per year
Portfolio
(Investment Management)
- -------------------------------------------------------------------------------------------------------
The Diversified Core Fixed Income Delaware 12/24/97(1) Fee equal to
Portfolio International portion of
(Sub-Advisory) Advisers Ltd. management fee
("DIAL") attributable to
foreign
investments.
- -------------------------------------------------------------------------------------------------------
The Emerging Markets Portfolio DIAL 4/14/97(2) 1.20% per year
- -------------------------------------------------------------------------------------------------------
The Global Equity Portfolio
(Investment Management) DIAL 10/14/97(3) 0.75% per year
- -------------------------------------------------------------------------------------------------------
The Global Equity Portfolio
(Sub-Advisory) DMC 10/14/97(3) 50% of
management fee
paid to DIAL
- -------------------------------------------------------------------------------------------------------
The Global Fixed-Income Portfolio DIAL 4/3/95(4) 0.50% per year
less directors'
fees
- -------------------------------------------------------------------------------------------------------
The Growth & Income Portfolio
- -------------------------------------------------------------------------------------------------------
The High-Yield Bond Portfolio DMC 11/29/95(5) 0.45% per year
- -------------------------------------------------------------------------------------------------------
The Intermediate Fixed-Income Portfolio DMC 4/3/95(4) 0.40% per year
less directors'
fees
- -------------------------------------------------------------------------------------------------------
The International Equity Portfolio DIAL 4/3/95(1) 0.75% per year
less directors'
fees
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Management
Fees that
Proposed Would Have
Management Been Due
(or During The Servicing
Sub-Advisory) Management Last Fiscal /Distribution
Fee Rate Fees Due Year Under Fees Paid
Based on and/or Proposed Percentage Last Fiscal
Average Waived Last Management Difference Year to
Daily Net Fiscal Year Fee Rate Between Affiliates
Delaware Pooled Trust, Inc. Portfolios Assets A B A & B of Manager
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The Aggregate Fixed Income Portfolio No Change N/A N/A
- -----------------------------------------------------------------------------------------------------------------
The Diversified Core Fixed Income No Change N/A N/A
Portfolio
(Investment Management)
- -----------------------------------------------------------------------------------------------------------------
The Diversified Core Fixed Income No Change N/A N/A
Portfolio
(Sub-Advisory)
- -----------------------------------------------------------------------------------------------------------------
The Emerging Markets Portfolio 1.00% per
year
- -----------------------------------------------------------------------------------------------------------------
The Global Equity Portfolio
(Investment Management) No Change N/A N/A
- -----------------------------------------------------------------------------------------------------------------
The Global Equity Portfolio
(Sub-Advisory) No Change N/A N/A
- -----------------------------------------------------------------------------------------------------------------
The Global Fixed-Income Portfolio No Change N/A N/A
- -----------------------------------------------------------------------------------------------------------------
The Growth & Income Portfolio
- -----------------------------------------------------------------------------------------------------------------
The High-Yield Bond Portfolio No Change N/A N/A
- -----------------------------------------------------------------------------------------------------------------
The Intermediate Fixed-Income Portfolio No Change N/A N/A
- -----------------------------------------------------------------------------------------------------------------
The International Equity Portfolio No Change N/A N/A
</TABLE>
(1) Last submitted to shareholders for initial approval on [December 24, 1997].
(2) Last submitted to shareholders for initial approval on [April 14, 1997].
(3) Last submitted to shareholders for initial approval on [October 14, 1997].
(4) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National Corporation's acquisition of DMC and DIAL.
(5) Last submitted to shareholder for initial approval on [November 29, 1995].
F-1
<PAGE>
EXHIBIT F
INFORMATION RELATING TO INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Current
Management (or
Asset Sub-Advisory)
Investment Size as Fee Rate Based
Manager or Date of of On Average Daily
Delaware Pooled Trust, Inc. Portfolios Sub-Adviser Agreement 10/31/98 Net Assets
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
The International Fixed-Income Portfolio DIAL 4/3/95(1) 0.50% per year
- --------------------------------------------------------------------------------------------------------
The Labor Select International Equity DIAL 11/29/95(2) 0.75% per year
Portfolio
- --------------------------------------------------------------------------------------------------------
The Large Cap Value Equity Portfolio DMC 4/3/95(1) 0.55% per year
less directors'
fees
- --------------------------------------------------------------------------------------------------------
The Mid-Cap Growth Equity Portfolio DMC 4/3/95(1) 0.80% per year
(formerly The Aggressive Growth
Portfolio)
- --------------------------------------------------------------------------------------------------------
The Real Estate Investment Trust DMC 10/14/97(3) 0.75% per year
Portfolio II
(Investment Management)
- --------------------------------------------------------------------------------------------------------
The Real Estate Investment Trust Lincoln 10/14/97(3) 30% of
Portfolio II Investment management fee
(Sub-Advisory) Management, paid to DMC
Inc.
- --------------------------------------------------------------------------------------------------------
The Small-Cap Growth Equity Portfolio
- --------------------------------------------------------------------------------------------------------
The Small/Mid-Cap Value Equity Portfolio DMC 11/29/95(2) 0.65% per year
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Management
Fees that
Proposed Would Have
Management Been Due
(or During The Servicing
Sub-Advisory) Management Last Fiscal /Distribution
Fee Rate Fees Due Year Under Fees Paid
Based on and/or Proposed Percentage Last Fiscal
Average Waived Last Management Difference Year to
Daily Net Fiscal Year Fee Rate Between Affiliates
Delaware Pooled Trust, Inc. Portfolios Assets A B A & B of Manager
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The International Fixed-Income Portfolio No Change N/A N/A
- ------------------------------------------------------------------------------------------------------------------
The Labor Select International Equity No Change N/A N/A
Portfolio
- ------------------------------------------------------------------------------------------------------------------
The Large Cap Value Equity Portfolio No Change N/A N/A
- ------------------------------------------------------------------------------------------------------------------
The Mid-Cap Growth Equity Portfolio 0.75% per
(formerly The Aggressive Growth year
Portfolio)
- ------------------------------------------------------------------------------------------------------------------
The Real Estate Investment Trust No Change N/A N/A
Portfolio II
(Investment Management)
- ------------------------------------------------------------------------------------------------------------------
The Real Estate Investment Trust No Change N/A N/A
Portfolio II
(Sub-Advisory)
- ------------------------------------------------------------------------------------------------------------------
The Small-Cap Growth Equity Portfolio
- ------------------------------------------------------------------------------------------------------------------
The Small/Mid-Cap Value Equity Portfolio No Change N/A N/A
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Last submitted to shareholders for approval on March 29, 1995 in connection
with Lincoln National Corporation's acquisition of DMC and DIAL.
(2) Last submitted to shareholder for initial approval on [November 29, 1995].
(3) Last submitted to shareholders for initial approval on [October 14, 1997].
F-2
<PAGE>
EXHIBIT G
FUNDS SIMILARLY MANAGED BY THE INVESTMENT MANAGERS
AND SUB-ADVISERS
Domestic Equity Funds
<TABLE>
<CAPTION>
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 10/31/98 On Average Daily Net Assets on Average Daily Net Assets
---- ----------- -------------- ------------------------ ------------------------------
<S> <C> <C> <C> <C>
Aggressive Growth Fund DMC $____________ 1.00% per year 0.75% on the first $500
million
0.70% on the next $500 million
0.65% on the next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
0.65% on first $500 million
Blue Chip Fund DMC $____________ 0.65% on first $500 million 0.60% on next $500 million
(Investment Management) 0.625% on next $500 million 0.55% on next $1,500 million
0.60% on assets in excess of 0.50% on assets in excess of
$1,000 million; all per year $2,500 million; all per year
Blue Chip Fund VGA $____________ 0.15% on average daily net N/A
(Sub-Advisory) assets averaging one year
old or less 0.20% on
average daily net assets
averaging two years old or
less, but greater than
one year old 0.35% on
average daily net assets
averaging over two years old;
all per year
Capital Appreciation Fund DMC $____________ 0.75% on first $500 million 0.75% on first $500 million
0.725% on next $500 million 0.70% on next $500 million
0.70% on assets in excess of 0.65% on next $1,500 million
$1,000 million; all per year 0.60% on assets in excess of
$2,500 million; all per year
Convertible Securities Series DMC $____________ 0.75% per year 0.75% on first $500 million
(Variable Annuity) 0.70% on next $500 million
0.65% on next 1,500 million
0.60% on assets in excess of
$2,500 million; all per year
Decatur Income Fund DMC $____________ 0.60% on first $100 million 0.65% on first $500 million
0.525% on next $150 million 0.60% on next $500 million
0.50% on next $250 million 0.55% on next $1,500 million
0.475% on assets in excess 0.50% on assets in excess of
of $500 million; all per $2,500 million; all per year
year less directors' fees
Decatur Total Return Fund DMC $____________ 0.60% on first $500 million 0.65% on first $500 million
0.575% on next $250 million 0.60% on next $500 million
0.55% on assets in excess 0.55% on next 1,500 million
of $750 million; all per 0.50% on assets in excess of
year less directors' fees $2,500 million; all per year
Decatur Total Return Series DMC $____________ 0.60% per year less 0.65% on first $500 million
(Variable Annuity) directors' fees 0.60% on next $500 million
0.55% on next 1,500 million
0.50% on assets in excess of
$2,500 million; all per year
* Investment Managers/Sub-Advisers:
Delaware Management Company ("DMC")
Delaware International Advisers Ltd. ("DIAL")
Lincoln Investment Management, Inc. ("LIM"
Voyageur Asset Management LLC ("VAM")
Vantage Global Advisors, Inc. ("VGA")
Lynch & Mayer, Inc. ("L&M")
AIB Govett, Inc. ("AIBG")
*Closed-end fund that does not accept new investments; therefore, there are no
breakpoints in the management fees.
</TABLE>
G-1
<PAGE>
<TABLE>
<CAPTION>
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 10/31/98 On Average Daily Net Assets on Average Daily Net Assets
---- ----------- -------------- ------------------------ ------------------------------
<S> <C> <C> <C> <C>
Delaware Fund DMC $____________ 0.60% on first $100 million 0.65% on first $500 million
0.525% on next $150 million 0.60% on next $500 million
0.50% on next $250 million 0.55% on next $1,500 million
0.475% on assets in excess 0.50% on assets in excess of
of $500 million; all per year $2,500 million; all per year
less directors' fees
Delaware Series DMC $____________ 0.60% per year less 0.65% on first $500 million
(Variable Annuity) directors' fees 0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500; all per year
DelCap Fund DMC $____________ 0.75% per year less 0.75% on first $500 million
directors' fees 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
DelCap Series DMC $____________ 0.75% per year less 0.75% on first $500 million
(Variable Annuity) directors' fees 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
Devon Fund DMC $____________ 0.60% on first $500 million 0.65% on first $500 million
0.50% on assets in excess of 0.60% on next $500 million
$500 million; all per year 0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
Devon Series DMC $____________ 0.60% per year 0.65% on first $500 million
0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
Diversified Value Fund DMC $____________ 0.65% on first $500 million N/A
0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
Growth Stock Fund DMC $____________ 1.00% per year 0.65% on the first $500 million
(Investment Management) 0.60% on the next $500
million 0.55% on the next
$1,500 million 0.50% on
assets in excess of $2,500
million; all per year
Growth Stock Fund VAM $____________ 0.50% per year 0.325% per year
(Sub-Advisory)
Mid Cap Value Fund DMC $____________ 0.75% on first $500 million N/A
0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
The Real Estate Investment DMC $____________ 0.75% per year 0.75% on first $500 million
Trust Portfolio 0.70% on next $500 million
(Investment Management) 0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
* Investment Managers/Sub-Advisers:
Delaware Management Company ("DMC")
Delaware International Advisers Ltd. ("DIAL")
Lincoln Investment Management, Inc. ("LIM"
Voyageur Asset Management LLC ("VAM")
Vantage Global Advisors, Inc. ("VGA")
Lynch & Mayer, Inc. ("L&M")
AIB Govett, Inc. ("AIBG")
*Closed-end fund that does not accept new investments; therefore, there are no
breakpoints in the management fees.
</TABLE>
G-2
<PAGE>
<TABLE>
<CAPTION>
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 10/31/98 On Average Daily Net Assets on Average Daily Net Assets
---- ----------- -------------- ------------------------ ------------------------------
<S> <C> <C> <C> <C>
The Real Estate Investment LIM $____________ 30% of management fee paid N/A
Trust Portfolio to DMC
(Sub-Advisory)
REIT Series DMC $____________ 0.75% on first $500 million N/A
(Variable Annuity) 0.70% on next $500 million
(Investment Management) 0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
REIT Series LIM $____________ 30% of management fee paid N/A
(Variable Annuity) to DMC
(Sub-Advisory)
Retirement Income Fund DMC $____________ 0.65% on first $500 million 0.65% on first $500 million
0.625% on next $500 million 0.60% on next $500 million
0.60% on assets in excess of 0.55% on next $1,500 million
$1,000; all per year 0.50% on assets in excess of
$2,500; all per year
Small Cap Contrarian Fund DMC $____________ 0.75% on first $500 million N/A
0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
Small Cap Value Fund DMC $____________ 0.75% per year less 0.75% on first $500 million
directors' fees 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
Small Cap Value Series DMC $____________ 0.75% per year 0.75% on first $500 million
(Variable Annuity) 0.70% on next $500
million 0.65% on next $1,500
million 0.60% on assets in
excess of $2,500 million; all
per year
Social Awareness Fund DMC $____________ 0.75% on first $500 million 0.75% on first $500 million
(Investment Management) 0.725% on next $500 million 0.70% on next $500 million
0.70% on assets in excess of 0.65% on next $1,500 million
$1,000; all per year 0.60% on assets in excess of
$2,500 million; all per year
Social Awareness Fund VGA $____________ 0.20% of average daily net N/A
(Sub-Advisory) assets averaging one year
old or less 0.25% of
average daily net assets
averaging two years old or
less, but greater than
one year old 0.40% of
average daily net assets
averaging over two years old;
all per year
Social Awareness Series DMC $____________ 0.75% per year 0.75% on first $500 million
(Variable Annuity) 0.70% on next $500 million
(Investment Management) 0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
* Investment Managers/Sub-Advisers:
Delaware Management Company ("DMC")
Delaware International Advisers Ltd. ("DIAL")
Lincoln Investment Management, Inc. ("LIM"
Voyageur Asset Management LLC ("VAM")
Vantage Global Advisors, Inc. ("VGA")
Lynch & Mayer, Inc. ("L&M")
AIB Govett, Inc. ("AIBG")
*Closed-end fund that does not accept new investments; therefore, there are no
breakpoints in the management fees.
</TABLE>
G-3
<PAGE>
<TABLE>
<CAPTION>
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 10/31/98 On Average Daily Net Assets on Average Daily Net Assets
---- ----------- -------------- --------------------------- ------------------------------
<S> <C> <C> <C> <C>
Social Awareness Series VGA $____________ 0.25% on first $20 million N/A
(Variable Annuity) 0.35% on next $30 million
(Sub-Advisory) 0.40% on assets in excess of
$50 million; all per year
Tax-Efficient Equity Fund DMC $____________ 0.75% on first $500 million 0.75% on first $500 million
0.725% on next $500 million 0.70% on next $500 million
0.70% on assets in excess of 0.65% on next $1,500 million
$1,000 million; all per year 0.60% on assets in excess of
$2,500 million; all per year
Trend Fund DMC $____________ 0.75% per year less 0.75% on first $500 million
directors' fees 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
Trend Series DMC $____________ 0.75% per year 0.75% on first $500 million
(Variable Annuity) 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
U.S. Growth Fund DMC $____________ 0.70% per year 0.65% on first $500 million
(Investment Management) 0.60% on next $500 million
0.55% on next $1,500 million
0.50% on assets in excess of
$2,500 million; all per year
U.S. Growth Fund L&M $____________ 0.40% per year N/A
(Sub-Advisory)
Growth and Income Fund of VGA $4,004,488,483 0.20% per year N/A
Lincoln Multi-Funds
Special Opportunities Fund of VGA $ 885,491,436 0.20% per year N/A
Lincoln Multi-Funds
Social Awareness Fund of VGA $1,710,210,719 0.20% per year N/A
Lincoln Multi-Funds
Managed Fund of VGA $ 468,863,668 0.20% per year N/A
Lincoln Multi-Funds
Core Equity Fund of VGA $ 666,471,755 0.20% per year N/A
Lincoln Director Funds
Lincoln National LIM $ 107,643,507 0.875% per year N/A
Convertible Securities Fund, Inc.
Lincoln National LIM $ 300,098,000 0.75% on first $200 million N/A
Aggressive Growth 0.70% on next $200 million
Fund 0.65% on assets in
excess of $400 million;
all per year
Lincoln National Capital LIM $ 636,124,000 0.80% per year N/A
Appreciation Fund
Lincoln National Equity LIM $ 945,271,000 0.95% N/A
Income Fund
Lincoln National Growth LIM $3,941,773,000 0.48% on first $200 million N/A
& Income Fund 0.40% on next $200 million
0.30% on assets in excess
of $400 million; all
per year
Lincoln National LIM $1,698,006,000 0.48% on first $200 million N/A
Social Awareness 0.40% on next $200 million
Fund 0.30% on assets in excess
of $400 million; all
per year
Lincoln National LIM $ 844,084,000 0.48% on first $200 million N/A
Special Opportunities 0.40% on next $200 million
Fund 0.30% on assets in excess
of $400 million; all
per year
</TABLE>
<PAGE>
Domestic Fixed-Income Funds
<TABLE>
<CAPTION>
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 10/31/98 On Average Daily Net Assets on Average Daily Net Assets
---- ----------- -------------- --------------------------- ------------------------------
<S> <C> <C> <C> <C>
Corporate Bond Fund DMC $____________ 0.50% on first $500 million N/A
0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess
of $2,500 million; all per
year
Delaware Group Dividend and DMC $____________ 0.55% per year N/A
Income Fund, Inc.**
Delaware-Voyageur US DMC $____________ 0.50% per year 0.55% on first $500 million
Government Securities Fund 0.50% on next $500 million
(Investment Management) 0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
Delaware-Voyageur US VAM $____________ 0.25% per year N/A
Government Securities Fund
(Sub-Advisory)
* Investment Managers/Sub-Advisers:
Delaware Management Company ("DMC")
Delaware International Advisers Ltd. ("DIAL")
Lincoln Investment Management, Inc. ("LIM"
Voyageur Asset Management LLC ("VAM")
Vantage Global Advisors, Inc. ("VGA")
Lynch & Mayer, Inc. ("L&M")
AIB Govett, Inc. ("AIBG")
*Closed-end fund that does not accept new investments; therefore, there are no
breakpoints in the management fees.
</TABLE>
G-4
<PAGE>
<TABLE>
<CAPTION>
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 10/31/98 On Average Daily Net Assets on Average Daily Net Assets
---- ----------- -------------- --------------------------- ------------------------------
<S> <C> <C> <C> <C>
Delchester Fund DMC $____________ 0.60% on first $500 million 0.65% on first $500 million
0.575% on next $250 million 0.60% on next $500 million
0.55% on assets in excess of 0.55% on next $1,500 million
$750 million; all per year 0.50% on assets in excess of
less directors' fees $2,500 million; all per year
Delchester Series DMC $____________ 0.60% per year less 0.65% on first $500 million
directors' fees 0.60% on next $500 million
0.55% on next 1,500 million
0.50% on assets in excess of
$2,500 million; all per year
Extended Duration Bond Fund DMC $____________ 0.55% on first $500 million N/A
0.50% on next $500, million
0.45% on next $1,500 million
0.425% on assets in excess
of $2,500 million; all per
year
High-Yield Opportunities Fund DMC $____________ 0.65% on first $500 million 0.65% on first $500 million
0.625% on next $500 million 0.60% on next $500 million
0.60% on assets in excess of 0.55% on next $1,500 million
$1,000 million; all per year 0.50% on assets in excess of
$2,500 million; all per year
Limited Term Government Fund DMC $____________ 0.50% per year less 0.50% on first $500 million
directors' fees 0.475% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$1,500 million; all per year
Strategic Income Fund DMC $____________ 0.65% on first $500 million 0.65% on first $500 million
(Investment Management) 0.625% on next $500 million 0.60% on next $500 million
0.60% on assets in excess of 0.55% on next $1,500 million
$1,000 million; all per year 0.50% on assets in excess of
$2,500 million; all per year
Strategic Income Fund DIAL $____________ 1/3 of management fees paid N/A
(Sub-Advisory) to DMC
Strategic Income Series DMC $____________ 0.65% per year 0.65% on first $500 million
(Variable Annuity) 0.60% on the next $500 million
(Investment Management) 0.55% on the next $1,500
million; per year
0.50% on assets in excess of
$2,500 million; all per year
Strategic Income Series DIAL $____________ 1/3 of management fees paid N/A
(Variable Annuity) to DMC
(Sub-Advisory)
U.S. Government Fund DMC $____________ 0.60% per year less 0.55% on first $500 million
directors' fees 0.50% on next $500 million
0.45% on next $1,500 million
0.425% on assets in excess of
$2,500 million; all per year
* Investment Managers/Sub-Advisers:
Delaware Management Company ("DMC")
Delaware International Advisers Ltd. ("DIAL")
Lincoln Investment Management, Inc. ("LIM"
Voyageur Asset Management LLC ("VAM")
Vantage Global Advisors, Inc. ("VGA")
Lynch & Mayer, Inc. ("L&M")
AIB Govett, Inc. ("AIBG")
*Closed-end fund that does not accept new investments; therefore, there are no
breakpoints in the management fees.
</TABLE>
G-5
<PAGE>
Global and International Funds
<TABLE>
<CAPTION>
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 10/31/98 On Average Daily Net Assets on Average Daily Net Assets
---- ----------- -------------- --------------------------- ------------------------------
<S> <C> <C> <C> <C>
Delaware Group Global DMC $____________ 0.70% per year N/A
Dividend and Income Fund,
Inc.
(Investment Management)
Delaware Group Global DIAL $____________ 40% of management fees paid N/A
Dividend and Income Fund, to DMC
Inc.
(Sub-Advisory)
Emerging Markets Fund DIAL $____________ 1.25% per year 1.25% on first $500 million
1.20% on next $500 million
1.15% on next $1,500 million
1.10% on assets in excess of
$3,500 million; all per year
Emerging Markets Series DIAL $____________ 1.25% per year 1.25% on first $500 million
(Variable Annuity) 1.20% on next $500 million
1.15% on next 1,500 million
1.10% on assets in excess of
$2,500 million; all per year
Global Equity Fund (f/k/a DIAL $____________ 0.75% per year less 0.85% on first $500 million
Global Assets Series) directors' fees 0.80% on next $500 million
(Investment Management) 0.75% on next 1,500 million
0.70% on assets in excess of
$2,500 million; all per year
Global Equity Fund (f/k/a DMC $____________ 25% of fees paid to DIAL N/A
Global Assets Series)
(Sub-Advisory)
Global Bond Fund DIAL $____________ 0.75% per year less 0.75% on first $500 million
directors' fees 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
Global Bond Series DIAL $____________ 0.75% per year 0.75% on first $500 million
(Variable Annuity) 0.70% on next $500 million
0.65% on next $1,500 million
0.60% on assets in excess of
$2,500 million; all per year
Global Opportunities Fund DIAL $____________ 0.80% per year 0.85% on first $500 million
(f/k/a Global Equity Series) 0.80% on next $500 million
(Investment Management) 0.75% on next 1,500 million
0.70% on assets in excess of
$2,500 million; all per year
Global Opportunities Fund DMC $____________ 50% of fees paid to DIAL N/A
(f/k/a Global Equity Series)
(Sub-Advisory)
* Investment Managers/Sub-Advisers:
Delaware Management Company ("DMC")
Delaware International Advisers Ltd. ("DIAL")
Lincoln Investment Management, Inc. ("LIM"
Voyageur Asset Management LLC ("VAM")
Vantage Global Advisors, Inc. ("VGA")
Lynch & Mayer, Inc. ("L&M")
AIB Govett, Inc. ("AIBG")
*Closed-end fund that does not accept new investments; therefore, there are no
breakpoints in the management fees.
</TABLE>
G-6
<PAGE>
<TABLE>
<CAPTION>
Investment Current Management (or Proposed Management (or
Manager or Asset Size Sub-Advisory) Fee Rate Based Sub-Advisory) Fee Rate Based
Fund Sub-Adviser* as of 10/31/98 On Average Daily Net Assets on Average Daily Net Assets
---- ----------- -------------- --------------------------- ------------------------------
<S> <C> <C> <C> <C>
International Equity Fund DIAL $____________ 0.75% per year less 0.85% on first $500 million
directors' fees 0.80% on next $500 million
0.75% on next $1,500 million
0.70% on assets in excess of
$2,500 million; all per year
International Equity Series DIAL $____________ 0.75% per year less 0.85% on first $500 million
(Variable Annuity) directors' fees 0.80% on next $500 million
0.75% on next 1,500 million
0.70% on assets in excess of
$2,500 million; all per year
International Small Cap Fund DIAL $____________ 1.25% per year 1.25% on first $500 million
1.20% on next $500 million
1.15% on next $1,500 million
1.10% on assets in excess of
$3,500 million; all per year
Latin America Fund DIAL $____________ 1.25% per year N/A
New Europe Fund DIAL $____________ 1.25% per year N/A
New Pacific Fund DMC $____________ 0.80% per year 0.85% on first $500 million
(Investment Management) 0.80% on next $500 million
0.75% on next $1,500 million
0.70% on assets in excess of
$2,500 million; all per year
New Pacific Fund AIBG $____________ 0.50% per year N/A
(Sub-Advisory)
Overseas Equity Fund DMC $____________ 1.00% per year 0.85% on first $500 million
(Investment Management) 0.80% on next $500 million
0.75% on next $1,500 million
0.70% on assets in excess of
$2,500 million; all per year
Overseas Equity Fund DIAL $____________ 80% of fees paid to DMC N/A
(Sub-Advisory)
* Investment Managers/Sub-Advisers:
Delaware Management Company ("DMC")
Delaware International Advisers Ltd. ("DIAL")
Lincoln Investment Management, Inc. ("LIM"
Voyageur Asset Management LLC ("VAM")
Vantage Global Advisors, Inc. ("VGA")
Lynch & Mayer, Inc. ("L&M")
AIB Govett, Inc. ("AIBG")
*Closed-end fund that does not accept new investments; therefore, there are no
breakpoints in the management fees.
</TABLE>
G-7
<PAGE>
EXHIBIT H
FORM OF INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between [REGISTRANT], a[____________] ("Fund") on behalf
of the [Portfolio] ("Series"), and [MANAGER NAME] , a ________________]
("Investment Manager").
WITNESSETH:
WHEREAS, the Fund has been organized and operates as an investment company
registered under the Investment Company Act of 1940 and is currently comprised
of [_] series, including the Series; as a separate series of the Fund, each
series 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 Fund on behalf of the Series and the Investment Manager desire to
enter into this Agreement.
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 Fund's 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 and other instruments to purchase and sell on behalf of the
Series and shall effect the purchase and sale of such investments in
furtherance of the Series' objectives and policies and shall furnish the
Board 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;
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. Directors, officers and
employees of the Investment Manager may be directors, officers and
employees of any of the investment companies within the Delaware
Investments family (including the Fund). Directors, officers and employees
of the Investment Manager who are directors, officers and/or employees of
these investment companies shall not receive any compensation from such
companies 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, which may include legal and accounting
personnel, with appropriate proration of expenses between them.
3. (a) Subject to the primary objective of obtaining the best available
prices and execution, the Investment Manager will place orders for the
purchase and sale of portfolio securities and other instruments with such
broker/dealers selected who provide statistical, factual and financial
information and services to the Fund, to the Investment Manager, to any
Sub-Adviser, as defined in Paragraph 5 hereof, or to any other fund for
which the Investment Manager or any such Sub-Adviser 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 or any
such Sub-Adviser provides investment advisory services. Broker/dealers who
sell shares of the funds of which Delaware Management Company 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 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
H-1
<PAGE>
another member of an exchange, broker or dealer would have charged for
effecting that transaction, in such instances where the Fund 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 and
other advisory accounts for which the Investment Manager or any
Sub-Adviser, as defined in Paragraph 5 hereof, exercises investment
discretion.
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:
Monthly 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 investment advisers registered under the Investment Advisers Act of
1940 ("Sub-Advisers") to perform some or all of the services for the Series
for which it is responsible under this Agreement. The Investment Manager
will compensate any Sub-Adviser for its services to the Series. The
Investment Manager may terminate the services of any Sub-Adviser at any
time in its sole discretion, and shall at such time assume the
responsibilities of such Sub-Adviser unless and until a successor
Sub-Adviser is selected and the requisite approval of the Series'
shareholders is obtained. The Investment Manager will continue to have
responsibility for all advisory services furnished by any Sub-Adviser.
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. It is understood and agreed that so long as the Investment Manager
and/or its advisory affiliates shall continue to serve as the Fund's
investment adviser, other mutual funds as may be sponsored or advised by
the Investment Manager or its affiliates shall have the right permanently
to adopt and to use the words "Delaware," "Delaware Investments" or
"Delaware Group" in their names and in the names of any series or class of
shares of such funds.
9. In the absence of willful misfeasance, bad faith, gross negligence, or a
reckless disregard of the performance of its duties as the Investment
Manager to the Fund, the Investment Manager shall not be subject to
liability 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.
<PAGE>
10. This Agreement shall be executed and become effective as of the date
written below if approved by the vote of a majority of the outstanding
voting securities of the Series. It shall continue in effect for a period
of two years and may be renewed thereafter only so long as such renewal and
continuance is specifically approved at least annually by the Board or by
the vote of a majority of the outstanding voting securities of the Series
and only if the terms and the renewal hereof have been approved by the vote
of a majority of the 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 the Fund or pursuant to the 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 a 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.
H-2
<PAGE>
11. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
12. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities"; "interested persons"; and "assignment"
shall have the meaning defined in the Investment Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have caused their corporate seals to be
affixed and duly attested and their presents to be signed by their duly
authorized officers as of the day of , 19 .
[MANAGER NAME] [REGISTRANT NAME]
for the [SERIES NAME]
By:_____________________________
Name:___________________________
Title:__________________________
By:_______________________
Name:_____________________
Title:____________________
Attest:_________________________
Name:___________________________
Title:__________________________
Attest:___________________
Name:_____________________
Title:____________________
H-3
<PAGE>
EXHIBIT I
FORM OF SUB-ADVISORY AGREEMENT
AGREEMENT, made by and between [MANAGER NAME] ("Investment Manager"), and
[SUB-ADVISER NAME] ("Sub-Adviser").
WITNESSETH:
WHEREAS, [REGISTRANT NAME], a [______________] ("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 and the Fund on behalf of the [Portfolio]
("Series") have entered into an agreement of even date herewith ("Investment
Management Agreement") whereby the Investment Manager will provide investment
advisory services to the Fund on behalf of the Series; and
WHEREAS, the Investment Management Agreement permits the Investment Manager to
hire one or more sub-advisers to assist the Investment Manager in providing
investment advisory services to the Fund on behalf of the Series; and
WHEREAS, the Investment Manager and the Sub-Adviser are registered Investment
Advisers under the Investment Advisers Act of 1940 and engage in the business of
providing investment management services.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
each of the parties hereto intending to be legally bound, it is agreed as
follows:
1. The Investment Manager hereby employs the Sub-Adviser, subject always to
the Investment Manager's control and supervision, to manage the investment
and reinvestment of that portion of the Series' assets as the Investment
Manager shall designate from time to time and to furnish the Investment
Manager with investment recommendations, asset allocation advice, research,
economic analysis and other investment services with respect to securities
in which the Series may invest, subject to the direction of the Board and
officers of the Fund for the period and on the terms hereinafter set forth.
The Sub-Adviser hereby accepts such employment and agrees during such
period to render the services and assume the obligations herein set forth
for the compensation herein provided. The Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor, and shall,
unless otherwise expressly provided and authorized, have no authority to
act for or represent the Fund in any way, or in any way be deemed an agent
of the Fund. The Sub-Adviser shall regularly make decisions as to what
securities to purchase and sell on behalf of the Series with respect to
that portion of the Series' assets designated by the Investment Manager,
shall effect the purchase and sale of such investments in furtherance of
the Series' objectives and policies and shall furnish the Board of the Fund
with such information and reports regarding its activities as the
Investment Manager deems appropriate or as the Directors of the Fund may
reasonably request in the performance of its duties and obligations under
this Agreement, the Sub-Adviser shall act in conformity with the Articles
of Incorporation, By-Laws and Prospectus of the Fund and with the
instructions and directions of the Investment Manager and of the Board of
the Fund and will conform to and comply with the requirements of the 1940
Act, the Internal Revenue Code of 1986 and all other applicable federal and
state laws and regulations consistent with the provisions of Section 15(c)
of the Investment Company Act of 1940.
2. Under the terms of the Investment Management Agreement, 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 and repurchase of shares; preparation of share
certificates; reports and notices to shareholders; calling and holding of
shareholders' meetings; miscellaneous office expenses; brokerage
commissions; custodian fees; legal and accounting fees; taxes; and federal
and state registration fees. Without limiting the foregoing, except as the
Investment Manager and the Sub-Adviser may agree in writing from time to
time, the Sub-Adviser shall have no responsibility for record maintenance
and preservation obligations under Section 31 of the Investment Company Act
of 1940.
Directors, officers and employees of the Sub-Adviser may be directors,
officers and employees of other funds which have employed the Sub-Adviser
as sub-adviser or investment manager. Directors, officers and employees of
the Sub-Adviser who are Directors, officers and/or employees of the Fund,
shall not receive any compensation from the Fund for acting in such dual
capacity.
I-1
<PAGE>
In the conduct of the respective business of the parties hereto and in the
performance of this Agreement, the Fund, the Investment Manager and the
Sub-Adviser may share facilities common to each, which may include legal
and accounting personnel, with appropriate proration of expenses between
and among them.
3. (a) Subject to the primary objective of obtaining the best available
prices and execution, the Sub-Adviser will place orders for the purchase
and sale of portfolio securities and other instruments with such
broker/dealers who provide statistical, factual and financial information
and services to the Fund, to the Investment Manager, to the Sub-Adviser or
to any other Fund for which the Investment Manager or Sub-Adviser provides
investment advisory services and/or with broker/dealers who sell shares of
the Fund or who sell shares of any other Fund for which the Investment
Manager or Sub-Adviser provides investment advisory services.
Broker/dealers who sell shares of the Funds for which the Investment
Manager or Sub-Adviser provides advisory services shall only receive orders
for the purchase or sale of portfolio securities to the extent that the
placing of such orders is in compliance with the rules of the Securities
and Exchange Commission and 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 and officers of
the Fund, the Sub-Adviser 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 Sub-Adviser
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 Sub-Adviser's overall responsibilities with respect to
the Fund and to other funds and other advisory accounts for which the
Investment Manager or the Sub-Adviser exercises investment discretion.
4. As compensation for the services to be rendered to the Fund for the
benefit of the Series by the Sub-Adviser under the provisions of this
Agreement, the Investment Manager shall pay to the Sub-Adviser a monthly
fee equal to [ %] of the fee paid to the Investment Manager under the terms
of the Investment Management Agreement.
If this Agreement is terminated prior to the end of any calendar month, the
Sub-Advisory fee shall be prorated for the portion of any month in which
this Agreement is in effect according to the proportion which the number of
calendar days, during which the Agreement is in effect, bears to the number
of calendar days in the month, and shall be payable within 10 days after
the date of termination.
5. The services to be rendered by the Sub-Adviser to the Fund for the
benefit of the Series under the provisions of this Agreement are not to be
deemed to be exclusive, and the Sub-Adviser shall be free to render similar
or different services to others so long as its ability to render the
services provided for in this Agreement shall not be impaired thereby;
provided, however, except for advisory arrangements implemented prior to
the date of this Agreement, during the term of this Agreement, the
Sub-Adviser, will not, without the written consent of the Investment
Manager, which consent will not be unreasonably withheld, render investment
company (or portfolio thereof) which the Investment manger reasonably
determines would be in competition with and which has investment policies
similar to those of the Portfolio.
6. Subject to the limitation set forth in Paragraph 5, the Sub-Adviser, its
directors, officers, employees, agents and shareholders may engage in other
businesses, may render investment advisory services to other investment
companies, or to any other corporation, association, firm or individual,
and may render underwriting services to the Fund or to any other investment
company, corporation, association, firm or individual.
The Investment Manager agrees that it shall not use the Sub-Adviser's name
or otherwise refer to the Sub-Adviser in any materials distributed to third
parties, including the Series' shareholders, without the prior written
consent of the Sub-Adviser.
7. In the absence of willful misfeasance, bad faith, gross negligence, or a
reckless disregard of the performance of its duties as Sub-Adviser to the
Fund, the Sub-Adviser shall not be subject to liability to the Fund, to the
Investment Manager 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.
I-2
<PAGE>
8. This Agreement shall be executed and become effective as of the date
written below if approved by the vote of a majority of the outstanding
voting securities of the Series. It shall continue in effect for a period
of two years and may be renewed thereafter only so long as such renewal and
continuance is specifically approved at least annually by the Board or by
the vote of a majority of the outstanding voting securities of the Series
and only if the terms and the renewal hereof have been approved by the vote
of a majority of the 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 Investment Manager or the Fund at
any time, without the payment of a penalty, on sixty days' written notice
to the Sub-Adviser, of the Investment Manager's or the Fund's intention to
do so, in the case of the Fund pursuant to action by the Board of the Fund
or pursuant to the vote of a majority of the outstanding voting securities
of the Series. The Sub-Adviser may terminate this Agreement at any time,
without the payment of a penalty on sixty days' written notice to the
Investment Manager and the 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 Investment Manager to pay
to the Sub-Adviser the fee provided in Paragraph 4 hereof, prorated to the
date of termination. This Agreement shall automatically terminate in the
event of its assignment. This Agreement shall automatically terminate upon
the termination of the Investment Management Agreement.
9. This Agreement shall extend to and bind the successors of the parties
hereto.
10. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities"; "interested person"; and "assignment"
shall have the meaning defined in the Investment Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have caused their corporate seals to
be affixed and duly attested and their presents to be signed by their duly
authorized officers as of the day of [_____________], [______].
[MANAGER NAME]
By:_________________________________________
Name:
Title:
Attest:_____________________________________
[SUB-ADVISER NAME]
By:_________________________________________
Name:
Title:
Attest:_____________________________________
Agreed to and accepted as of the day and year first above written:
[REGISTRANT NAME]
on behalf of the [SERIES NAME]
By:________________________________________
Chairman
Attest:_____________________________________
I-3
<PAGE>
EXHIBIT J
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement") is
made as of this ___ day of ______________, 1998 by and between Delaware Pooled
Trust, a Delaware business trust ("Fund"), and Delaware Pooled Trust, Inc., a
Maryland corporation ("Corporation") (the Fund and the Corporation are
hereinafter collectively referred to as the "parties").
In consideration of the mutual promises contained herein, and
intending to be legally bound, the parties hereto agree as follows:
1. Plan of Reorganization.
(a) Upon satisfaction of the conditions precedent described in
Section 3 hereof, the Corporation will convey, transfer and deliver to the Fund
at the closing provided for in Section 2 (hereinafter referred to as the
"Closing") all of the Corporation's then-existing assets, the assets belonging
to each series of the Corporation to be conveyed, transferred and delivered to
the corresponding series of the Fund. In consideration thereof, the Fund agrees
at the Closing (1) to assume and pay, to the extent that they exist on or after
the Effective Date of the Reorganization (as defined in Section 2 hereof), all
of the Corporation's obligations and liabilities, whether absolute, accrued,
contingent or otherwise, including all fees and expenses in connection with the
Agreement, which fees and expenses shall in turn include, without limitation,
costs of legal advice, accounting, printing, mailing, proxy solicitation and
transfer taxes, if any, the obligations and liabilities allocated to each series
of the Corporation to become the obligations and liabilities of the
corresponding series of the Fund, and (2) to deliver, in accordance with
paragraph (b) of this Section 1, full and fractional shares of beneficial
interest, $.01 par value, of each of the Fund's separate series and the
respective classes of those series, all as set forth in the Appendix attached
hereto (hereinafter, the series are individually and collectively referred to as
"Series of the Fund" and the classes are individually referred to as a "Class of
the Fund" and collectively as "Classes of the Fund"), equal in number to the
number of full and fractional shares of common stock, ______ par value, of,
respectively, each of the Corporation's separate series and the respective
J-1
<PAGE>
classes of those series, all as set forth in the Appendix attached hereto
(hereinafter, the series are referred to individually and collectively as
"Series of the Corporation" and the classes are referred to individually as a
"Class of the Corporation" and collectively as "Classes of the Corporation")
outstanding immediately prior to the Effective Date of the Reorganization. The
transactions contemplated hereby are intended to qualify as a reorganization
within the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended ("Code").
(b) In order to effect such delivery, the Fund will establish
an open account for each shareholder of each Series of the Corporation and, on
the Effective Date of the Reorganization, will credit to such account full and
fractional shares of such Series and Class of the Fund equal to the number of
full and fractional shares such shareholder holds in the corresponding Series
and Class of the Corporation at the close of regular trading on the New York
Stock Exchange on the business day immediately preceding the Effective Date of
the Reorganization; fractional shares of each Class of the Fund will be carried
to the third decimal place. On the Effective Date of the Reorganization, the net
asset value per share of beneficial interest of each Class of the Fund shall be
deemed to be the same as the net asset value per share of the corresponding
Class of the Corporation at the close of regular trading on the New York Stock
Exchange on the business day immediately preceding the Effective Date of the
Reorganization. On the Effective Date of the Reorganization, each certificate
representing shares of a Series and Class of the Corporation will represent the
same number of shares of the corresponding Series and Class of the Fund. Each
shareholder of the Corporation will have the right to exchange his (her) share
certificates for share certificates of the Fund. However, a shareholder need not
make this exchange of certificates unless he (she) so desires. Simultaneously
with the crediting of the shares of the Series and Classes of the Fund to the
shareholders of record of the Corporation, the shares of the Series and Classes
of the Corporation held by such shareholder shall be cancelled.
(c) As soon as practicable after the Effective Date of the
Reorganization, the Corporation shall take all necessary steps under Maryland
law to effect a complete dissolution of the Corporation.
2. Closing and Effective Date of the Reorganization.
The Closing shall consist of (i) the conveyance, transfer and
delivery of the Corporation's assets to the Fund, in exchange for the assumption
and payment by the Fund of the Corporation's liabilities; and (ii) the issuance
and delivery of the Fund's shares in accordance with Section 1(b), together with
related acts necessary to consummate such transactions. The Closing shall occur
J-2
<PAGE>
either on (a) the business day immediately following the later of receipt of all
necessary regulatory approvals and the final adjournment of the meeting of
shareholders of the Corporation at which this Agreement will be considered or
(b) such later date as the parties may mutually agree ("Effective Date of the
Reorganization").
3. Conditions Precedent.
The obligations of the Corporation and the Fund to effectuate
the reorganization hereunder shall be subject to the satisfaction of each of the
following conditions:
(a) Such authority and orders from the Securities and Exchange
Commission ("Commission") as may be necessary to permit the parties to carry out
the transactions contemplated by this Agreement shall have been received;
(b) (i) One or more post-effective amendments to the
Corporation's Registration Statement on Form N-1A ("Registration Statement")
under the Securities Act of 1933, as amended, and the Investment Company Act of
1940, as amended ("1940 Act"), containing such amendments to the Registration
Statement as are determined by the Trustees of the Fund to be necessary and
appropriate as a result of this Agreement shall have been filed with the
Commission; (ii) the Fund shall have adopted as its own such Registration
Statement, as so amended; (iii) the most recent post-effective amendment to the
Registration Statement filed with the Commission relating to the Fund shall have
become effective, and no stop-order suspending the effectiveness of the
Registration Statement shall have been issued, and no proceeding for that
purpose shall have been initiated or threatened by the Commission (other than
any such stop-order, proceeding or threatened proceeding that shall have been
withdrawn or terminated); and (iv) an amendment of the Form N-8A Notification of
Registration filed pursuant to Section 8(a) of the 1940 Act ("Form N-8A")
reflecting the change in legal form of the Corporation to a Delaware business
trust shall have been filed with the Commission and the Fund shall have
expressly adopted such amended Form N-8A as its own for purposes of the 1940
Act;
(c) Each party shall have received an opinion of Stradley,
Ronon, Stevens & Young, LLP, Philadelphia, Pennsylvania, to the effect that the
reorganization contemplated by this Agreement qualifies as a "reorganization"
J-3
<PAGE>
under Section 368 of the Code, and thus will not give rise to the recognition of
income, gain or loss for federal income tax purposes to the Corporation, the
Fund, or the shareholders of the Corporation or the Fund;
(d) The Corporation shall have received an opinion of
Stradley, Ronon, Stevens & Young, LLP, dated the Effective Date of the
Reorganization, addressed to and in form and substance satisfactory to the
Corporation, to the effect that (i) the Fund is duly formed as a business trust
under the laws of the State of Delaware; (ii) this Agreement and the
reorganization provided for herein and the execution and delivery of this
Agreement have been duly authorized and approved by all requisite action of the
Fund and this Agreement has been duly executed and delivered by the Fund and is
a legal, valid and binding agreement of the Fund in accordance with its terms;
and (iii) the shares of the Fund to be issued in the reorganization have been
duly authorized and, upon issuance thereof in accordance with this Agreement,
will have been validly issued and fully paid and will be non-assessable by the
Fund;
(e) The Fund shall have received the opinion of Stradley,
Ronon, Stevens & Young, LLP, dated the Effective Date of the Reorganization,
addressed to and in form and substance satisfactory to the Fund, to the effect
that: (i) the Corporation is a corporation, duly organized and validly existing
under the laws of the State of Maryland; (ii) the Corporation is an open-end
investment company of the management type registered under the 1940 Act; and
(iii) this Agreement and the reorganization provided for herein and the
execution and delivery of this Agreement have been duly authorized and approved
by all requisite corporate action of the Corporation and this Agreement has been
duly executed and delivered by the Corporation and is a legal, valid and binding
agreement of the Corporation in accordance with its terms;
(f) The shares of each Series and Class of the Fund are
eligible for offering to the public in those states of the United States and
jurisdictions in which the shares of their corresponding Series and Class of the
Corporation are presently eligible for offering to the public so as to permit
the issuance and delivery of shares contemplated by this Agreement to be
consummated;
(g) This Agreement and the reorganization contemplated hereby
shall have been adopted and approved by the appropriate action of the
shareholders of the Corporation at an annual or special meeting or any
adjournment thereof;
J-4
<PAGE>
(h) The shareholders of the Corporation shall have voted to
direct the Corporation to vote, and the Corporation shall have voted, as sole
shareholder of the Fund, to:
(i) Elect as Trustees of the Fund the following
individuals: Messrs. Walter P. Babich, Anthony D. Knerr, W. Thacher
Longstreth, Charles E. Peck, Wayne A. Stork, Thomas F. Madison, and
Jeffrey J. Nick, and Ms. Ann R. Leven;
(ii) Select Ernst & Young LLP as the independent
auditors for the Fund for the fiscal year ending October 31, 1999;
(iii) (A) With respect to each Series, if at the
annual or special meeting specified in paragraph (g) of this Section 3
(or any adjournment thereof) the shareholders of a Series of the
Corporation (x) approve a proposal for a new investment management
agreement ("New Investment Management Agreement") between the current
investment advisor to the Series (the "Advisor") and the Corporation on
behalf of such Series, approve an investment management agreement
between the Advisor and the Fund on behalf of such Series that is
substantially identical to the New Investment Management Agreement, or
(y) do not approve a proposal for a New Investment Management Agreement
between the Advisor and the Corporation on behalf of such Series,
approve an investment management agreement between the Advisor and the
Fund on behalf of such Series that is substantially identical to the
then-current investment management agreement between the Advisor and
the Corporation on behalf of such Series;
(B) With respect to each Series that is subject
to a sub-advisory agreement, if any, if at the annual or special
meeting specified in paragraph (g) of this Section 3 (or any
adjournment thereof) the shareholders of such Series of the Corporation
(x) approve a proposal for a new sub-advisory agreement ("New
Sub-Advisory Agreement") between the Advisor and the current
sub-advisor (the "Sub-Advisor") with respect to the assets of such
Series, approve a New Sub-Advisory Agreement between the Advisor and
the Sub-Advisor with respect to the assets of such Series that is
substantially identical to the New Sub-Advisory Agreement, or (y) do
not approve a proposal for a New Sub-Advisory Agreement between the
Advisor and the Sub-Advisor, approve a sub-advisory agreement between
the Advisor and the Sub-Advisor with respect to the assets of such
Series that is substantially identical to the then-current sub-advisory
agreement between the Advisor and the Sub-Advisor with respect to the
assets of such Series;
J-5
<PAGE>
(i) The Trustees of the Fund shall have taken the
following actions at a meeting duly called for such purposes:
(i) Approval of the investment management agreements
and the sub-advisory agreements, if any, described in paragraph (h) of this
Section 3 hereof for each Series of the Fund;
(ii) Approval of a distribution plan, if any, for
each Class of each Series of the Fund, as adopted pursuant to Rule 12b-1 under
the 1940 Act, that is substantially identical to the then-current distribution
plan, if any, as adopted pursuant to Rule 12b-1 under the 1940 Act for each
Class of each corresponding Series of the Corporation;
(iii) Approval of the assignment of the Corporation's
Custodian Agreement with The Chase Manhattan Bank to the Fund;
(iv) Selection of Ernst & Young LLP as the Fund's
independent auditors for the fiscal year ending October 31, 1999;
(v) Approval of the Fund's Shareholders Services
Agreement with Delaware Service Company, Inc.; (vi) Approval of the Fund
Accounting Agreement with Delaware Service Company, Inc. that covers the funds
comprising the Delaware Investments Family of Funds;
(vii) Approval of the Distribution Agreement between
the Fund and Delaware Distributors, L.P. on behalf of the Series and Classes;
(viii) Authorization of the issuance by the Fund,
prior to the Effective Date of the Reorganization, of one share of each Series
and Class of the Fund to the Corporation in consideration for the payment of
$10.00 per share for the purpose of enabling the Corporation to vote on the
matters referred in paragraph (h) of this Section 3 hereof;
(ix) Submission of the matters referred to in
paragraph (h) of this Section 3 to the Corporation as sole shareholder of each
Series of the Fund; and
J-6
<PAGE>
(x) Authorization of the issuance and delivery by the
Fund of shares of each Series and Class of the Fund on the Effective Date of the
Reorganization in exchange for the assets of the corresponding Series of the
Corporation pursuant to the terms and provisions of this Agreement.
At any time prior to the Closing, any of the foregoing
conditions may be waived by the Board of Directors of the Corporation if, in the
judgment of such Board, such waiver will not affect in a materially adverse way
the benefits intended to be accorded the shareholders of the Corporation under
this Agreement.
4. Termination.
The Board of Directors of the Corporation may terminate this
Agreement and abandon the reorganization contemplated hereby, notwithstanding
approval thereof by the shareholders of the Corporation, at any time prior to
the Effective Date of the Reorganization if, in the judgment of such Board, the
facts and circumstances make proceeding with this Agreement inadvisable.
5. Entire Agreement.
This Agreement embodies the entire agreement between the
parties and there are no agreements, understandings, restrictions or warranties
among the parties other than those set forth herein or herein provided for.
6. Further Assurances.
The Corporation and the Fund shall take such further action as
may be necessary or desirable and proper to consummate the transactions
contemplated hereby.
7. Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
8. Governing Law.
This Agreement and the transactions contemplated hereby shall
be governed by and construed and enforced in accordance with the laws of the
State of Maryland.
J-7
<PAGE>
IN WITNESS WHEREOF, the Fund and the Corporation have each
caused this Agreement and Plan of Reorganization to be executed on its behalf by
its Chairman, President or a Vice President and attested by its Secretary or an
Assistant Secretary, all as of the day and year first-above written.
DELAWARE POOLED TRUST, INC.
(a Maryland Corporation)
Attest:
By: /s/ George M. Chamberlain, Jr. By: /s/ Jeffrey J. Nick
------------------------------- ---------------------------------
George M. Chamberlain, Jr. Jeffrey J. Nick
Secretary President and
Chief Executive Officer
DELAWARE POOLED TRUST
(a Delaware business trust)
Attest:
By: /s/ Eric E. Miller By: /s/ Jeffrey J. Nick
------------------------------- -----------------------
Eric E. Miller Jeffrey J. Nick
Assistant Secretary President and
Chief Executive Officer
J-8
<PAGE>
Appendix
<TABLE>
<CAPTION>
Series and Classes of Delaware Pooled Trust, Inc. Corresponding Series and Classes of Delaware Pooled
- ------------------------------------------------- ---------------------------------------------------
Trust
-----
<S> <C>
The Large-Cap Value Equity Portfolio The Large-Cap Value Equity Portfolio
The Mid-Cap Growth Equity Portfolio The Mid-Cap Growth Equity Portfolio
The International Equity Portfolio The International Equity Portfolio
The Intermediate Fixed Income Portfolio The Intermediate Fixed Income Portfolio
The Limited-Term Maturity Portfolio The Limited-Term Maturity Portfolio
The Global Fixed Income Portfolio The Global Fixed Income Portfolio
The International Fixed Income Portfolio The International Fixed Income Portfolio
The Small/Mid-Cap Value Equity Portfolio The Small/Mid-Cap Value Equity Portfolio
The High-Yield Bond Portfolio The High-Yield Bond Portfolio
The Labor Select International Equity Portfolio The Labor Select International Equity Portfolio
The Real Estate Investment Trust Portfolio The Real Estate Investment Trust Portfolio
The Real Estate Investment Trust Portfolio class The Real Estate Investment Trust Portfolio class
REIT Fund A Class REIT Fund A Class
REIT Fund B Class REIT Fund B Class
REIT Fund C Class REIT Fund C Class
REIT Fund Institutional Class REIT Fund Institutional Class
The Emerging Markets Portfolio The Emerging Markets Portfolio
The Global Equity Portfolio The Global Equity Portfolio
The Real Estate Investment Trust Portfolio II The Real Estate Investment Trust Portfolio II
The Aggregate Fixed Income Portfolio The Aggregate Fixed Income Portfolio
The Diversified Core Fixed Income Portfolio The Diversified Core Fixed Income Portfolio
The International Mid-Cap Sub Portfolio The International Mid-Cap Sub Portfolio
The Growth and Income Portfolio The Growth and Income Portfolio
The Small-Cap Growth Equity Portfolio The Small-Cap Growth Equity Portfolio
</TABLE>
J-9
<PAGE>
EXHIBIT K
DIFFERENCES IN LEGAL STRUCTURES
COMPARISON and SIGNIFICANT DIFFERENCES for DELAWARE BUSINESS TRUSTS
and MARYLAND CORPORATIONS
Unless otherwise defined in this Exhibit, capitalized terms have
the meanings set forth in Proposal Seven.
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ------------------------------------------------------------
DELAWARE BUSINESS TRUST MARYLAND CORPORATION MARYLAND CORPORATION
- ------------------------------------------------------------ ------------------------------------------------------------
GOVERNING DOCUMENTS
<S> <C>
- -- Created by a governing instrument (which may consist of -- A corporation's articles of incorporation must be filed
one or more instruments, including an agreement and with the State Department of Assessments and Taxation of the
declaration of trust and By-Laws) and a Certificate of State of Maryland in order to form a Maryland corporation.
Trust, which must be filed with the Delaware Secretary of
State. The Delaware Business Trust ("DBT") statutes found at -- Under Maryland law, the business and affairs of a
Del. Code. Ann. title 12, ss.3801, et seq. are referred to corporation are governed by its articles of incorporation
in this chart as the "Delaware Act." and By-Laws (the "charter documents"). A Board of Directors
manages or directs the business and affairs of a Maryland
- -- A DBT is an unincorporated association organized under corporation.
the Delaware Act which operates similar to a typical
corporation. A DBT's operations are governed by a trust -- A Maryland corporation organized as an open-end
instrument and By-Laws. The business and affairs of a DBT investment company is subject to the 1940 Act.
are managed by or under the direction of a Board of
Trustees.
- -- DBTs are organized as an open-end investment company
subject to the Investment Company Act of 1940, as amended
(the "1940 Act"). Shareholders own shares of "beneficial
interest" as compared to the shares of "common stock" issued
by corporations. There is however, no practical difference
between the two types of shares.
- -- As described in this chart, DBTs are granted a
significant amount of organizational and operational
flexibility. The Delaware Act makes it easier to obtain
needed shareholder approvals, and also permits management of
a DBT to take various actions without being required to make
state filings or obtain shareholder approval. The Delaware
Act also contains favorable limitations on shareholder and
Trustee liability, and provides for indemnification out of
trust property for any shareholder or Trustee that may be
held personally liable for the obligations of a Delaware
Trust.
MULTIPLE SERIES AND CLASSES
- -- Under the Delaware Act, a declaration of trust may -- Maryland law permits a corporation to issue one or more
provide for classes, groups or series of shares, or classes, classes of stock and, if the stock is divided into classes,
groups or series of trustees or shareholders, having such the charter is required to describe each class, including
relative rights, powers and duties as the declaration of any preferences, conversion or other rights, voting powers,
trust may provide. The series and classes of a DBT may be restrictions, limitations as to dividends, qualifications
described in the declaration of trust or in resolutions and terms or conditions of redemption. The charter documents
adopted by the board of trustees. Neither state filings nor which describe a new series or classes, or a change to an
shareholder approval is required to create series or existing series or class, are amendments to the fund's
classes. The New Funds' Agreement and Declaration of Trust charter documents and must be filed with the State of
(the "Declaration of Trust") permits the creation of Maryland. Although a charter amendment is involved, Maryland
multiple series and classes and establishes the provisions law allows a fund's board to exchange, classify, reclassify,
relating to shares. cancel any of its issued or unissued stock, or increase or
</TABLE>
K-1
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ------------------------------------------------------------
DELAWARE BUSINESS TRUST MARYLAND CORPORATION MARYLAND CORPORATION
- ------------------------------------------------------------ ------------------------------------------------------------
<S> <C>
- -- The Delaware Act explicitly provides for a reciprocal decrease the aggregate number of shares of stock without
limitation of interseries liability. The debts, liabilities, shareholder approval by filing Articles Supplementary in the
obligations and expenses incurred, contracted for or State of Maryland. Maryland law also permits a board to
otherwise existing with respect to a particular series of a change the preferences, conversion and other rights, voting
multiple series investment company registered under the 1940 powers, restrictions, limitation as to dividends,
Act are enforceable only against the assets of such series, qualifications, and terms and conditions of redemption of
and not against the assets of the trust, or any other any of its issued or unissued stock without shareholder
series, generally, provided that: (i) the governing approval.
instrument creates one or more series; (ii) separate and
distinct records are maintained for any such series; (iii) -- Maryland law does not contain specific statutory
the series' assets are held and accounted for separately provisions addressing series liability with respect to a
from the trust's other assets or any series thereof; (iv) multiple series investment company; however, if the stock of
notice of the limitation on liabilities of the series is set a corporation is divided into classes, Maryland law requires
forth in the certificate of trust; and (v) the governing the corporation's charter documents to set forth any
instrument so provides. The Declaration of Trust for the New preferences or restrictions relating to such classes. As a
Funds provides that each of its series shall not be charged result, the Current Funds' standard charter documents state
with the liabilities of any other series. Further, it states that the liabilities of any series shall be charged only to
that any general assets or liabilities not readily the assets of that particular series.
identifiable as to a particular series will be allocated or
charged by the Trustees of the New Funds to and among any -- The Articles of Incorporation and By-Laws of the Current
one or more series in such manner, and on such basis, as the Funds are consistent with Maryland law.
Trustees deem fair and equitable in their sole discretion.
As required by the Delaware Act, the New Funds' Certificate
of Trust specifically limits the debts, liabilities,
obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular series of
the New Fund as enforceable against the assets of that
series of the New Fund, and not against the assets of the
New Fund generally.
- -- Use of the DBT structure could potentially provide
greater flexibility with respect to a "fund of funds"
operating format as compared with the Maryland corporate
structure. Under Maryland law, when one series of a fund
purchases shares issued by another series of the same fund,
the shares of the purchased series are retired. Thus, it is
impractical for a fund organized as a Maryland corporation
to operate as a fund of funds when one of its underlying
funds is a series of the same Maryland corporation. By
comparison, under Delaware law, shares of a series purchased
by another series of the same trust are not similarly
retired. Thus, a DBT could potentially issue additional
series to operate as separate mutual funds which would serve
as underlying investments for the fund of funds series.
</TABLE>
K-2
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ------------------------------------------------------------
DELAWARE BUSINESS TRUST MARYLAND CORPORATION MARYLAND CORPORATION
- ------------------------------------------------------------ ------------------------------------------------------------
<S> <C>
SHAREHOLDER VOTING RIGHTS AND PROXY REQUIREMENTS
- -- The governing instrument determines shareholders' rights. -- The charter of the Current Funds, consistent with
The Declaration of Trust for the New Funds provides that Maryland law, provides that the holder of each share of
shareholders of record of each share are entitled to one stock of a fund is entitled to one vote for each full share,
vote for each full share, and a fractional vote for each and a fractional vote for each fractional share of stock,
fractional shares. In addition, shareholders are not irrespective of the series or class. In addition,
entitled to cumulative voting for electing a trustee(s) or shareholders are not entitled to cumulative voting for
for any other matter. The Declaration of Trust further electing director(s) or for any other matter. The charters
provides that voting by the New Funds will occur separately of the Current Funds further state that, on any matter
by series, and if applicable, by class, subject to: (1) submitted to a vote of shareholders, all shares of the
requirements of the 1940 Act where shares of the Trust must corporation then issued and outstanding and entitled to
be voted in the aggregate without reference to series or vote, irrespective of series or class, shall be voted in the
class, and (2) where the matter affects only a particular aggregate and not by series or class except when (1)
series or class. otherwise expressly required by Maryland law; (2) required
by the 1940 Act; and/or (3) the matter does not affect any
- -- The Delaware Act and By-Laws for the New Funds also interest of the particular series or class, then only
permit the New Funds to accept proxies by any electronic, shareholders of the affected series or class shall be
telephonic, computerized, telecommunications or other entitled to vote thereon, unless otherwise expressly
reasonable alternative to the execution of a written provided in the corporation's charter.
instrument authorizing the proxy to act, provided such
authorization is received within eleven (11) months before -- Maryland law permits shareholders to vote in person at
the meeting. the meeting or by proxy through a signed writing. The
signature may be achieved through any reasonable means
including facsimile. Although Maryland law permits certain
telephone solicitations, it currently does not provide the
level of flexibility available under the Delaware Act.
SHAREHOLDERS' MEETINGS
- -- The governing instrument determines beneficial owners' -- Maryland law provides for a special meeting upon the
rights to call meetings. The Declaration of Trust for the written request of 25% or more of all eligible votes, unless
New Funds provides that the Board of Trustees shall call the corporate charter or By-Laws contain a provision setting
shareholder meetings for the purpose of (1) electing a greater or lesser percentage (but not more than a
trustees, (2) matters prescribed by law, the Declaration of majority) of votes necessary to call the special meeting.
Trust or By-Laws, or (3) for taking action upon any other The Current Funds' standard By-Laws are more favorable to
matter deemed necessary or desirable by the Board of shareholders than Maryland law because they require a
Trustees. An annual shareholders' meeting is not required. special meeting upon the written request of the holders of
at least ten percent (10%) of the capital stock of the
corporation entitled to vote at such meeting. Thus, it is
easier for the shareholders of the Current Funds to call a
special meeting.
-- Under Maryland law, annual shareholder's meetings of a
registered investment company are not required if the
charter or By-Laws of the company so provide; however, an
annual meeting is required to be held when the 1940 Act
requires the election of directors to be acted upon by
shareholders. The By-Laws of the Current Funds are
consistent with Maryland law.
</TABLE>
K-3
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ------------------------------------------------------------
DELAWARE BUSINESS TRUST MARYLAND CORPORATION MARYLAND CORPORATION
- ------------------------------------------------------------ ------------------------------------------------------------
<S> <C>
QUORUM REQUIREMENT
- -- The Declaration of Trust of the New Funds, consistent -- Maryland law and the By-Laws of the Current Funds provide
with the Delaware Act, establishes a quorum when that the presence in person or by proxy of the holders of
thirty-three and one-third percent (33-1/3%) of the shares record of a majority of the outstanding shares of stock
entitled to vote are present in person or by proxy. -- The entitled to vote constitute a quorum.(1) Maryland law
Declaration of Trust of the New Funds, consistent with the provides that abstentions and broker non-votes are included
Delaware Act, establishes a quorum when thirty-three and and treated as votes present at the meeting but are not
one-third percent (33-1/3%) of the shares entitled to vote treated as votes cast.
are present in person or by proxy. For purposes of
determining whether a quorum exists, the Declaration of
Trust provides that abstentions and broker non-votes are
included and treated as votes present at the shareholders'
meeting but are not treated as votes cast.
ACTION WITHOUT SHAREHOLDERS' MEETING
- -- Delaware law permits the governing instrument to set -- Under Maryland law, any action required to be approved at
forth the procedure whereby action required to be approved a meeting of the shareholders may also be approved by the
by shareholders at a meeting may be done by consent. The unanimous written consent of the shareholders entitled to
Declaration of Trust for the New Funds permits any action vote at such meeting.
required to be approved at a meeting of shareholders to be
approved by the unanimous written consent of the
shareholders entitled to vote at such meeting.
</TABLE>
- --------
(1) The Delaware Group Adviser Funds, Inc. provides for a lower quorum standard
permitting one-third (1/3) of the issued and outstanding common stock of the
Corporation or series or class, as applicable, to establish a quorum.
K-4
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ------------------------------------------------------------
DELAWARE BUSINESS TRUST MARYLAND CORPORATION MARYLAND CORPORATION
- ------------------------------------------------------------ ------------------------------------------------------------
<S> <C>
MATTERS REQUIRING SHAREHOLDER APPROVAL
- -- The Delaware Act affords Trustees the ability to easily -- Consistent with Maryland law, the Current Funds Articles
adapt a DBT to future contingencies. For example, Trustees of Incorporation require shareholder approval by a majority
have the authority to incorporate a DBT to merge or of all votes entitled to be cast to approve the following:
consolidate with another entity, to cause multiple series of (1) amendments or restatements of the articles; (2)
a DBT to become separate trusts, to change the domicile or reduction of state capital; (3) a consolidation, merger,
to liquidate a DBT, all without having to obtain a share exchange or transfer of assets, including a sale of
shareholder vote. More importantly, in cases where funds are all or substantially all the assets of the corporation; (4)
required or do elect to seek shareholder approval for distribution in partial liquidation; or (5) a voluntary
transactions, the Delaware Act provides great flexibility dissolution. Unless the charter provides for a lesser
with respect to the quorum and voting requirements for standard, Maryland law by itself requires an affirmative
approval of such transactions. vote of two-thirds (2/3) of all votes entitled to be cast
when approving these extraordinary corporate transactions.
- -- The Declaration of Trust for the New Funds, consistent The Current Funds By-Laws provide that a majority of shares
with the Delaware Act, affords shareholders the power to voting at the meeting is sufficient to approve other matters
vote on the following matters: (1) the election of trustees properly before shareholders except for an election of
(including the filling of any vacancies; (2) as required by directors, which require a plurality.(1)
the Declaration of Trust, By-Laws, the 1940 Act or
registration statement; and (3) other matters deemed by the
Board of Trustees to be necessary or desirable.
- -- The Declaration of Trust provides that when a quorum is
present, a majority of votes cast shall decide any issues,
and a plurality shall elect a Trustee(s), unless a different
vote is required by the Declaration of Trust, By-Laws or
under applicable law.
</TABLE>
- --------
(1) The Delaware Group Adviser Funds, Inc. By-Laws provide that all elections
and issues subject to a meeting of shareholders are decided by a majority of
votes cast at such meeting, unless a different vote is required by Maryland
law, Articles of Incorporation or By-Laws. Based on such By-Laws and
Maryland law, the election of directors and other matters properly at a
meeting of shareholders (except as noted below) may be decided by a majority
of votes cast at the meeting. A different standard exists for certain
extraordinary corporate transactions whereby Maryland law requires an
affirmative vote of two-thirds (2/3) of all votes entitled to be cast
(unless the charter provides a different standard) in order to approve: (1)
amendments to the charter; (2) reduction of stated capital; (3)
consolidation, merger, share exchange or transfer of assets, including a
sale of all or substantially all the assets of the corporation; (4) partial
liquidation; or (5) a voluntary dissolution. Accordingly, for these
extraordinary corporate transactions, Delaware Group Adviser Funds, Inc. is
subject to the two-thirds (2/3) shareholder voting requirement found in
Maryland law.
K-5
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ------------------------------------------------------------
DELAWARE BUSINESS TRUST MARYLAND CORPORATION MARYLAND CORPORATION
- ------------------------------------------------------------ ------------------------------------------------------------
<S> <C>
AMENDMENTS TO GOVERNING DOCUMENTS
- -- The Delaware Act provides broad flexibility with respect -- Under Maryland law, the charter of a Maryland corporation
to amendments of governing documents of a DBT. The New may be amended only (i) upon adoption of a resolution by the
Funds' Declaration of Trust state that, if shares have been Directors which sets forth the proposed amendments; and (ii)
issued, shareholder approval to adopt amendments to the approval of the proposed amendment by the holders of a
Declaration of Trust is only required if such adoption would majority of the corporations outstanding shares entitled to
adversely affect to a material degree the rights and vote. Maryland law does, however, permit investment
preferences of the shares of any series (or class) already companies to amend their charter documents without
issued. Before adopting any amendment to the Declaration of shareholder approval in order to create additional series or
Trust relating to shares without shareholder approval, the classes of shares, increase or decrease the aggregate number
Trustees are required to determine that the amendment is: of shares of stock that the corporation has authority to
(i) consistent with the fair and equitable treatment of all issue, or reflect changes in the names of the corporation,
shareholders, and (ii) shareholder approval is not required its series or classes. The Current Funds charter documents
by the 1940 Act or other applicable law. are consistent with Maryland law. Because shareholder
approval is required for most other amendments to charter
- -- The New Funds' By-Laws may be amended or repealed by the documents, Maryland law is more restrictive than the
affirmative vote or written consent of a majority of the Delaware Act.
outstanding shares entitled to vote. Subject to the rights
of the shareholders, those By-Laws also may be adopted, -- The By-Laws of a Maryland corporation may also be
amended or repealed by the Board of Trustees. amended. Maryland law provides that, after the
organizational meeting of the board of directors, the power
to adopt, alter or repeal the By-Laws is vested in the
shareholders, except to the extent that the charter or
By-Laws vest such power in the board of directors.
Consistent with Maryland law, the Current Funds By-Laws
provide that they may be amended, altered or repealed by the
affirmative vote of the holders of a majority of shares
entitled to vote thereon, or by a majority of the Board of
Directors, as the case may be.
RECORD DATE
- -- The Delaware Act permits a governing instrument to -- Maryland law contains provisions by which a corporation
contain provisions that provide for the establishment of may determine which shareholders are entitled to notice of a
record dates for determining voting rights. meeting, to vote at a meeting, or to any other rights. The
Maryland law requires that the record date be not more than
- -- The Declaration of Trust for the New Funds provides that ninety (90) days and not less than ten (10) days before the
the Board of Trustees may fix in advance a record date which date on which the action requiring determination will be
shall not be more than one hundred eighty (180) days, nor taken. If a Maryland corporation does not set a record date,
less than seven (7) days, before the date of any such Maryland law requires that the date be the later of: (1)
meeting. thirty (30) days before the meeting or (2) the close of
business on the day the notice was mailed. Consistent with
Maryland law, the Current Funds By-Laws allow the
corporation to close the transfer books twenty (20) days
before a meeting or set a date not more than ninety (90)
days before a meeting for determining such rights.
REMOVAL OF DIRECTORS/ TRUSTEES
- -- The Delaware Act is silent with respect to the removal of -- Under Maryland law, shareholders may remove a director
Trustees. However, the Declaration of Trust states that the with or without cause. Unless the charter provides
Board of Trustees, by action of a majority of the then otherwise, Maryland law requires the affirmative vote of a
Trustees at a duly constituted meeting, may fill vacancies majority of all votes entitled to be cast for the election
in the Board of Trustees or remove Trustees with or without of directors to remove a director. Unless the charter
cause. provides otherwise, if a class or series is entitled to
elect one or more directors separately, such director may
not be removed without cause except by the affirmative vote
of a majority of all the votes of that series or class. The
Current Funds Articles of Incorporation and By-Laws (except
for one) are silent regarding the removal of directors.(1)
</TABLE>
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(1) The By-Laws of the Delaware Group Adviser Funds, Inc. provide for the
removal of a director by two-thirds (2/3) of the record holders of the
corporations common stock of all series. Removal may be achieved either by a
declaration in writing filed with the corporations secretary or by votes
cast in person or by proxy at a meeting called for the purpose. The By-Laws
further state that a meeting of stockholders is to be called for the purpose
of removal of a director when requested in writing by stockholders of ten
percent or more of the corporations common stock of all series.
K-6
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DELAWARE BUSINESS TRUST MARYLAND CORPORATION MARYLAND CORPORATION
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SHAREHOLDER RIGHTS OF INSPECTION
- -- The Delaware Act sets forth the rights of shareholders to -- Maryland law provides that during usual business hours a
gain access to and receive copies of certain Trust documents shareholder may inspect and copy the following corporate
and records. This right is qualified by the extent otherwise documents: By-Laws; minutes of shareholders meetings;
provided in the governing instrument of the Trust as well as annual statements of affairs; and voting trust agreements.
a reasonable demand standard related to the shareholder's Moreover, one or more persons who together are, and for at
interest as an owner of the DBT. least six months have been, shareholders of record of at
least five percent of the outstanding stock of any class are
- -- Consistent with Delaware law, the By-Laws of the New entitled to inspect and copy the corporations books of
Funds provide that at reasonable times during office hours, account and stock ledger and to review a statement of
a shareholder may inspect the share registry and By-Laws. affairs and a list of shareholders.
The By-Laws further permit at any reasonable time during
usual business hours for a purpose reasonably related to the
shareholder's interests, that a shareholder inspect and copy
accounting books and records and minutes of proceedings of
the shareholders and the Board of Trustees and any committee
or committees of the Board of Trustees.
DIVIDENDS AND OTHER DISTRIBUTIONS
- -- The Delaware Act does not contain any statutory -- Maryland law allows the payment of a dividend or other
limitations on the payment of dividends and other distribution unless, after giving effect to the dividend or
distributions. other distribution, (1) the corporation would not be able to
pay its debts as they become due in the usual course of
- -- The New Funds By-Laws specify that the declaration of business or (2) the corporations total assets would be less
dividends is subject to the Declaration of Trust and than the corporations total liabilities plus (unless the
applicable law. In addition, the By-Laws provide that prior corporations charter provides otherwise) the amount that
to payment of dividends, the New Funds may set aside a would be needed, if the corporation were to be dissolved at
reserve(s) to meet contingencies, equalizing dividends, the time of the distribution, to satisfy the preferential
repairing or maintaining property or for other purposes rights upon dissolution of shareholders whose preferential
deemed by the Trustees to be in the best interest of the rights upon dissolution are superior to those receiving the
Fund. distribution.
-- Current Funds By-Laws provide that prior to payment of
dividends, the Funds may set aside a reserve to meet
contingencies, equalizing dividends, repairing, or
maintaining property or for other purposes deemed by the
directors to be in the best interest of the Fund.
SHAREHOLDER/BENEFICIAL OWNER LIABILITY
- -- Personal liability is limited by the Delaware Act to the -- As a general matter, the shareholders of a Maryland
amount of investment in the trust and may be further limited corporation are not personally liable for the obligations of
or restricted by the governing instrument. the corporation. Under Maryland law, a shareholder of a
Maryland corporation may, however, be liable in the amount
- -- Consistent with Delaware law, the Declaration of Trust of any distribution he or she accepts knowing that the
for the New Funds provides that the DBT, its trustees, distribution was made in violation of the corporations
officers, employees, and agents do not have the power to charter or Maryland law. The charter for the Current Funds
personally bind a shareholder. Shareholders of the DBT are is consistent with Maryland law.
entitled to the same limitation of personal liability
extended to stockholders of a private corporation organized
for profit under the general corporation law of the State of
Delaware.
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K-7
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DELAWARE BUSINESS TRUST MARYLAND CORPORATION MARYLAND CORPORATION
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DIRECTOR/ TRUSTEE LIABILITY
- -- Subject to the declaration of trust, the Delaware Act -- Maryland law requires a director to perform his or her
provides that a trustee, when acting in such capacity, may duties in good faith, in a manner he or she reasonably
not be held personally liable to any person other than the believes to be in the best interests of the corporation and
DBT or a beneficial owner for any act, omission or with the care that an ordinarily prudent person in a like
obligation of the DBT or any trustee. A trustees duties and position would use under similar circumstances. A director
liabilities to the DBT and its beneficial owners may be who performs his or her duties in accordance with this
expanded or restricted by the provisions of the declaration standard has no liability by reason of being or having been
of trust. a director. If it is established that a director did not
meet the foregoing standard, the director, for example, may
- -- The Declaration of Trust for the New Funds provides that be personally liable to the corporation for (i) voting or
the Trustees shall not be liable or responsible in any event assenting to a distribution of assets to shareholders which
for any neglect or wrongdoing of any officer, agent, is in violation of either the Funds charter documents or
employee, manager or principal underwriter of the New Funds, Maryland law; and (ii) voting or assenting to a repurchase
nor shall any Trustee be responsible for the act or omission of the corporations shares in violation of Maryland law.
of any other Trustee. In addition, the Declaration of Trust Maryland law as well as the applicable Current Funds
also provides that the Trustees acting in their capacity as charter document prohibit limiting a directors liability if
Trustees, shall not be personally liable for acts done by or said director would otherwise be subject by reason of
on behalf of the New Fund. willful misfeasance, bad faith, gross negligence or reckless
disregard of ones duties.
-- Seven of the Current Funds charter documents do not
contain provisions regarding director liability.(1) The other
remaining Current Funds that have this liability provision
state that to the fullest extent that liability is limited
under Maryland law, no director or officer will be liable to
the corporation or its shareholders for damages.
INDEMNIFICATION
- -- The Delaware Act permits a DBT to indemnify and hold -- Under Maryland law, a director or officer who is
harmless any trustee, beneficial owner or agent from and threatened or made a party to a proceeding, may be
against any and all claims and demands. Consistent with the indemnified against judgments, penalties, fines, settlements
Delaware Act, the Declaration of Trust for the New Funds and reasonable expenses actually incurred by the director in
provides for the indemnification of officers and trustees connection with the proceeding. Indemnification will not be
from and against any and all claims and demands arising out permitted if the act or omissions of the Director or
of or related to the performance of duties as an officer or officer: (1) was material to the matter giving rise to the
Trustee. The New Funds will not indemnify, hold harmless or proceeding and was committed in bad faith or the result of
relieve from liability trustees or officers for those acts active and deliberate dishonesty; (2) resulted in an
or omissions for which they are liable if such conduct improper benefit to the individual; or (3) was committed
constitutes willful misfeasance, bad faith, gross negligence when the director or officer had reasonable cause to believe
or reckless disregard of their duties. that the act or omission was unlawful.
- -- The Declaration of Trust also provides that any
shareholder or former shareholder that is exposed to
liability by reason of a claim or demand related to having
been a shareholder, and not because of his or her acts or
omissions, shall be entitled or beheld harmless and
indemnified out of the assets of the DBT.
</TABLE>
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(1) These seven Current Funds include: Delaware Group Equity Funds I, Equity
Funds II, Equity Funds III, Equity Funds V, Government Funds, Income Funds
and Tax-Free Fund.
K-8
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DELAWARE BUSINESS TRUST MARYLAND CORPORATION MARYLAND CORPORATION
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INSURANCE
- -- The Delaware Act does not contain a provision -- Under Maryland Law, a corporation may purchase insurance
specifically related to insurance. The Trust's Declaration on behalf of any director, officer or employee against any
of Trust provides that the Trustees shall be entitled and liability asserted against and incurred by such person in
have the authority to purchase with Trust assets insurance any such capacity or arising out of such persons position,
for liability and for all expenses reasonably incurred or whether or not the corporation would have the power to
paid or expected to be paid by a Trustee or officer in indemnify such person against such liability. Under Maryland
connection with any claim, or proceeding in which he or she law, insurance also may be purchased under the corporate
becomes involved by virtue of his or her capacity (or former by-laws on behalf of agents of a fund. The Current Funds
capacity) with the Trust. The Bylaws of the New Funds permit Bylaws are silent with respect to this issue.
such insurance coverage to extend to employees and other
agents of the Trust.
</TABLE>
K-9
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DELAWARE INVESTMENTS THIS PROXY IS SOLICITED ON BEHALF OF THE
1818 MARKET STREET BOARD OF DIRECTORS/TRUSTEES, The
PHILADELPHIA, PA 19103 Undersigned hereby Appoints {________________}, or any of them, with the
right of substitution, proxies of the undersigned at the Special Meeting
Of Shareholders OF THE ABOVE FUND TO BE HELD AT The Union League, 140
South Broad Street, Philadelphia, Pennsylvania, on March 17, 1999 at
10:00 A.M., or at any postponement or adjournments thereof, with all the
powers which the undersigned would possess, if personally present, and
instructs them to vote upon any matters which may properly be acted upon
at this meeting and specifically as indicated on the lower portion of
this form. Please refer to the proxy statement for a discussion of each
of these matters.
BY SIGNING AND DATING THIS CARE, YOU AUTHORIZE THE PROXIES TO VOTE EACH PROPOSAL
AS MARKED, OR IF NOT MARKED, TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR
DISCREITION TO VOTE ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING,
PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE.
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</TABLE>
THIS PROXY CARD IS VALID ONLY SIGNED AND DATED.
<TABLE>
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Vote On Directors For Withhold For All
1. To elect the following nominees as Directors or Trustees of the Company All All Except
01) WAYNE A. STORK 06) ANN R. LEVEN
02) JEFFREY J. NICK 07) JAN R. YEOMANS ____________________________________
03) WALTER P. BABICH 08) THOMAS F. MADISON To withhold authority to vote, "For All Except"
04) JOHN H. DURHAM 09) CHARLES E. PECK and write the nominee's number on the line above.
05) ANTHONY D. KNERR
Vote On Proposals For Against Abstain
2. To approve the reclassification of the Fund's 3G. To reclassify all current
fundamental Investment objective from fundamental to non- investment restrictions as non-fundamental
Fundamental
3. To approve standardized fundamental investment 4. To approve a new investment management
restrictions for the Fund (proposal involves agreement with Delaware Management Company
separate votes on sub-proposals 3A-3G) for the Fund
3A. To adopt a new fundamental investment 5. To approve a new sub-advisory agreement with
restriction concerning concentration of the Delaware International Advisers Ltd. for the Fund
Fund's investments in the same industry
3B. To adopt a new fundamental investment 6. To ratify the selection of Ernst & Young LLP, as
restriction concerning borrowing money and independent auditors for the Company
issuing senior securities
3C. To adopt a new fundamental investment 7. To approve the reorganization of the Company
restriction concerning underwriting from its current form of organization into a
3D. To adopt a new fundamental investment Delaware Business Trust
restriction concerning investments in real
estate PLEASE DATE AND SIGN NAME OR NAMES BELOW AS
3E. To adopt a new fundamental investment PRINTED ABOVE TO AUTHORIZE THE VOTING OF YOUR
restriction concerning investments in SHARES AS INDICATED ABOVE, WHER SHARES ARE
commodities REGISTERED WITH JOINT OWNERS SHOULD SIGN.
3F. To adopt a new fundamental investment PERSONS SIGNING AS EXECUTOR, ADMINISTRATOR,
restriction concerning lending by the Fund TRUSTEE OR OTHER REPRESENTATIVE SHOULD
GIVE FULL TITLE AS SUCH.
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Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date
</TABLE>
