SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
OPTIMUM FUND TRUST
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(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):
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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[_] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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OPTIMUM FUND
TRUST
JULY 6, 2004
OPTIMUM INTERNATIONAL FUND
Dear Shareholder:
Enclosed is a Notice of Meeting for a Special Meeting of Shareholders of
Optimum International Fund (the "Fund"), a series of Optimum Fund Trust (the
"Trust"). The Meeting has been called for August 31, 2004 at 3:00 p.m., Eastern
time, at 2001 Market Street, 2nd Floor Auditorium, Philadelphia, Pennsylvania
19103. The accompanying Proxy Statement describes a certain proposal (the
"Proposal") being presented for your consideration and requests your prompt
attention and vote via the enclosed proxy card.
PLEASE TAKE A MOMENT TO FILL OUT, SIGN AND RETURN THE ENCLOSED PROXY CARD!
The enclosed Proxy Statement describes the Proposal you are being asked to
consider, which is to approve a new subadvisory agreement. As more fully
described in the Proxy Statement, a new subadvisory agreement is needed as a
result of the pending sale by Delaware Investments of its London-based
international investment management business, specifically Delaware
International Advisers Ltd. ("DIAL"). If the shareholders of the Fund approve
the Proposal, DIAL (which is currently a subadviser of the Fund) will be able to
continue as a sub-adviser for the Fund.
The Proposal is being presented to shareholders in connection with Delaware
Investments' pending sale of DIAL. The sale of DIAL will result in the automatic
termination of DIAL's subadvisory agreement with respect to the Fund between
Delaware Management Company, a series of Delaware Management Business Trust
("DMC"), the investment manager to the Fund, and DIAL. The Proposal will not
result in a change in the investment objective or investment policies of the
Fund, nor will the investment management fees, or any other expenses paid by the
Fund, change.
Please take the time to review this entire document and vote now! Whether or
not you plan to attend the Meeting, please vote your shares by completing,
dating and signing the enclosed proxy card. If you determine at a later date
that you wish to attend the Meeting, you may revoke your proxy and vote in
person. Proxy cards must be received prior to the Meeting in order to be
counted.
Thank you for your prompt attention and participation.
Sincerely,
/s/ John C.E. Campbell
John C.E. Campbell
President and Chief Executive Officer
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OPTIMUM FUND TRUST
Optimum International Fund
2005 Market Street
Philadelphia, PA 19103
(800) 914-0278
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on August 31, 2004
To the Shareholders of Optimum International Fund:
This is your official notice that a Special Meeting of Shareholders (the
"Meeting") of Optimum International Fund (the "Fund"), a series of Optimum Fund
Trust, a Delaware statutory trust (the "Trust"), has been called by the Board of
Trustees of the Trust and will be held at 2001 Market Street, 2nd Floor
Auditorium, Philadelphia, PA 19103, on August 31, 2004 at 3:00 p.m., Eastern
time. The Special Meeting is being called for the following reasons:
1. To approve a Sub-Advisory Agreement between Delaware Management Company
and Delaware International Advisers Ltd. (the "Proposal").
2. To vote upon any other business as may properly come before the Meeting or
any adjournment thereof.
The Proposal set forth above is more fully described in the attached Proxy
Statement. A copy of the form of proposed Sub-Advisory Agreement is attached as
Schedule A to the Proxy Statement. The Board of Trustees of the Trust is
soliciting your votes.
If you are a shareholder of record of the Fund as of the close of business on
June 28, 2004, you have the right to direct the persons listed on the enclosed
proxy card as to how your shares in the Fund should be voted. In addition, a
Proxy Statement describing the matters to be voted on at the Meeting or any
adjournment(s) thereof is attached to this Notice. YOUR VOTE IS IMPORTANT.
By Order of the Board of Trustees,
/s/ Richelle S. Maestro
Richelle S. Maestro
Secretary
July 6, 2004
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TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE OF FURTHER
MAILINGS, PLEASE MARK YOUR PROXY CARD, SIGN IT, AND RETURN IT IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. PROXY CARDS
MUST BE RECEIVED BEFORE THE MEETING IN ORDER TO BE COUNTED. YOU MAY REVOKE YOUR
PROXY AT ANY TIME AT OR BEFORE THE MEETING OR VOTE IN PERSON IF YOU ATTEND THE
MEETING.
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PROXY STATEMENT
TABLE OF CONTENTS
PAGE
----
Meeting Information ................................................................ 1
Purposes of the Meeting ............................................................ 1
More Information Regarding the Fund ................................................ 1
OVERVIEW OF THE PROPOSAL ........................................................... 2
Why am I getting this proxy? .................................................... 2
What is an "Interim Agreement?" ................................................. 2
What is the Board of Trustees Recommending? ..................................... 2
PROPOSAL: TO APPROVE A NEW SUBADVISORY AGREEMENT WITH DIAL ......................... 3
Introduction .................................................................... 3
Approval of the New Subadvisory Agreement ....................................... 3
Comparison of the Current Subadvisory Agreement and the New Subadvisory Agreement 3
Advisory Services ............................................................... 3
Fees ............................................................................ 4
Brokerage ....................................................................... 4
Limitation of Liability ......................................................... 4
Continuance ..................................................................... 4
Termination ..................................................................... 5
Board Considerations and Determinations ......................................... 5
Interim Agreement ............................................................... 6
ADDITIONAL INFORMATION ABOUT DMC, DIAL AND OTHER SERVICE PROVIDERS ................. 6
DMC and DIAL .................................................................... 6
Administrator and Distributor ................................................... 8
VOTING INFORMATION ................................................................. 9
How many votes are necessary to approve the Proposal? ........................... 9
How do I ensure my vote is accurately recorded? ................................. 9
May I revoke my proxy? .......................................................... 9
What other matters will be voted upon at the Meeting? ........................... 9
Who is entitled to vote? ........................................................ 9
What other solicitations will be made? .......................................... 9
PRINCIPAL SHAREHOLDERS ............................................................. 10
SHAREHOLDER PROPOSALS .............................................................. 10
SCHEDULE A - FORM OF SUB-ADVISORY AGREEMENT BETWEEN DELAWARE MANAGEMENT COMPANY
AND DELAWARE INTERNATIONAL ADVISERS LIMITED ..................................... A-1
Delaware
Investments(SM)
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A member of Lincoln Financial Group(R)
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
OF
OPTIMUM INTERNATIONAL FUND
A SERIES OF
OPTIMUM FUND TRUST
TO BE HELD ON AUGUST 31, 2004
MEETING INFORMATION
This Proxy Statement solicits proxies to be voted at a Special Meeting of
Shareholders (the "Meeting") of Optimum International Fund, a series of Optimum
Fund Trust, a Delaware statutory trust (the "Trust"). The Meeting will be held
at the offices of Delaware Investments, which are located at 2001 Market Street,
2nd Floor Auditorium, Philadelphia, Pennsylvania 19103, on August 31, 2004 at
3:00 p.m., Eastern time. The Board of Trustees of the Trust, on behalf of the
Optimum International Fund (the "Fund"), is soliciting these proxies.
This Proxy Statement and form of Proxy Card will first be sent to
shareholders on or about July 9, 2004.
PURPOSES OF THE MEETING
The purpose of the Meeting is to consider the Proposal that is listed in the
accompanying Notice and any other business that may properly come before the
Meeting.
The Board of Trustees of the Trust urges you to complete, sign and return the
Proxy Card included with this Proxy Statement whether or not you intend to be
present at the Meeting. It is important that you return the signed Proxy Card
promptly to help assure a quorum for the Meeting.
MORE INFORMATION REGARDING THE FUND
The Fund'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 Fund at the address and
telephone number shown on the top of the Notice of Special Meeting of
Shareholders.
OVERVIEW OF THE PROPOSAL
WHY AM I GETTING THIS PROXY?
Delaware International Advisers Ltd. ("DIAL") is currently one of two
subadvisers to the Fund. If the Proposal described in this Proxy Statement is
approved, DIAL will continue to provide day-to-day investment management to its
portion of the Fund, as allocated to it from time to time (the "Managed
Portion"). However, DMH Corp., of which DIAL is an indirect, wholly owned
subsidiary, has entered into an agreement that, if consummated, will result in a
company owned by DIAL's current management and others, including various private
investment firms affiliated with Hellman & Friedman LLC, a private equity firm
(the "Purchasers"), purchasing DIAL from Delaware Investments (the "DIAL
Acquisition"). The Purchasers are paying Delaware Investments $172 million in
cash and will provide relief of certain liabilities of approximately $27 million
as of April 30, 2004. Under applicable law, the DIAL Acquisition will
automatically result in a termination of DIAL's subadvisory agreement with
Delaware Management Company ("DMC"), which provides for the provision of
subadvisory services to the Fund (the "Current Subadvisory Agreement").
The purpose of the Meeting is to have shareholders of the Fund vote upon a
new subadvisory agreement between DIAL and DMC (the "New Subadvisory Agreement")
that will be needed for the Fund's continuity of operations upon the anticipated
completion of the DIAL Acquisition. The DIAL Acquisition is expected to close
later this year.
WHAT IS AN "INTERIM AGREEMENT?"
As discussed above, the laws that govern the operation of the Fund provide
that the Current Subadvisory Agreement will automatically terminate as a result
of the DIAL Acquisition. If the DIAL Acquisition is completed before the Meeting
where shareholders approve the New Subadvisory Agreement, DMC and DIAL will need
an interim agreement (the "Interim Agreement") to ensure that uninterrupted
subadvisory services are provided by DIAL for the Managed Portion of the Fund.
The Interim Agreement, if actually entered into, will permit DIAL to continue
managing the Managed Portion of the Fund until the New Subadvisory Agreement is
approved by the Fund's shareholders or until DMC makes other arrangements for
portfolio management of the Managed Portion. However, applicable law requires
that the Interim Agreement terminate no later than 150 days after it becomes
effective.
The Interim Agreement is identical in form and terms to the Current
Subadvisory Agreement, except for certain additional provisions that are
permitted or required by applicable law. The term and effective date of the
Interim Agreement differ from the Current Subadvisory Agreement. As mentioned,
the Interim Agreement can only remain in effect for 150 days. In addition, the
Interim Agreement has an "escrow" provision so that any compensation earned by
DIAL under the Interim Agreement would be held in an interest-bearing escrow
account.
In order for such compensation to be released from the escrow account to DIAL
for services to the Fund, the law requires that shareholders of the Fund approve
an agreement with DIAL before the end of the 150-day period. In this case,
shareholder approval of the New Subadvisory Agreement will cause all of the fees
in the escrow account to be released to DIAL.
If the Interim Agreement is entered into (i.e., because the DIAL Acquisition
closes before shareholders of the Fund approve the New Subadvisory Agreement)
and shareholders approve the New Subadvisory Agreement, then DIAL is entitled to
receive all of the compensation held in the escrow account plus any interest
earned thereon. If the Interim Agreement is entered into and shareholders do not
approve the New Subadvisory Agreement, then DIAL is entitled to receive the
lesser of the compensation held in the escrow account or its actual costs of
providing subadvisory services during the period that such fees are being
escrowed.
WHAT IS THE BOARD OF TRUSTEES RECOMMENDING?
At the Meeting, the Board of Trustees is recommending that shareholders of
the Fund approve the New Subadvisory Agreement whereby DIAL will be able to
continue to provide the day-to-day investment management of the Managed Portion
and any compensation held in escrow pursuant to the Interim Agreement will be
released to DIAL.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE NEW
SUBADVISORY AGREEMENT.
2
PROPOSAL: TO APPROVE A NEW SUBADVISORY AGREEMENT WITH DIAL
INTRODUCTION
In order to maintain the existing services and management for the Managed
Portion of the Fund following the closing of the DIAL Acquisition, management of
the Fund recommended to the Board of Trustees at its June 17, 2004 Board Meeting
that DIAL be retained to continue to provide the day-to-day investment
management as sub-adviser of the Managed Portion.
On June 17, 2004, the Board of Trustees of the Trust met to review and
consider the DIAL Acquisition, its impact upon the Trust and the Fund, and Fund
management's recommendation. As more fully described below, the Board of
Trustees reviewed information provided by DIAL and the Purchasers. Based upon
such information and the recommendations of Fund management, the Board of
Trustees, at its June 17, 2004 meeting, approved the New Subadvisory Agreement,
subject to shareholder approval, and the Interim Agreement. The terms and
conditions of the New Subadvisory Agreement are substantially the same as the
terms and conditions of the Current Subadvisory Agreement, except as otherwise
described below under "COMPARISON OF THE CURRENT SUBADVISORY AGREEMENT AND THE
NEW SUBADVISORY AGREEMENT."
The Current Subadvisory Agreement was (1) originally approved by the Board of
Trustees, including a majority of the Trustees who are not "interested persons"
("Independent Trustees"), as defined by Section 2(a)(19) of the Investment
Company Act of 1940, as amended (the "1940 Act"), on July 17, 2003 and (2) was
approved by the initial shareholder of the Fund in connection with its
organization and became effective with respect to the Fund on July 17, 2003. The
Current Subadvisory Agreement has not since been submitted to the Board of
Trustees or Fund shareholders for their reapproval.
Set out in this Proxy Statement is important information regarding DIAL, the
DIAL Acquisition, the New Subadvisory Agreement, including a comparison of the
New Subadvisory Agreement to the Current Subadvisory Agreement, fees and
expenses and certain other information that was presented to the Board of
Trustees and that is important for you to consider in deciding how to vote.
Following this information, beginning on page 5 is a description of the
information that the Board particularly focused on in considering to approve and
recommend that shareholders approve the Proposal and the Board's determinations
with respect thereto.
As noted above and in accordance with the applicable rules under the 1940
Act, shareholder approval of the New Subadvisory Agreement is necessary in order
for DIAL to receive all of the investment advisory fees escrowed pursuant to the
Interim Agreement and for DIAL to continue to provide investment management
services to the Managed Portion.
APPROVAL OF THE NEW SUBADVISORY AGREEMENT
The New Subadvisory Agreement will become effective on the later of the date
the Fund's shareholders approve it or the closing of the DIAL Acquisition. If
shareholders do not approve the New Subadvisory Agreement with DIAL, DMC will
either directly manage the Managed Portion on a day-to-day basis, or hire
another sub-adviser, subject to any necessary Board of Trustees and shareholder
approvals, to manage the Managed Portion on a day-to-day basis.
COMPARISON OF THE CURRENT SUBADVISORY AGREEMENT AND THE NEW SUBADVISORY
AGREEMENT
ADVISORY SERVICES
Under the proposed New Subadvisory Agreement, DMC, as manager, will retain
DIAL as a sub-adviser, and DIAL will continue to manage the Managed Portion on a
day-to-day basis, subject to the supervision of DMC. The services to be provided
to the Fund by DIAL, as sub-adviser, under the New Subadvisory Agreement will be
identical to those currently provided by DIAL under the Current Subadvisory
Agreement.
Under the Current Subadvisory Agreement, DIAL is responsible for the
day-to-day portfolio management of the Managed Portion and determines from time
to time the securities and other investments that are purchased, retained, or
sold with respect to the Managed Portion. In addition, DIAL implements such
determinations through the placement of orders for the execution of portfolio
transactions with or through brokers or dealers as selected by DIAL. DIAL
provides the services under the Current Subadvisory Agreement in accordance with
the Fund's investment objectives, policies and restrictions, as stated in the
Fund's current prospectus. DIAL will have the same contractual obligations and
duties under the New Subadvisory Agreement.
Both the Current Subadvisory Agreement and the New Subadvisory Agreement
require the manager and sub-adviser to maintain all books and records with
respect to the securities transactions of the Managed Portion and to furnish the
Board such periodic and special reports as the Board may request.
3
FEES
The rate of investment management fees payable by the Fund will not be
affected by the DIAL Acquisition because DMC pays subadvisers to the Fund out of
the fees it receives under the investment management agreement it has with the
Trust on behalf of the Fund. However, the subadvisory fees under the proposed
New Subadvisory Agreement differ from those under the Current Subadvisory
Agreement. The current annual rate of subadvisory fees payable to DIAL by DMC,
based on the average daily net assets of the Managed Portion, is as follows:
0.55% of the first $50 million
0.40% of the next $50 million
0.36% of all assets above $100 million
For the fiscal period ended March 31, 2004, DIAL received $26,076 for its
subadvisory services to the Fund. Under the New Subadvisory Agreement, DIAL
would receive 0.40% of the average daily net assets of the Managed Portion for
its services as a subadviser. Had this fee been in place during the last fiscal
period, DIAL would have received $18,946 for its services as subadviser, which
is approximately 27% less than what DIAL received during the last fiscal period
under the Current Subadvisory Agreement.
BROKERAGE
The Current Subadvisory Agreement, subject to the primary objective of
obtaining the best execution, permits DIAL to 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 DMC, to
DIAL or to the Managed Portion. The Current Subadvisory Agreement also permits
DIAL to place orders for the purchase and sale of portfolio securities and other
instruments with broker-dealers who sell shares of the Trust or who sell shares
of any other investment company (or series thereof) for which DIAL or any
sub-adviser provides investment advisory services, although this is not a
practice in which DIAL currently engages. Broker-dealers who sell shares of any
investment companies or series thereof for which DIAL or any sub-adviser
provides investment advisory services are permitted to 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 U.S. Securities and Exchange
Commission ("SEC") and NASD Regulation, Inc. Subject to such policies and
procedures as may be adopted by the Board of Trustees and officers of the Trust,
under the Current Subadvisory Agreement, DIAL may cause the Fund 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 DIAL has 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 DIAL's overall responsibilities with respect to
the Trust and to other investment companies (or series thereof) and other
advisory or subadvisory accounts for which DIAL exercises investment discretion.
The New Subadvisory Agreement contains a substantially similar provision;
however, the portion of the provision permitting DIAL to consider the sale of
Trust or other investment company shares when placing purchases and sales of
portfolio securities has been eliminated.
LIMITATION OF LIABILITY
The Current Subadvisory Agreement provides that DIAL shall not be liable to
DMC, the Trust, the Fund or any shareholder for any action or omission in the
course of, or connected with, rendering services or for any losses that may be
sustained in the purchase, holding or sale of any security, or otherwise, in the
absence of willful misfeasance, bad faith, gross negligence, or a reckless
disregard of the performance of its duties as subadviser to the Trust and to
DMC. The New Subadvisory Agreement contains an identical provision.
The Current Subadvisory Agreement and New Subadvisory Agreement each provide
that DIAL and DMC shall indemnify each other and their respective affiliates to
the fullest extent permitted by law against any and all loss, damage, judgments,
fines, amount paid in settlement and reasonable expenses, including attorney's
fees, incurred by the party seeking indemnification and its affiliates arising
from or in connection with such Agreement so long as such losses arise out of
the other party's willful misfeasance, bad faith, gross negligence, or reckless
disregard in performing its responsibilities under the Agreement.
CONTINUANCE
If shareholders of the Fund approve the New Subadvisory Agreement, it will
continue until two years from the date of its execution, unless earlier
terminated. The New Subadvisory Agreement may be continued from year to year
thereafter by a majority vote of the Board of the Trust or by a vote of a
majority of all votes attributable to the outstanding shares of the Fund,
provided that in either case the terms and the renewal have been approved by the
vote of a majority of the Independent Trustees, cast in person at a meeting
called for the purpose of voting on such approval.
4
In connection with the DIAL Acquisition, DMC and DIAL have agreed, subject to
their respective fiduciary obligations and oversight of the Board of Trustees,
to maintain their relationship for the foreseeable future and for at least 18
months following the DIAL Acquisition.
TERMINATION
The Current Subadvisory Agreement provides that it may be terminated at any
time on 60 days' written notice to the other party, without the payment of any
penalty, by the Trust (by vote of the Board of Trustees or by vote of a majority
of the outstanding voting securities of the Fund) or by DIAL. The Current
Subadvisory Agreement also provides that it would immediately terminate in the
event of its assignment.
The New Subadvisory Agreement may be terminated, without the payment of a
penalty, with respect to the Fund by DMC at any time, on 90 days' written notice
to DIAL; by the Trust at any time, on 60 days' written notice to DIAL; and by
DIAL on 90 days' written notice to DMC and the Trust. The New Subadvisory
Agreement also provides that it would immediately terminate in the event of its
assignment.
BOARD CONSIDERATIONS AND DETERMINATIONS
In considering approval of the New Subadvisory Agreement and submission of it
to shareholders for their approval, the Board of Trustees reviewed information
and representations provided by DIAL and advice from outside counsel as to the
adequacy of the materials provided by DIAL, and focused on: (1) the nature,
extent, and quality of the services to be provided by DIAL; (2) the investment
performance of the Fund and comparable funds advised or subadvised by DIAL; (3)
the compatibility of DIAL's investment philosophy and methodology with the other
subadviser co-managing the Fund, Marsico Capital Management, LLC; and (4) the
costs of the services to be provided and profits to be realized by DIAL and its
affiliates from the relationship with the Fund. In addition to the materials
provided regarding the DIAL Acquisition overall, separate presentations were
made by Linsco/Private Ledger Corp. ("LPL"), the investment consultant to DMC,
and by DIAL regarding the management strategies for the Fund, DIAL's buy and
sell disciplines and Fund performance to date. At each quarterly meeting since
the Fund's inception, the Board also received reports prepared by LPL regarding
DIAL's investment performance, including comparisons to the Fund's benchmark,
adherence to stated investment philosophy and compatibility with the Fund's
other sub-adviser.
1. The Quality of Services to be Provided
In considering the nature, extent and quality of the services to be provided
by DIAL, the Board specifically considered that the New Subadvisory Agreement
contains substantially similar provisions to those in the Current Subadvisory
Agreement except for the effective dates and the fees. With respect to the New
Subadvisory Agreement, the Board considered the benefits of providing
consistency of portfolio management. The Board reviewed materials provided by
DIAL regarding the experience and qualifications of personnel responsible for
managing the Fund, and placed weight on DIAL's representation that there are no
planned changes with respect to the DIAL personnel responsible for security
selection and portfolio management after the closing of the DIAL Acquisition.
The Board also considered DIAL's management of the operating expenses of the
Fund, such as transaction costs, including how portfolio transactions for the
Fund are conducted and how brokers are chosen. The Board also considered
information provided by the Purchasers regarding their plans for DIAL,
particularly Hellman & Friedman's prior experience in the industry partnering
with management of investment advisory firms and the Board's discussions with
representatives of Hellman & Friedman concerning the autonomy to be provided to
DIAL.
The Board also considered that DIAL would continue to co-manage the Fund with
another subadviser, Marsico Capital Management, LLC. The Board considered the
compatibility of the two subadvisers' investment philosophies and methodologies
and that the New Subadvisory Agreement provides flexibility to DMC to adjust the
amount of the Fund's assets advised by DIAL. Based upon these considerations,
the Board determined that the nature, extent and quality of the services to be
provided by DIAL under the New Subadvisory Agreement are satisfactory and that
the New Subadvisory Agreement is in the best interests of shareholders.
2. Investment Performance
With respect to the investment performance of the Fund, and specifically of
the Managed Portion of the Fund, as well as the comparable mutual funds advised
by DIAL, the Board looked at the Fund's performance to date relative to its
peers and benchmark. As part of its presentation to the Board, DIAL reviewed
performance to date. In particular, management reviewed for the Board both the
effective and ineffective short-term portfolio moves since Fund inception, as
well as where the portfolio is anticipated to be in the longer term. The Board
also considered that the Fund has been in existence for less than a year, but
that DIAL has managed the Managed Portion in the style represented to the Board.
Based upon these considerations, the Board determined that the performance of
the Fund provides evidence of the high quality of portfolio management services
to be provided under the New Subadvisory Agreement.
5
3. The Costs of the Services to be Provided
In considering the costs of the services to be provided and profits to be
realized by DIAL and its affiliates from the relationship with the Fund, the
Board considered the fees paid to DIAL and the fair market value of the services
provided by DIAL. The Board had been previously provided with information
regarding the level of the advisory fees of the Fund and overall levels of
expenses for the Fund compared to its peer group of comparable mutual funds and
what proportion of the fees paid to DMC were being passed through to DIAL with
respect to the Managed Portion. The Board made particular note of fees paid by
other accounts sub-advised by DIAL. The Board also noted that the proposed
change to DIAL's subadvisory fee would lower, at least initially, the
subadvisory fees received by DIAL. The materials provided to the Board noted
that the management fee paid by the Fund to DMC would stay the same.
Based upon these considerations, and the considerations regarding fees and
expenses in general, the Board was able to determine that the fees under the New
Subadvisory Agreement are fair and reasonable.
In reaching its decision to recommend approval of the New Subadvisory
Agreement, the Board did not identify any single factor as being of paramount
importance. Based on the information and representations provided by DIAL and
its considerations as described above, the Board of Trustees, including a
majority of Independent Trustees, determined (1) that the New Subadvisory
Agreement would provide appropriate continuity of services to the Fund and its
shareholders and (2) that the terms thereof, including the compensation to be
paid under the New Subadvisory Agreement, are in compliance with the 1940 Act,
including the rules and regulations thereunder, and are fair and reasonable and
in the best interests of shareholders.
Therefore, the Board of Trustees determined that the New Subadvisory
Agreement should be submitted to shareholders with its
recommendation for approval.
INTERIM AGREEMENT
As mentioned above, in the event that the DIAL Acquisition is closed prior to
shareholders of the Fund approving the New Subadvisory Agreement, to assure that
the Managed Portion continues to be managed by DIAL after the DIAL Acquisition
and the termination of the Current Subadvisory Agreement as a result thereof,
the Board of Trustees (including a majority of the Independent Trustees)
approved the Interim Agreement with respect to the Fund pursuant to Rule 15a-4
under the 1940 Act at its in-person meeting held on June 17, 2004.
If needed, the Interim Agreement would become effective upon the closing of
the DIAL Acquisition (the "Interim Effective Date"), and would terminate upon
the earlier of 150 days from the Interim Effective Date or upon shareholder
approval of the New Subadvisory Agreement. The Interim Agreement also provides
that the Board of Trustees, or a majority of the "outstanding voting securities"
of the Fund, as that term is defined in the 1940 Act, may terminate the Interim
Agreement on 10 days' written notice to DIAL. The Interim Agreement also
provides that DMC may terminate it at any time upon 60 days' written notice to
DIAL. The Interim Agreement also terminates immediately in the event of its
"assignment," as that term is defined in the 1940 Act.
Pursuant to the terms of the Interim Agreement, the maximum amount of
investment management fees payable by DMC to DIAL during this interim period
would be identical to that which would have been payable to DIAL under the
Current Subadvisory Agreement.
In accordance with the provisions of Rule 15a-4 under the 1940 Act, the
compensation to be paid to DIAL under the Interim Agreement would be held in an
interest-bearing escrow account. The costs, if any, of maintaining such escrow
account would be borne by DMC and DIAL. The Interim Agreement also provides
that, if the shareholders of the Fund approve a new agreement with DIAL no later
than 150 days from the Interim Effective Date, DIAL would be entitled to all of
the compensation held in the escrow account (including interest earned). If the
New Subadvisory Agreement is not approved by the shareholders, the Interim
Agreement provides that DIAL will be entitled to be paid, out of the escrow
account, the lesser of (1) the total amount held in the escrow account (plus
interest earned on that amount) or (2) any costs incurred by DIAL in performing
its duties under the Interim Agreement prior to its termination (plus interest
earned on the amount while in the escrow account). Such amount would be released
to DIAL, as appropriate, from the escrow account. Any excess monies held in the
escrow account would be returned to DMC.
ADDITIONAL INFORMATION ABOUT DMC, DIAL AND OTHER SERVICE PROVIDERS
DMC AND DIAL
DMC is registered as an investment adviser under the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), and, together with its predecessors,
has been managing funds within the Delaware Investments family since 1938. DMC
is a series of Delaware Management Business Trust ("DMBT"). DMC and DMBT are
located at 2005 Market Street, Philadelphia, Pennsylvania 19103-7094.
6
DIAL is a United Kingdom affiliate of DMC, is an investment adviser
registered in the United States under the Advisers Act and is regulated in the
United Kingdom by the Financial Services Authority. 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, EC2V 6EE, England.
As of May 31, 2004, DMC was managing approximately $25 billion in assets in
various open-end and closed-end investment company accounts. DIAL was managing
approximately $19.5 billion in institutional or separately managed accounts and
approximately $4.5 billion in mutual fund accounts as of the same date. Other
affiliates of DMC and DIAL were managing additional institutional and separate
account assets in the amount of $13.9 billion as of that date.
Both DMC and DIAL are indirect, wholly-owned subsidiaries of Lincoln National
Corporation, also known as Lincoln Financial Group, a publicly held corporation.
Lincoln National Corporation, with headquarters currently at 1500 Market Street,
Suite 3900, Centre Square Tower, Philadelphia, Pennsylvania 19102, is a
diversified organization involved in many aspects of the financial services
industry, including insurance and investment management. Delaware International
Holdings Ltd., located at Claredon House, 2 Church Street, P.O. Box HM 1022,
Hamilton HM DX, Bermuda, owns 18.9% of DIAL. DIAL Holding Company, Inc., located
at Foulkstone Plaza, 1430 Foulkstone, Wilmington, Delaware 19803, owns 81.1% of
DIAL and 100% of Delaware International Holdings Ltd. DMH Corp is located at the
same address.
At the closing of the DIAL Acquisition, Atlantic Value Partners (No. 3) Ltd.
("AVP 3"), whose registered address is 20-22 Bedford Row, London WC1R 4JS,
England, intends to acquire 100% indirect control of DIAL, which will then
operate under a new name.
AVP 3 is an indirect, wholly-owned subsidiary of Atlantic Value Asset
Management L.P. ("AVAM"), whose address is Appleby Corporate Services (Cayman)
Limited, P.O. Box 1350GT, Clifton House, Fort Street, George Town, Grand Cayman,
Cayman Islands. The sole general partner of AVAM is Atlantic Value GP Ltd.
("AVGP"), whose address is Appleby Corporate Services (Cayman) Limited, Clifton
House, 75 Fort Street, P.O. Box 1350 GT, Grand Cayman, Cayman Islands.
Various private equity funds affiliated with Hellman & Friedman LLC (the "H&F
Funds"), which are limited partnerships, intend to invest as limited partners in
AVAM and as shareholders in AVGP. One of the H&F Funds, HFCP IV (Bermuda), L.P.,
will be a 35.85% owner of AVGP. Each of the remaining H&F Funds will own less
than 10% of AVGP. The address of each of the H&F Funds is c/o A.S.& K. Services
Ltd., Cedar House, 41 Cedar Avenue, Hamilton HM EX Bermuda. The sole general
partner of each of the H&F Funds is H&F Investors IV (Bermuda), L.P., whose
address is c/o A.S.& K. Services Ltd., Cedar House, 41 Cedar Avenue, Hamilton HM
EX Bermuda, and the sole general partner of H&F Investors IV (Bermuda), L.P. is
H&F Corporate Investors IV (Bermuda) Ltd., whose address is c/o A.S.& K.
Services Ltd., Cedar House, 41 Cedar Avenue, Hamilton HM EX Bermuda. The
shareholders of H&F Corporate Investors IV (Bermuda) Ltd., are eleven persons,
each of whom owns less than 10% of H&F Corporate Investors IV (Bermuda) Ltd.
Atlantic Value Partners Management, L.P., whose address is c/o Corporation
Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware, also
intends to invest as a limited partner in AVAM and a shareholder in AVGP.
Atlantic Value Partners Management, L.P. is expected to be a 55.5% owner of
AVGP. Atlantic Value Partners GP Limited, whose registered address is Third
Floor, 80 Cheapside, London EC2V 6EE, England, is the sole general partner of
Atlantic Value Partners Management, L.P. The shareholders of Atlantic Value
Partners GP Limited are eight individual members of DIAL management, each of
whom owns 12.5% of Atlantic Value Partners GP Limited.
DIAL also provides sub-advisory services to other mutual funds that have
investment objectives that are similar to those of the Fund. The following is a
list of these similar funds that are sub-advised by DIAL (and not managed by
DMC) along with the assets of the fund and the investment subadvisory fees that
each fund pays as of May 31, 2004:
ASSETS UNDER
DIAL'S EFFECTIVE
TRUST NAME - MANAGEMENT/ SUBADVISORY
FUND NAME FUND SIZE FEE TYPE OF FUND FEE WAIVER
------------ ------------- ----------- ------------ ----------
Equity Fund
BBH Fund, Inc.- $110,000,000/ 0.41% International None
BBH International $115,000,000 Equity
Equity Fund
Fremont Mutual $14,000,000/ 0.50% International None
Fund, Inc.- $14,000,000 Equity
Fremont Global Fund
7
ASSETS UNDER
DIAL'S EFFECTIVE
TRUST NAME - MANAGEMENT/ SUBADVISORY
FUND NAME FUND SIZE FEE TYPE OF FUND FEE WAIVER
------------ ------------- ------------ ------------ ----------
TIFF Investment $47,000,000/ 0.54% International None
Program Inc - $48,000,000 Equity
TIFF International
Equity Fund
UBS PACE Select $167,000,000/ 0.35% International None
Advisors Trust - $169,000,000 Equity
UBS PACE
International Equity
Investments
DMC is a series of DMBT. The Trustee, the Managing Directors and the
principal executive officer of DMC and their principal occupations (that are
positions with DMC) are as follows: Jude T. Driscoll is the President and Chief
Executive Officer of DMC; Gerald S. Frey, Managing Director and Chief Investment
Officer-Growth Investing; See Y. Quek, Executive Vice President, Managing
Director-Fixed Income; Patrick P. Coyne, Executive Vice President, Managing
Director, Chief Investment Officer-Fixed Income; and John B. Fields, Senior Vice
President/Trustee. The address of each of the principal executive officer, the
Managing Directors and the Trustee of DMC is 2005 Market Street, Philadelphia,
Pennsylvania 19103-7094.
The following officers of DMC are also officers of the Trust: John C.E.
Campbell serves as Executive Vice President - Global Marketing and Client
Services of DMC and Chairman and Trustee of the Trust; Richelle S. Maestro
serves as Executive Vice President, General Counsel and Secretary to DMC and the
Trust; and Joseph H. Hastings serves as Executive Vice President, Interim Chief
Financial Officer, Treasurer and Controller of DMC and Executive Vice President
and Chief Financial Officer of the Trust.
Currently and until the closing of the DIAL Acquisition, Jude T. Driscoll is
Chairman and Director of DIAL. Clive A. Gillmore is Deputy Managing Director of
DIAL. In addition to Mr. Driscoll and Mr. Gillmore, the Directors and their
principal occupations with DIAL are as follows: John C.E. Campbell, Director;
George E. Deming, Director; Elizabeth A. Desmond, Regional Research
Director/Director/Senior Portfolio Manager; John Emberson, Director/Chief
Operating Officer/Secretary; John Kirk, Director/Senior Portfolio Manager; G.
Roger H. Kitson, Vice Chairman/Director; Nigel G. May, Regional Research
Director/Director/Senior Portfolio Manager; Christopher A. Moth, Director/Chief
Investment Officer Fixed Income/Senior Portfolio Manager; Hamish O. Parker,
Director/Senior Portfolio Manager; and David G. Tilles, Managing Director/Chief
Investment Officer. The address of each of the officers and/or Directors of
DIAL, other than Messrs. Driscoll, Campbell and Deming, is 80 Cheapside, London
EC2V 6EE, England.
After the closing of the DIAL Acquisition, David G. Tilles will be the
Managing Director and Chief Executive Officer of DIAL. Clive A. Gillmore will be
the Deputy Managing Director of DIAL. In addition to Mr. Tilles and Mr.
Gillmore, the Directors and their principal occupations with DIAL will be as
follows: G. Roger H. Kitson, Director; Hamish O. Parker, Director; Elizabeth, A.
Desmond, Regional Research Director; John Emberson, Director/Chief Operating
Officer; John Kirk, Director/Global Fixed Income and Currency; Nigel G. May,
Regional Research Director; and Christopher A. Moth, Director/Chief Investment
Officer Global Fixed Income & Currency. The address of each of the officers
and/or Directors of DIAL is 80 Cheapside, London, EC2V 6EE, England.
ADMINISTRATOR AND DISTRIBUTOR
The Fund receives administrative services from DMC, the investment manager,
and from Delaware Service Company, Inc. ("DSC"), which acts as Shareholder
Servicing, Dividend Disbursing, Accounting Services and Transfer Agent. DSC is
located at 2005 Market Street, Philadelphia, PA 19103-7094. The DIAL Acquisition
will not affect the services provided by DMC or DSC. For the fiscal period ended
March 31, 2004, DSC received $163,985 from the Fund for such services.
The Fund's principal underwriter is Delaware Distributors, L.P. ("DDLP"),
2005 Market Street, Philadelphia, PA 19103-7094. DDLP may receive fees from the
Fund under a distribution plan in connection with the sale and distribution of
certain classes of shares of the Fund. For the fiscal period ended March 31,
2004, DDLP received $47,479 from the Fund under such a plan.
8
VOTING INFORMATION
HOW MANY VOTES ARE NECESSARY TO APPROVE THE PROPOSAL?
Provided that there is 33 1/3% of the shares present in person or represented
by proxy and entitled to vote at the Meeting (i.e., a quorum is present), the
approval of the Proposal requires the affirmative vote of the lesser of: (i) a
majority of the votes attributable to the outstanding shares of the Fund, or
(ii) 67% or more of the votes attributable to the shares represented at the
Meeting at which the holders of more than 50% of the votes attributable to the
outstanding shares of the Fund are represented in person or by proxy. Each
shareholder will be entitled to one vote for each dollar of net asset value per
share, and a proportionate fractional vote for any fractional dollar value, held
on the Record Date. If sufficient votes to approve the Proposal are not received
by the date of the Meeting, the Meeting may be adjourned to permit further
solicitations of proxies. The holders of a majority of the votes attributable to
the shares of the Fund entitled to vote at the Meeting and present in person or
by proxy (whether or not sufficient to constitute a quorum) may adjourn the
Meeting. The Meeting may also be adjourned by the chairperson of the Meeting.
Abstentions will be included for purposes of determining whether a quorum is
present at the Meeting, but will be treated as votes against the Proposal for
purposes of determining whether the matters to be voted upon at the Meeting have
been approved. Broker non-votes will be included for purposes of determining
whether a quorum is present at the Meeting, but will be treated as votes against
the Proposal for purposes of determining whether the matters to be voted upon at
the Meeting have been approved. Broker non-votes are proxies from brokers or
nominees indicating that such persons have not received voting instructions from
the beneficial owner or other person entitled to vote shares on a particular
matter with respect to which the brokers or nominees do not have discretionary
power.
HOW DO I ENSURE MY VOTE IS ACCURATELY RECORDED?
You may attend the Meeting and vote in person. You may also vote by
completing and signing the attached proxy card and mailing it in the enclosed
postage paid envelope. A proxy card is, in essence, a ballot. If you simply sign
and date the proxy card but give no voting instructions, your shares will be
voted in favor of the Proposal and in accordance with the views of management
upon any unexpected matters that come before the Meeting or adjournment of the
Meeting. 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 call toll-free to vote by
telephone, or you may vote using the Internet.
MAY I REVOKE MY PROXY?
Shareholders may revoke their proxy at any time before it is voted by sending
a written notice to the Trust expressly revoking their proxy, by signing and
forwarding to the Trust a later-dated proxy, or by attending the Meeting and
voting in person.
WHAT OTHER MATTERS WILL BE VOTED UPON AT THE MEETING?
The Board of Trustees of the Trust does not intend to bring any matters
before the Meeting other than that described in this Proxy Statement. The Board
is not aware of any other matters to be brought before the Meeting by others. If
any other matter legally comes before the Meeting, proxies for which discretion
has been granted will be voted in accordance with the views of management.
WHO IS ENTITLED TO VOTE?
Only shareholders of record of the Fund at the close of business on June 28,
2004 (the "Record Date") will be entitled to vote at the Meeting. As of the
Record Date, there were 3,693,980.728 outstanding shares of the Fund, of which
505,624.111 are Class A Shares, 216,531.684 are Class B Shares; 1,797,955.292
are Class C Shares, and 1,173,869.641 are Institutional Class Shares. As of the
Record Date, the net asset values per share of each class of shares of the Fund
were as follows: $10.52 - Class A; $10.46 - Class B; $10.47 - Class C.; and
$10.55 - Institutional Class.
WHAT OTHER SOLICITATIONS WILL BE MADE?
The Fund will request broker-dealer firms, custodians, nominees and
fiduciaries to forward proxy materials to the beneficial owners of the shares of
record. DMC and DIAL may reimburse broker-dealer firms, custodians, nominees and
fiduciaries for their reasonable expenses incurred in connection with such proxy
solicitation. In addition to solicitations by mail, officers and employees of
the Trust, DMC or DIAL, without extra pay, may conduct additional solicitations
by telephone, telecopy and personal interviews. It is not currently anticipated
that the Trust will engage a proxy solicitation firm to solicit proxies. The
costs of proxy solicitation will be borne by DMC, DIAL or their affiliates and
will not be borne by the Trust, the Fund or its shareholders.
9
PRINCIPAL SHAREHOLDERS
On the Record Date, the officers and Trustees of the Trust, as a group, owned
less than 1% of the outstanding voting shares of the Fund.
To the best knowledge of the Trust, as of the Record Date, no person owned
beneficially or of record more than 5% of the outstanding shares of any class of
the Fund.
SHAREHOLDER PROPOSALS
Because the Trust and the Fund do not hold regular shareholder meetings,
there currently is no specific date by which shareholder proposals intended to
be presented at future Meetings of Shareholders must be received by the Trust.
However, a proposal that is received by the Trust at its principal executive
offices a reasonable time before the Trust begins to print and mail its proxy
materials for such a meeting will be considered for inclusion in the Trust's
proxy statement and form or forms of proxy card relating to such meeting.
Proposals received thereafter will be considered untimely and will not be
considered for inclusion in these proxy materials.
10
SCHEDULE A
FORM OF SUB-ADVISORY AGREEMENT
AGREEMENT made by and between DELAWARE MANAGEMENT COMPANY, A SERIES OF
DELAWARE MANAGEMENT BUSINESS TRUST (the "Investment Manager") and DELAWARE
INTERNATIONAL ADVISERS LIMITED (the "Sub-Adviser").
WITNESSETH:
WHEREAS, OPTIMUM FUND TRUST (the "Trust") is an investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), and is
organized as a statutory trust under the laws of the State of Delaware; and
WHEREAS, OPTIMUM INTERNATIONAL FUND (the "Fund") is a series of the Trust;
and
WHEREAS, the Investment Manager and the Trust, on behalf of the Fund, have
entered into an agreement (the "Investment Management Agreement") dated July 17,
2003 whereby the Investment Manager will provide investment advisory services to
the Trust with respect to the Fund; and
WHEREAS, the Investment Manager has the authority under the Investment
Management Agreement to retain one or more sub-advisers to assist the Investment
Manager in providing investment advisory services to the Trust with respect to
the Fund; and
WHEREAS, the Investment Manager and the Sub-Adviser are registered investment
advisers under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and engage in the business of providing investment advisory services; and
WHEREAS, the Board of Trustees (the "Board" or the "Trustees") of the Trust
and the Investment Manager desire that the Investment Manager retain the
Sub-Adviser to render investment advisory and other services with respect to
that portion of the Fund as the Investment Manager shall from time to time
allocate to the Sub-Adviser (the "Managed Portion") in the manner, for the
period, and on the terms hereinafter set forth;
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. (a) The Sub-Adviser will supervise and direct the investments of the
assets of the Managed Portion of the Fund in accordance with the
Fund's investment objectives, policies, and restrictions as provided
in the Fund's Prospectus and Statement of Additional Information, as
currently in effect and as amended or supplemented from time to time
(hereinafter referred to as the "Prospectus"), and such other
limitations as the Fund may impose by notice in writing to the
Sub-Adviser, subject always to the supervision and control of the
Investment Manager and the Board.
(b) As part of the services it will provide hereunder, the Sub-Adviser is
authorized, in its discretion and without prior consultation with the
Fund or the Investment Manager to:
(i) obtain and evaluate information relating to investment
recommendations, asset allocation advice, industries, businesses,
securities markets, research, economic analysis, and other
investment services with respect to the securities that are
included in the Managed Portion or that are under consideration
for inclusion in the Managed Portion and invest the Managed
Portion in accordance with the Investment Manager's and the
Board's written direction as more fully set forth herein and as
otherwise directed;
(ii) regularly make decisions as to what securities to purchase and
sell on behalf of the Fund with respect to the Managed Portion,
effect the purchase and sale of such investments in furtherance
of the Fund's objectives and policies, and furnish the Board with
such information and reports regarding the Sub-Adviser's
activities in the performance of its duties and obligations under
this Agreement as the Investment Manager deems appropriate or as
the Board may reasonably request, including such reports,
information, and certifications as the officers of the Trust may
reasonably require in order to comply with applicable
international, federal and state laws and regulations;
(iii) provide any and all material composite or other performance
information, records and supporting documentation about accounts
or funds the Sub-Adviser manages, if appropriate, that are
relevant to the Managed Portion and that have investment
objectives, policies, and strategies substantially similar to
those employed by the Sub-Adviser in managing the Managed Portion
that may be reasonably necessary, under applicable laws, to allow
the Fund or its agent to present information concerning the
Sub-Adviser's prior performance in the Fund's currently effective
Prospectus, as the same may be hereafter modified, amended,
and/or supplemented from time to time, and in any permissible
reports and materials prepared by the Fund or its agent;
A-1
(iv) provide information as reasonably requested by the Investment
Manager or the Board to assist them or their agents in the
determination of the fair value of certain portfolio securities
held in the Managed Portion when market quotations are not
readily available for the purpose of calculating the Fund's net
asset value in accordance with procedures and methods established
by the Board;
(v) vote proxies, exercise conversion or subscription rights, and
respond to tender offers and other consent solicitations
("Corporate Actions") with respect to the issuers of securities
held in the Managed Portion, provided materials relating to such
Corporate Actions have been timely received by the Sub-Adviser,
and to submit reports regarding such Corporate Actions, including
a copy of any policies regarding such Corporate Actions, in a
form reasonably satisfactory to the Investment Manager and the
Fund in order to comply with any applicable federal or state
reporting requirements;
(vi) provide performance and other information as reasonably requested
by the Investment Manager or the Board to assist them or their
agent in conducting ongoing due diligence and performance
monitoring; and
(vii) maintain all accounts, books, and records with respect to the
Managed Portion as are required of an investment adviser of a
registered investment company pursuant to the 1940 Act and the
Advisers Act and the rules thereunder and preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any accounts,
books and records that it maintains for the Fund and that are
required to be maintained by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall furnish to the Investment Manager copies of all
such accounts, books, and records as the Investment Manager may
reasonably request. The Sub-Adviser agrees that such accounts,
books, and records are the property of the Trust, and will be
surrendered to the Trust promptly upon request, with the
understanding that the Sub-Adviser may retain its own copy of all
records.
(c) The Sub-Adviser shall not consult with any other sub-adviser of the
Fund or of any fund that is an "affiliated person" of the Fund
concerning transactions for the Fund in securities or other assets,
except as such consultations may be reasonably necessary in order to
ensure compliance with Rule 12d3-1 under the 1940 Act.
(d) In furnishing services hereunder, the Sub-Adviser shall be subject to,
and shall perform in accordance with, the following: (i) provisions of
the Trust's Agreement and Declaration of Trust, as the same may be
hereafter modified, amended, and/or supplemented from time to time,
that are applicable to the Managed Portion; (ii) provisions of the
Trust's By-Laws, as the same may be hereafter modified, amended,
and/or supplemented from time to time; that are applicable to the
Managed Portion; (iii) the Fund's Prospectus; (iv) the 1940 Act and
the Advisers Act and the rules under each and all other international,
federal and state securities laws or regulations applicable to the
Trust and the Fund; (v) the Trust's compliance procedures and other
policies and procedures adopted from time to time by the Board
applicable to the Managed Portion; and (vi) the written instructions
of the Investment Manager.
(e) The Investment Manager agrees to provide the Sub-Adviser with current
copies of the documents mentioned in paragraph 1(d)(i), (ii), (iii)
and (v) above and all changes made to such documents at, or if
practicable, before the time such changes become effective, and the
Investment Manager acknowledges and agrees that the Sub-Adviser shall
not be responsible for compliance with such documents or amendments
unless and until they are received by the Sub-Adviser. The Sub-Adviser
shall be fully protected in acting upon any proper instructions
reasonably believed by it to be genuine and signed or communicated by
or on behalf of the Investment Manager or the Fund.
(f) The Sub-Adviser hereby agrees during the period hereinafter set forth
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 Trust, the Fund or the Investment Manager
in any way, or in any way be deemed an agent of the Trust, the Fund or
the Investment Manager.
(g) The Sub-Adviser may perform its services through its employees,
officers or agents, and the Investment Manager shall not be entitled
to the advice, recommendation or judgment of any specific person;
provided, however, that the persons identified in the Fund's
Prospectus shall perform the portfolio management duties described
therein until the Sub-Adviser notifies the Investment Manager that one
or more other affiliates, employees, officers or agents identified in
such notice shall assume such duties as of a specific date.
(h) The Investment Manager shall provide (or use its best efforts to cause
to be provided) timely information to the Sub-Adviser regarding such
matters as the cash requirements and cash available for investment in
the Managed Portion, and all other information as may be reasonably
necessary for the Sub-Adviser to perform its responsibilities under
this Agreement.
A-2
2. (a) Under the terms of the Investment Management Agreement, the Trust
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 existence as a statutory trust organized under the laws of the
State of Delaware; the maintenance of its own books, records, and
procedures; dealing with its own shareholders; the payment of
dividends; transfer of shares, including issuance and repurchase of
shares; preparation of share certificates, if any; reports and notices
to shareholders; calling and holding of shareholders' meetings;
miscellaneous office expenses; brokerage commissions; custodian fees;
legal and accounting fees; taxes; interest and federal and state
registration fees.
(b) Directors, officers and employees of the Sub-Adviser may be directors,
officers and employees of other funds that have employed the
Sub-Adviser as sub-adviser or investment manager. Directors, officers
and employees of the Sub-Adviser who are Trustees, officers and/or
employees of the Trust, shall not receive any compensation from the
Trust for acting in such dual capacity.
3. (a) The Sub-Adviser will select brokers and dealers to effect all Fund
transactions with respect to the Managed Portion subject to the
conditions set forth herein. The Sub-Adviser may combine orders for
the Managed Portion with orders for other accounts or funds under
management. Transactions involving combined orders are allocated in a
manner deemed equitable to each account. The Sub-Adviser will place
all necessary orders with brokers, dealers, or issuers, and will
negotiate brokerage commissions, if applicable. The Sub-Adviser is
directed at all times to seek to execute transactions for the Managed
Portion (i) in accordance with any written policies, practices or
procedures that may be established by the Board or the Investment
Manager from time to time and provided to the Sub-Adviser, and (ii) as
described in the Fund's Prospectus and SAI. In placing any orders for
the purchase or sale of investments for the Fund, with respect to the
Managed Portion, the Sub-Adviser shall use its best efforts to obtain
for the Managed Portion "best execution," considering all of the
circumstances, and shall maintain records adequate to demonstrate
compliance with this requirement.
(b) Subject to the appropriate policies and procedures approved by the
Board and provided to the Sub-Adviser in writing, the Sub-Adviser may,
to the extent authorized by Section 28(e) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), cause the Managed
Portion to pay a broker or dealer that provides brokerage and research
services to the Investment Manager, the Sub-Adviser and the Managed
Portion an amount of commission for effecting a Fund transaction in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Adviser determines,
in good faith, that such amount of commission is reasonable in
relation to the value of such brokerage and research services provided
viewed in terms of that particular transaction or the Sub-Adviser's
overall responsibilities to its clients for which the Investment
Manager or the Sub-Adviser exercises investment discretion. To the
extent authorized by Section 28(e) and the Board, the Sub-Adviser
shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of such
action.
(c) Subject to applicable law and regulations, including Section 17(e) of
the 1940 Act and Rule 17e-1 thereunder, the Sub-Adviser is authorized
to place orders for the purchase and sale of securities for the
Managed Portion with brokers or dealers that are affiliated with the
Sub-Adviser. Any entity or person associated with the Investment
Manager or the Sub-Adviser that is a member of a national securities
exchange is authorized to effect any transaction on such exchange for
the account of the Fund to the extent and as permitted by Section
11(a)(1)(H) of the Exchange Act and Rule 11a2-2(T) thereunder.
4. As compensation for the services to be rendered to the Trust for the
benefit of the Fund by the Sub-Adviser under the provisions of this
Agreement, the Investment Manager shall pay to the Sub-Adviser a fee as
provided in Schedule A attached hereto.
5. The services to be rendered by the Sub-Adviser to the Trust for the
benefit of the Fund 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 materially
impaired thereby.
6. (a) 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 Trust or to any other investment company,
corporation, association, firm or individual.
(b) Neither the Investment Manager, the Trust nor the Fund shall use the
Sub-Adviser's actual or fictitious name(s), mark(s), derivative(s)
and/or logo(s) (or that of any affiliate of the Sub-Adviser, other
than that of the Fund, the Trust, or any affiliate of the Investment
Manager that is an affiliate of the Sub-Adviser solely by reason of
the Sub-Adviser's provision of services pursuant to this Agreement) or
otherwise refer to the Sub-Adviser in any materials related to the
Trust or the Fund distributed to third parties, including the Fund's
shareholders, without prior review and written approval by or on
behalf of the Sub-Adviser, which may not be unreasonably withheld or
delayed. Upon termination
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of this Agreement, the Investment Manager, the Trust and the Fund,
shall, to the extent applicable and as soon as is reasonably possible,
cease to use the Sub-Adviser's actual or fictitious name(s), mark(s),
derivative(s) and/or logo(s) in materials related to the Fund.
(c) The Sub-Adviser shall not use the Investment Manager's name (or that
of any affiliate of the Investment Manager, other than that of any
affiliate of the Sub-Adviser that is an affiliate of the Investment
Manager solely by reason of the Sub-Adviser's provision of services
pursuant to this Agreement) or otherwise refer to the Investment
Manager in any materials related to the Trust or the Fund distributed
to third parties, including the Fund's shareholders, without prior
review and written approval by the Investment Manager, which may not
be unreasonably withheld or delayed. Upon termination of this
Agreement, the Sub-Adviser, shall, to the extent applicable and as
soon as is reasonably possible, cease to use the actual or fictitious
name(s), mark(s), derivative(s) and/or logo(s) of the Trust and the
Fund.
(d) This Section 6 applies solely to materials related to the Fund and the
Trust only, and not to other products or relationships between the
Sub-Adviser and the Investment Manager.
7. (a) In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard in the performance of its duties as Sub-Adviser to
the Trust on behalf of the Fund, neither the Sub-Adviser nor any of
its officers, directors, employees or agents (collectively,
"Sub-Adviser Related Persons") shall be liable to the Trust, the Fund,
the Investment Manager or any shareholder of the Trust 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. The Sub-Adviser makes
no representation or warranty, express or implied, that any level of
performance or investment results will be achieved by the Managed
Portion or the Fund, or that the Managed Portion or the Fund will
perform comparably with any standard or index, including other clients
of the Sub-Adviser, whether public or private. Subject to the first
sentence of this Section 7(a), the Sub-Adviser shall not be
responsible for any loss incurred by any reason of any act or omission
of any bank, broker, the custodian bank or any administrator or
trustee whether appointed on behalf of the Investment Manager, the
Fund or the Trust. Nothing contained herein shall be deemed to waive
any liability which cannot be waived under applicable law, including
applicable U.S. state and federal securities laws, ERISA and the
Financial Services and Markets Act 2000 of the United Kingdom ("FSMA")
or any rules or regulations adopted under any of those laws.
(b) The Investment Manager shall indemnify Sub-Adviser Related Persons to
the fullest extent permitted by law against any and all loss, damage,
judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees, (collectively "Losses") incurred by the
Sub-Adviser or Sub-Adviser Related Persons arising from or in
connection with this Agreement or the performance by the Sub-Adviser
or Sub-Adviser Related Persons of its or their duties hereunder so
long as such Losses arise out of the Investment Manager's willful
misfeasance, bad faith, gross negligence, or reckless disregard in
performing its responsibilities hereunder, including, without
limitation, such Losses arising under any applicable law or that may
be based upon any untrue statement of a material fact contained in the
Trust's Registration Statement, or any amendment thereof or any
supplement thereto, or the omission to state therein a material fact
that was known or that should have been known and was required to be
stated therein or necessary to make the statements therein not
misleading, unless such statement or omission was made in reasonable
reliance upon information furnished to the Investment Manager or the
Trust by the Sub-Adviser or a Sub-Adviser Related Person specifically
for inclusion in the Registration Statement or any amendment thereof
or supplement thereto, except to the extent any such Losses referred
to in this paragraph (b) result from willful misfeasance, bad faith,
gross negligence or reckless disregard on the part of the Sub-Adviser
or a Sub-Adviser Related Person in the performance of any of its
duties under, or in connection with, this Agreement.
(c) The Sub-Adviser shall indemnify the Investment Manager and its
affiliates and its or their controlling persons, officers, directors,
employees, agents, legal representatives and persons controlled by it
(collectively, "Investment Manager Related Persons") to the fullest
extent permitted by law against any and all Losses incurred by the
Investment Manager or Investment Manager Related Persons arising from
or in connection with this Agreement or the performance by the
Investment Manager or Investment Manager Related Persons of its or
their duties hereunder so long as such Losses arise out of the
Sub-Adviser's willful misfeasance, bad faith, gross negligence, or
reckless disregard in performing its responsibilities hereunder,
including, without limitation, such Losses arising under any
applicable law or that may be based upon any untrue statement of a
material fact contained in the Trust's Registration Statement, or any
amendment thereof or any supplement thereto, or the omission to state
therein a material fact that was known or that should have been known
and was required to be stated therein or necessary to make the
statements therein not misleading, if such statement or omission was
made in reasonable reliance upon information furnished to the
Investment Manager or the Trust by the Sub-Adviser or a Sub-Adviser
Related Person specifically for inclusion in the Registration
Statement or any amendment thereof or supplement thereto, except to
the extent any such Losses referred to in this paragraph (c) result
from willful misfeasance, bad faith, gross negligence or reckless
disregard on the part of the Investment Manager or an Investment
Manager Related Person in the performance of any of its duties under,
or in connection with, this Agreement.
A-4
8. (a) This Agreement shall be executed and become effective as of the date
written below; provided, however, that this Agreement shall not become
effective with respect to the Fund unless it has first been approved
in the manner required by the 1940 Act and the rules thereunder or in
accordance with exemptive or other relief granted by the Securities
and Exchange Commission (the "SEC") or its staff. This Agreement shall
continue in effect for a period of two (2) 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 Fund and only
if the terms and the renewal hereof have been approved by the vote of
a majority of those Trustees of the Trust who are not parties hereto
or "interested persons" of the Trust, the Fund, or any party hereto,
cast in person at a meeting called for the purpose of voting on such
approval.
(b) No amendment to this Agreement shall be effective unless approved in
the manner required by the 1940 Act and the rules thereunder or in
accordance with exemptive or other relief granted by the SEC or its
staff.
(c) This Agreement may be terminated (i) by the Investment Manager at any
time, without the payment of a penalty, on ninety (90) days' written
notice to the Sub-Adviser of the Investment Manager's intention to do
so and (ii) by the Trust at any time, without the payment of a
penalty, on sixty (60) days' written notice to the Sub-Adviser of the
Trust's intention to do so pursuant to action by the Board or pursuant
to the vote of a majority of the outstanding voting securities of the
Fund. The Sub-Adviser may terminate this Agreement at any time,
without the payment of a penalty, on ninety (90) days' written notice
to the Investment Manager and the Trust 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 (i) any obligation arising out of or relating
to a breach of this Agreement committed prior to such termination,
(ii) 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, and (iii) any indemnification obligation provided
in Paragraph 7 hereof. This Agreement shall automatically terminate in
the event of its assignment or upon the termination of the Investment
Management Agreement.
9. Any information and advice furnished by either party to this Agreement to
the other party shall be treated as confidential and shall not be disclosed to
third parties without the consent of the other party hereto. Notwithstanding the
foregoing, information shall not be subject to such confidentiality obligations
if it:
(i) is already known to the receiving party at the time it is
obtained (other than through previous disclosure by the
protected party or by a party known by the receiving party to be
bound by a confidentiality obligation to the protected party);
(ii) is or becomes publicly known or available through no wrongful
act of the receiving party;
(iii) is rightfully received from a third party who, to the best of
the receiving party's knowledge, is not under a duty of
confidentiality;
(iv) is required to be disclosed by the receiving party pursuant to a
requirement of a court order, subpoena, governmental or
regulatory agency or law (provided the receiving party provides
the protected party written notice of such requirement, to the
extent such notice is permitted);
(v) is relevant to the defense of any claim or cause of action
asserted against the receiving party (provided the receiving
party provides the protected party with sixty (60) days' written
notice of any disclosure if practicable or such lesser amount as
may be necessary and provided such notice does not prejudice the
receiving party); or
(vi) has been or is independently developed or obtained by the
receiving party.
The Sub-Adviser shall not disclose any "nonpublic personal information" (as
such term is defined in Regulation S-P, including any amendments thereto)
pertaining to the customers of the Trust or a client of the Investment Manager
to any third party or use such information other than for the purpose of
providing the services contemplated by this Agreement.
10. The Sub-Adviser represents, warrants and agrees that:
(a) The Sub-Adviser: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act,
the Advisers Act or other law, regulation or order from performing the
services contemplated by this Agreement; (iii) to the best of its
knowledge, has met and will seek to continue to meet for so long as
this Agreement remains in effect, any other applicable federal or
state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the
authority to enter into and perform the services contemplated by this
Agreement; and (v) will promptly notify the Investment Manager of the
occurrence of any event that would disqualify the Sub-Adviser from
serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise. The Sub-Adviser will also
promptly notify the Fund and the Investment Manager if it is served or
otherwise receives notice of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public
board or body, involving the affairs of the Fund, provided, however,
that routine regulatory examinations that do not specifically relate
to the Managed Portion or the Fund shall not be required to be
reported by this provision.
A-5
(b) The Sub-Adviser has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and will provide the
Investment Manager and the Board with a copy of such code of ethics,
together with evidence of its adoption. In accordance with the
requirements of Rule 17j-1, the Sub-Adviser shall certify to the
Investment Manager that the Sub-Adviser has complied in all material
respects with the requirements of Rule 17j-1 during the previous year
and that there has been no material violation of the Sub-Adviser's
code of ethics relating to the services the Sub-Adviser performs under
this Agreement or, if such a material violation has occurred, that
appropriate action was taken in response to such violation. Upon the
written request of the Investment Manager, the Sub-Adviser shall
provide to the Investment Manager, its employees or its agents all
information required by Rule 17j-1(c)(1) relating to the approval by
the Fund's Board of Trustees of the Sub-Adviser's code of ethics
relating to the services the Sub-Adviser performs under this
Agreement.
(c) The Sub-Adviser has provided the Investment Manager with a copy of its
Form ADV at least forty-eight (48) hours prior to execution of this
Agreement, which as of the date of this Agreement is its Form ADV as
most recently filed with the SEC, and promptly will furnish a copy of
all amendments to the Investment Manager at least annually. Such
amendments shall reflect all changes in the Sub-Adviser's
organizational structure, professional staff or other significant
developments affecting the Sub-Adviser, as required by the Advisers
Act.
(d) The Sub-Adviser will notify the Trust and the Investment Manager of
any event that would be deemed an assignment of this Agreement, with
the exception of any assignment by or with respect to the Investment
Manager, or change of control of the Sub-Adviser, as applicable, and
any changes in the key personnel who are the portfolio manager(s) of
the Managed Portion prior to or promptly after such change. The
Investment Manager will notify the Sub-Adviser of any event that would
be deemed an assignment of this Agreement, with the exception of any
assignment by or with respect to the Sub-Adviser, or change of control
of the Investment Manager, as applicable. The Sub-Adviser agrees to
bear all reasonable expenses of the Fund, if any, arising out of an
assignment of this Agreement or change in control of the Sub-Adviser
so long as the assignment is not by or with respect to the Investment
Manager.
(e) The Sub-Adviser agrees to maintain an appropriate level of errors and
omissions or professional liability insurance coverage as shall be
reasonably necessary in light of its obligations under this Agreement.
11. This Agreement shall extend to and bind the successors of the parties
hereto. Nothing in this Agreement, express or implied, is intended to or
shall (a) confer on any person other than the parties hereto and their
respective successors or permitted assigns any rights (including third
party beneficiary rights), remedies, obligations or liabilities under or
by reason of this Agreement, or (b) constitute the parties hereto as
partners or as participants in a joint venture.
12. For the purposes of this Agreement, the terms "vote of a majority of the
outstanding voting securities," "interested person," "affiliated person,"
and "assignment" shall have the meanings given them in the 1940 Act,
subject, however to such exemptions as may be granted by the SEC and its
staff under the 1940 Act.
A-6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers and duly attested as of the _____ day
of __________, 2004.
DELAWARE INTERNATIONAL DELAWARE MANAGEMENT COMPANY,
ADVISERS LIMITED A SERIES OF DELAWARE MANAGEMENT
BUSINESS TRUST
By:_____________________________________ By___________________________________
Name: Name:
Title: Title:
Attest:_________________________________ Attest:______________________________
Name:
Title:
Agreed to and accepted as of the day and year first above written:
OPTIMUM INTERNATIONAL FUND
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
A-7
EXHIBIT A
TO
SUB-ADVISORY AGREEMENT
______________
FEE SCHEDULE
______________
The compensation payable to Sub-Adviser for its services hereunder, pursuant
to Paragraph 4 of the Sub-Advisory Agreement shall be calculated and paid as
follows:
The total fee will be 0.40% (40 basis points) (on an annual basis) of the
total assets within the Managed Portion(s) sub-advised by Sub-Adviser.
The fee shall be payable on the Managed Portion's average daily net assets
monthly to the Sub-Adviser on or before the tenth (10th) day of the next
succeeding calendar month. If this Agreement becomes effective or terminates
before the end of any month, the investment management fee for the period from
the effective date to the end of such month or from the beginning of such month
to the date of termination, as the case may be, shall be prorated according to
the proration which such period bears to the full month in which such
effectiveness or termination occurs. Each month, the Investment Manager will
provide the Sub-Adviser with a worksheet accompanying payment of the
sub-advisory fee that sets forth the computation of such sub-advisory fee.
A-8
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PX-OPT-DIAL [--] IVES 7/04
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OPTIMUM INTERNATIONAL FUND SPECIAL SHAREHOLDER MEETING - AUGUST 31, 2004
The undersigned hereby appoints Richelle S. Maestro, Michael P. Bishof and David P. O'Connor, or any of them, each with the right of
substitution, proxies of the undersigned at the Special Meeting of Shareholders of the Fund named above, a series of the Trust (as
defined in the proxy statement), to be held at the offices of Delaware Investments located at 2001 Market Street, 2nd Floor
Auditorium, Philadelphia, Pennsylvania 19103, on Tuesday, August 31, 2004 at 3:00 P.M. (E.T.), 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 reverse side of this form. Please
refer to the proxy statement for a discussion of these matters.
THIS PROXY CARD IS ONLY VALID WHEN SIGNED AND DATED. TO SECURE
THE LARGEST POSSIBLE REPRESENTATION AND AVOID THE ADDITIONAL
EXPENSE OF FURTHER SOLICITATION, PLEASE DATE AND SIGN NAME OR
NAMES BELOW AS PRINTED ON THIS CARD TO AUTHORIZE THE VOTING OF
YOUR SHARES AS INDICATED. WHERE SHARES ARE REGISTERED WITH
JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS
EXECUTOR, ADMINISTRATOR, TRUSTEE OR OTHER REPRESENTATIVE
SHOULD GIVE FULL TITLE AS SUCH.
--------------------------------------------------------------
--------------------------------------------------------------
Signature(s) (Joint Owners) (PLEASE SIGN WITHIN BOX)
Date _______________, 2004
- ------------------------------------------------------------------------------------------------------------------------------------
Please fill in the box(es) as shown using a black or blue ink or number 2 pencil. PLEASE DO NOT USE FINE POINT PENS.
BY SIGNING AND DATING THIS CARD, YOU AUTHORIZE THE PROXIES TO VOTE THE PROPOSALS AS MARKED, OR IF NOT MARKED, TO VOTE "FOR" THE
PROPOSALS, AND TO USE THEIR DISCRETION TO VOTE ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING, OR AT ANY POSTPONEMENT
OR ADJOURNMENT THEREOF. PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
FOR AGAINST ABSTAIN
1. To approve a Sub-Advisory Agreement between Delaware Management Company and |_| |_| |_|
Delaware International Advisers Ltd.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.