SCHEDULE 14C (RULE 14C-101) INFORMATION REQUIRED IN INFORMATION STATEMENT SCHEDULE 14C INFORMATION INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. _______) Check the appropriate box: [ ] Preliminary information statement [ ] Confidential, for use of the Commission only (as permitted by Rule 14c-5(d)(2)). X Definitive information statement Optimum Fund Trust (Name of Registrant as Specified in Its Charter) Payment of Filing Fee (check the appropriate box): X No fee required [ ] Fee computed on table below per Exchange Act Rules 14c-5(g) 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 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: OPTIMUM FUND TRUST OPTIMUM LARGE CAP GROWTH FUND 2005 Market Street PHILADELPHIA, PA 19103-7094 INFORMATION STATEMENT This Information Statement is being furnished on behalf of the Board of Trustees ("Trustees" or "Board") of the Optimum Fund Trust (the "Trust") to inform shareholders of the Optimum Large Cap Growth Fund (the "Fund") about a recent change related to the Fund's subadvisory arrangements. The change was approved by the Board of the Trust on the recommendation of the Fund's investment manager, Delaware Management Company ("DMC" or the "Manager"), without shareholder approval as is permitted by an order of the U.S. Securities and Exchange Commission ("SEC") dated November 7, 2006. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. This Information Statement is being mailed on or about March 4, 2008 to shareholders of record of the Fund as of February 25, 2008. INTRODUCTION DMC is the investment manager for each of the Trust's funds. DMC employs a "manager of managers" arrangement in managing the assets of the Trust. This permits DMC, subject to approval by the Board, to hire, terminate or replace subadvisers unaffiliated with the Trust or DMC ("unaffiliated subadvisers"), and to modify material terms and conditions of subadvisory agreements with unaffiliated subadvisers, without shareholder approval. DMC recommended and the Board has approved a new subadvisory agreement ("New Subadvisory Agreement") with one of the Fund's current subadvisers, Marsico Capital Management, LLC ("Marsico"), due to a transaction under which Marsico was repurchased from a subsidiary of its parent company, Bank of America ("BOA") (the "Transaction") (See "The Transaction" below). Section 15(a) of the Investment Company Act of 1940 (the "1940 Act") generally requires that the shareholders of a mutual fund approve an agreement pursuant to which a person serves as investment adviser or subadviser of the fund. In order to use the "manager or managers" authority discussed above, DMC, the Trust, and certain Delaware Investments affiliates requested and received an exemptive order from the SEC on November 7, 2006 (the "SEC Order"). The SEC Order exempts DMC, the Trust and the other Delaware Investments affiliates from certain of the shareholder approval requirements of Section 15(a) of the 1940 Act and allows the Trust's Board, subject to certain conditions, to appoint new, unaffiliated subadvisers and approve new subadvisory agreements on behalf of the Trust without shareholder approval. Consistent with the SEC Order, the Board, including a majority of the Trustees who are not "interested persons" of the Trust or of DMC under the 1940 Act ("Independent Trustees"), has approved the New Subadvisory Agreement among the Trust, DMC and Marsico relating to the Fund. As discussed later in this Information Statement, the Board carefully considered the matter and concluded that the approval of the New Subadvisory Agreement was in the best interests of the Fund and its shareholders. As a condition to relying on the SEC Order, DMC and the Trust are required to furnish Fund shareholders with notification of the New Subadvisory Agreement within ninety days from the date that the subadviser is hired. This Information Statement provides that notice and gives details of the new arrangement. THE TRANSACTION On June 14, 2007, Thomas F. Marsico, Chief Executive Officer ("CEO") and Chief Investment Officer ("CIO") of Marsico, and Marsico Parent Company, LLC (the "Company"), a company controlled by Mr. Marsico, signed a definitive agreement to repurchase Marsico from a subsidiary of BOA, which constitutes a "change of control" of Marsico under applicable provisions of the 1940 Act. The 1940 Act provides that a "change of control" of a fund's adviser or subadviser results in an "assignment," and a consequent automatic termination, of an investment advisory agreement between a fund and its adviser or subadviser, as the case may be. Accordingly, as a result of the Transaction, the prior subadvisory agreement dated July 31, 2003 among DMC, as the Funds' investment manager, the Trust, and Marsico, as the Fund's subadviser, terminated on December 14, 2007. In anticipation of the Transaction and consequent automatic termination of the prior subadvisory agreement with Marsico, the Board, at its September 20, 2007 regular meeting (the "Board Meeting"), approved the New Subadvisory Agreement with Marsico, having terms substantively similar to the terms of the prior subadvisory agreement. Under the terms of the New Subadvisory Agreement, Marsico makes investment decisions for the segment of the Fund's assets allocated to Marsico by the Manager, and continuously reviews, supervises and administers the Fund's investment programs with respect to these assets. DMC'S RECOMMENDATION AND THE BOARD OF TRUSTEES' DECISION DMC recommended the approval of the New Subadvisory Agreement between DMC, Marsico and the Trust. Because Marsico was an existing subadviser to the Fund, the Board took into account information furnished and discussed throughout the year at quarterly Board meetings when discussing the New Subadvisory Agreement, as well as information furnished specifically for the contract approval considerations being conducted at the Board Meeting. Information furnished at Board meetings throughout the year included: an analysis by DMC (with the assistance of its consultant, LPL Financial Corporation ("LPL")) of the investment performance of Marsico and the sleeve of the Fund it sub-advised; a report prepared by Lipper Inc. ("Lipper") comparing the Fund's investment performance and expenses with those of other mutual funds deemed comparable ("Lipper Report"); and compliance reports and related certifications furnished by Marsico and DMC. Material furnished specifically in connection with the review of the New Subadvisory Agreement included: memoranda discussing and analyzing the performance of Marsico's sleeve of the Fund and the Transaction between Marsico and a subsidiary of BOA; a description of fees charged by Marsico showing them to be competitive with those charged other comparable investment companies or accounts; a copy of the New Subadvisory Agreement; and a "due diligence" report describing various material items in relation to the personnel, organization and policies of Marsico. Lastly, representatives of Marsico (including its CEO) were present at the Board meeting to provide a presentation and answer any Board questions. In considering such information and materials, the independent Trustees received assistance from and met separately with independent counsel. The materials prepared by DMC specifically in connection with the approval of the New Subadvisory Agreement were sent to the independent Trustees in advance of the meeting and were discussed at an executive session of the independent Trustees and their counsel prior to the Board Meeting. While attention was given to all information furnished, the following discusses under separate headings the primary factors taken into account by the Board in its contract approval considerations. Nature, Extent and Quality of Services. In considering the nature, extent and quality of the services to be provided by Marsico, the Board specifically considered that the New Subadvisory Agreement contains substantially similar provisions to those in the prior Marsico subadvisory agreement for the Fund. The Board also considered the benefits of providing consistency of portfolio management. The Board reviewed materials provided by Marsico regarding its experience and the qualifications of its personnel, and placed weight on Marsico's representation that there were no planned changes with respect to Marsico's personnel responsible for security selection and portfolio management of the portion of the Fund managed by Marsico after the completion of the Transaction. The quality of the services of Marsico was considered primarily in respect to the investment performance on its sleeve of the Fund. The Board was also satisfied with the adherence by Marsico with the investment policies and restrictions of the Fund it advised, as well as their adherence to various compliance and other procedures based on personal presentations made by representatives of Marsico and DMC reports of its discussions with Marsico, as well as certificates and materials furnished at Board meetings and in connection with the approval of the New Subadvisory Agreement. Investment Performance. The Board placed significant emphasis on Marsico's prior investment performance on its sleeve of the Fund. While consideration was given to performance reports and discussions throughout the year (including the Lipper Report described above), particular attention in assessing performance was given to Marsico's performance on its portion of the sleeve to date relative to the Fund's peers and benchmark. The Board was satisfied with such performance. In addition, the Board placed weight on Marsico's representation that there were no planned changes with respect to the Marsico personnel responsible for security selection and portfolio management of its portion of the Fund after the completion of the Transaction. Based upon these considerations, the Board determined that the performance of Marsico on the Fund provides evidence of the high quality of portfolio management services expected to be provided by Marsico under the New Subadvisory Agreement. Subadvisory Fee; Profitability; and Economies of Scale. The Board was provided with a description of fees to be charged by Marsico under the New Subadvisory Agreement which showed them to be identical to the subadvisory fees from the prior Marsico subadvisory agreement for the Fund, and to be competitive with those charged by Marsico to other comparable investment companies or accounts. Trustees were also given information on profits being realized by Marsico in relation to Marsico's overall investment advisory business. The Board noted that the fees payable to Marsico for the investment subadvisory services provided by it to the Fund would be paid out of the fee received by DMC in its role as investment manager. The Board also noted that the materials provided to them regarding the Transaction stated that the management fee paid by the Fund to DMC would stay the same, and that DMC's profitability will not be impacted by the terms of the New Subadvisory Agreement. The Board also noted that economies of scale may be shared with a fund and its shareholders through investment management fee breakpoints, so that as a fund grows in size, its effective management fee rate declines. The investment management fees for the Fund contained breakpoints with the Fund's asset size being at a high enough level to benefit from such breakpoints, and to the extent economies of scale may be realized in the management of the Fund, the Trustees believed such schedule of fees provided a sharing of benefits with the Fund and its shareholders. THE NEW SUBADVISORY AGREEMENT The New Subadvisory Agreement has terms substantially similar to the prior subadvisory agreement between DMC, the Trust and Marsico. Marsico will make all investment decisions for the portion of the Fund's assets allocated to it, and will continuously review, supervise and administer the Fund's investment program with respect to those assets. Marsico is not affiliated with DMC, and as noted above, Marsico's subadvisory fee is paid out of the fee received by DMC in its role as investment manager. Marsico discharges its responsibilities subject to the supervision of DMC and the Board, and has agreed to do so in a manner consistent with the Fund's investment objective, policies and limitations. Additionally, the New Subadvisory Agreement clarifies each party's responsibilities concerning compliance reporting and regulations, as well as assisting in the updating of the Fund's prospectuses and statement of additional information. The prior subadvisory agreement was dated July 31, 2003 with an initial term ending July 31, 2005. The New Subadvisory Agreement is dated December 14, 2007 and has an initial term ending December 14, 2009. Thereafter, continuance of this New Subadvisory Agreement requires the annual approval of the Trust's Board, including a majority of the independent Trustees. ADDITIONAL INFORMATION ABOUT MARSICO Marsico Capital Management, LLC is located at 1200 17th Street, Suite 1600, Denver, CO 80202. Marsico was organized in September 1997 as a registered investment adviser. Marsico provides investment services to other mutual funds and private accounts and, as of December 31, 2007, had approximately $106 billion under management. Thomas F. Marsico is the founder and CEO of Marsico and manages the investment program for Marsico's portion of the Optimum Large Cap Growth Fund. Mr. Marsico has over 20 years of experience as a securities analyst and a portfolio manager. He has held his Fund responsibilities since the inception of the Fund. The portfolio manager and key executives of Marsico and their principal occupations are listed in Appendix A. Unless otherwise noted, the address of each person listed is 1200 17th Street, Suite 1600, Denver, CO 80202. Marsico currently serves as subadviser to 19 other mutual funds with similar objectives to the Fund. The chart at Appendix B contains a description of these funds and the compensation paid to Marsico for its subadvisory services. THE INVESTMENT MANAGER AND THE MANAGEMENT AGREEMENT DMC, located at 2005 Market Street, Philadelphia, Pennsylvania 19103-7094, is a series of Delaware Management Business Trust, which is an indirect subsidiary of Delaware Management Holdings, Inc ("DMH"), which in turn is an indirect subsidiary, and subject to the ultimate control, of Lincoln National Corporation ("LNC"). The Manager, together with its predecessors, have been managing mutual funds since 1938. As of December 31, 2007, DMC and its affiliates had more than $150 billion in assets under management. As the Fund's investment manager, DMC has overall responsibility for the general management of the Trust and all of its funds, which includes selecting the funds' subadvisers and monitoring each fund and subadviser to ensure that investment activities remain consistent with a fund's investment objective. A team is responsible for conducting ongoing investment reviews with each subadviser and for developing the criteria by which fund performance is measured. The Manager has hired LPL, a registered broker/dealer and investment adviser, as a consultant to assist with this process. The key executives and each trustee of DMC and their principal occupations are listed in Appendix A. Unless otherwise noted, the address of each person listed is 2005 Market Street, Philadelphia, Pennsylvania 19103-7094. The Trust and the Manager have entered into an investment management agreement (the "Management Agreement"), which was initially approved by the Board of Trustees at a meeting held on July 17, 2003. Under the Management Agreement, the Manager has full discretion and responsibility, subject to the overall supervision of the Trust's Board of Trustees, to select and contract with one or more investment subadvisers, to manage the investment operations and composition of each fund, and to render investment advice for each fund, including the purchase, retention, and dispositions of investments, securities and cash contained in each fund. The Management Agreement obligates the Manager to implement decisions with respect to the allocation or reallocation of each fund's assets among one or more current or additional subadvisers, and to monitor the subadvisers' compliance with the relevant fund's investment objective, policies and restrictions. Under the Management Agreement, the Trust will bear the expenses of conducting its business. The Trust and the Manager may share facilities in common to each, which may include legal and accounting personnel, with appropriate pro ration of expenses between them. In addition, the Manager pays the salaries of all officers and Trustees of the Trust who are officers, directors or employees of the Manager or its affiliates. Pursuant to the Management Agreement, the Trust compensates DMC for these services to the Fund by paying DMC an annual advisory fee assessed against average daily net assets under management of: 0.8000% of assets up to $250 million, 0.7875% of assets from $250 million to $300 million, 0.7625% of assets from $300 million to $400 million, 0.7375% of assets from $400 million to $500 million, and 0.7250% of assets over $500 million. For services to the Fund, DMC received, after fee waivers, $4,549,157 in advisory fees for the fiscal year ended March 31, 2007, and $3,369,431 in advisory fees for the six months ended September 30, 2007. SUBADVISORY FEES PAID The Fund has two subadvisers: Marsico and T. Rowe Price Associates, Inc. (T. Rowe Price"). Marsico and T. Rowe Price earned $2,951,709 in the aggregate for sub-advisory services provided for the Fund for the fiscal year ended March 31, 2007. For the six months ended September 30, 2007, Marsico and T. Rowe Price earned $1,934,668 for services provided to the Fund. PAYMENTS TO AFFILIATED BROKERS The Fund did not make any payments to an affiliated broker for the fiscal year ended March 31, 2007. RECORD OF BENEFICIAL OWNERSHIP As of February 25, 2008, the Fund believes that there were no accounts holding 5% or more of the outstanding shares of any Class of the Fund. As of February 25, 2008, the Fund's officers and Trustees owned less than 1% of the outstanding shares of each Class of the Fund. GENERAL INFORMATION DISTRIBUTOR The Distributor, Delaware Distributors, L.P. ("Distributor"), located at 2005 Market Street, Philadelphia, PA 19103-7094, serves as the national distributor of the Trust's shares under a Distribution Agreement dated July 17, 2003. The Distributor is an affiliate of the Manager and bears all of the costs of promotion and distribution, except for payments by the Class A, Class B and Class C shares under their respective Rule 12b-1 Plans. The Distributor is an indirect subsidiary of DMH, and, therefore, of LNC. The Distributor has agreed to use its best efforts to sell shares of the Fund. Shares of the Fund are offered on a continuous basis by the Distributor and may be purchased through authorized investment dealers or directly by contacting the Distributor or the Trust. The Board of Trustees annually reviews fees paid to the Distributor. TRANSFER AGENT AND ADMINISTRATOR Delaware Service Company, Inc. ("DSC"), located at 2005 Market Street, Philadelphia, PA 19103-7094, serves as the Trust's shareholder servicing, dividend disbursing and transfer agent. DSC provides fund accounting and financial administration oversight services to the Fund. Those services include overseeing the Fund's pricing process, the calculation and payment of Fund expenses, and financial reporting in shareholder reports, registration statements and other regulatory filings. Additionally, DSC manages the process for the payment of dividends and distributions and the dissemination of Fund net asset values and performance data. DSC is an affiliate of the Manager, and is an indirect subsidiary of DMH and, therefore, of LNC. Mellon Bank, N.A. ("Mellon"), One Mellon Center, Pittsburgh PA 15258, provides fund accounting and financial administration services to the Fund. Those services include performing functions related to calculating the Fund's net asset value and providing financial reporting information, regulatory compliance testing and other related accounting services. HOUSEHOLDING Only one copy of this Information Statement may be mailed to households, even if more than one person in a household is a Fund shareholder of record; unless the Trust has received instructions to the contrary. If you need additional copies of this Information Statement, please contact your participating securities dealer or other financial intermediary. If you do not want the mailing of an Information Statement to be combined with those for other members of your household in the future, or if you are receiving multiple copies and would rather receive just one copy for the household, please contact your participating securities dealer or other financial intermediary. FINANCIAL INFORMATION Shareholders can obtain a copy of the Trust' most recent Annual Report and any Semi-Annual Report following the Annual Report, without charge, by contacting their participating securities dealer or other financial intermediary, or if a shareholder owns Trust shares directly through the Trust's service agent, by calling toll free at 800-914-0278. APPENDIX A Marsico Capital Management, LLC Name Principal Occupation - -------------------------------------------------------------------------------- Thomas F. Marsico Chief Executive Officer and Chief Investment Officer Christopher J. Marsico President Neil L. Gloude Executive Vice President, Chief Financial Officer and Treasurer Kenneth M. Johnson Executive Vice President and Director of Marketing and Client Services Steven R. Carlson Executive Vice President and Chief Compliance Officer Thomas M. J. Kerwin Executive Vice President, General Counsel and Secretary James G. Gendelman Vice President and Portfolio Manager Corydon J. Gilchrist Vice President and Portfolio Manager Delaware Management Company Name Principal Occupation - -------------------------------------------------------------------------------- Patrick P. Coyne Trustee and President John C.E. Campbell Trustee and Executive Vice President / Global Marketing & Client Services See Yeng Quek Trustee and Executive Vice President / Managing Director / Chief Investment Officer, Fixed Income David P. O'Connor Trustee and Senior Vice President / Strategic Investment Relationships and Initiatives / General Counsel Michael J. Hogan Executive Vice President / Head of Equity Investments Philip N. Russo Executive Vice President / Chief Administrative Officer APPENDIX B APPROXIMATE FUND ASSETS ($ million) SUBADVISORY FEE PAID TO MARSICO** AS OF 12/31/07 NAME OF FUND AS OF 12/31/07 (ANNUALLY, AS % OF FUND ASSETS) - ------------------------------------------------------------------------------------------------------------------------------------ AEGON/Transamerica & Transamerica IDEX ATST Marsico Growth Fund $724.4 0.40% TA IDEX Marsico Growth Fund $421.7 0.40% Advanced Series Trust (AST) / Prudential Investments AST Marsico Capital Growth $5,540.7 0.40% on aggregate up to $1.5 billion AST Advanced Strategies Portfolio 295.1* 0.35% on aggregate assets > $1.5 billion Target Portfolio Trust - Large Cap Growth 171.4* on the AST / Prudential funds listed herein Target Conservative Allocation Fund 21.3* Target Moderate Allocation Fund 67.9* Target Growth Allocation Fund 71.9* Prudential Series Fund Global Portfolio 253.5* BlackRock Marsico Growth FDP Fund of FDP Series, Inc. $169.6 0.40% Columbia Funds (formerly Nations Funds) Columbia Marsico Growth $7,054.8 0.45% on aggregate up to $18 billion Master Portfolio 0.40% on aggregate > $18 billion and < $21 billion Columbia Marsico Growth Fund, $1,341.3 Variable Series 0.35% on aggregate > $21 billion aggregated across the Columbia funds listed herein and others managed by Marsico GuideStone Funds Growth Equity Fund 432.4* 0.45% on first $400 million 0.40% on assets >$400 million ING Investors Trust ING Marsico Growth Portfolio $1,022.3 0.45% on first $500 million 0.40% on $500 million to $1.5 billion 0.35% on assets >$1.5 billion Merrill Lynch Roszel/Marsico Large Cap Growth Portfolio $76.2 0.40% Northern Multi-Manager Funds Multi-Manager Large Cap Fund $20.7 0.40% on first $1.5 billion 0.35% on assets > $1.5 billion Russell Investment Company Equity I Fund 191.6* 0.325% on aggregate up to $500 million Diversified Equity Fund $450.2 0.275% on aggregate assets > $500 million to < $750 million 0.225% on aggregate assets > $750 million across the Russell funds listed herein and others managed by Marsico USAA USAA Aggressive Growth Fund $1,374.3 0.35% * Denotes multi-manager fund. Assets reflect the Marsico-managed portion only. ** A principal investment manager other than Marsico typically charges management fees to these mutual funds that include both sub-advisory fees paid to Marsico and additional management fees paid to the principal investment manager.
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DEF 14C Filing
Optimum Fund Trust DEF 14CInformation statement
Filed: 29 Feb 08, 12:00am