UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934 (Amendment
Filed by the Registrant [x]
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[_] Preliminary Proxy Statement [_] Soliciting Material Under
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| ☐ | | Preliminary Proxy Statement |
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| ☐ | | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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| ☑ | | Definitive Proxy Statement |
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| ☐ | | Definitive Additional Materials |
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| ☐ | | Soliciting Material Pursuant to §240.14a-12 |
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional MaterialsDelaware Group
DELAWARE GROUP ADVISER® Adviser Funds
Delaware Group Cash Reserve
Delaware Group Equity FundsFUNDS
DELAWARE GROUP CASH RESERVE
DELAWARE GROUP EQUITY FUNDS I
Delaware Group Equity Funds
DELAWARE GROUP EQUITY FUNDS II
Delaware Group Equity Funds III
Delaware Group Equity Funds
DELAWARE GROUP EQUITY FUNDS IV
Delaware Group Equity Funds
DELAWARE GROUP EQUITY FUNDS V
Delaware Group Foundation Funds
Delaware Group Global
DELAWARE GROUP FOUNDATION FUNDS
DELAWARE GROUP GLOBAL & International Funds
Delaware Group Government Fund
Delaware Group Income Funds
Delaware Group Limited-Term Government Funds
Delaware Group State Tax-Free Income Trust
Delaware Group Tax-Free Fund
Delaware Group Tax-Free Money Fund
Delaware PooledINTERNATIONAL FUNDS
DELAWARE GROUP GOVERNMENT FUND
DELAWARE GROUP INCOME FUNDS
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX FREE FUND
DELAWARE POOLED® TrustTRUST
DELAWARE VIP® TRUST
VOYAGEUR INSURED FUNDS
VOYAGEUR INTERMEDIATE TAX FREE FUNDS
VOYAGEUR MUTUAL FUNDS
VOYAGEUR MUTUAL FUNDS II
VOYAGEUR MUTUAL FUNDS III
VOYAGEUR TAX FREE FUNDS
Voyageur Insured FundsVoyageur Intermediate Tax Free FundsVoyageur Mutual FundsVoyageur Mutual Funds IIVoyageur Mutual Funds IIIVoyageur Tax Free Funds------------------------------------------------------------------------------------------------------------------------------------------------------(
NameNames of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if
Other Thanother than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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| ☐ | | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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| ☐ | | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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[x] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.1) Title
DELAWARE GROUP® ADVISER FUNDS
DELAWARE GROUP CASH RESERVE
DELAWARE GROUP EQUITY FUNDS I
DELAWARE GROUP EQUITY FUNDS II
DELAWARE GROUP EQUITY FUNDS IV
DELAWARE GROUP EQUITY FUNDS V
DELAWARE GROUP FOUNDATION FUNDS
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS
DELAWARE GROUP GOVERNMENT FUND
DELAWARE GROUP INCOME FUNDS
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX FREE FUND
DELAWARE POOLED® TRUST
DELAWARE VIP® TRUST
VOYAGEUR INSURED FUNDS
VOYAGEUR INTERMEDIATE TAX FREE FUNDS
VOYAGEUR MUTUAL FUNDS
VOYAGEUR MUTUAL FUNDS II
VOYAGEUR MUTUAL FUNDS III
VOYAGEUR TAX FREE FUNDS
100 Independence
610 Market Street
Philadelphia, PA 19106-2354
October 22, 2021
Dear Shareholder:
A joint special meeting of the shareholders of each classtrust listed above in the Delaware Funds® by Macquarie complex (each individually, a “Trust,” and collectively, the “Trusts”) and each series of securitieseach Trust as set forth on Appendix A (each individually, a “Fund,” and collectively the “Funds”) will be held via webcast on December 17, 2021 at 10:30 am, ET (the “Meeting”). You are receiving this letter because you were a shareholder of record of at least one Fund as of October 4, 2021 (the “Record Date”).
The Meeting is being held to approve to the election of thirteen (13) trustees to the Board of Trustees of each Trust.
The Board of Trustees of each Trust has approved, and unanimously recommends that you vote FOR, all trustee nominees.
Detailed information about the proposal is contained in the enclosed materials. Please review and consider the enclosed materials carefully, and then please take a moment to vote.
Due to the coronavirus outbreak (COVID-19) and to support the health and well-being of our shareholders, employees, and community, the Meeting will be a completely virtual meeting of shareholders, which transaction applies:
____________________________________________________________________________________
2) Aggregate numberwill be conducted exclusively by webcast. You are entitled to participate in the Meeting only if you were a shareholder of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuantto Exchange Act Rule 0-11 (set forth the
amount on which the filing fee iscalculated 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 parta Fund as of the feeclose of business on the Record Date, or if you hold a valid proxy for the Meeting. Shareholders will be able to attend and participate in the Special Meeting online, vote electronically and submit questions prior to and during the meeting by visiting https://meetnow.global/MV5Z5XA on the meeting date and time described in the accompanying proxy statement. To participate in the Special Meeting, you will need to log on using the control number from your proxy card or Meeting notice. The control number can be found in the shaded box. There is offsetno physical location for the Meeting.
Whether or not you plan to attend the virtual Meeting, your vote is needed.
Attendance at the Meeting will be limited to shareholders of the Fund as providedof the close of business on Record Date. You are entitled to notice of, and to vote at, the Meeting and any adjournment of the Meeting, even if you no longer hold shares of the Fund. Your vote is important no matter how many shares you own. It is important that your vote be received no later than the time of the Meeting.
Voting is quick and easy. Everything you need is enclosed. You may vote by Exchange Act Rule0-11(a)(2)completing and identifyreturning your proxy card/voting instruction form in the filingenclosed postage-paid return envelope, by calling the toll-free telephone number listed on the enclosed proxy card/voting instruction form, or by visiting the Internet website listed on the enclosed proxy card/voting instruction form. You may receive more than one set of proxy materials if you hold shares in more than one account. Please be sure to vote each proxy card/voting instruction form you receive. If we do not hear from you, our proxy solicitor, Computershare, may contact you. This will ensure that your vote is counted even if you cannot or do not wish to attend the Meeting. If you have any questions about the proposal or how to vote, you may call Computershare at 866-963-6125 and a representative will assist you.
Your vote is important to us. Thank you for which
the offsetting fee was paidpreviously. Identify the previous filing by registration statement number,or the form or
scheduleyour response and the date of its filing.for your investment.
|
| Sincerely, |
Shawn K. Lytle |
| President of the Trusts |
____________________________________________________________________________________ 1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
____________________________________________________________________________________
3) Filing Party:
4) Date Filed:
PROXY MATERIALS
DELAWARE
INVESTMENTSGROUP® FAMILY OFADVISER FUNDS
Delaware Group
DELAWARE GROUP CASH RESERVE
DELAWARE GROUP EQUITY FUNDS I
DELAWARE GROUP EQUITY FUNDS II
DELAWARE GROUP EQUITY FUNDS IV
DELAWARE GROUP EQUITY FUNDS V
DELAWARE GROUP FOUNDATION FUNDS
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS
DELAWARE GROUP GOVERNMENT FUND
DELAWARE GROUP INCOME FUNDS
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX FREE FUND
DELAWARE POOLED® Adviser Funds
Delaware Group Cash Reserve
Delaware Group Equity Funds I
Delaware Group Equity Funds II
Delaware Group Equity Funds III
Delaware Group Equity Funds IV
Delaware Group Equity Funds V
Delaware Group Foundation Funds
Delaware Group Global & International Funds
Delaware Group Government Fund
Delaware Group Income Funds
Delaware Group Limited-Term Government Funds
Delaware Group State Tax-Free Income Trust
Delaware Group Tax-Free Fund
Delaware Group Tax-Free Money Fund
Delaware PooledTRUST
DELAWARE VIP® TRUST
VOYAGEUR INSURED FUNDS
VOYAGEUR INTERMEDIATE TAX FREE FUNDS
VOYAGEUR MUTUAL FUNDS
VOYAGEUR MUTUAL FUNDS II
VOYAGEUR MUTUAL FUNDS III
VOYAGEUR TAX FREE FUNDS
100 Independence
610 Market Street
Philadelphia, PA 19106-2354
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
|
NOTICE IS HEREBY GIVENTrust1
Voyageur Insured Funds
Voyageur Intermediate Tax Free Funds
Voyageur Mutual Funds
Voyageur Mutual Funds II
Voyageur Mutual Funds III
Voyageur Tax Free FundsDear Shareholder:
I am writing to let you know that a joint special meeting (the “Meeting”) of the shareholders of each trust listed above of the Delaware Investments funds listed above (theFunds by Macquarie complex (each individually, a “Trust,” and collectively, the “Trusts”) will be held at the offices of Stradley Ronon Stevens & Young, LLP, 2005 Market Street, 21st Floor, Philadelphia, Pennsylvania 19103, on November 12, 2009 at 3:00 p.m., Eastern time. The purpose of the Meeting is to vote on several important proposals that affect the Trusts and each series of their separate serieseach Trust as set forth on Appendix A (each individually, a “Fund”“Fund,” and collectively the “Funds”) will be held via webcast on December 17, 2021 at 10:30 am ET (the “Meeting”). At the Meeting, shareholders will be asked to consider and vote upon the following proposal (the “Proposal”) and to act upon any other business which may properly come before the Meeting or any adjournment or postponement thereof:
| | | | Shareholders Entitled to Vote |
Proposal: | | To Elect Thirteen (13) Trustees to the Board of Trustees of each Trust | | All shareholders of each Trust, voting separately |
The Board of Trustees of each Trust (collectively, the “Board”) has approved, and unanimously recommends that you vote FOR, all nominees in the Proposal.
The Proposal is discussed in greater detail in the enclosed joint proxy statement. Please read the joint proxy statement carefully for information concerning the Proposal. The enclosed materials contain the Notice of Meeting of Shareholders, joint proxy statement and proxy card(s)/voting instruction form(s). A proxy card/voting instruction form is, in essence, a ballot. When you vote your proxy, it tells us how you wish to vote on important issues relating to your Fund(s). If you complete, sign and return the proxy card/voting instruction form, we will vote it as you indicated. If you simply sign, date and return the enclosed proxy card/voting instruction form, but do not specify a vote, your proxy will be voted FOR the Proposal and FOR each trustee nominee.
Shareholders of record of the Fund at the close of business on October 4, 2021 (the “Record Date”) are entitled to receive notice of, and to vote at, the Meeting and any adjournments, postponements or delays thereof. It is important that your shares be voted at the Meeting. You may vote by telephone, Internet or by completing the enclosed proxy card(s)/voting instruction form(s) and returning it in the accompanying envelope as promptly as possible. You may also vote by attending the Meeting via webcast.
REGARDLESS OF WHETHER YOU PLAN TO PARTICIPATE IN THE MEETING VIA WEBCAST, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD/VOTING INSTRUCTION FORM IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE OR VOTE BY TELEPHONE OR THROUGH THE INTERNET PURSUANT TO THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD/VOTING INSTRUCTION FORM.
If you attend the Meeting via webcast and wish to vote at that time, you will be able to do so and your investment in one or morevote at the Meeting will revoke any proxy you may have submitted. Merely attending the Meeting via webcast, however, will not revoke a previously given proxy.
Due to the coronavirus outbreak (COVID-19) and to support the health and well-being of them. Theour shareholders, employees, and community, the Meeting will be held concurrentlya completely virtual meeting of shareholders, which will be conducted exclusively by webcast. You are entitled to participate in the Meeting only if you were a shareholder of a Fund as of the close of business on the Record Date, or if you hold a valid proxy for the Meeting. Shareholders will be able to attend and participate in the Special Meeting online, vote electronically and submit questions prior to and during the meeting by visiting https://meetnow.global/MV5Z5XA on the meeting date and time described in the accompanying proxy statement. To participate in the Special Meeting, you will need to log on using the control number from your proxy card or Meeting notice. The control number can be found in the shaded box. There is no physical location for the Meeting.
YOUR VOTE IS EXTREMELY IMPORTANT. NO MATTER HOW MANY SHARES YOU OWN, PLEASE SEND IN THE PROXY CARD/VOTING INSTRUCTION FORM, OR VOTE BY TELEPHONE OR THE INTERNET TODAY.
Important Notice Regarding the Internet Availability of Proxy Materials for the Meeting. This Notice and the joint proxy statement and prospectus are available on the internet at delawarefunds.com/DFBMproxy. On this webpage, you will be able to access the Notice, the joint proxy statement and prospectus, any accompanying materials and any amendments or supplements to the foregoing material that are required to be furnished to shareholders. We encourage you to access and review all of the important information contained in the proxy materials before voting.
|
By Order of the Boards of Trustees |
| Shawn K. Lytle |
President of the Trusts October 22, 2021 |
JOINT PROXY STATEMENT
For
DELAWARE GROUP® ADVISER FUNDS
DELAWARE GROUP CASH RESERVE
DELAWARE GROUP EQUITY FUNDS I
DELAWARE GROUP EQUITY FUNDS II
DELAWARE GROUP EQUITY FUNDS IV
DELAWARE GROUP EQUITY FUNDS V
DELAWARE GROUP FOUNDATION FUNDS
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS
DELAWARE GROUP GOVERNMENT FUND
DELAWARE GROUP INCOME FUNDS
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX FREE FUND
DELAWARE POOLED® TRUST
DELAWARE VIP® TRUST
VOYAGEUR INSURED FUNDS
VOYAGEUR INTERMEDIATE TAX FREE FUNDS
VOYAGEUR MUTUAL FUNDS
VOYAGEUR MUTUAL FUNDS II
VOYAGEUR MUTUAL FUNDS III
VOYAGEUR TAX FREE FUNDS
100 Independence
610 Market Street
Philadelphia, PA 19106-2354
Dated: October 22, 2021
JOINT PROXY STATEMENT FOR THE JOINT SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 17, 2021
|
This joint proxy statement (“Joint Proxy Statement”) is being furnished to you in connection with the meetingssolicitation of shareholdersproxies by the Boards of other funds withinTrustees (each a “Board,” and collectively, the Delaware Investments Family“Board” or the “Boards”) of Funds. Asthe each of the trusts listed above (each individually, a shareholder,“Trust,” and collectively, the “Trusts”) on behalf of each series of each Trust as set forth on Appendix A (each individually, a “Fund,” and collectively the “Funds”) to be held via webcast on December 17, 2021 at 10:30 am ET (the “Meeting”).
The Joint Proxy Statement provides you have the opportunity to voice your opinionwith information you should review before voting on the matters that affect your Fund(s)listed in the Notice of the Joint Special Meeting of Shareholders. Much of the information in this Joint Proxy Statement is required under rules of the U.S. Securities and Exchange Commission (“SEC”). If there is anything you do not understand, please contact Computershares at 866-963-6125. This package contains informationJoint Proxy Statement, the Notice of the Joint Special Meeting of Shareholders and related proxy card(s)/voting instruction form(s) will be mailed to shareholders of the Funds beginning on or about the proposalsOctober 25, 2021.
Proposal/Shareholders Entitled to Vote
The Meeting is being called to ask shareholders to consider and
the materials to use when voting by mail, telephone, or through the Internet.____________________
1 | | Solely on behalf of Delaware REIT Fund (also known as The Real Estate Investment Trust Portfolio), a series of Delaware Pooled Trust. |
Please read the enclosed materials and cast your vote on the proxy card(s)following proposal (the “Proposal”), which is described more fully below:
| | | | Shareholders Entitled to Vote |
Proposal: | | To Elect Thirteen (13) Trustees to the Board of Trustees of each Trust | | All shareholders of each Trust, voting separately |
The Board has unanimously approved, and recommends that you vote FOR, all nominees.
Shareholders of record of the Fund as of the close of business on October 4, 2021 (the “Record Date”) are entitled to attend and to vote at the Meeting. As of the Record Date, the number of shares of each Fund outstanding and entitled to vote at the Meeting is set forth on Appendix B.
Due to the coronavirus outbreak (COVID-19) and to support the health and well-being of our shareholders, employees, and community, the Meeting will be conducted exclusively via webcast. Instructions on how to vote whether you expect to attend the Meeting or by telephone or vianot are provided under the Internet.section “VOTING PROCEDURES—How do I vote?” section of this Joint Proxy Statement.
TO ASSURE THE PRESENCE OF A QUORUM AT THE MEETING, PLEASE PROMPTLY EXECUTE AND RETURN THE ENCLOSED PROXY CARD(S)/VOTING INSTRUCTION FORM(S). A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. ALTERNATIVELY, YOU MAY VOTE THROUGH THE INTERNET AT THE WEBSITE ADDRESS PRINTED ON THE ENCLOSED PROXY CARD/VOTING INSTRUCTION FORM.
2Please vote your shares promptly.
IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL
Below is a brief overview of the matter to be voted on at the Meeting. Your vote is
extremely important, no matter how large or small your holdings may be.
The proposals have been carefully reviewed by Please read the Boardsfull text of this Joint Proxy Statement, which contains additional information about the Proposal, and keep it for future reference.
PROPOSAL: TO ELECT THIRTEEN (13) TRUSTEES TO THE BOARD OF TRUSTEES OF EACH TRUST
Why am I being asked to elect new Trustees?
Currently, the Board of Trustees of
the Trusts. The Trustees, all but oneeach Trust has ten members, nine of whom are
not affiliated with Delaware Investments, are responsible for protecting your interests as a shareholder.Independent Trustees (as defined below). The
Trustees believe these proposals are inBoard has determined to increase the
best interests of shareholders.The Trustees recommend that you vote FOR each proposal.
The enclosed Q&A is provided to assist you in understanding the proposals. Eachsize of the proposals is described in greater detail inBoard of each Trust to thirteen members, to be comprised of the enclosed Proxy Statement.
Voting is quickten existing trustees of each Trust and easy. Everything you need is enclosed.To cast your vote, simply completethree nominees who served as trustees of the proxy card(s) enclosed in this package. Be sureIvy Funds complex prior to sign the card(s) before mailing it (them) inacquisition of the postage-paid envelope. You may also vote your sharesparent company of the Ivy Funds’ investment adviser, Waddell & Reed Financial, Inc., by touch-tone telephone or throughMacquarie Asset Management, the Internet. Simply call the toll-free number or visit the Web site indicated on your proxy card(s), enter the control number found on the card(s),asset management division of Macquarie Group (“Macquarie”) and follow the recorded or online instructions.
If you have any questions before you vote, please call Computershare Fund Services, Inc. (“Computershare”),an affiliate of the Funds’ proxy solicitor, at 877 520-8548. Computershare will help you get your vote in quickly. You may also receive a telephone call from Computershare reminding youinvestment adviser, Delaware Management Company (“DMC”). In order to vote your shares. Thank you for your participation in this important initiative.
Sincerely,
/s/ Patrick P. Coyne
Patrick P. Coyne
Chairman, President, and Chief Executive Officer
September 25, 2009
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
To be held on November 12, 2009
Important notice regardingsatisfy the availabilityboard composition requirements of proxy materials for the shareholder
meeting to be held on November 12, 2009: this proxy statement is available at
www.delawareinvestments.com/proxy.
To the Shareholders of:
Delaware Group® Adviser Funds
Delaware Group Cash Reserve
Delaware Group Equity Funds I
Delaware Group Equity Funds II
Delaware Group Equity Funds III
Delaware Group Equity Funds IV
Delaware Group Equity Funds V
Delaware Group Foundation Funds
Delaware Group Global & International Funds
Delaware Group Government Fund
Delaware Group Income Funds
Delaware Group Limited-Term Government Funds
Delaware Group State Tax-Free Income Trust
Delaware Group Tax-Free Fund
Delaware Group Tax-Free Money Fund
Delaware Pooled®Trust1
Voyageur Insured Funds
Voyageur Intermediate Tax Free Funds
Voyageur Mutual Funds
Voyageur Mutual Funds II
Voyageur Mutual Funds III
Voyageur Tax Free Funds
NOTICE IS HEREBY GIVEN that a joint special meeting (the “Meeting”) of shareholders of the open-end registered investment companies listed above (each, a “Trust” and collectively, the “Trusts”), along with certain other funds within the Delaware Investments® Family of Funds, each of which is issuing proxy solicitation materials, will be held at the offices of Stradley Ronon Stevens & Young, LLP, 2005
____________________
1 | | Solely on behalf of Delaware REIT Fund (also known as The Real Estate Investment Trust Portfolio), a series of Delaware Pooled Trust. |
Market Street, 21st Floor, Philadelphia, Pennsylvania 19103 on November 12, 2009 at 3:00 p.m., Eastern time. The Meeting is being called to vote on the following proposals:
| 1. | | To elect a Board of Trustees for each of the Trusts. The nominees for election to the Boards of Trustees, all of whom are currently members of the Boards of Trustees, are: |
Thomas L. Bennett | Ann R. Leven |
Patrick P. Coyne | Thomas F. Madison |
John A. Fry | Janet L. Yeomans |
Anthony D. Knerr | J. Richard Zecher |
Lucinda S. Landreth | |
| 2. | | To approve a new investment advisory agreement for each separate series of the Trusts (each, a “Fund” and collectively, the “Funds”). |
Shareholders of record of the Trusts as of the close of business on September 18, 2009 are entitled to notice of, and to vote at, the Meeting or any adjournment thereof.Whether or not you plan to attend the Meeting, please vote your shares by returning the proxy card(s) by mail in the enclosed postage-paid envelope provided, or by voting by telephone or over the Internet. Your vote is important.
By order of the Boards of Trustees, |
|
/s/ Patrick P. Coyne |
Patrick P. Coyne |
Chairman, President, and Chief Executive Officer |
September 25, 2009
To secure the largest possible representation and to save the expense of further mailings, please mark your proxy card(s), sign, and return it (them) in the enclosed envelope, which requires no postage if mailed from the United States. If you prefer, you may instead vote by telephone or the Internet. You may revoke your proxy at any time before or at the Meeting or vote in person if you attend the Meeting, as provided in the attached Proxy Statement.
SOME SHAREHOLDERS HOLD SHARES IN MORE THAN ONE FUND AND MAY RECEIVE PROXY CARDS AND/OR PROXY MATERIALS FOR EACH FUND OWNED. PLEASE SIGN AND PROMPTLY RETURN EACH PROXY CARD IN THE SELF-ADDRESSED ENVELOPE REGARDLESS OF THE NUMBER OF SHARES OWNED.
PROXY STATEMENT
TABLE OF CONTENTS
| | Page |
PROPOSAL 1: TO ELECT A BOARD OF TRUSTEES | | 3 |
Introduction to Proposal 1 | | 3 |
Who are the Trustee Nominees? | | 3 |
How are nominees for Trustee selected? | | 4 |
How often do the Boards meet and how are the Trustees compensated? | | 5 |
Who are the principal officers of the Trusts? | | 5 |
What are the standing committees of the Boards? | | 5 |
Who are the Trusts’ independent auditors? | | 6 |
What is the required vote to elect Trustees? | | 8 |
PROPOSAL 2: TO APPROVE A NEW INVESTMENT | | |
ADVISORY AGREEMENT | | 8 |
Introduction to Proposal 2 | | 8 |
Description of the Transaction | | 9 |
Section 15(f) of the 1940 Act | | 12 |
The New Investment Advisory Agreements | | 12 |
Additional information about DMC | | 16 |
Board considerations in approving the New Investment | | |
Advisory Agreements | | 17 |
Required vote | | 28 |
VOTING INFORMATION | | 29 |
How will shareholder voting be handled? | | 29 |
How do I ensure my vote is accurately recorded? | | 29 |
May I revoke my proxy? | | 30 |
What other matters will be voted upon at the Meeting? | | 30 |
Who is entitled to vote? | | 30 |
What is the Quorum requirement? | | 30 |
Who will pay the expenses of the Meeting? | | 30 |
What other solicitations will be made? | | 31 |
Why did my household receive only one copy of this Proxy Statement? | | 32 |
How do I submit a shareholder proposal for inclusion in a Trust’s proxy | | |
statement for a future shareholder meeting? | | 32 |
How may I communicate with the Boards? | | 33 |
MORE INFORMATION ABOUT THE FUNDS | | 33 |
PRINCIPAL HOLDERS OF SHARES | | 34 |
APPENDIX A — TRUSTS AND SERIES USING THIS | | |
PROXY STATEMENT | | A-1 |
APPENDIX B — TRUSTEES OF THE TRUSTS | | B-1 |
APPENDIX C — NOMINATING AND CORPORATE | | |
GOVERNANCE COMMITTEE CHARTER | | C-1 |
APPENDIX D — FUND SHARE BENEFICIAL OWNERSHIP BY | | |
TRUSTEE NOMINEES | | D-1 |
APPENDIX E — TRUSTEE COMPENSATION | | E-1 |
APPENDIX F — PRINCIPAL OFFICERS OF THE TRUSTS | | F-1 |
APPENDIX G — AUDITOR INFORMATION | | G-1 |
APPENDIX H — PRE-APPROVAL POLICIES AND PROCEDURES | | H-1 |
APPENDIX I — FORM OF NEW INVESTMENT ADVISORY | | |
AGREEMENTS | | I-1 |
APPENDIX J — CURRENT INVESTMENT ADVISORY | | |
AGREEMENTS: DATES OF APPROVALS | | J-1 |
APPENDIX K — FEES PAID TO DMC AND AFFILIATES | | K-1 |
APPENDIX L — OTHER FUNDS ADVISED BY DMC | | L-1 |
APPENDIX M — TRUSTEES AND OFFICERS OF DMC | | M-1 |
APPENDIX N — NUMBER OF SHARES OF EACH FUND | | |
OUTSTANDING AS OF JULY 31, 2009 | | N-1 |
APPENDIX O — 1% SHARE OWNERSHIP | | O-1 |
APPENDIX P — 5% SHARE OWNERSHIP | | P-1 |
DELAWARE INVESTMENTS® FAMILY OF FUNDS
JOINT PROXY STATEMENT
Dated September 25, 2009
Delaware Group® Adviser Funds
Delaware Group Cash Reserve
Delaware Group Equity Funds I
Delaware Group Equity Funds II
Delaware Group Equity Funds III
Delaware Group Equity Funds IV
Delaware Group Equity Funds V
Delaware Group Foundation Funds
Delaware Group Global & International Funds
Delaware Group Government Fund
Delaware Group Income Funds
Delaware Group Limited-Term Government Funds
Delaware Group State Tax-Free Income Trust
Delaware Group Tax-Free Fund
Delaware Group Tax-Free Money Fund
Delaware Pooled® Trust1
Voyageur Insured Funds
Voyageur Intermediate Tax Free Funds
Voyageur Mutual Funds
Voyageur Mutual Funds II
Voyageur Mutual Funds III
Voyageur Tax Free Funds
Important notice regarding the availability of proxy materials for the shareholder
meeting to be held on November 12, 2009: this proxy statement is available at
www.delawareinvestments.com/proxy.
This joint proxy statement (the “Proxy Statement”) solicits proxies to be voted at a joint special meeting of shareholders (the “Meeting”) of the registered open-end management investment companies listed above (each, a “Trust” and collectively, the “Trusts”), along with other registered investment companies in the Delaware Investments Family of Funds, each of which is issuing proxy solicitation materials. Each of the separate funds within a Trust is referred to as a “Fund” and they are
____________________
1 | | Solely on behalf of Delaware REIT Fund (also known as The Real Estate Investment Trust Portfolio), a series of Delaware Pooled Trust. |
collectively referred to as the “Funds.” The Meeting was called by the Boards of Trustees of the Trusts (each, a “Board” and collectively, the “Boards”) to vote on the following proposals (the “Proposals”), each of which is described more fully below:
Proposal | | Who votes on the Proposal? |
1. | | To elect a Board of Trustees. | | Shareholders of each Trust, with shareholders of all Funds of such Trust voting collectively. |
| | | | |
2. | | To approve a new investment advisory agreement for each Fund. | | Shareholders of each Fund, voting separately from shareholders of each other Fund. |
The principal offices of the Trusts are located at 2005 Market Street, Philadelphia, Pennsylvania 19103. You can reach the offices of the Trusts by telephone by calling 800 523-1918. Each Trust is a Delaware statutory trust registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). A list, the Funds’ shareholders must approve the selection of the Fundstrustee nominees. Among other things, the Board considered the background and experience of each Trusttrustee nominee, including each trustee nominee’s experience with the Delaware Funds by Macquarie or the Ivy Funds, and determined that each trustee nominee would provide valuable continuity and enhance the Board’s oversight of the Funds. Information about the trustee nominees, including age, principal occupations during the past five years, and other information, such as the trustee nominees’ experience, qualifications, attributes, or skills, is set forth in Appendix A.
this Joint Proxy Statement.
VOTING PROCEDURES
Why did you send me this booklet?
You are receiving this booklet because you were a shareholder of one or more Funds as of the close of business on October 4, 2021 (the “Record Date”). This booklet includes the Joint Proxy Statement. It provides you with information you should review before providing voting instructions on the matters listed above. The words “you” and “shareholder” are used in this Joint Proxy Statement to refer to the person or entity that has voting rights or is being asked to provide voting instructions in connection with the shares.
Who is asking for my vote?
The Board has sent a Joint Proxy Statement to you and all other shareholders of record who have a beneficial interest in a Fund as of the Record Date. The Board is soliciting your vote for the Proposal discussed herein.
Who is eligible to vote?
Shareholders holding an investment in shares of any of the Funds as of the close of business on the Record Date are eligible to vote. Shareholders of the Funds on the Record Date will be entitled to one vote for each share (and a proportional fractional vote for each fraction of a share held.) No shares have cumulative voting rights in the election of Trustees.
Delaware VIP Trust (“Delaware VIP”) sells its shares only to the separate accounts of certain select insurance companies (“Participating Insurance Companies”) to fund certain variable life insurance policies and variable annuity contracts (“Policies”). These shares are currently sold only to variable life insurance separate accounts and variable annuity separate accounts (hereinafter collectively referred to as the “Variable Accounts”) as a funding vehicle for the Policies offered by the Variable Accounts of Participating Insurance Companies. Each of the Variable Accounts has a sub-account (“Sub-Account”), the assets of which are invested in shares of Delaware VIP Funds.
Owners of the Policies issued by each Participating Insurance Company (“Policyowners”) who select a portfolio for investment through a Variable Account have a beneficial interest in a Delaware VIP Fund, but do not invest directly in or hold shares of a Delaware VIP Fund. The Participating Insurance Company that uses a Delaware VIP Fund as an investment option is, in most cases, the actual shareholder of the Delaware VIP Fund and, as the legal owner of the Delaware VIP Fund’s shares, has voting power with respect to the shares. Each Participating Insurance company is
the legal owner of all Delaware VIP Fund shares held by the Variable Accounts of that Participating Insurance Company. In accordance with its view of applicable law, each Participating Insurance Company is soliciting voting instructions from its Policyowners with respect to all matters to be acted upon at the Meeting. The Policyowners permitted to give instructions for the Delaware VIP Fund and the number of Fund shares for which instructions may be given will be determined as of the Record Date for the Meeting. The numbers of votes which a Policyowner has the right to instruct will be calculated separately for each Variable Account. That number will be determined by applying the Policyowner’s percentage interest, if any, in the Sub-Account holding shares of the Fund to the total number of votes attributable to that Sub-Account. All Delaware VIP Fund shares held by the Variable Accounts of a Participating Insurance Company will be voted in accordance with voting instructions received from its Policyowners. Each Participating Insurance Company will vote Delaware VIP Fund shares attributable to its Policies as to which no timely instructions are received, and any Delaware VIP Fund shares held by that Participating Insurance Company as to which Policyowners have no beneficial interest, in proportion to the voting instructions, including abstentions, which are received with respect to its Policies participating in the Delaware VIP Fund. The effect of such proportional voting is that a small number of Policyowners may determine the outcome of the vote.
For purposes of this Joint Proxy Statement, the terms “shareholder,” “you,” and “your” may refer to Policyowners and to Variable Accounts and Participating Insurance Companies, as direct owners of shares of the Delaware VIP Funds, and any other direct shareholders of the Funds, unless the context otherwise requires.
How do I vote?
Due to the coronavirus outbreak (COVID-19) and to support the health and well-being of our shareholders, employees, and community, the Meeting will be helda completely virtual meeting of shareholders, which will be conducted exclusively by webcast. You are entitled to participate in the Meeting only if you were a shareholder of a Fund as of the close of business on the Record Date, or if you hold a valid proxy for the Meeting. Shareholders will be able to attend and participate in the Meeting online, vote electronically and submit questions prior to and during the meeting by visiting https://meetnow.global/MV5Z5XA on the meeting date and time described in the accompanying proxy statement. To participate in the Special Meeting, you will need to log on using the control number from your proxy card or meeting notice. The control number can be found in the shaded box. There is no physical location for the Special Meeting.
If you do not expect to be present at the officesMeeting via webcast and wish to vote your shares, please vote your proxy in accordance with the instructions included on the enclosed proxy card(s)/voting instruction form(s). If your proxy is properly returned, shares represented by it will be voted at the Meeting in accordance with your instructions for the Proposal. If your proxy is properly executed and returned and no choice is specified on the proxy card(s)/voting instruction form(s) with respect to the Proposal, the proxy will be voted FOR the approval of Stradley Ronon Stevens & Young, LLP, 2005 Market Street, 21st Floor, Philadelphia, Pennsylvania 19103,each trustee nominee and in accordance with the judgment of the person appointed as proxy upon any other matter that may properly come before the Meeting. Shareholders who execute proxies may revoke or change their proxy at any time prior to the time it is voted by delivering a written notice of revocation, by delivering a subsequently dated proxy by mail or the Internet or by attending the Meeting via webcast and voting at the Meeting. If you revoke a previous proxy, your vote will not be counted unless you attend the Meeting via webcast and vote or legally appoint another proxy to vote on November 12, 2009 at 3:your behalf.
If you are a registered shareholder, you do not need to register to attend the Meeting virtually on the Internet. If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Meeting virtually on the Internet.
To register to attend the Meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your Fund holdings along with your name and email address to Computershare. You must contact the bank or broker who holds your shares to obtain your legal proxy. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m.,
Eastern time. Only Fund shareholders will be admittedET, 3 business days prior to the
Meeting. The Boards, on behalf of each Fund, are soliciting these proxies. This Proxy Statement is first being sent to shareholders on or about September 30, 2009. This Proxy Statement gives you information about the Trustees, the new investment advisory agreement, and other matters that you should know before voting. The Board of each Trust has determined that the joint use of this Proxy StatementMeeting date.
Requests for
the Meeting is in the best interests of each Fund and its shareholders in light of the similar matters being considered and voted on by the shareholders of all of the Funds.Each Fund’s annual report to shareholders is sent to shareholders of record following the Fund’s fiscal year end. Each Fund will furnish, without charge, a copy of its most recent annual report and most recent succeeding semiannual report, if any, to a shareholder upon request. Such requestsregistration should be directed to us by emailing an image of your legal proxy, to shareholdermeetings@computershare.com.
The virtual meeting platform is fully supported across MS Edge, Firefox, Chrome and Safari browsers and devices (desktops, laptops, tablets and cell phones) running the most up-to-date version of applicable software and plugins. Please note that Internet Explorer is no longer supported. Participants should ensure that they have a Fund by calling 800 523-1918strong WiFi connection wherever they intend to participate in the meeting. We encourage you to access the meeting prior to the
start time. A link on the meeting page will provide further assistance should you need it or you may call 888-724-2416 or 781-575-2748.
How can I obtain more information about the Funds?
Copies of each Trust’s Annual Report for the most recently completed fiscal year previously have been mailed or made available to shareholders. This Joint Proxy Statement should be read in conjunction with each Annual Report. You can obtain copies of the Annual Reports, without charge, by writing to the Fundrespective Trust or to Delaware Distributors, L.P. at Attention: Account Services, P.O. Box 219691, Kansas City, MO 64121-9691100 Independence, 610 Market Street, Philadelphia, PA 19106-2354, or by regular mail or 430 W. 7th Street, Kansas City, MO 64105 by overnight courier service. Each Fund’s most recent annual report and most recent succeeding semiannual report, if any,calling 800-523-1918. You should receive the reports within three business days of your request. Copies of these reports are also available free of charge throughat www.delawarefunds.com.
PROPOSAL 1
TO ELECT THIRTEEN (13) TRUSTEES TO THE BOARD OF TRUSTEES OF EACH TRUST
Introduction
Currently, the Board of Trustees of each Trust has ten members, nine of whom are Independent Trustees (as defined below). The Board has determined to increase the size of the Board of each Trust to thirteen members, to be comprised of the ten existing trustees of each Trust and three nominees who served as trustees of the Ivy Funds complex prior to the acquisition of the parent company of the Ivy Funds’ investment adviser, Waddell & Reed Financial, Inc., by Macquarie Asset Management, the asset management division of Macquarie Group (“Macquarie”) and an affiliate of the Funds’
Web site at www.delawareinvestments.com.2
Two or moreinvestment adviser, Delaware Management Company (“DMC”).. In order to satisfy the board composition requirements of the Investment Company Act of 1940, as amended (the “1940 Act”), the Funds’ shareholders must approve the selection of a Fund who share an address might receive only one annual report or Proxy Statement, unless the Fund has received instructions totrustee nominees. Among other things, the contrary. Each Fund will promptly send a separate copyBoard considered the background and experience of such documents to any shareholder upon request. To request a separate copyeach trustee nominee, including each trustee’s experience with the Delaware Funds by Macquarie and the Ivy Funds, and determined that each trustee nominee would provide valuable continuity and enhance the Board’s oversight of an annual report or the Proxy Statement, shareholders should contact their Fund atFunds.
At the
address and phone number set forth above.PROPOSAL 1: TO ELECT A BOARD OF TRUSTEES
Introduction to Proposal 1
In Proposal 1,Meeting, shareholders of each Trust are beingwill be asked to elect nine trustees (together, the following nominees to serve as Trustees on the Board of each Trust: Jerome D. Abernathy, Thomas L. Bennett, Ann D. Borowiec, Joseph W. Chow, H. Jeffrey Dobbs, John A. Fry, Joseph Harroz, Jr., Sandra A. J. Lawrence, Frances A. Sevilla-Sacasa, Thomas K. Whitford, Christianna Wood, Janet L. Yeomans, and Shawn K. Lytle (the “Trustee Nominees”).
The Board currently consists of ten Trustees: Jerome D. Abernathy, Thomas L. Bennett, Ann D. Borowiec, Joseph W. Chow, John A. Fry, Frances A. Sevilla-Sacasa, Thomas K. Whitford, Christianna Wood, Janet L. Yeomans, and Shawn K. Lytle (the “Current Trustees”).
If each Trustee Nominee is approved, the Board of each Trust would consist of thirteen Trustees. Of the ten Current Trustees, Thomas L. Bennett, Ann D. Borowiec, Joseph W. Chow, John A. Fry, Frances A. Sevilla-Sacasa, Thomas K. Whitford and Janet L. Yeomans have previously been elected to the
Boards. AllBoard by Fund shareholders. In addition to the Trustee Nominees who are Current Trustees, it is proposed that three additional Trustee Nominees — Joseph Harroz, Jr., Sandra A. J. Lawrence, and H. Jeffrey Dobbs — be added to the Board if elected by Fund shareholders. Except for Mr. Lytle, none of the Trustee Nominees are
currently members of the Boards. Each Trust is governed by a Board, which has oversight responsibility for the management of the Trust’s business affairs. Trustees establish procedures and oversee and review the performance of the investment adviser, the distributor, and others who perform services for the Trust. Allan “interested person” of the Trusts have Boards comprised of the same trustees, and all of the Trusts are served by the same officers.
Who are the Trustee Nominees?
The trustees of the Boards (each, a “Trustee” and collectively, the “Trustees”) are responsible for supervising the management of the Trusts and serving the needs and best interests of Fund shareholders. As noted above, all of the Trustee Nominees standing for election are currently members of the Boards. The nine Trustee Nominees are Thomas L. Bennett, Patrick P. Coyne, John A. Fry, Anthony D. Knerr, Lucinda S. Landreth, Ann R. Leven, Thomas F. Madison, Janet L. Yeomans, and J. Richard Zecher.
Each Board is comprised of the same nine Board members, eight of whom are not “interested persons” of the Trusts, as that(as such term is defined in the 1940 Act (together, theAct) (the “Independent Trustees”). OnlyShould Mr. CoyneLytle be elected to the Board of each Trust by that Trust’s shareholders, he would be considered an “interested” Trustee because of his position with Macquarie (the “Interested Trustee”).
At a meeting held on August 11-12, 2021, the Board, at the recommendation of the Trusts’ Nominating and Corporate Governance Committee, which is deemedcomprised solely of Independent Trustees, nominated each Trustee Nominee for election to the Board of each Trust.
Information about the Trustee Nominees
The persons named in the accompanying form of proxy intend to vote at the Meeting (unless directed not to vote) FOR the election of each Trustee Nominee set forth below. All Trustee Nominees have indicated that they will serve on the Board, and the Board has no reason to believe that any of them will become unavailable to continue to serve as Trustees. If a Trustee Nominee is unavailable to serve for any reason, the persons named as proxies will vote for such other Trustee Nominees nominated by the Independent Trustees. Under the Declarations of Trust and By-laws, a Trustee may serve as a Trustee until he or she dies, resigns or is removed from office.
Independent Trustee Nominees
The twelve Independent Trustee Nominees, their term of office and length of time served (as applicable), their principal business occupations during the past five years, the number of portfolios overseen by the Trustee Nominees
(or the number of portfolios they will oversee should they be elected by shareholders, as applicable) and other directorships, if any, held by the Trustee Nominees are shown below.
NAME, ADDRESS AND YEAR OF BIRTH | POSITION(S)
HELD OR TO BE HELD WITH
THE TRUSTS | TRUSTEE
SINCE | PRINCIPAL
OCCUPATION(S)
DURING PAST
5 YEARS | NUMBER
OF FUNDS IN
FUND
COMPLEX
OVERSEEN OR TO BE OVERSEEN | OTHER
DIRECTORSHIPS
HELD DURING
PAST 5 YEARS |
Interested Trustee | | | | | |
Shawn K. Lytle1 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1970 | President, Chief Executive Officer, and Trustee | President and Chief Executive Officer since August 2015 Trustee since September 2015 | Global Head of Macquarie Investment Management (January 2019-Present); Head of Americas of Macquarie Group (December 2017-Present); Deputy Global Head of Macquarie Investment Management (2017-2019); Head of Macquarie Investment Management Americas (2015-2017) | 150 | None |
| Independent Trustees | | | | | |
Jerome D. Abernathy 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1959 | Trustee | Since January 2019 | Managing Member, Stonebrook Capital Management, LLC (financial technology: macro factors and databases) (January 1993–Present) | 150 | None |
Thomas L. Bennett 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1947 | Chair and
Trustee | Trustee since March 2005 Chair since March 2015 | Private Investor (March 2004–Present) | 150 | None |
Ann D. Borowiec 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1958 | Trustee | Since March 2015 | Private Investor (2013-Present)
Chief Executive Officer, Private Wealth Management (2011–2013) and Market Manager, New Jersey Private Bank (2005–2011)—J.P.Morgan Chase & Co. | 150 | Director—Banco Santander International (October 2016–December 2019) Director—Santander Bank, N.A. (December 2016– December 2019) |
Joseph W. Chow 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1953 | Trustee | Since January 2013 | Private Investor (April 2011–Present) | 150 | Director and Audit Committee Member—Hercules Technology Growth Capital, Inc. (July 2004–July 2014) |
H. Jeffrey Dobbs 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1955 | Trustee Nominee | N/A | Private Investor (2015-Present)
Global Sector Chairman, Industrial Manufacturing—KPMG LLP (2010-2015) | 150 | Trustee—Ivy Funds, InvestEd and Ivy VIP Funds (2019-2021) Director—Valparaiso University (2012-Present) Director—TechAccel LLC (2015-Present) (Tech R&D) |
NAME, ADDRESS AND YEAR OF BIRTH | POSITION(S)
HELD OR TO BE HELD WITH
THE TRUSTS | TRUSTEE
SINCE | PRINCIPAL
OCCUPATION(S)
DURING PAST
5 YEARS | NUMBER
OF FUNDS IN
FUND
COMPLEX
OVERSEEN OR TO BE OVERSEEN | OTHER
DIRECTORSHIPS
HELD DURING
PAST 5 YEARS |
|
|
|
|
|
Board Member—Kansas City Repertory Theatre (2015-Present) Board Member—PatientsVoices, Inc. (technology) (2018-Present) Kansas City Campus for Animal Care (2018-Present) |
John A. Fry 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1960 | Trustee | Since January 2001 | President—Drexel University (August 2010–Present) President—Franklin & Marshall College (July 2002–June 2010) | 150 | Director; Compensation Committee and Governance Committee Member—Community Health Systems (May 2004–Present) Director and Audit Committee Member— vTv Therapeutics Inc. (2017–Present) Director and Audit Committee Member—FS Credit Real Estate Income Trust, Inc. (2018–Present) Director and Audit Committee Member—Federal Reserve Bank of Philadelphia (January 2020–Present) |
Joseph Harroz, Jr. 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1967 | Trustee Nominee | N/A | President (2020-Present), Interim President (2019-2020), Vice President (2010-2019) and Dean (2010-2019)—College of Law, University of Oklahoma Managing Member—Harroz Investments, LLC, (commercial enterprises) (1998-2019) Managing Member—St. Clair, LLC (commercial enterprises) (2019-Present) | 150 | Trustee—Ivy Funds, InvestEd and Ivy VIP Funds (1998-2021) Director and Shareholder—Valliance Bank (2007-Present) Director—Foundation Healthcare (formerly Graymark HealthCare) (2008-2017) Trustee—the Mewbourne Family Support Organization (non-profit) (2006-Present) (non-profit) Independent Director—LSQ Manager, Inc. (real estate) (2007-2016)
Director—Oklahoma Foundation for Excellence (non-profit) (2008-Present) Independent Chairman and Trustee—WRA Funds (Independent Chairman: 2015-2018; Trustee: 1998-2018) |
NAME, ADDRESS AND YEAR OF BIRTH
| POSITION(S)
HELD OR TO BE HELD WITH
THE TRUSTS | TRUSTEE
SINCE | PRINCIPAL
OCCUPATION(S)
DURING PAST
5 YEARS | NUMBER
OF FUNDS IN
FUND
COMPLEX
OVERSEEN OR TO BE OVERSEEN | OTHER
DIRECTORSHIPS
HELD DURING
PAST 5 YEARS |
| | | | | |
| | | | | |
Sandra A. J. Lawrence 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1957 | Trustee Nominee | N/A | Private Investor (2019-Present) Formerly, Chief Administrative Officer—Children’s Mercy Hospitals and Clinics (2016-2019); and CFO—Children’s Mercy Hospitals and Clinics (2005-2016) | 150 | Trustee—Ivy Funds, InvestEd and Ivy VIP Funds (2019-2021)
Director, Hall Family Foundation (1993-Present) Director, Westar Energy (utility) (2004-2018) Trustee, Nelson-Atkins Museum of Art (non-profit) (2007-2020) Director, Turn the Page KC (non-profit) (2012-2016) Director, Kansas Metropolitan Business and Healthcare Coalition (non-profit) (2017-2019) Director, National Association of Corporate Directors (non-profit) (2017-Present) Director, American Shared Hospital Services (medical device) (2017-Present) Director, Evergy, Inc., Kansas City Power & Light Company, KCP&L Greater Missouri Operations Company, Westar Energy, Inc. and Kansas Gas and Electric Company (related utility companies) (2018-Present) Director, Stowers (research) (2018); CoChair, Women Corporate, Directors (director education) (2018-2020) |
Frances A. Sevilla-Sacasa 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1956 | Trustee | Since September 2011 | Private Investor (January2017–Present) Chief Executive Officer— Banco Itaú International (April 2012–December 2016) Executive Advisor to Dean (August 2011–March2012) and Interim Dean (January 2011–July 2011)— | 150 | Trust Manager and Audit Committee Chair—Camden Property Trust (August 2011–Present) Director; Audit and Compensation Committee—Callon Petroleum Company (December 2019–Present) Director; Audit Committee |
NAME, ADDRESS AND YEAR OF BIRTH | POSITION(S)
HELD OR TO BE HELD WITH
THE TRUSTS | TRUSTEE
SINCE | PRINCIPAL
OCCUPATION(S)
DURING PAST
5 YEARS | NUMBER
OF FUNDS IN
FUND
COMPLEX
OVERSEEN OR TO BE OVERSEEN | OTHER
DIRECTORSHIPS
HELD DURING
PAST 5 YEARS |
|
|
|
University of Miami School of Business Administration President—U.S. Trust Bank of America Private Wealth Management (Private Banking) (July 2007–December 2008) |
|
Member—Carrizo Oil & Gas, Inc.(March 2018–December 2019) |
Thomas K. Whitford 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1956 | Trustee | Since January 2013 | Private Investor (2013-Present)
Vice Chairman (2010–April 2013)—PNC Financial Services Group | 150 | Director—HSBC North America Holdings Inc. (December 2013–Present) Director—HSBC USA Inc. (July 2014–Present) Director—HSBC Bank USA, National Association (July 2014–March 2017) Director—HSBC Finance Corporation (December 2013–April 2018) |
Christianna Wood 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 1959 | Trustee | Since January 2019 | Chief Executive Officer and President—Gore Creek Capital, Ltd. (August 2009–Present) | 150 | Director; Finance Committee and Audit Committee Member— H&R Block Corporation (July 2008–Present) Director; Investments Committee, Capital and Finance Committee and Audit Committee Member—Grange Insurance (2013–Present) Trustee; Chair of Nominating and Governance Committee and Member of Audit Committee—The Merger Fund (2013–2021), The Merger Fund VL (2013–2021), WCM Alternatives: Event-Driven Fund (2013–2021), and WCM Alternatives: Credit Event Fund (December 2017–2021) Director; Chair of Governance Committee and Audit Committee Member—International Securities Exchange (2010–2016) |
Janet L. Yeomans 100 Independence, 610 Market Street Philadelphia, PA 19106-2354 | Trustee | Since April 1999 | Private Investor (2012-Present)
Vice President and Treasurer
| 150 | Director; Personnel and Compensation Committee Chair; Member of Nominating, Investments, and Audit Committees for various periods
|
NAME, ADDRESS AND YEAR OF BIRTH | POSITION(S)
HELD OR TO BE HELD WITH
THE TRUSTS | TRUSTEE
SINCE | PRINCIPAL
OCCUPATION(S)
DURING PAST
5 YEARS | NUMBER
OF FUNDS IN
FUND
COMPLEX
OVERSEEN OR TO BE OVERSEEN | OTHER
DIRECTORSHIPS
HELD DURING
PAST 5 YEARS |
1948 |
|
|
(January 2006–July 2012), Vice President—Mergers & Acquisitions (January 2003–January 2006), and Vice President and Treasurer (July 1995–January 2003)—3M Company |
|
throughout directorship—Okabena Company (2009–2017) |
| 1. | Shawn K. Lytle is considered to be an “Interested Trustee” because he is an executive officer of DMC. |
Trustee Qualifications
The Nominating and Corporate Governance Committee of the Board of the Trusts
because he is
an executive officerresponsible for identifying, evaluating and recommending candidates to the Board. The Committee reviews the background and the educational, business and professional experience of candidates and the candidates’ expected contributions to the Board. Although the Board has not adopted a formal diversity policy, the Board nevertheless believes that the different perspectives, viewpoints, professional experience, education, and individual qualities of each director contribute to the Board’s diversity of experiences and bring a variety of complementary skills. It is the Trustees’ belief that this allows the Board, as a whole, to oversee the business of the
Funds’ investment adviser. Appendix B containsTrusts in a
listmanner consistent with the best interests of the
Trustee Nominees with certain background and related information. If elected,Trusts’ shareholders.
The Board has determined that each Trustee Nominee will hold office for an indefinite term untilis qualified to serve on the Board because of his or her successorspecific attributes, including prior experience, background and skills. The Board considered that the Trustee Nominees’ familiarity and experience with the Funds, as members of the Board, of DMC and its affiliates, as members of the Delaware Funds by Macquarie board or the Ivy Funds board, would result in the Board having a breadth of knowledge that would enhance its ability to oversee the Funds.
The following is electeda summary of various qualifications, experiences and qualified, or until his or her earlier death, resignation, or removal. Eachskills of each Trustee Nominee currentlythat that led to the Board’s conclusion that the Trustee Nominee should serve as a Trustee on the Board.
Independent Trustee Nominees
Jerome D. Abernathy – Mr. Abernathy has over 30 years of experience in the investment management industry. In selecting him to serve on the Board, the Independent Trustees of the Trust noted and valued his extensive experience as a chief investment officer, director of research, trader, and analytical proprietary trading researcher. Mr. Abernathy received a B.S. in electrical engineering from Howard University and a Ph.D. in electrical engineering and computer science from Massachusetts Institute of Technology.
Thomas L. Bennett – Mr. Bennett has over 30 years of experience in the investment management industry, particularly with fixed income portfolio management and credit analysis. He has served in senior management for a number of money management firms. Mr. Bennett has also served as a board member of another investment company, an educational institution, nonprofit organizations, and for-profit companies. He has an M.B.A. from the University of Cincinnati. Mr. Bennet has been nominated to serve as Chair of the Board.
Ann D. Borowiec – Ms. Borowiec has over 25 years of experience in the banking and wealth management industry. Ms. Borowiec also serves as a board member on several nonprofit organizations. In nominating her to the Board in 2015, the Independent Trustees of the Trust found that her experience as a Chief Executive Officer in the private wealth management business at a leading global asset manager and private bank, including the restructuring of business lines and defining client recruitment strategies, complemented the skills of existing board members. Her experience would also provide additional oversight skill in the area of fund distribution. Ms. Borowiec holds a B.B.A. from Texas Christian University and an M.B.A. from Harvard University.
Joseph W. Chow – Mr. Chow has over 30 years of experience in the banking and financial services industry. In nominating him to the Board, the Independent Trustees of the Trust found that his extensive experience in business strategy in non-US markets complemented the skills of existing Board members and also reflected the increasing importance of global financial markets in investment management. The Independent Trustees also found that Mr. Chow’s management responsibilities as a former Executive Vice President of a leading global asset servicing and investment management firm as well as his experience as Chief Risk and Corporate Administration Officer would add helpful oversight skills to the Board’s expertise. Mr. Chow holds a B.A. degree from Brandeis University and M.C.P. and M.S. in Management degree from Massachusetts Institute of Technology.
H. Jeffrey Dobbs – Mr. Dobbs has more than 35 years of experience in the automotive, industrial manufacturing, financial services and consumer sectors. He also has served as a partner in a public accounting firm. Mr. Dobbs holds a degree in accounting from Valparaiso University. The Board concluded that Mr. Dobbs is availablesuitable to act as Trustee because of his extensive work in the global professional services industry and as a trustee of the Ivy Funds complex member, as well as his educational background.
John A. Fry – Mr. Fry has over 30 years of experience in higher education. He has served in senior management for three major institutions of higher learning including serving as president of a leading research university. Mr. Fry has also served as a board member of many nonprofit organizations and several for-profit companies. Mr. Fry has extensive experience in overseeing areas such as finance, investments, risk-management, internal audit, and information technology. He holds a B.A. degree in American Civilization from Lafayette College and an M.B.A. from New York University.
Joseph Harroz, Jr. – Mr. Harroz serves as the President of a state university, and also serves as a Director of a bank. He also has served as President and Director of a publicly traded company, as Interim President and General Counsel to a state university system and as Dean of the College of Law of that state university. Mr. Harroz holds a B.A. degree from the University of Oklahoma and a J.D. from Georgetown University Law Center. Mr. Harroz has multiple years of service as a trustee of the Ivy Funds complex. The Board concluded that Mr. Harroz is suitable to serve as Trustee because of his educational background, his work experience and the length of his service as a trustee of the Ivy Funds complex.
Sandra A. J. Lawrence – Ms. Lawrence has been a member and chair of the boards of several closely-held corporations and charitable organizations. She also has more than 14 years of experience serving on boards of public companies and has consentedserved as a chief financial officer and on investment committees. Ms. Lawrence holds an A.B. from Vassar College, as well as master’s degrees from the Massachusetts Institute of Technology and Harvard Business School. The Board concluded that Ms. Lawrence is suitable to serve if elected. If anyas Trustee because of her work experience, financial background, academic background, service as trustee of the Trustee Nominees should become unavailable beforeIvy Funds complex, and service on corporate and charitable boards.
Frances A. Sevilla-Sacasa – Ms. Sevilla-Sacasa has over 30 years of experience in banking and wealth management. In nominating her to the
Meeting,Board, the
designated proxy holders will haveIndependent Trustees of the
authority to voteTrust found that her extensive international wealth management experience, in
their discretionparticular, complemented the skills of existing Board members and also reflected the increasing importance of international investment management not only for
another person or persons who may be nominateddollar-denominated investors but also for investors outside the US. The Independent Trustees also found that Ms. Sevilla-Sacasa’s management responsibilities as
Trustees. Ms. Leven serves as3
Coordinating Trustee for each Trust. Although Mr. Coyne, the Chairman,former President and Chief Executive Officer of a major trust and wealth management company would add a helpful oversight skill to the Board’s expertise, and her extensive nonprofit Board experience gave them confidence that she would make a meaningful, experienced contribution to the Board of Trustees. Finally, in electing Ms. Sevilla-Sacasa to the Board, the Independent Trustees valued her perceived dedication to client service as a result of her overall career experience. Ms. Sevilla-Sacasa holds B.A. and M.B.A. degrees from the University of Miami and Thunderbird School of Global Management, respectively.
Thomas K. Whitford – Mr. Whitford has over 25 years of experience in the banking and financial services industry, and served as Vice Chairman of a major banking, asset management, and residential mortgage banking institution. In nominating him to the Board, the Independent Trustees of the Trust found that Mr. Whitford’s senior management role in wealth management and experience in the mutual fund servicing business would provide valuable current management and financial industry insight, in particular, and complemented the skills of existing Board members.
The Independent Trustees also found that his senior management role in integrating company acquisitions, technology, and operations and his past role as Chief Risk Officer would add a helpful oversight skill to the Board’s expertise. Mr. Whitford holds a B.S. degree from the University of Massachusetts and an M.B.A. degree from The Wharton School of the University of Pennsylvania.
Christianna Wood – Ms. Wood has over 30 years of experience in the investment management industry. In selecting her to serve on the Board, the Independent Trustees of the Trust noted and valued her significant portfolio management, corporate governance and audit committee experience. Ms. Wood received a B.A. in economics from Vassar College and an M.B.A. in finance from New York University.
Janet L. Yeomans – Ms. Yeomans has over 28 years of business experience with a large global diversified manufacturing company, including service as Treasurer for this company. In this role, Ms. Yeomans had significant broad-based financial experience, including global financial risk-management, investments, and mergers and acquisitions. She served as a board member of a for-profit company and also is a current board member of a hospital and a public university system. She holds degrees in mathematics and physics from Connecticut College, an M.S. in mathematics from Illinois Institute of Technology, and an M.B.A. from the University of Chicago.
Interested Trustee Nominee
Shawn K. Lytle – Mr. Lytle has over 20 years of experience in the investment management industry. He has been the president of Macquarie Asset Management - Americas since June 2015, and he is responsible for all aspects of the firm’s business. Prior to that time, Mr. Lytle served in various executive management, investment management, and distribution positions at two major banking institutions. He holds a B.A. degree from The McDonough School of Business at Georgetown University. Mr. Lytle serves on the board of directors of the National Association of Securities Professionals (NASP), the Sustainability Accounting Standards Board, and he is a member of the board of governors for the Investment Company Institute (ICI). In November 2017, Mr. Lytle was named to the Black Enterprise list of “Most Powerful Executives in Corporate America.”
Board Structure and Related Matters
The Trusts are governed by the Board, which is responsible for the overall management of the Trusts currently servesand the Funds. Such responsibility includes general oversight and review of the Funds’ investment activities, in accordance with Federal law and the law of the State of Delaware, as well as the stated policies of the Funds. The Board has appointed officers of the Trusts and delegated to them the management of the day-to-day operations of the Funds, based on policies reviewed and approved by the Board, with general oversight by the Board.
Under the Declarations of Trust and By-laws, a Trustee may serve as a Trustee until he or she dies, resigns or is standing for election by Fundremoved from office. The Trusts are not required to hold annual meetings of shareholders for the first time.election or re-election of Trustees or for any other purpose, and do not intend to do so. Delaware law permits shareholders to remove Trustees under certain circumstances and requires the Trusts to assist in shareholder communications.
If shareholders elect the Trustee Nominees, the Board will be comprised of twelve Independent Trustees and one Interested Trustee. The Board believes that having a majority of Independent Trustees on the Board is appropriate and in the best interests of the Trusts’ shareholders. In addition, the Board’s chairman, Thomas L. Bennett, is an Independent Trustee. In that regard, Mr. Coyne was appointedBennett’s responsibilities include: setting an agenda for each meeting of the Board; presiding at all meetings of the Board and of the Independent Trustees; and serving as a liaison with other Trustees, the Trusts’ officers and other management personnel, and counsel. The Independent Chair also performs such other duties as the Board may from time to time determine.
The Board generally holds four regularly scheduled meetings each year. The Board may hold special meetings, as needed, in person, by videoconference or by telephone, to address matters arising between regular meetings. The Independent Trustees also hold four regularly scheduled meetings each year, during a portion of which management is not present, as well as a special meeting in connection with the Board’s annual consideration of the Trusts’ management agreements, and may hold special meetings, as needed. The Board held 6 meetings (all of which were virtual because of the COVID-19 pandemic) during the 12-month period ended August 31, 2021. No Current Trustee byattended less than 75% of the Boards in 2006, having been recommended for appointment toaggregate number of meetings of each Board and of each Committee on which the Boards byCurrent Trustee served during such period.
The Board has established a committee structure (described below) that includes four standing committees, the Audit Committee, the Nominating and Corporate Governance Committee,
the Investments Committee, and the Committee of Independent Trustees, all of which
consistsare comprised solely of Independent Trustees.
How The Board periodically evaluates its structure and composition, as well as various aspects of its operations. The Board believes that its leadership structure, including its Independent Chair position and its committees, is appropriate for the Trusts in light of, among other factors, the asset size and nature of the Trusts, the number of Funds overseen by the Board, the arrangements for the conduct of the Trusts’ operations, the number of Trustees, and the Board’s responsibilities.
Committees of the Board
The Board has established the following standing committees: Audit Committee, Executive Committee, Investment Oversight Committee and Governance Committee. The respective duties and current memberships of the standing committees are nomineesset forth below. The Board may establish ad hoc committees from time to time and compensate Trustees for Trustee selected?service on such committees.
Audit Committee. This committee monitors accounting and financial reporting policies, practices, and internal controls for the Trust. It also oversees the quality and objectivity of the Trust's financial statements and the independent audit thereof, and acts as a liaison between the Trust's independent registered public accounting firm and the full Board. The Trust's Audit Committee consists of the following Independent Trustees: Thomas K. Whitford, Chair; Jerome D. Abernathy; John A. Fry; and Christianna Wood. The Committee held 7 meetings (all of which were virtual because of the COVID-19 pandemic) during the 12-month period ended August 31, 2021.
Each Board’s Committee of Independent Trustees. This committee develops and recommends to the Board a set of corporate governance principles and oversees the evaluation of the Board, its committees, and its activities. The committee comprises all of the Trust's Independent Trustees. The Committee held 4 meetings (all of which were virtual because of the COVID-19 pandemic) during the 12-month period ended August 31, 2021.
Investment Committee. The primary purposes of the Investments Committee are to: (i) assist the Board at its request in its oversight of the investment advisory services provided to the Trust by DMC as well as any sub-advisors; (ii) review all proposed advisory and sub-advisory agreements for new funds or proposed amendments to existing agreements and to recommend what action the full Board and the Independent Trustees should take regarding the approval of all such proposed agreements; and (iii) review reports supplied by DMC regarding investment performance, portfolio risk and expenses and to suggest changes to such reports. The Investments Committee consists of the following Independent Trustees: Joseph W. Chow, Chair; Jerome D. Abernathy; and Christianna Wood. The Committee held 6 meetings (all of which were virtual because of the COVID-19 pandemic) during the 12-month period ended August 31, 2021.
Nominating and Corporate Governance CommitteeCommittee. This committee recommends Board members,nominees, fills Board vacancies that arise in between meetings of shareholders, and considers the qualifications and independence of prospective Board members. The committee also monitors the performance of counsel for the Independent Trustees. The committee will consider shareholder recommendations for Trustee nominationsnomination to the Board only in the event that there is a vacancy on athe Board. Shareholders who wish to submit recommendations for nominations to the Board to fill a vacancy on a Board must submit their recommendations in writing to the Nominating and Corporate Governance Committee, Attention: Secretary, c/o Delaware Investments Funds by Macquarie at 2005100 Independence, 610 Market Street, Philadelphia, Pennsylvania 19103-7094.PA 19106-2354. Shareholders should include appropriate information on the background and qualifications of any candidatepersons recommended (e.g.(e.g., a resume), as well as the candidate’scandidate's contact information and a written consent from the candidate to serve if nominated and elected. Shareholder recommendations for nominations to athe Board will be accepted on an ongoing basis and such recommendations will be kept on file for consideration when there is a vacancy on the Board. The committee consists of the following Independent Trustees: Frances A. Sevilla-Sacasa, Chair; Thomas L. Bennett (ex officio); Ann D. Borowiec; John A. Fry, Chairman; Anthony D. Knerr; Lucinda S. Landreth;Fry; and Ann R. Leven (ex officio), all of whom are Independent Trustees. Each Board’s Nominating and Corporate Governance Committee held five meetings during the 12-month period ended June 30, 2009. EachJanet L. Yeomans. The Board has adopted and approved a formal written charter forof the Nominating and Corporate Governance Committee, which is attached as Appendix CC. The Committee held 5 meetings (all of which were virtual because of the COVID-19 pandemic) during the 12-month period ended August 31, 2021.
In reaching its determination that an individual should serve or continue to serve as a Trustee of the Trust, the committee considers, in light of the Trust's business and structure, the individual's experience, qualifications, attributes, and skills (the “Selection Factors”). No one Selection Factor is determinative, but some of the relevant
factors that have been considered include: (i) the Trustee's business and professional experience and accomplishments, including prior experience in the financial services industry or on other boards; (ii) the ability to work effectively and collegially with other people; and (iii) how the Trustee's background and attributes contribute to the overall mix of skills and experience on the Board as a whole.
Risk Oversight
Consistent with its responsibility for oversight of the Trusts and their Funds, the Board oversees the management of risks relating to the administration and operation of the Trusts and the Funds. The Board performs this
Proxy Statement.risk management oversight directly and, as to certain matters, directly through its The Board performs a risk oversight function for the Trust consisting, among other things, of the following activities: (1) receiving and reviewing reports related to the performance and operations of the Trust; (2) reviewing, approving, or modifying as applicable, the compliance policies and procedures of the Trust; (3) meeting with portfolio management teams to review investment strategies, techniques and the processes used to manage related risks; (4) addressing security valuation risk in connection with its review of fair valuation decisions made by Fund management pursuant to Board-approved procedures; (5) meeting with representatives of key service providers, including DMC, the Funds’ distributor, the Funds' transfer agent, the custodian and the independent public accounting firm of the Trust, to review and discuss the activities of the Trust's series, and to provide direction with respect thereto; (6) engaging the services of the Trust's Chief Compliance Officer to test the compliance procedures of the Trust and its service providers; and (7) requiring management's periodic presentations on specified risk topics.
The Trustees perform this risk oversight function throughout the year in connection with each quarterly Board meeting. The Trustees routinely discuss certain risk-management topics with Fund management at the Board level and also through the standing committees of the Board. In addition to these recurring risk-management discussions, Fund management raises other specific risk-management issues relating to the Funds with the Trustees at Board and committee meetings. When discussing new product initiatives with the Board, Fund management also discusses risk — either the risks associated with the new proposals or the risks that the proposals are designed to mitigate. Fund management also provides periodic presentations to the Board to give the Trustees a general overview of how DMC and its affiliates identify and manage risks pertinent to the Trust.
The Audit Committee looks at specific risk-management issues on an ongoing basis. The Audit Committee is responsible for certain aspects of risk oversight relating to financial statements, the valuation of the Trust's assets, and certain compliance matters. In addition, the Audit Committee meets with DMC’s internal audit and risk-management personnel on a quarterly basis to review the reports on their examinations of functions and processes affecting the Trust.
The Board's other committees also play a role in assessing and managing risk. The Nominating and Corporate Governance Committees met on September 3, 2009,Committee and the Committee of Independent Trustees play a role in managing governance risk by developing and recommending to evaluate candidatesthe Board corporate governance principles and, in the case of the Committee of Independent Trustees, by overseeing the evaluation of the Board, its committees, and its activities. The Investments Committee plays a significant role in assessing and managing risk through its oversight of investment performance, investment process, investment risk controls, and fund expenses.
Because risk is inherent in the operation of any business endeavor, and particularly in connection with the making of financial investments, there can be no assurance that the Board's approach to risk oversight will be able to minimize or even mitigate any particular risk. The Funds are designed for positions oninvestors that are prepared to accept investment risk, including the Boards, including evaluating candidates’ qualificationspossibility that as yet unforeseen risks may emerge in the future.
Selection of Nominees
The Board’s Nominating and Corporate Governance Committee makes Independent Trustee candidate recommendations to the Board pursuant to its charter. The Committee evaluates a candidate’s qualification for Board membership and theirthe independence of such candidate from DMC and other principal service providers.
The Committee evaluates candidates using certain criteria, considering, among other qualities, a high level of integrity, appropriate experience, a commitment to fulfill the fiduciary duties inherent in Board membership, and the extent to which potential candidates possess sufficiently diverse skill sets that would contribute to the Board’s overall effectiveness.
The Committee considers prospective candidates from any reasonable source, including from recommendations by shareholders of the Trusts. The Committee initially evaluates prospective candidates on the basis of preliminary information required of all preliminary candidates, considered in light of the criteria discussed above. Those prospective candidates that appear likely to be able to fill a significant need of the Board would be contacted by a Committee member to discuss the position; if there appeared to be sufficient interest, a meeting with one or more Committee members would be arranged. If the Committee, based on the results of these contacts, believed it had identified a viable candidate, it would air the matter with the full group of Independent Trustees for input.
Any request by management to meet with the prospective candidate would be given appropriate consideration. The Trusts have not paid a fee to third parties to assist in finding nominees.
Shareholders seeking to recommend one or more candidates to the Board should direct the names of such candidates they wish to be considered to the attention of the Trusts’ Nominating and Corporate Governance Committee, in care of the Trusts’ Secretary, at the address of the Trusts listed on the front page of this Joint Proxy Statement. Such candidates will be considered with any other trustee candidates on the basis of the same criteria described above used to consider and evaluate candidates recommended by other sources.
For candidates to serve as Independent Trustees, independence from
the Funds’ investment adviser andDMC, its affiliates and other
Fundprincipal service providers
is critical, as
well as such other information asis an independent and questioning mindset. The Committee also considers whether the
Committees deemed relevantprospective candidates’ workloads would allow them to
their considerations. The Nominatingattend the vast majority of Board meetings, be available for service on Board committees, and
Corporate Governance Committees recommendeddevote the
Trustee Nominees for nomination by the Independent Trustees,additional time and
at their meeting on September 3, 2009, the Independent Trusteeseffort necessary to keep up with Board matters and the
full Board selected and nominatedrapidly changing regulatory environment in which the
Trustee Nominees for election by the shareholders of each Trust.4
How often do the Boards meet and how are the Trustees compensated?
The Boards held six meetings during the 12-month period ended June 30, 2009. Each Trustee Nominee attendedTrusts operate. Different substantive areas may assume greater or lesser significance at least 75%particular times, in light of the aggregate total numberBoard’s present composition and the Governance Committee’s (or the Board’s) perceptions about future issues and needs.
Ownership of
meetings of the Boards held during each Trust’s last fiscal year, and attended at least 75% of the total number of meetings held during that year by all committees of the Boards on which he or she served. The Trusts do not have a formal policy regarding Trustee attendance at shareholders’ meetings but they encourage Trustees to attend. The Trusts do not hold annual meetings at which Trustees are elected.No Independent Trustee owns, beneficially or of record, securities issued by any investment adviser or principal underwriter of any of the Funds, or a person directly or indirectly controlling, controlled by, or under common control with any of the foregoing. The tableFund Shares
Set forth in Appendix D
shows the dollar range of shares of each Fund and the aggregate dollar range ofis information regarding shares of the
Delaware Investments® Family of Funds
that were beneficially owned by each Trustee Nominee as of
June 30, 2009. Each Independent Trustee is compensated by the Trusts. Mr. Coyne, the sole Trustee who is not an Independent Trustee, is not compensated by the Trusts for servingRecord Date, as Trustee. Trust officers are not compensated by the Trust. The tabledetermined in Appendix E shows the compensation that each Independent Trustee received from each Trust during the 12-month period ended June 30, 2009 and the aggregate compensation that each Independent Trustee received from the Delaware Investments Family of Funds during that period. In addition, the Independent Trustees received separate compensation from the Trusts for the meetings held in connectionaccordance with their review of the transaction describedRule 16a-1(a)(2) under Proposal 2 below.
Who are the principal officers of the Trusts?
Officers of each Trust are appointed by the Trust’s Board and serve at the pleasure of the Board. Appendix F to this Proxy Statement identifies the principal officers of the Trusts, and provides certain background and related information.
What are the standing committees of the Boards?
Each Trust’s Board has four standing committees: the Audit Committee, the Nominating and Corporate Governance Committee, the Independent Trustees Committee, and the Investments Committee.
Audit Committee. This committee monitors accounting and financial reporting policies and practices and internal controls for a Trust. The Audit Committee also oversees the quality and objectivity of a Trust’s financial statements and the independent audit thereof, and acts as a liaison between the Trusts’ independent registered public accounting firm and the full Boards. Each Trust’s Audit Committee
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consists of the following Independent Trustees: Thomas F. Madison, Chairman; Thomas L. Bennett; John A. Fry; and J. Richard Zecher. Each Trust’s Audit Committee held six meetings during the 12-month period ended June 30, 2009.
Nominating and Corporate Governance Committee. Information on the Nominating and Corporate Governance Committee is provided above under “How are nominees for Trustee selected?”
Independent Trustees Committee.This committee develops and recommends to the Boards a set of corporate governance principles and oversees the evaluation of the Boards, the committees, and Board activities. The committee is comprised of all of the Independent Trustees. Each Trust’s Independent Trustees Committee held four meetings during the 12-month period ended June 30, 2009.
Investments Committee. The primary purposes of the Investments Committee are to: (i) assist the Boards, upon request, in oversight of the investment advisory services provided to the Funds by their investment adviser as well as any sub-advisers; (ii) review all proposed advisory and sub-advisory agreements for new Funds or proposed amendments to existing agreements and to recommend actions the full Boards and the Independent Trustees should take regarding the approval of all such proposed agreements; and (iii) review from time to time reports supplied by the Funds’ investment adviser regarding investment performance and expenses and suggest changes to such reports. Each Board’s Investments Committee consists of the following Independent Trustees: Thomas L. Bennett, Chairman; Anthony D. Knerr; Lucinda S. Landreth; Ann R. Leven (ex officio); Janet L. Yeomans; and J. Richard Zecher. Each Investments Committee held four meetings during the 12-month period ended June 30, 2009.
Who are the Trusts’ independent auditors?
Selection of Auditors. For each Trust, the Audit Committee and the Board have selected the firm of Ernst & Young LLP (“E&Y”) to serve as the Funds’ independent registered public accounting firm. Representatives of E&Y are not expected to be present at the Meeting, but will be available telephonically if necessary.
Audit Fees. Appendix G shows for each Trust the aggregate fees billed for each of the last two fiscal years for professional services rendered by E&Y for the audit of the Trust’s annual financial statements and for review of the financial statements included in the Trust’s annual reports or for services that normally are provided by E&Y in connection with statutory and regulatory filings or engagements for those fiscal years.
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Audit-Related Fees. No Trust was billed during its last two fiscal years for assurance and related services rendered by E&Y that were reasonably related to the audit or review of the Trust’s financial statements but where such services were not reported under “Audit Fees” above. Appendix G shows for the last two fiscal years of each Trust the aggregate audit-related fees billed by E&Y for providing such services to the Funds’ investment adviser or other service providers that are under common control with the Funds’ investment adviser. These audit-related services consisted of the issuance of reports concerning the Funds’ transfer agent’s system of internal accounting control pursuant to Rule 17Ad-13 of the Securities Exchange Act of 1934, as amended.
Tax Fees. Appendix G also shows for each Trustamended, as well as the aggregate fees billed indollar range of shares owned by each Trustee Nominee of Funds within the Delaware Funds by Macquarie complex.
To the best of the last two fiscal years for professional services rendered by E&Y to the Trust for tax compliance, tax advice, and tax planning. These tax-related services consistedTrusts’ knowledge, as of the reviewRecord Date, no person owned beneficially more than 5% of income tax returnsthe outstanding shares of any class of any Fund’s securities, except as set out in Appendix E. As of that date, all of the Trustees and annual excise distribution calculations and, for certainofficers of the Trusts, tax compliance services with respect to investments in foreign securities. E&Y did notas a group, beneficially owned less than 1% of the outstanding shares of each class of the Funds. In addition, no Trustee or nominee purchased or sold any securities of Macquarie or its affiliates during any Trust’s last twothe past fiscal years provide any such servicesyear.
Compensation
The fees paid to the
Trustees are allocated among the Trusts based on their Funds’
investment adviser or other service providers under common control withrelative asset size. Information relating to compensation paid to the
Funds’ investment adviser.Aggregate Non-Audit Fees. Appendix G also shows,Trustees for each Trust’s last twomost recent fiscal years, the aggregate non-audit fees billed by E&Y for services renderedyear is set forth in Appendix F.
Required Vote
Shareholders of each Trust, including each Fund and class thereof, will vote on a trust-by-trust basis to
the Trust, its investment adviser, and any entity controlling, controlled by, or under common control with its investment adviserelect Trustees to that
provides ongoing services to the Trust.Trust’s Board. For each Trust, the Audit Committee has considered whetherpresence at the provisionMeeting of non-audit services that were rendered to the Trust’s investment adviser, and any entity controlling, controlled by, or under common control with the Trust’s investment adviser that provides ongoing services to the Trust, is compatible with maintaining the independence of E&Y. The Audit Committee has determined that E&Y’s provision of these services is compatible with maintaining E&Y’s independence. E&Y currently is analyzing whether its independence will be affected after the completionone-third of the transaction described in Proposal 2 asoutstanding shares of such Trust shall be sufficient to constitute a result of services provided by E&Y to Macquarie Group Limited and its affiliates.
All Other Fees. There were no additional fees paid by any Trust or by the Funds’ investment adviser or other service providers under common control with the Funds’ investment adviser during such Trust’s last two fiscal yearsquorum for products and services provided by E&Y, other than the services reported above.
Pre-Approval Policies and Procedures. Each Trust’s Audit Committee has adopted Pre-Approval Policies and Procedures, whichthat Trust. Trustees are set forth in Appendix H to this Proxy Statement. All of the fees disclosed above were pre-approved pursuant to
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the Pre-Approval Policies and Procedures. The Audit Committee for each Trust did not approve any of the services described above pursuant to thede minimis exceptions set forth in Rule 2-01(c)(7)(i)(C) and Rule 2-01(c)(7)(ii) of Regulation S-X.
What is the required vote to elect Trustees?
Provided that Quorum requirements (as defined below in “Voting Information”) have been satisfied, the Trustee Nominees will be elected to the Board of each Trust by the affirmative vote of a plurality of votes cast collectively by shareholders of all ofshares present at the Funds of such Trust.Meeting and entitled to vote, at which quorum is present. This means that the nine Trustee Nominees receiving13 candidates who
receive the largest number of votes will be
elected. Forelected as trustees. In the election of trustees, votes may be cast in favor of a
Trust that is made up of more than one Fund,candidate or withheld. If elected, the
votes of all the shares of the Funds of that TrustTrustee Nominees will
be counted together in determining the results of the voting for Proposal 1.serve as Trustees.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF EACH TRUST VOTE “FOR” ALL
FOR THE ELECTION OF EACH TRUSTEE NOMINEES.NOMINEE.
17PROPOSAL 2: TO APPROVE A NEW INVESTMENT
ADVISORY AGREEMENTIntroduction
OTHER BUSINESS
The Board does not intend to
Proposal 2 In Proposal 2, youpresent any other business at the Meeting. If, however, any other matters are being asked to approve a new investment advisory agreement between your Fund and Delaware Management Company (“DMC”) (each, a “New Investment Advisory Agreement”). DMC currently serves as investment adviser for each Fund, but, forproperly brought before the reasons discussed below, a New Investment Advisory Agreement will be required ifMeeting, the Transaction (as defined below) is completed. For a general description ofpersons named in the proposed New Investment Advisory Agreements and a comparison of the proposed New Investment Advisory Agreements and the investment advisory agreements currently in effect for each Fund (each, a “Current Investment Advisory Agreement”), see “The New Investment Advisory Agreements” below. Theaccompanying form of the New Investment Advisory Agreements is presentedproxy card/voting instruction form will vote thereon in Appendix I. accordance with their judgment.
The
date of each Fund’s Current Investment Advisory Agreement and the date on which it was last approved by shareholders are provided in Appendix J. The Boards are proposing the approval of the New Investment Advisory Agreements because the Current Investment Advisory Agreements will terminate upon completion of the Transaction. As required by the 1940 Act, each Current Investment Advisory Agreement terminates automatically upon its “assignment.” Under the 1940 Act, a change in control of an investment adviser constitutes an “assignment.” The consummation of the Transaction will result in a change of
8
control of DMC, and thus, the assignment and automatic termination of the Current Investment Advisory Agreements. Shareholders of each Fund are therefore being asked to approve a New Investment Advisory Agreement for their Fund. Each New Investment Advisory Agreement would become effective only if approved by the shareholders of the applicable Fund and if the Transaction is completed. Although the closing of the Transaction (the “Closing”) is currently expected to take place on or about December 31, 2009, if the Transaction is not completed or the Transaction Agreement (as defined below) is terminated, the New Investment Advisory Agreements will not go into effect and the Current Investment Advisory Agreements will continue in effect.
Description of the Transaction
Lincoln National Corporation (“LNC”) and its indirect, wholly owned subsidiary, Lincoln National Investment Companies, Inc. (“LNIC”), entered into a definitive agreement (the “Transaction Agreement”), dated as of August 18, 2009, with Macquarie Bank Limited, whereby LNIC will sell all of the issued and outstanding capital stock of Delaware Management Holdings, Inc. (“DMHI”) to Macquarie Bank Limited (or a subsidiary thereof) (the “Transaction”). Certain Fund service providers are subsidiaries of DMHI and will be included in the Transaction, including DMC, Delaware Service Company, Inc. (“DSC”), the fund accounting and financial administration oversight provider and transfer agent for the Funds, and Delaware Distributors, L.P. (“DDLP”), the principal underwriter for the Funds. DMHI and its subsidiaries are referred to collectively as “Delaware Investments.”
Macquarie Group Limited and its various subsidiaries (including Macquarie Bank Limited) are referred to collectively as “Macquarie Group.” The Transaction Agreement requires Macquarie Bank Limited (or a permitted assignee) to pay LNIC approximately $428 million in cash at the Closing to acquire DMHI and its subsidiaries, subject to certain specified closing adjustments at and after the Closing. The Closing is subject to the satisfaction or waiver of customary closing conditions, including (i) annualized advisory fees payable to Delaware Investments by all clients that have consented to the assignment of their investment advisory agreements or approved a new investment advisory agreement (including the Trusts) not being less than a minimum percentage of annualized advisory fees payable to Delaware Investments as of April 30, 2009 and (ii) the parties obtaining certain domestic and international regulatory approvals (including expiration of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended).
DMC manages the assets of each Fund and makes each Fund’s investment decisions, subject to the supervision of the Board of each Trust. DMC is a series of Delaware Management Business Trust (“DMBT”), which is an indirect subsidiary of
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DMHI. DMC, DMBT, and DMHI are located at 2005 Market Street, Philadelphia, Pennsylvania 19103. Delaware Investments has been managing mutual funds since 1938. As of June 30, 2009, Delaware Investments managed, in the aggregate, more than $120 billion in assets in various institutional, separately managed, investment company, and insurance accounts. DMHI, a Delaware corporation, is a holding company that, through its subsidiaries and affiliates, provides investment advisory, asset management, administrative, broker/dealer, and related products and services. DMHI’s asset management capabilities include the ability to manage equity, fixed income, and money market securities, which are offered through vehicles such as mutual funds, closed-end funds, privately managed accounts, and institutional separate accounts. DMHI is an indirect, wholly owned subsidiary of, and subject to ultimate majority control of, LNC, which is a publicly traded corporation. LNC is a diversified organization with operations in many aspects of the financial services industry, including insurance and investment management. LNIC is an Indiana corporation and an indirect, wholly owned subsidiary of LNC. LNIC owns 100% of the issued and outstanding common stock of DMHI. After the Transaction, DMHI will be an indirect, wholly owned subsidiary of Macquarie Group Limited.
Macquarie Group is a global provider of banking, financial, advisory, investment and fund management services. Macquarie Group Limited, No. 1 Martin Place, Sydney, New South Wales 2000, Australia, is listed on the Australian Securities Exchange (ASX:MQG) and is regulated by the Australian Prudential Regulation Authority, the Australian banking regulator, as the owner of Macquarie Bank Limited, an authorized deposit taker. Founded in 1969, Macquarie Group now operates in more than 70 office locations in over 26 countries. Macquarie Group employed approximately 12,500 people and had assets under management of $190 billion as of July 31, 2009. Macquarie Group has been active in North America for over a decade. Macquarie Group currently has more than 1,900 professionals in offices in 25 North American locations. Macquarie Funds Group, the asset management arm of Macquarie Group, is a full service global fund manager with over 25 years’ experience and offers a range of investments for retail and institutional investors across a variety of asset classes including fixed income, cash, currencies, equities, commodities, emerging markets, listed infrastructure and listed real estate as well as private equity and hedge fund of funds. Macquarie Funds Group employs over 600 staff across 19 locations globally with assets under management of approximately $67 billion as of July 31, 2009. More information on Macquarie Group’s operations is available at www.macquarie.com.au and at www.macquarie.com/us.
Australian Banking Regulations require the following disclaimer to be made:Investments in the FundsTrusts generally are not and will not be deposits with or liabilitiesrequired to hold annual meetings of Macquarie Bank Limited ABN 46 008 583 542 and its holding companies including their subsidiaries or related companies, and are subject to investment risk,
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including possible delays in repayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of any Fund, the repayment of capital from any Fund, or any particular rate of return.
The Transaction is part of Macquarie Group’s strategy to develop a global asset management capability through building a highly regarded team of investment professionals, offering an attractive suite of investment products and gaining broader access to markets in the United States. Macquarie Group values DMC’s focus on the advisory segment of the U.S. market, its significant investment management capabilities, and its experienced management team. The Transaction is not currently expected to result in a change in the persons responsible for the day-to-day management of the Funds or in the operation of the Funds. Moreover, it is currently anticipated that following the Closing, DMHI, DMC, DDLP, DSC, and the Funds will continue to operate in substantially the same manner as at present, and the Delaware Investments brand will remain with the business. Upon completion of the Transaction, the combined assets under management of Macquarie Group, including DMHI and its subsidiaries, are expected to be over $300 billion. After the Transaction, DMHI and its subsidiaries (including DMC) will remain headquartered in Philadelphia. Investment management professionals serving DMC’s clients are not currently expected to change as a result of the Transaction. Clients of DMC may be offered opportunities to invest in new products with access to Macquarie Group’s investment strategies, notably in real assets, global fixed income securities, and alternative investments. Macquarie Group clients across its global network may be offered investment products involving Delaware Investments’ investment strategies in structures designed specifically for them. Macquarie Group also currently anticipates providing additional funding to support the growth of DMC and its affiliates, for example through potential investment in operations and distribution and a commitment to expanding its multi-boutique approach.
In anticipation of the Transaction, the Boards have had a number of telephonic and in-person meetings and met both formally and in informational sessions between April 16, 2009 and September 3, 2009, for purposes of, among other things, considering whether it would be in the best interests of each Fund and its shareholders, to approve a New Investment Advisory Agreement. The 1940 Act requires that each Fund’s New Investment Advisory Agreement be approved by the Fund’s shareholders in order to become effective. At the in-person meeting held on September 3, 2009, for the reasons discussed below under “Board considerations in approving the New Investment Advisory Agreements,” the Boards, including a majority of each Board’s Independent Trustees, approved the New Investment Advisory Agreements as being in the best interests of the Funds and their shareholders and recommended their approval by shareholders. In the event shareholders of a Fund do not approve a New Investment Advisory Agreement, the Fund’s Board will take such action as it deems
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to be in the best interests of the Fund and its shareholders, including entering into a temporary, interim advisory agreement with DMC pursuant to Rule 15a-4 of the 1940 Act pending further solicitation of shareholder approval.
Section 15(f) of the 1940 Act
The Boards have been advised that the parties intend to rely on Section 15(f) of the 1940 Act, which provides a non-exclusive safe-harbor whereby an owner (such as LNC and LNIC) of an investment adviser (such as DMC) to an investment company (such as a Fund) may receive payment or benefit in connection with the sale of an interest in the investment adviser if two conditions are satisfied. The first condition is that during the three-year period following the transaction, at least 75% of the investment company’s board must not be “interested persons” (as defined in the 1940 Act) of the investment adviser or its predecessor. Each Board currently meets this test and is expected to do so after the Transaction is completed. Second, no “unfair burden” can be imposed on the investment company as a result of the transaction. An “unfair burden” includes any arrangement during the two-year period after the transaction where the investment adviser (or predecessor or successor adviser), or any of its “interested persons” (as defined in the 1940 Act), receive or is entitled to receive any compensation, directly or indirectly, (i) from any person in connection with the purchase or sale of securities or other property to, from or on behalf of the investment company (other than bona fide ordinary compensation as principal underwriter for the investment company) or (ii) from the investment company or its shareholders (other than fees for bona fide investment advisory or other services). Macquarie Bank Limited has agreed as part of the Transaction Agreement that, following the Closing, to the extent within its control, it will not take or fail to take (and will not cause its affiliates to take or fail to take) any action, if such action or failure to take action would have the effect, directly or indirectly, of causing the requirements of Section 15(f) of the 1940 Act not to be met with respect to the Transaction. In that regard, from and after the Closing date and to the extent within its control, Macquarie Bank Limited has agreed to conduct its business (and to cause each of its affiliates to conduct its business) so as to assure that the two aforementioned conditions are satisfied.
The New Investment Advisory Agreements
Each Fund’s New Investment Advisory Agreement will be substantially similar to its Current Investment Advisory Agreement. Appendix I contains the form of the New Investment Advisory Agreement. The following is a comparison of certain provisions of the New Investment Advisory Agreements and Current Investment Advisory Agreements.
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Fees. There will be no change in the fee schedule applicable to any Fund under its New Investment Advisory Agreement. All currently effective contractual expense limitations or reimbursements will remain in place after the Transaction until the end of their respective terms, and Macquarie Group has no present intention to cause DMC to alter any voluntary expense limitations or reimbursements currently in effect for the Funds.
Investment Advisory Services. Each New Investment Advisory Agreement requires DMC to provide the same services to the applicable Funds as it does under the Current Investment Advisory Agreement. Each Fund’s New Investment Advisory Agreement generally provides that, subject to the direction and control of the Fund’s Board, DMC shall (i) regularly make decisions as to what securities and other instruments to purchase and sell on behalf of the Fund; (ii) effect the purchase and sale of those investments in furtherance of the Fund’s objectives and policies; and (iii) furnish the Board with information and reports regarding the Fund’s investments as DMC deems appropriate or as the Board may reasonably request.
Subject to the primary objective of obtaining best execution, DMC may place orders for the purchase and sale of portfolio securities and other instruments with broker/dealers that provide statistical, factual, or financial information and services to a Fund, to DMC, or to other clients of DMC. Both the Current and New Investment Advisory Agreement for each Fund provide that the services of DMC are not exclusive to the Funds, and DMC and its affiliates may render services to others.
The New Investment Advisory Agreements provide that DMC may, to the extent permitted by applicable law, appoint at its own expense one or more sub-advisers, including affiliates of DMC, to perform investment advisory services for the Fund. DMC may terminate a sub-adviser in its sole discretion at any time to the extent permitted by applicable law. A similar provision is included in the Current Investment Advisory Agreements.
Fund Administration Services. DMC and Macquarie Group have advised the Boards that they anticipate and intend that the nature and level of administrative services provided to the Funds under their Current Investment Advisory Agreements, in combination with any administrative services agreements, will not be diminished as a result of the Transaction or the implementation of the New Investment Advisory Agreements. In addition, any fees for administrative services, whether payable under a Current Investment Advisory Agreement or a separate administrative agreement, will not increase as a direct result of the Transaction or the New Investment Advisory Agreement.
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Payment of Expenses. The provisions contained in each Fund’s New Investment Advisory Agreement addressing allocation of expenses are substantially similar in all material respects to those contained in that Fund’s Current Investment Advisory Agreement. Both the Current and New Investment Advisory Agreements provide that each Fund is responsible for its own expenses, including costs incurred in the maintenance of a Fund’s corporate existence; the maintenance of the Fund’s books, records and procedures; dealing with the Fund’s shareholders; the payment of dividends; transfer of shares, including issuance, redemption and repurchase of shares; preparation of share certificates; reports and notices to shareholders; calling and holding of shareholders’ and trustees’ meetings; miscellaneous office expenses; brokerage commissions; custodian fees; legal and accounting fees; taxes; and federal and state registration fees. In addition, to avoid uncertainty, certain other expenses paid by the Funds under the Current Investment Advisory Agreement are listed expressly as Fund expenses in the New Investment Advisory Agreement. These expenses include auditing, fund accounting and financial administration fees, and other costs and expenses approved by the Board. Except as expressly provided for in the Current and New Investment Advisory Agreements, DMC is not responsible for a Fund’s expenses. The costs of the Transaction, however, are treated differently. See “Board considerations in approving the New Investment Advisory Agreement – Comparative Expenses.”
Trustees, officers, and employees of DMC may be Trustees and officers of the Trusts, but trustees, officers, and employees of DMC who are Trustees, officers and/ or employees of the Trusts do not receive any compensation from the Trusts for acting in a dual capacity. DMC and the Trusts may share common facilities, which may include legal and accounting personnel, with appropriate proration of expenses between the applicable Fund and DMC.
Limitation on Liability. Under the Current and New Investment Advisory Agreements, in the absence of willful misfeasance, bad faith, gross negligence, or a reckless disregard of the performance of its duties as the investment adviser to a Fund, DMC shall not be liable to a Fund or to any shareholder for any action or omission arising in the course of, or connected with, rendering its services under the Agreement or for any losses arising from the purchase, holding, or sale of any security, or otherwise.
Term and Continuance. If approved by shareholders of a Fund, the New Investment Advisory Agreement for the Fund will continue in effect for an initial period of two years from the date of implementation, and may be renewed thereafter provided that its renewal is specifically approved at least annually by both (i) the vote of a majority of the Fund’s Board or the vote of a 1940 Act Majority (as defined below) of the outstanding voting securities of the Fund and (ii) the vote of a majority
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of the Independent Trustees cast in person at a meeting called for the purpose of voting on the approval. The Current Investment Advisory Agreements have similar provisions for their term and continuance. The initial two-year period has elapsed for most of the Current Investment Advisory Agreements, which were most recently approved by the applicable Fund’s Board in May 2009.
A “1940 Act Majority” of the outstanding voting securities of a Fund means the lesser of (i) 67% or more of the voting securities of the Fund that are present in person or by proxy at a meeting if holders of shares representing more than 50% of the outstanding voting securities of the Fund are present in person or by proxy or (ii) more than 50% of the outstanding voting securities of the Fund.
Termination. Each Fund’s New Investment Advisory Agreement generally provides that the Agreement may be terminated at any time, without the payment of any penalty, by the Fund upon giving DMC 60 days’ written notice, provided that the termination is directed or approved by the vote of a majority of the Fund’s Board or by the vote of a 1940 Act Majority of the Fund’s outstanding voting securities. The New Investment Advisory Agreements may also be terminated by DMC on 60 days’ written notice. As required by the 1940 Act, each New Investment Advisory Agreement will also immediately terminate in the event of its “assignment” (as defined in the 1940 Act). The Current Investment Advisory Agreements contain similar termination provisions.
Proxy Voting. Each Fund’s New Investment Advisory Agreement provides explicitly that DMC shall be responsible for voting proxies of portfolio securities of each Fund, a service currently provided by DMC but not provided for explicitly in the Current Investment Advisory Agreement.
Amendments. To incorporate explicitly the requirements of the 1940 Act, each Fund’s New Investment Advisory Agreement provides that it may not be amended without a shareholder vote and a vote of the Independent Trustees, but that it may be amended without shareholder approval if the amendment relates solely to a change for which applicable laws and regulations do not requireintend to hold such meetings unless certain specified shareholder approval. Each Fund’s Current Investment Advisory Agreement does not contain a similar provision. The New Investment Advisory Agreements provide that they may be amended pursuant to a written agreement executed by a Fund and DMC.
Other Changes. Each Fund’s New Investment Advisory Agreement conforms the Current Investment Advisory Agreement to currently applicable laws and regulations and includes a number of minor wording changes that clarify non-material ambiguities in the Current Investment Advisory Agreement.
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Additional Information. A discussion of the basis for a Board’s approval of each Fund’s Current Investment Advisory Agreement is available, or will be made available, in the Fund’s most recent or next-published annual or semiannual report to shareholders. Appendix J provides information on the Current Investment Advisory Agreements, including their dates, the dates of last shareholder approval, and the reason for the most recent submission to shareholders. Exhibit A to Appendix I discloses the rate of compensation of DMC under both the Current Investment Advisory Agreement and the New Investment Advisory Agreement. Appendix K describes for each Fund the aggregate amount of DMC’s fees and the amount and purpose of any other material payments to DMC (including any affiliated person of DMC) for services provided to each Fund during the last fiscal year of the Fund. These services will continueactions are required to be provided if the New Investment Advisory Agreements are approved. For other registered funds advised by DMC that have investment objectives similar to those of the Funds, Appendix L sets forth the fund’s name, the fund’s net assets as of July 31, 2009, the rate of DMC’s compensation, and whether DMC has waived, reduced, or otherwise agreed to reduce its compensation under the applicable contract.
Additional information about DMC
Appendix M provides the name, address and principal occupation of each executive officer and each trustee of DMC, and each individual who is an officer or Trustee of the Trusts and who is also an officer, employee or shareholder of DMC. Mr. Coyne, a Trustee and executive officer of the Trusts, and certain other executive officers of the Trusts, may be deemed to have a substantial interest in this Proposal 2 arising from equity interests (the “Equity Interests”) they hold in Delaware Investments U.S., Inc. (“DIUS”), a subsidiary of DMHI and indirect parent of DMC. These persons may indirectly receive a portion of the purchase consideration for the Transaction as a result of the accelerated vesting of the Equity Interests caused by the Transaction. Based on the purchase consideration described above and other valuations, the approximate Equity Interests as a percentage of issued and outstanding equity of DIUS held by these persons as of August 18, 2009 are as follows: Patrick P. Coyne 0.32%; Michael J. Hogan 0.25%; See Yeng Quek 0.29%; David P. O’Connor 0.17%; and Richard Salus 0.01%. See Appendix M for a list of the executive officer positions with the Trusts of each of the above named individuals. Generally, the Equity Interests will be fully vested and may be put back to DIUS or called by DIUS not later than thirteen months following the Closing. The holders of the Equity Interests will only obtain a portion of the purchase consideration if they put their vested Equity Interests back to DIUS or their Equity Interests are called by DIUS, and the dollar value of the Equity Interests will be ascertained at the time of the put or call, as the case may be. Certain other officers of DMC who are also officers of the Trusts own or hold vested or unvested stock or options on stock of LNC.
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Board considerations in approving the New Investment Advisory Agreements
At an in-person meeting held on September 3, 2009, the Boards, including the Independent Trustees, discussed and unanimously approved the New Investment Advisory Agreement between each Fund and DMC. Concluding that approval of the New Investment Advisory Agreement would be in the best interests of each Fund and its shareholders, the Boards also directed that each New Investment Advisory Agreement be submitted to the applicable Fund shareholders for approval, and recommended that shareholders vote“FOR” approval of each New Investment Advisory Agreement.
Prior to their consideration of the New Investment Advisory Agreements, pursuant to letters from their independent legal counsel addressed to Macquarie Group and DMC, the Independent Trustees requested extensive materials about the Transaction and matters related to the proposed approvals. To assist the Boards in considering the New Investment Advisory Agreements, Macquarie Group provided materials and information about Macquarie Group, including detailed written responses to the questions posed to it by the Independent Trustees. DMC also provided materials and information about the Transaction, including detailed written responses to the questions posed to it by the Independent Trustees. The Boards requested and received certain information regarding the policies of DMC with respect to advisory fee levels and DMC’s philosophy with respect to breakpoints; the structure of portfolio manager compensation; DMC’s profitability; as well as any constraints or limitations on the availability of securities in certain investment styles that might inhibit DMC’s ability to invest fully in accordance with Fund policies.
The Coordinating Trustee and the Chair of each committee of the Boards, together with their independent legal counsel and Fund counsel, met with representatives of DMC and Macquarie Group to discuss the Transaction in very preliminary terms. Thereafter, the Independent Trustees, together with their independent legal counsel and Fund counsel, participated in a combination of four separate in-person meetings and telephone conference calls with representatives of DMC and Macquarie Group. In addition, management of DMC and certain Independent Trustees met in person or by telephone on several other occasions during the months preceding the Boards’ in-person meeting on September 3, 2009. At these meetings and on these telephone calls, the Transaction and future plans for DMC and the Funds were discussed at length. Finally, the Independent Trustees consulted with their independent legal counsel in executive sessions on numerous occasions during the time period covered by the negotiation of the Transaction and discussed, among other things, the legal standards applicable to their review of the New Investment Advisory Agreements and certain other contracts and considerations relevant to their deliberations on whether to approve the New Investment Advisory Agreements.
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At the in-person meetings and telephonic conference calls, the Trustees discussed the Transaction with DMC management and with key Macquarie Group representatives. The meetings included discussions of the strategic rationale for the Transaction as discussed above under “Description of the Transaction,” and Macquarie Group’s general plans and intentions regarding the Funds and DMC. On these occasions, representatives of DMC and Macquarie Group made presentations to, and responded to questions from, the Trustees. The Board members also inquired about the plans for, and anticipated roles and responsibilities of, key employees and officers of DMHI and DMC in connection with the Transaction.
In connection with the Trustees’ review of the New Investment Advisory Agreements, DMC and/or Macquarie Group emphasized that:
They expected that there will be no adverse changes as a result of the Transaction in the nature, quality, or extent of services currently provided to the Funds and their shareholders, including investment management, distribution, or other shareholder services;
No material changes in personnel or operations are currently contemplated in the operation of DMC under Macquarie Group as a result of the Transaction and no material changes are currently contemplated in connection with third party service providers to the Funds;
Macquarie Group has no present intention to cause DMC to alter the voluntary expense limitations and reimbursements currently in effect for the Funds; and
Under the Transaction Agreement, Macquarie Bank Limited has agreed to conduct, and to cause its affiliates to conduct, their respective businesses in compliance with the conditions of Section 15(f) of the 1940 Act with respect to the Funds to the extent within its control, including maintaining Board composition of at least 75% of the Board members qualifying as Independent Trustees and not imposing any “unfair burden” on the Funds for at least two years from the Closing.
In addition to the information provided by DMC and Macquarie Group as described above, the Trustees also considered all other factors they believed to be relevant to evaluating the New Investment Advisory Agreements, including the specific matters discussed below. In their deliberations, the Trustees did not identify any particular information that was controlling, and different Trustees may have attributed different weights to the various factors. However, for each Fund, the Trustees determined that the overall arrangements between the Fund and DMC, as provided in its respective New Investment Advisory Agreement, including the proposed advisory fees and
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the related administration arrangements between the Fund and DMC, were fair and reasonable in light of the services to be performed, expenses incurred and such other matters as the Trustees considered relevant. Factors evaluated included:
The potential for expanding distribution of Fund shares through access to Macquarie Group’s existing distribution channels;
Delaware Investments’ acquisition of an exclusive wholesaling sales force from a subsidiary of LNC;
The reputation, financial strength, and resources of Macquarie Group as well as its historic and ongoing commitment to the asset management business in Australia and other parts of the world;
The terms and conditions of the New Investment Advisory Agreements, including that each Fund’s contractual fee rate under the New Investment Advisory Agreements will remain the same (see “The New Investment Advisory Agreements” above);
The Boards’ full annual review (or initial approval) of the Current Investment Advisory Agreements at their in-person meeting in May 2009 as required by the 1940 Act and their determination at that time that (i) DMC had the capabilities, resources, and personnel necessary to provide the satisfactory advisory and administrative services currently provided to each Fund and (ii) the advisory and/or management fees paid by each Fund, taking into account any applicable fee limitations and breakpoints, represented reasonable compensation to DMC in light of the services provided, the costs to DMC of providing those services, economies of scale, and the fees and other expenses paid by similar funds and such other matters that the Boards considered relevant in the exercise of their reasonable judgment;
The portfolio management teams for the Funds are not currently expected to change as a result of the Transaction;
LNIC’s and Macquarie Bank Limited’s execution of an agreement with the Trusts (the “Expense Agreement”) pursuant to which LNIC and Macquarie Bank Limited have agreed to pay (or reimburse) all reasonable out-of-pocket costs and expenses of the Funds in connection with the Boards’ consideration of the Transaction, the New Investment Advisory Agreements and related agreements, and all costs related to proxy solicitation (subject to certain limited exceptions);
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The likelihood that Macquarie Group would invest additional amounts in Delaware Investments, including DMC, which could result in increased assets under management, which would in turn allow some Funds the potential opportunity to achieve economies of scale and lower fees payable by Fund shareholders; and
The compliance and regulatory history of Macquarie Group and its affiliates.
Certain of these considerations are discussed in more detail below.
In making their decision relating to the approval of each Fund’s New Investment Advisory Agreement, the Independent Trustees gave attention to all information furnished. The following discussion, however, identifies the primary factors taken into account by the Trustees and the conclusions reached in approving the New Investment Advisory Agreements.
Nature, Extent, and Quality of Service. The Trustees considered the services historically provided by DMC to the Funds and their shareholders. In reviewing the nature, extent, and quality of services, the Boards considered that the New Investment Advisory Agreements will be substantially similar to the Current Investment Advisory Agreements (as discussed above under “The New Investment Advisory Agreements”), and they therefore considered the many reports furnished to them throughout 2008 and 2009 at regular Board meetings covering matters such as the relative performance of the Funds; the compliance of portfolio managers with the investment policies, strategies, and restrictions for the Funds; the compliance of management personnel with the Code of Ethics adopted throughout the Delaware Investments® Family of Funds; and the adherence to fair value pricing procedures as established by the Boards. The Trustees were pleased with the current staffing of DMC and the emphasis placed on research and risk management in the investment process. Favorable consideration was given to DMC’s efforts to maintain expenditures and, in some instances, increase financial and human resources committed to Fund matters.
The Boards also considered the transfer agent and shareholder services that would continue to be provided to Fund shareholders by DMC’s affiliate, DSC. The Boards routinely review and have been impressed by DSC’s performance. The Trustees noted, in particular, DSC’s commitment to maintain a high level of service as well as DSC’s expenditures to improve the delivery of shareholder services. The Boards were assured that shareholders would continue to receive the benefits provided to Fund shareholders by being part of the Delaware Investments Family of Funds, including each shareholder’s ability to exchange an investment in one Fund for the same class of shares in another Fund without a sales charge, to reinvest Fund dividends into additional shares of any of the Funds, and the privilege to combine holdings in other Funds to obtain a reduced sales charge.
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Based on the information provided by DMC and Macquarie Group, including that Macquarie Group and DMC currently expected no material changes as a result of the Transaction in (i) personnel or operations of DMC or (ii) third party service providers to the Funds, the Boards concluded that the satisfactory nature, extent, and quality of services currently provided to the Funds and their shareholders were very likely to continue under the New Investment Advisory Agreements. Moreover, the Boards concluded that the Funds would probably benefit from the expanded distribution resources that would become available to Delaware Investments following the Transaction. The Boards also concluded that it was very unlikely that any “unfair burden” would be imposed on any of the Funds for the first two years following the Closing as a result of the Transaction. Consequently, the Boards concluded that they did not expect the Transaction to result in any adverse changes in the nature, quality, or extent of services (including investment management, distribution, or other shareholder services) currently provided to the Funds and their shareholders.
Investment Performance. The Boards considered the overall investment performance of DMC and the Funds. The Trustees placed significant emphasis on the investment performance of the Funds in view of its importance to shareholders. Although the Trustees gave appropriate consideration to performance reports and discussions with portfolio managers at Board meetings throughout the year, the Trustees gave particular weight to their review of investment performance in connection with the approval of the Current Investment Advisory Agreements at the Board meeting held in May 2009. At that meeting, the Trustees reviewed reports for each Fund prepared by Lipper, Inc., an independent statistical compilation organization (“Lipper”), which showed the Fund’s investment performance as of December 31, 2008 in comparison to a group of funds selected by Lipper as being similar to the Fund (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe made up the first quartile; the next 25% made up the second quartile; the next 25% made up the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe made up the fourth quartile. Annualized investment performance for each Fund was shown for the past 1-, 3-, 5-, and 10-year periods, to the extent applicable, compared to that of the Performance Universe. The Boards’ objective was that each Fund’s performance for the periods considered be at or above the median of its Performance Universe. During the May 2009 review process, the Trustees observed the significant improvements to relative investment performance of the funds in the Delaware Investments® Family of Funds as compared to the funds’ performance as of December 31, 2007.
At their meeting on September 3, 2009, the Trustees, including the Independent Trustees in consultation with their independent counsel, updated their examination of the investment performance of each fund in the Delaware Investments Family
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of Funds. The Trustees compared the performance of each fund in the Delaware Investments® Family of Funds to that of its respective Performance Universe for the 1-, 3-, 5-, and 10-year periods ended June 30, 2009 and compared its relative investment performance against the corresponding relative investment performance of each fund in the Delaware Investments Family of Funds for such time periods ended December 31, 2008, to the extent applicable. As of June 30, 2009, 30 of the funds in the Delaware Investments Family of Funds had investment performance relative to that of the respective Performance Universe that was better than the corresponding relative investment performance at December 31, 2008 for all applicable time periods. At June 30, 2009, an additional six funds in the Delaware Investments Family of Funds had investment performance relative to that of their respective Performance Universe that was better than the corresponding relative investment performance at December 31, 2008 for a majority of the applicable time periods. At June 30, 2009, 15 additional funds in the Delaware Investments Family of Funds had investment performance relative to that of their respective Performance Universe that was better than the corresponding relative investment performance at December 31, 2008 for an equal number of the applicable time periods, and only 29 funds in the Delaware Investments Family of Funds had poorer relative investment performance at June 30, 2009 compared to that at December 31, 2008.
The Boards therefore concluded that the investment performance of the funds in the Delaware Investments Family of Funds on an aggregate basis had continued to improve relative to their respective Performance Universe since the data reviewed at the May 2009 meeting.Based on information provided by DMC and Macquarie Group, the Boards concluded that neither the Transaction nor the New Investment Advisory Agreement would likely have an adverse effect on the investment performance of any Fund because (i) DMC and Macquarie Group did not currently expect the Transaction to cause any material change to the Funds’ portfolio management teams responsible for investment performance, which the Boards found to be satisfactory and improving, (ii) as discussed in more detail below, the Funds’ expenses were not expected to increase as a result of the Transaction, (iii) the Trustees thought it was extremely unlikely that the Funds would bear any Transaction-related expenses, and (iv) there was not expected to be any “unfair burden” imposed on the Funds as a result of the Transaction.
Comparative Expenses.The Trustees also evaluated expense comparison data for the Funds previously considered in May 2009. At that meeting, DMC had provided the Boards with information on pricing levels and fee structures for the Funds and comparative funds. The Trustees focused on the comparative analysis of the effective management fees and total expense ratios of each Fund versus the effective management fees and expense ratios of a group of funds selected by Lipper as being similar to each Fund (the “Expense Group”). In reviewing comparative costs, each
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Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) of other funds within the Expense Group, taking into account any applicable breakpoints and fee limitations. Each Fund’s total expenses were also compared with those of its Expense Group. The Trustees also considered fees paid to Delaware Investments for non-management services. The Trustees’ objective was for each Fund’s total expense ratio to be competitive with that of the funds in the Expense Group. According to the Lipper reports furnished for the May 2009 meeting, the effective management fees and total expense ratios for a majority of the funds in the Delaware Investments® Family of Funds were below the respective Expense Group median. At the September 3, 2009 meeting, DMC advised the Boards that the more recent comparative expenses for the Funds remained consistent with the previous review in May 2009, and consequently the Trustees concluded that expenses of the Funds were satisfactory.
The Boards also considered the Expense Agreement in evaluating Fund expenses. The Expense Agreement provides that LNIC and Macquarie Bank Limited will pay or reimburse the Trusts for all reasonable out-of-pocket costs and expenses in connection with the Transaction and the consideration of the New Investment Advisory Agreements (subject to certain limited exceptions). These obligations of LNIC and Macquarie Bank Limited apply regardless of whether or not the Transaction is consummated. As a result, the Funds will bear no costs in connection with or related to evaluating the Transaction or seeking or obtaining shareholder approval of the New Investment Advisory Agreements (other than as described above).
Based on information provided by DMC and Macquarie Group, the Boards concluded that neither the Transaction nor the New Investment Advisory Agreements would likely have an adverse effect on the Funds’ expenses because (i) each Fund’s contractual fee rates under the New Investment Advisory Agreements would remain the same, (ii) the Boards were assured by DMC and Macquarie Group that they had no current intention to change DMC’s existing voluntary expense limitations and reimbursement policy as a result of the Transaction, (iii) under the Expense Agreement, the Funds would be reimbursed for all reasonable out-of-pocket costs and expenses in connection with the Transaction and the related proxy solicitation (subject to certain limited exceptions), (iv) consistent with Section 15(f) of the 1940 Act, no “unfair burden” would be imposed on the Funds for the first two years after the Closing, and (v) the expense ratios of certain Funds might decline as a result of the possible increased investment in Delaware Investments by Macquarie Group, as discussed below under “Economies of Scale.”
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Management Profitability. At their meeting on September 3, 2009, the Boards evaluated DMC’s profitability in connection with the operation of the Funds. The Boards had previously considered DMC’s profitability in connection with the operation of the Funds at their May 2009 meeting. At that meeting, the Boards reviewed an analysis that addressed the overall profitability of Delaware Investments’ business in providing management and other services to each of the Funds and the Delaware Investments® Family of Funds as a whole. Specific attention was given to the methodology followed in allocating costs for the purpose of determining profitability.
At the May 2009 meeting, representatives of DMC had stated that the level of profits of DMC, to a certain extent, reflected operational cost savings and efficiencies initiated by Delaware Investments (including DMC and its affiliates that provide services to the Funds). The Boards considered Delaware Investments’ efforts to improve services provided to Fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide SEC initiatives. At that meeting, the Boards found that the management fees charged were reasonable in light of the services rendered and the level of profitability of DMC. At the September 3, 2009 meeting, DMC advised the Boards that DMC did not expect the Transaction to affect materially the profitability of Delaware Investments compared to the level of profitability considered during the May 2009 review. Moreover, the Trustees reviewedpro forma balance sheets of certain key companies in Delaware Investments as of June 30, 2009 (which were provided by Macquarie Group and DMC in response to the Trustees’ requests), and evaluated the projections of Delaware Investments’ capitalization following the Transaction for purposes of evaluating the financial ability of Delaware Investments to continue to provide the nature, extent, and quality of services as it had under the Current Investment Advisory Agreement.
Based on information provided by DMC and Macquarie Group, the Boards concluded that DMC and Delaware Investments would be sufficiently capitalized following the Transaction to continue the same level and quality of services to the Funds under the New Investment Advisory Agreements as was the case under the Current Investment Advisory Agreements. The Board also concluded that Macquarie Group had sufficient financial strength and resources, as well as an ongoing commitment to a global asset management business, to continue investing in Delaware Investments, including DMC to the extent that Macquarie Group determined it was appropriate. Finally, because services and costs were expected to be substantially the same (and that DMC had represented that, correspondingly, profitability would be about the same), under the New Investment Advisory Agreements as under the Current Investment Advisory Agreements, the Trustees concluded that the profitability of Delaware Investments would not result in an inequitable charge on the Funds or
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their shareholders. Accordingly, the Boards concluded that the fees charged under the New Investment Advisory Agreements would be reasonable in light of the services to be provided and the expected profitability of DMC.
Economies of Scale. The Trustees considered whether economies of scale would be realized by Delaware Investments as each Fund’s assets increase and the extent to which any economies of scale would be reflected in the management fees charged. The Trustees took into account DMC’s practice of maintaining the competitive nature of management fees based on its analysis of fees charged by comparable funds. DMC management believed, and the Boards agreed, that the Funds were priced with breakpoints and relatively low management fees to reflect potential economies of scale to Fund shareholders.
The Boards also acknowledged Macquarie Group’s statement that the Transaction would not by itself immediately provide additional economies of scale given Macquarie Group’s limited presence in the U.S. mutual fund market. Nonetheless, the Trustees concluded that additional economies of scale could potentially be achieved in the future if DMC were owned by Macquarie Group as a result of Macquarie Group’s willingness to invest additional amounts in Delaware Investments if appropriate opportunities arise. The Board further concluded that potential economies of scale could be achieved as a result of Delaware Investments’ expanded distribution capabilities arising from the Transaction, as well as opportunities that might arise from Macquarie Group’s global asset management business.
Fall-Out Benefits. The Boards acknowledged that DMC would continue to benefit from soft dollar arrangements using portfolio brokerage of each Fund that invests in equity securities and that DMC’s profitability would likely be somewhat lower without the benefit of practices with respect to allocating Fund portfolio brokerage for brokerage and research services. The Boards also considered that Macquarie Group and Delaware Investments may derive reputational, strategic, and other benefits from their association with the Delaware Investments® Family of Funds, including service relationships with DMC, DSC, and DDLP, and evaluated the extent to which Delaware Investments might derive ancillary benefits from Fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Investments Family of Funds and the benefits from allocation of Fund brokerage to improve trading efficiencies. However, the Boards concluded that (i) any such benefits under the New Investment Advisory Agreements would not be dissimilar from those existing under the Current Investment Advisory Agreements, (ii) such benefits did not impose a cost or burden on the Funds or their shareholders, and (iii) such benefits would probably have an indirectly beneficial effect on the Funds and their shareholders because of the added importance that DMC and Macquarie Group might attach to the Funds as a result of the fall-out benefits that the Funds conveyed.
25
The Transaction Agreement.The Trustees reviewed the Transaction Agreement in advance of the September 3, 2009 meeting. The Trustees considered the terms of the Transaction Agreement, including those related to Section 15(f) of the 1940 Act and that LNIC and Macquarie Bank Limited will bear the expenses related to the Funds’ proxy solicitation. At the meeting, the Trustees discussed the purchase price to be paid and noted the conditions to the Closing, including the requirements for obtaining consents to the change in control from Delaware Investments’ advisory clients, such as the Funds. The Trustees believed that Delaware Investments’ ability to continue to manage the general account assets of certain LNC subsidiaries was important because it allowed Delaware Investments’ overhead expenses to be spread over a larger base of assets under management and thus potentially reduce costs to the Funds and their shareholders as compared to the costs that might apply if Delaware Investments did not manage the general account assets. Consequently, the Trustees evaluated the provisions of the Transaction Agreement related to the management of those assets and concluded that those provisions were satisfactory and likely to be beneficial to Fund shareholders.
Board Review of Macquarie Group.The Trustees reviewed detailed information supplied by Macquarie Group about its operations as well as other information regarding Macquarie Group provided by independent legal counsel to the Independent Trustees. As previously noted, to consider Delaware Investments’ ability to continue to provide the same level and quality of services to the Funds, the Boards requested, received and reviewedpro forma balance sheets of certain key companies in Delaware Investments as of June 30, 2009, which projected Delaware Investments’ capitalization following the Transaction. Based on this review, the Trustees concluded that Delaware Investments would continue to have the financial ability to maintain the high quality of services required by the Funds. The Trustees noted that there would be a limited transition period during which some services previously provided by LNC to Delaware Investments would continue to be provided by LNC after the Closing, and concluded that this arrangement would help minimize disruption in Delaware Investments’ provision of services to the Funds following the Transaction.
Macquarie Group described its proposed changes to Delaware Investments’ corporate governance, primarily through the anticipated addition of certain Macquarie Group officers to DMHI’s board of directors and to Delaware Investments’ distribution and product management affiliates. The Trustees considered favorably Macquarie Group’s statement that it had no current intention to change the executive, administrative, investment, or support staff of Delaware Investments in any significant way as a result of the Transaction. Macquarie Group described the proposed harmonization of the compensation system in use at Delaware Investments with the compensation plan used by Macquarie Group, including short-term and
26
long-term incentive compensation and equity interests for executive officers and investment personnel. Macquarie Group described its current intention to enhance certain administrative and operational areas of DMC following the Transaction, including information technology, product management, and risk management.
The Boards considered Macquarie Group’s support for Delaware Investments’ plans for Fund distribution by transferring wholesalers from Lincoln Financial Distributors, Inc., LNC’s retail distributor, to Delaware Investments, and Macquarie Group’s current intention to leave the Funds’ other service providers in place. The Boards also considered Macquarie Group’s current strategic plans to increase its asset management activities, one of its core businesses, particularly in North America, and its statement that its acquisition of DMC is an important component of this strategic growth and the establishment of a significant presence in the United States. Based in part on the information provided by DMC and Macquarie Group, the Boards concluded that Macquarie Group’s acquisition of Delaware Investments could potentially enhance the nature, quality, and extent of services provided to the Funds and their shareholders.
DMC and Macquarie Group explained to the Boards that, as a subsidiary of an Australian authorized deposit-taking institution, Delaware Investments would become subject to certain Australian regulatory oversight and requirements following the Transaction, including those related to disclosure, fund holdings, affiliated transactions, advisory agreements, and expense limitation agreements. DMC and Macquarie Group also explained to the Boards that certain exemptive relief had been provided to Macquarie Group by the Australian bank regulator in anticipation of the Transaction, and the Boards were informed of the nature of future relief that may be required. Based on the information provided and representations made by DMC and Macquarie Group, the Board concluded that the Australian bank regulatory requirements would not have a material effect on the operations of DMC or the Funds, including DMC’s ability to continue in its discretion to provide voluntary expense limitations and reimbursements to the Funds or to contribute appropriate levels of seed capital to new funds.
The Boards noted that DMC has placed brokerage transactions with a broker/ dealer affiliate of Macquarie Group and received research in connection with those transactions. In addition, certain other Macquarie Group affiliates participate as underwriters for securities offerings outside of the United States. Consequently, the Boards determined to have DMC report to them regularly to monitor any brokerage transactions with Macquarie Group affiliates for compliance with the requirements of Section 15(f) and Section 17(e) of the 1940 Act, and to ensure compliance with the Funds’ procedures under Rule 10f-3 promulgated under the 1940 Act for offerings in whichor a Macquarie Group affiliate isTrust’s charter documents. Any shareholder who wishes to submit proposals to be considered at a memberspecial meeting of a Fund’s shareholders should send such proposals to the Secretary of the underwriting syndicate.
27
Conclusion. The Independent Trusteesrelevant Fund at 100 Independence, 610 Market Street, Philadelphia, PA 19106-2354. Any shareholder proposal intended to be presented at any future meeting of each Trust deliberateda Fund’s shareholders must be received by such Fund at its principal office a reasonable time before the solicitation of proxies for such meeting in executive session; the entire Board of each Fund, including the Independent Trustees, then approved each New Investment Advisory Agreement. The Boards concluded that the advisory fee rate under each New Investment Advisory Agreement is reasonable in relationorder for such proposal to the services provided and that execution of the New Investment Advisory Agreement isbe considered for inclusion in the best interestsproxy statement relating to such meeting. Moreover, inclusion of any such proposals is subject to limitations under the shareholders. For each Fund, the Trustees noted that they had concludedfederal securities laws. Persons named as proxies for any subsequent shareholders’ meeting will vote in their most recent advisory agreement continuance considerations in May 2009 that the management fees and total expense ratios were at acceptable levels in light of the quality of services provided to the Funds and in comparison to those of the Funds’ respective peer groups; that the advisory fee schedule would not be increased and would stay the same for all of the Funds; that the total expense ratio had not changed materially since that determination; and that DMC had represented that the overall expenses for each Fund were not expected to be adversely affected by the Transaction. The Trustees also noted,discretion with respect to proposals submitted on an untimely basis.
Shareholders who wish to send communications to the
Funds that currently hadBoard or the
benefit of voluntary fee limitations, that Macquarie Group had no present intention to cause DMC to alter any voluntary expense limitations or reimbursements currently in effect for the Funds. On that basis, the Trustees concluded that the total expense ratio and proposed advisory fee for the Funds anticipated to result from the Transaction was acceptable. In approving each New Investment Advisory Agreement, each Board stated that it anticipated reviewing the continuancespecific members of the
agreementBoard should submit the communication in
advancewriting to the attention of the
expirationSecretary of the
initial two-year period.Required vote
To become effective with respect to a particularrelevant Fund, at the New Investment Advisory Agreementaddress in the preceding paragraph, identifying the correspondence as intended for that Fund must be approved by a 1940 Act Majority vote of the Fund’s outstanding voting securities. The approval of one Fund’s New Investment Advisory Agreement is not contingent on the approval of any other Fund’s New Investment Advisory Agreement. Each New Investment Advisory Agreement was approved separately by the Independent Trustees and by the Board of the applicable Trust asFund or a whole after consideration of all factors that it determined to be relevant to its deliberations, including those discussed above. The Board of each Trust also determined to submit each applicable Fund’s New Investment Advisory Agreement for consideration by the shareholdersspecified member of the Fund. If the shareholdersBoard. The Secretary will maintain a copy of a Fund do not approve the Fund’s New Investment Advisory Agreement,any such communication and will promptly forward it to the Board of that Fund will consider other possible courses of action foror the Fund, including entering into an interim advisory agreement with DMC pursuant to Rule 15a-4specified member of the 1940 Act.
FORBoard, as appropriate.
INFORMATION ABOUT THE
REASONS DISCUSSED ABOVE, THE BOARD OFEACH TRUST UNANIMOUSLY RECOMMENDS THAT YOU VOTE FORTHE APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT.28
VOTING INFORMATION
How will shareholder voting be handled?
Only shareholdersMEETING
Record Date
Shareholders of record of the Funds atas of the close of business on September 18, 2009 (the “Record Date”), will bethe Record Date are entitled to notice of, and to vote at the MeetingMeeting. Shareholders of the Funds on the matters described in this Proxy Statement. ShareholdersRecord Date will be entitled to one vote for each full share and a fractional vote for each fractional share that they hold. If sufficient votes to approve a Proposal for a Fund are not received byown. No shares have cumulative voting rights in the dateelection of Trustees. The number of shares that you may vote is the total of the Meeting,number shown on the proxy card/voting instruction form accompanying this Joint Proxy Statement. Appendix B sets forth the number of shares issued and outstanding for each class of each Fund as of the Record Date.
Revocation of Proxies
Any shareholder giving a proxy has the power to revoke it by mail (addressed to the Secretary at the principal executive office of the Trusts at the address shown at the beginning of this Joint Proxy Statement) or webcast at the Meeting, by executing a superseding proxy or by submitting a notice of revocation to the relevant Fund. A superseding proxy may also be adjournedexecuted by voting via telephone or Internet. The superseding proxy need not be voted using the same method (mail, telephone, or Internet) as the original proxy vote.
All properly executed and unrevoked proxies received in time for the Meeting will be voted as instructed by shareholders. If you execute your proxy but give no voting instructions, your shares that Fundare represented by proxies will be voted “FOR” each Trustee Nominee and, in the proxies’ discretion, “FOR” or for that Proposal to permit further solicitations of proxies. The persons named as proxies on the enclosed proxy cards will vote their proxies in their discretion on questions of adjournment and“AGAINST” any other items (other than the Proposals)business that may properly come before the Meeting. A majority of
Quorum, Voting and Adjournment
For each Trust, the votes cast by shareholders of a Fund present in personpresence at the Meeting, via webcast or by proxy, atof one-third of the Meeting (whether or notoutstanding shares of such Trust entitled to vote, as of the Record Date, shall be necessary and sufficient to constitute a quorum for the Fund) may adjourntransaction of business for that Trust or Fund.
In the event that a quorum is not present at the Meeting,
with respector if there are insufficient votes to
that Fund. Theapprove the Proposal by the time of the Meeting, the proxies, or their substitutes, or the chairman of the Meeting may
alsopropose that the Meeting be adjourned
one or more times to permit further solicitation. Any adjournment by the
Chairpersonshareholders requires the affirmative vote of a majority of the
Meeting.total number of shares that are present via webcast or by proxy when the adjournment is being voted on. If a quorum is present, the proxies will vote in favor of any such adjournment all shares that they are entitled to vote in favor of the Proposal and the proxies will vote against any such adjournment any shares for which they are directed to vote against the Proposal. The proxies will not vote any shares for which they are directed to abstain from voting on the Proposal.
Effect of Abstentions and Broker Non-Votes. For purposes of determining the presence of a quorum for transacting business at the Meeting, abstentions and broker non-votes“non-votes” (i.e., shares held by brokers or nominees, typically in “street name,” as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote and (ii) the broker or nominee does not have discretionary voting power on a particular matter) will be countedtreated as shares that are present for purposes of determining whether a quorum is present atquorum. For purposes of determining the Meeting. Abstentionsapproval of the Proposal, abstentions and broker non-votes do not count as votes cast with respect to the Proposal. Accordingly, abstentions and broker non-votes will have no effect on Proposal 1 butProposal.
Discretionary Voting
Broker-dealers that hold a Trust’s shares in “street name” for the benefit of their customers will
haverequest the
same effect asinstructions of such customers on how to vote their shares on the election of a
vote “against” Proposal 2. Broker non-votes are proxies from brokers or nominees indicatingTrustee Nominee. The Trusts understand that,
they have not received votingunder the rules of the New York Stock Exchange (“NYSE”), such broker-dealer firms may for certain “routine” matters, without instructions from
the beneficial owner or other person entitled to vote shares on a particular matter for which the brokers or nominees do not havetheir customers and clients, grant discretionary authority to
vote. This generally occurs only when there is another matter at the
meeting for whichproxies designated by the
brokers or nominees do have discretionary authorityBoard to vote
such as Proposal 1.How do I ensure my vote is accurately recorded?
You may attendif no instructions have been received prior to the Meeting and vote in person. You may also vote by completing, signing, and returning the enclosed proxy carddate specified in the enclosed postage paid envelope,broker-dealer firm’s request for voting instructions. The election of a Trustee is a “routine” matter and beneficial owners who do not provide proxy instructions or who do not return a proxy card/voting instruction form may have their shares voted by telephone or through the Internet. If you return your signed proxy card or vote by telephone or through the Internet, your vote will be officially cast at the Meeting by the persons appointed as proxies. A proxy card is, in essence, a ballot. If you sign and date the proxy card but give no voting instructions, your shares will be votedbroker-dealer firms in favor of all the Trustee Nominees in Proposal 1 and “For” Proposal 2. Your proxies will also be voted in the discretionProposal. Broker-dealers who are not members of the persons appointed as proxies on anyNYSE may be subject to other matters thatrules, which may properly come before the Meeting or any adjournment or postponement of the Meeting, although management of the Funds doesmay not expect any such matterspermit them to come before the Meeting. Ifvote your shares are held of record by a broker/dealer andwithout instruction. We urge you wish to vote in person at the Meeting, you must obtain a legal proxy from the broker of record and present it at the Meeting.
29
May I revoke my proxy?
You may revoke your proxy at any time for a Fund before it is voted by sending a written noticeprovide instructions to the Fund expressly revoking your proxy, by signing and forwarding to the Fund a later-dated proxy, or by attending the Meeting and voting in person. If your shares are held in the name of your broker you will have to make arrangements withor nominee so that your broker to revoke a previously executed proxy. If you wish to vote in-person at the Meeting, you must obtain a legal proxy from your brokervotes may be counted.
Solicitation of
record and present it at the Meeting.What other matters will be voted upon at the Meeting?
Proxies
The
Boards do not intend to bring any matters before the Meeting other than as described in this Proxy Statement. Because the Meeting is a special meeting, the Boards do not anticipate that any other matters will be brought before the Meeting by others. However, if any other matter legally comes before the Meeting,initial solicitation of proxies will be
voted in the discretion of the persons appointed as proxies.Who is entitled to vote?
Only shareholders of record on the Record Date will be entitled to vote at the Meeting on the matters described in this Proxy Statement. The table in Appendix N shows as of July 31, 2009, as to each class of voting securities of the Funds, the number of shares outstanding.
What is the Quorum requirement?
A “Quorum” is the minimum number of shares that must be present in order to conduct the Meeting. A Quorum for a Trust or a particular Fund means one-third (331/3%) of the shares of that Trust or Fund that are entitled to vote at the Meeting, present in person or represented by proxy.
Who will pay the expenses of the Meeting?
Under the Expense Agreement, all reasonable out-of-pocket costs and expenses incurred by the Funds related to the Meeting, including the costs of preparing proxy solicitation materials and soliciting proxies in connection with the Meeting, will be reimbursed by Macquarie Bank Limited and LNIC (subject to certain limited exceptions). The Funds have engaged Computershare Fund Services, Inc. (“Computershare”) to solicit proxies from brokers, banks, other institutional holders and individual shareholders at an anticipated cost of approximately $750,000. Fees and expenses may be greater depending on the effort necessary to obtain shareholder votes. The agreement with Computershare provides that Computershare shall be indemnified against certain liabilities and expenses, including liabilities under the federal securities laws.
30
What other solicitations will be made?
This proxy solicitation is being made by the Boards for use at the Meeting. In addition tomail. Additional solicitations by mail, solicitations also may be made by advertisement, telephone, telegram, facsimile transmissione-mail, or other electronic media,personal contact by the Trusts’ officers or personal contacts.employees or representatives of DMC or one of its affiliates or by a proxy soliciting firm retained by the Trusts. DMC has retained Computershare as proxy solicitor to assist in the solicitation of proxy votes primarily by contacting shareholders by telephone and facsimile. The Fundsproxy solicitor’s services include proxy consulting, mailing, tabulation and solicitation services. The cost of retaining such proxy solicitor, including printing and mailing costs, is estimated to be approximately $3,500,000-$5,000,000, to be borne by the Trusts. Costs will vary depending on the number of solicitations made. The Trusts’ officers, and those employees and representatives of DMC or its affiliates who assist in the proxy solicitation, will not receive any additional or special compensation for any such efforts. In addition, the Trusts will request broker/dealerbroker-dealer firms, custodians, nominees and fiduciaries to forward proxy materials to the beneficial owners of thetheir shares held of record. Reasonable out-of-pocket expenses of broker/dealer firms, custodians, nominees, and fiduciaries for their reasonable expenses incurred in connection with the proxy solicitation will be shared equallyrecord by LNIC and Macquarie Bank Limited as provided above. In addition to solicitations by mail, officers and employees of the Trusts,such persons.
OTHER INFORMATION
Service Providers
Investment Adviser. DMC,
and their affiliates may, without extra pay, conduct additional solicitations by telephone, telecopy, and personal interviews. The Funds expect that any solicitations will be primarily by mail, but also may include telephone, telecopy, or oral solicitations. As the Meeting date approaches, you may receive a telephone call from a representative of Computershare if your votes have not yet been received. Proxies that are obtained telephonically will be recorded in accordance with the procedures described below. These procedures are designed to ensure that both the identity of the shareholder casting the vote and the voting instructions of the shareholder are accurately determined.
In all cases where a telephonic proxy is solicited, the Computershare representative is required to ask for each shareholder’s full name and address, and to confirm that the shareholder has received the proxy materials in the mail. If the shareholder is a corporation or other entity, the Computershare representative is required to ask for the person’s title and confirmation that the person is authorized to direct the voting of the shares. If the information elicited matches the information previously provided to Computershare, then the Computershare representative has the responsibility to explain the voting process, read the Proposals listed on the proxy card, and ask for the shareholder’s instructions on the Proposals. Although the Computershare representative is permitted to answer questions about the process, he or she is not permitted to recommend to the shareholder how to vote, other than to read any recommendation set forth in this Proxy Statement. Computershare will record the shareholder’s instructions on the card. Within 72 hours, the shareholder will be sent a letter or mailgram to confirm his or her vote and asking the shareholder to call Computershare immediately if his or her instructions are not correctly reflected in the confirmation.
31
Why did my household receive only one copy of this Proxy Statement?
Unless you have instructed the Funds not to do so, only one copy of this Proxy Statement will be mailed to multiple Fund shareholders sharing an address(a “Household”), even if more than one shareholder in a Household is a Fund shareholder of record. If you need additional copies of this Proxy Statement, if you do not want the mailing of proxy solicitation materials to be combined with those of 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 broker/dealer firm or other financial intermediary or, if you hold Fund shares directly with the Funds, you may write to the Funds by regular mail to P.O. Box 219691, Kansas City, MO 64121-9691, by overnight courier service to 430 W. 7th Street, Kansas City, MO 64105, or by calling toll-free 800 523-1918.
How do I submit a shareholder proposal for inclusion in a Trust’s proxy statement for a future shareholder meeting?
The governing instruments of the Trusts do not require that the Funds hold annual meetings of shareholders. Each Fund is, however, required to call meetings of shareholders in accordance with the requirements of the 1940 Act to seek approval of new or material amendments to advisory arrangements or of a change in the fundamental investment policies, objectives or restrictions of the Fund. Each Trust also would be required to hold a shareholders meeting to elect new Trusteeslocated at such time as less than a majority of the Trustees holding office have been elected by shareholders. The Trusts’ governing instruments generally provide that a shareholder meeting may be called by a majority of the Trustees, the Chairperson of the Board, or the President of the Trust.
Shareholders of a Fund wishing to submit proposals for inclusion in a proxy statement for a future shareholder meeting must send their written proposal to that Fund a reasonable time before the Board’s solicitation relating to that meeting is to be made. Shareholder proposals must meet certain legal requirements established by the SEC, so there is no guarantee that a shareholder’s proposal will actually be included in the next proxy statement. The persons named as proxies in future proxy materials of a Fund may exercise discretionary authority with respect to any shareholder proposal presented at any subsequent shareholder meeting if written notice of that proposal has not been received by that Fund within a reasonable period of time before the Board’s solicitation relating to that meeting is made. Written proposals with regard to a Fund should be sent to the Secretary of the Trusts, David F. Connor, at the address of the Funds given above.
32
How may I communicate with the Boards?
Shareholders who wish to communicate to the Boards may address correspondence to Ann R. Leven, Coordinating Trustee for the Trusts, c/o the applicable Trust at 2005100 Independence, 610 Market Street, Philadelphia, Pennsylvania, 19103. Shareholders may also send correspondencePA 19106-2354, serves as the current investment adviser to the Coordinating Trustee, or any individual Trustee, c/oFunds. DMC is a series of Macquarie Investment Management Business Trust (a Delaware statutory trust), which is a subsidiary of Macquarie Management Holdings, Inc. (“MMHI”). MMHI is a subsidiary, and subject to the applicable Trustultimate control, of Macquarie Group Limited (“Macquarie”). Macquarie is a Sydney, Australia-headquartered global provider of banking, financial, advisory, investment and funds management services.
Distributor. Delaware Distributors, L.P. (“DDLP”), located at
2005100 Independence, 610 Market Street, Philadelphia,
Pennsylvania 19103. Without opening any such correspondence, Trust management will promptly forward all such correspondence to the intended recipient(s).MORE INFORMATION ABOUT THE FUNDS
Transfer Agency Services.DSC, 2005 Market Street, Philadelphia, Pennsylvania 19103, an affiliate of DMC, actsPA 19106-2354, serves as the shareholder servicing, dividend disbursing, and transfer agent for the Funds. For its shareholder servicing, dividend disbursing services, and transfer agency services, DSC is paid an annual per account charge of $11.00 for each open account and $6.50 for each closed account on its records and each account held on a sub-accounting system maintained by firms that hold accounts on an omnibus basis. These charges are assessed monthly on a pro rata basis and determined by using the number of shareholder and retirement accounts maintained asnational distributor of the last calendar day of each month. Compensation is fixed each year and approved by each Board, including a majority of the Independent Trustees.
DST Systems, Inc. (“DST”), 430 W. 7th Street, Kansas City, Missouri 64105, provides subtransfer agency services to the Funds. In connection with these services, DST administers the overnight investment of cash pending investment in a Fund or payment of redemptions. The proceeds of this investment program are used to offset the Funds’ transfer agency expenses.shares.
Custodian.Fund Accountants. The Bank of New York Mellon (“BNY Mellon”), located at One Wall Street, New York, New York 10286-0001,10286, serves as the custodian for the Funds.
Fund Accountants. BNY Mellon also provides fund accounting and financial administration services to
each Fund.the Funds. Those services include performing functions related to calculating
each Fund’sthe Funds’ net asset
valuevalues (“
NAV”NAVs”) and providing financial reporting information, regulatory compliance testing and other related accounting services. For these services, the Funds pay BNY Mellon an asset-based fee, subject to certain fee minimums plus certain out-of-pocket expenses and transactional charges.
DSC
Delaware Investments Fund Services Company (“DIFSC” or “Transfer Agent”), located at 100 Independence, 610 Market Street, Philadelphia, PA 19106-2354, provides fund accounting and financial administration oversight services to the Funds. Those services include overseeing the Funds’ pricing process, the calculation and payment of fund expenses, and financial reporting in shareholder reports, registration statements and other regulatory filings.
DSCDIFSC also manages the process for the payment of dividends and distributions,
and the dissemination of Fund NAVs and performance
data. For these services, the Funds pay DSC an asset-based33
fee, plus certain out-of-pocket expensesdata, and transactional charges. The fees payable to BNY Mellon and DSC for the services described above are allocated among all funds in the Delaware Investments® Family of Funds on a relative NAV basis.
Distribution Services. Pursuant to distribution agreements with each Trust, DDLP, 2005 Market Street, Philadelphia, Pennsylvania 19103, servesshareholder servicing.
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP (“PwC”) was selected as the
national distributor forFunds’ independent registered public accounting firm to audit the
Funds. DDLP pays the expenses of the promotion and distribution of the Funds’ shares, except for payments by the Funds on behalf of Class A Shares, Class B Shares, Class C Shares, and Class R Shares, as applicable under their respective 12b-1 Plans. DDLP also receives sales loads in connection with the purchase and redemption of certain classes of shares. DDLP is an indirect subsidiary of DMHIand is an affiliate of DMC. The Boards annually review fees paid to DDLP. Following the Transaction, DDLP will be primarily responsible for promoting the sale of Fund shares through broker/dealers, financial advisors and other financial intermediaries. This function is currently provided by Lincoln Financial Distributors, Inc. (“LFD”), 130 N. Radnor-Chester Road, Radnor, Pennsylvania 19087-5221, pursuant to a contractual arrangement with DDLP. LFD is owned by LNC and is an affiliate of DDLP and DMC.
No Fund paid any brokerage commissions for portfolio securities to any broker that is an affiliate (or an affiliate of an affiliate)accounts of the Funds DMC, DDLP, or DSC during the Fund’sfor their most recently completed fiscal year.
PRINCIPAL HOLDERS OF SHARES
Asyears. Representatives of July 31, 2009,PwC are not expected to attend the officersMeeting. The Funds do not know of any direct or indirect financial interest of PwC in the Trusts.
Appendix G shows the fees billed by PwC for audit and Trusteesother services provided to the Trusts for the fiscal years indicated.
Shareholder Reports
Copies of each Trust’s Annual Report for the most recently completed fiscal year previously have been mailed or made available to shareholders. This Joint Proxy Statement should be read in conjunction with each Annual Report. You can obtain copies of the
Trusts, as a group, owned less than 1%Annual Reports, without charge, by writing to the respective Trust or to DDLP at 100 Independence, 610 Market Street, Philadelphia, PA 19106-2354, or by calling 800-523-1918. You should receive the reports within three business days of
the outstanding voting sharesyour request. Copies of
each Fund or class thereof, except as noted in Appendix O.these reports are also available free of charge at www.delawarefunds.com.
Householding
To
the best knowledgeavoid sending duplicate copies of
materials to households, the Trusts
asmay mail only one copy of
July 31, 2009, no person, except asthis Joint Proxy Statement to shareholders having the same last name and address on the Trusts’ records, unless a Trust has received contrary instructions from a shareholder. The consolidation of these mailings benefits the Trusts through reduced mailing expenses. If a shareholder wants to receive multiple copies of these materials, the shareholder should make a request by writing to that Trust’s Transfer Agent at their address set forth
in Appendix P, owned of record 5% or more of the outstanding shares of any class of any Fund. Except as noted in Appendix P, the Trusts have no knowledge of beneficial ownership of 5% or more of the outstanding shares of any class of any Fund.34
above.
APPENDIX A
FUNDS INCLUDED IN THIS JOINT PROXY STATEMENT
APPENDIX A — TRUSTS AND SERIES USING THIS
PROXY STATEMENTTRUST | A-1 FUNDS |
APPENDIX B — TRUSTEES OF THE TRUSTS | B-1 |
APPENDIX C — NOMINATING AND CORPORATE GOVERNANCE
COMMITTEE CHARTER | C-1 |
APPENDIX D — FUND SHARE BENEFICIAL OWNERSHIP BY
TRUSTEE NOMINEES | D-1 |
APPENDIX E — TRUSTEE COMPENSATION | E-1 |
APPENDIX F — PRINCIPAL OFFICERS OF THE TRUSTS | F-1 |
APPENDIX G — AUDITOR INFORMATION | G-1 |
APPENDIX H — PRE-APPROVAL POLICIES AND PROCEDURES | H-1 |
APPENDIX I — FORM OF NEW INVESTMENT ADVISORY
AGREEMENTS | I-1 |
APPENDIX J — CURRENT INVESTMENT ADVISORY AGREEMENTS:
DATES OF APPROVALS | J-1 |
APPENDIX K — FEES PAID TO DMC AND AFFILIATES | K-1 |
APPENDIX L — OTHER FUNDS ADVISED BY DMC | L-1 |
APPENDIX M — TRUSTEES AND OFFICERS OF DMC | M-1 |
APPENDIX N — NUMBER OF SHARES OF EACH FUND
OUTSTANDING AS OF JULY 31, 2009 | N-1 |
APPENDIX O — 1% SHARE OWNERSHIP | O-1 |
APPENDIX P — 5% SHARE OWNERSHIP | P-1 |
35
APPENDIX A — TRUSTS AND SERIES USING THIS PROXY
STATEMENT
Trust | | Funds |
Delaware Group®Adviser Funds | | Delaware Diversified Income Fund |
| |
Delaware U.S. Growth Fund |
| Delaware Group Cash Reserve | | Delaware Cash ReserveInvestments Ultrashort Fund |
| Delaware Group Equity Funds I | | Delaware Mid Cap Value Fund |
| Delaware Group Equity Funds II | | Delaware Large Cap Value Fund |
| | Delaware Value®Fund |
Delaware Group Equity Funds III | | Delaware American Services Fund |
| | Delaware Small Cap Growth Fund |
| | Delaware Trend®Fund |
| Delaware Group Equity Funds IV | | Delaware Global Real Estate Securities Fund |
| | Delaware Growth Opportunities Fund |
| | Delaware Healthcare Fund Delaware Small Cap Growth Fund Delaware Smid Cap Growth Fund Delaware Covered Call Strategy Fund Delaware Equity Income Fund Delaware Global Equity Fund Delaware Growth and Income Fund Delaware Growth Equity Fund Delaware Hedged U.S. Equity Opportunities Fund Delaware Opportunity Fund Delaware Premium Income Fund Delaware Total Return Fund |
| Delaware Group Equity Funds V | | Delaware Dividend IncomeWealth Builder Fund |
| | Delaware Small Cap Core Fund |
| | Delaware Small Cap Value Fund |
| Delaware Group Foundation Funds | | Delaware AggressiveStrategic Allocation Portfolio1 |
| | Delaware Conservative Allocation Portfolio2 |
| | Delaware Foundation®Equity Fund |
| | Delaware Moderate Allocation Portfolio3 |
____________________
1 | | On October 21, 2009, the name will be changed to Delaware Foundation Growth Allocation Fund.
|
|
2 | | On October 21, 2009, the name will be changed to Delaware Foundation Conservative Allocation Fund.
|
|
3 | | On October 21, 2009, the name will be changed to Delaware Foundation Moderate Allocation Fund.
|
A-1
Trust | | Funds |
| Delaware Group Global & International Funds | | Delaware Emerging Markets Fund |
| | Delaware Focus Global Growth Fund |
| | Delaware Global Value Fund |
| | Delaware International Value Equity Fund Delaware International Small Cap Fund |
Delaware Group Government FundFunds | Delaware Strategic Income Fund |
| Delaware Core Plus BondEmerging Markets Debt Corporate Fund |
| | Delaware Inflation Protected Bond Fund
|
| Delaware Group Income Funds | | Delaware Corporate Bond Fund |
| | Delaware Extended Duration Bond Fund |
| | Delaware High-Yield Opportunities Fund Delaware Floating Rate Fund |
| Delaware Group Limited-Term Government Funds | | Delaware Limited-Term Diversified Income Fund Delaware Tax-Free New Jersey Fund Delaware Tax-Free Oregon Fund |
| Delaware Group State Tax-Free Income Trust | | Delaware Tax-Free Pennsylvania Fund |
Delaware Group Tax-FreeTax Free Fund | | Delaware Tax-Free USA Fund |
| | Delaware Tax-Free USA Intermediate Fund |
Delaware Group Tax-Free MoneyPooled Trust | Macquarie Emerging Markets Portfolio Macquarie Emerging Markets Portfolio II Macquarie Labor Select International Equity Portfolio Delaware Global Listed Real Assets Fund | | (formerly, Delaware Tax-Free Money FundREIT Fund) |
Delaware Pooled®VIP® Trust | | Delaware REITVIP® Emerging Markets Series Delaware VIP® Small Cap Value Series Delaware VIP® Equity Income Series Delaware VIP® Fund |
| | (also known as The Real Estate for Income Series Delaware VIP® Growth and Income Series Delaware VIP® Growth Equity Series Delaware VIP® International Series Delaware VIP® Investment Trust Portfolio)Grade Series Delaware VIP® Limited Duration Bond Series Delaware VIP® Opportunity Series Delaware VIP® Special Situations Series Delaware VIP® Total Return Series |
| Voyageur Insured Funds | | Delaware Tax-Free Arizona Fund |
| Voyageur Intermediate Tax Free Funds | | Delaware Tax-Free Minnesota Intermediate Fund |
A-2
Trust | | Funds |
| Voyageur Mutual Funds | | Delaware Minnesota High-Yield Municipal Bond Fund |
| | Delaware National High-Yield Municipal Bond Fund |
| | Delaware Tax-Free California Fund |
| | Delaware Tax-Free Idaho Fund |
| | Delaware Tax-Free New York Fund
|
| Voyageur Mutual Funds II | | Delaware Tax-Free Colorado Fund |
| Voyageur Mutual Funds III | | Delaware Large Cap Core Fund |
| | Delaware Select Growth Fund |
| Voyageur Tax Free Funds | | Delaware Tax-Free Minnesota Fund |
APPENDIX B — TRUSTEES
SHARES ISSUED AND OUTSTANDINGAS OF THE
TRUSTS | | | | | | | | Number of | | |
| | | | | | | | Portfolios | | |
| | | | | | Principal | | in Fund | | Other |
| | Position(s) | | | | Occupation(s) | | Complex | | Directorships |
Name, Address, | | Held with | | Length of | | During Past | | Overseen | | Held by |
and Birth Date | | the Trusts | | Time Served | | 5 Years | | by Trustee | | Trustee |
Interested Trustee | | | | | | | | | | |
|
Patrick P. Coyne1 | | Chairman, | | Chairman | | Patrick P. Coyne | | 81 | | Director – Kaydon |
2005 Market Street | | President, | | and Trustee | | has served in | | | | Corp. |
Philadelphia, PA | | Chief | | since | | various executive | | | | |
19103 | | Executive | | August 16, | | capacities at | | | | |
| | Officer, and | | 2006 | | different times | | | | |
April 1963 | | Trustee | | | | at Delaware | | | | |
| | | | President | | Investments.2 | | | | |
| | | | and Chief | | | | | | |
| | | | Executive | | | | | | |
| | | | Officer since | | | | | | |
| | | | August 1, | | | | | | |
| | | | 2006 | | | | | | |
____________________RECORD DATE
| Registrants / Funds | Autex Code | Class A | Class C | Class R | Class R6 | Institutional Class | Class L |
Delaware Group® Adviser Funds |
| Delaware Diversified Income Fund | NE | 78,415,706.791 | 8,849,610.354 | 2,405,090.700 | 25,213,054.199 | 337,160,079.013 | N/A |
Delaware Group® Cash Reserve |
| Delaware Investments Ultrashort Fund | D8 | 4,243,876.641 | 536,994.066 | N/A | N/A | 3,229,593.558 | 346,253.602 |
Delaware Group® Equity Funds I |
| Delaware Mid Cap Value Fund | G6 | 1,682,664.824 | 454,332.257 | 38,372.781 | N/A | 7,905,563.444 | N/A |
Delaware Group® Equity Funds II |
Delaware Value® Fund | NN | 64,664,287.428 | 10,951,494.368 | 2,118,260.139 | 50,170,552.364 | 270,949,943.065 | N/A |
Delaware Group® Equity Funds IV |
| Delaware Smid Cap Growth Fund | DF | 39,299,565.116 | 11,595,250.828 | 564,313.993 | 2,490,910.021 | 44,118,407.352 | N/A |
| Delaware Healthcare Fund | G4 | 11,727,525.156 | 3,771,040.036 | 155,326.241 | N/A | 22,227,653.454 | N/A |
| Delaware Small Cap Growth Fund | GF | 1,521,117.147 | 464,821.289 | 172,697.012 | N/A | 11,339,915.273 | N/A |
| Delaware Covered Call Strategy Fund | FIN | 7,276,792.990 | N/A | N/A | 3,666.475 | 2,645,913.375 | N/A |
| Delaware Equity Income Fund | FI2 | 38,543,530.424 | N/A | N/A | 2,758.031 | 236,672.508 | N/A |
| Delaware Global Equity Fund | FI6 | 32,800,309.818 | N/A | N/A | 18,229.842 | 2,052,141.207 | N/A |
| Delaware Growth Equity Fund | FI3 | 29,351,777.363 | N/A | N/A | 99,124.103 | 4,434,868.067 | N/A |
| Delaware Growth and Income Fund | FI1 | 70,889,261.414 | N/A | N/A | 13,040.627 | 328,227.385 | N/A |
| Delaware Hedged U.S. Equity Opportunities Fund | FIP | 4,408,474.234 | N/A | N/A | 1,583.571 | 2,355,974.247 | N/A |
| Delaware Opportunity Fund | FI4 | 19,463,927.404 | N/A | N/A | 6,406.391 | 114,421.975 | N/A |
| Delaware Premium Income Fund | FIQ | 2,127,856.410 | N/A | N/A | 2,962.075 | 2,539,158.430 | N/A |
| Delaware Total Return Fund | FI8 | 28,461,514.397 | N/A | N/A | 3,567.892 | 80,504.503 | N/A |
1 | | Mr. Coyne is considered to be an “Interested Trustee” because he is an executive officer of DMC.
|
|
2 | | Delaware Investments is the marketing name for Delaware Management Holdings, Inc. and its subsidiaries, including the Funds’ investment adviser, principal underwriter, and transfer agent.
|
| Registrants / Funds | Autex Code | Class A | Class C | Class R | Class R6 | Institutional Class | Class L |
Delaware Group® Equity Funds V |
| Delaware Wealth Builder Fund | FR | 16,676,076.591 | 2,116,900.798 | 75,860.936 | N/A | 7,465,947.474 | N/A |
| Delaware Small Cap Core Fund | NS | 10,185,228.682 | 4,988,200.191 | 1,526,715.216 | 40,878,472.850 | 173,862,450.849 | N/A |
| Delaware Small Cap Value Fund | DJ | 13,731,009.708 | 851,135.157 | 764,111.293 | 19,676,998.168 | 49,158,132.325 | N/A |
Delaware Group® Foundation Funds |
| Delaware Strategic Allocation Fund | NG | 16,681,686.846 | 767,374.309 | 109,499.716 | N/A | 3,440,494.597 | N/A |
Delaware Group® Global & International Funds |
| Delaware Emerging Markets Fund | FP | 15,373,639.454 | 4,943,843.298 | 1,450,223.951 | 89,919,363.552 | 157,339,023.439 | N/A |
| Delaware International Value Equity Fund | DW | 13,288,568.573 | 308,624.310 | 321,570.493 | 252,302.928 | 23,224,550.090 | N/A |
| Delaware International Small Cap Fund | G7 | 1,012,758.992 | 257,245.944 | 17,613.397 | 2,149,947.600 | 8,150,067.756 | N/A |
Delaware Group® Government Fund |
| Delaware Strategic Income Fund | DD | 12,237,815.255 | 164,855.133 | 19,822.394 | N/A | 2,273,363.498 | N/A |
| Delaware Emerging Markets Debt Corporate Fund | GC | 99,620.145 | 12,941.292 | 343.776 | N/A | 9,351,513.335 | N/A |
Delaware Group® Income Funds |
| Delaware Corporate Bond Fund | NO | 61,999,251.534 | 4,136,615.841 | 1,948,795.771 | 1,760,921.065 | 158,834,454.526 | N/A |
| Delaware Extended Duration Bond Fund | NP | 13,881,420.044 | 1,201,354.754 | 1,187,268.454 | 8,603,810.183 | 58,292,276.925 | N/A |
| Delaware High-Yield Opportunities Fund | FV | 112,108,280.455 | 1,794,277.683 | 726,095.069 | 18,388,640.725 | 23,275,196.237 | N/A |
| Delaware Floating Rate Fund | GA | 7,867,506.619 | 999,220.429 | 2,645.062 | 32,652.656 | 17,649,643.416 | N/A |
| Registrants / Funds | Autex Code | Class A | Class C | Class R | Class R6 | Institutional Class | Class L |
Delaware Group® Limited-Term Government Funds |
| Delaware Limited-Term Diversified Income Fund | DE | 32,674,647.762 | 1,256,155.716 | 103,527.580 | 536,314.956 | 28,993,614.387 | N/A |
| Delaware Tax-Free New Jersey Fund | FIC | 1,936,154.709 | N/A | N/A | N/A | 152,871.963 | N/A |
| Delaware Tax-Free Oregon Fund | FIE | 2,684,682.495 | N/A | N/A | N/A | 342,775.438 | N/A |
Delaware Group® State Tax-Free Income Trust |
| Delaware Tax-Free Pennsylvania Fund | D7 | 46,088,762.950 | 1,689,754.266 | N/A | N/A | 9,091,021.008 | N/A |
Delaware Group® Tax-Free Fund |
| Delaware Tax-Free USA Fund | DA | 76,296,744.969 | 800,612.813 | N/A | N/A | 17,138,774.494 | N/A |
| Delaware Tax-Free USA Intermediate Fund | D9 | 44,739,618.885 | 606,500.013 | N/A | N/A | 51,636,651.724 | N/A |
Delaware Pooled® Trust | Institutional Class | DPT Class |
| Macquarie Emerging Markets Portfolio | FZ | N/A | N/A | N/A | N/A | N/A | 7,562,684.903 |
| Macquarie Emerging Markets Portfolio II | G9 | N/A | N/A | N/A | N/A | N/A | 1,751,131.142 |
| Macquarie Labor Select International Equity Portfolio | F8 | N/A | N/A | N/A | N/A | N/A | 11,793,922.207 |
| Delaware Global Listed Real Assets Fund | F9 | 3,095,951.951 | 102,128.922 | 284,471.786 | 576,548.219 | 4,533,595.460 | N/A |
| Voyageur Insured Funds |
| Delaware Tax-Free Arizona Fund | V3 | 5,510,328.815 | 126,128.174 | N/A | N/A | 1,882,418.943 | N/A |
| Voyageur Intermediate Tax Free Funds |
| Delaware Tax-Free Minnesota Intermediate Fund | VN | 5,676,099.491 | 263,609.599 | N/A | N/A | 2,116,477.904 | N/A |
| | | | | | | | Number of | | |
| | | | | | | | Portfolios | | |
| | | | | | Principal | | in Fund | | Other |
| | Position(s) | | | | Occupation(s) | | Complex | | Directorships |
Name, Address, | | Held with | | Length of | | During Past | | Overseen | | Held by |
and Birth Date | | the Trusts | | Time Served | | 5 Years | | by Trustee | | Trustee |
Independent Trustees | | | | | | | | | | |
|
Thomas L. Bennett | | Trustee | | Since March | | Private | | 81 | | Director — Bryn Mawr |
2005 Market Street | | | | 2005 | | Investor — | | | | Bank Corp. (BMTC) |
Philadelphia, PA | | | | | | (March 2004 – | | | | (April 2007 – Present) |
19103 | | | | | | Present) | | | | |
|
October 1947 | | | | | | Investment | | | | |
| | | | | | Manager — | | | | |
| | | | | | Morgan Stanley | | | | |
| | | | | | & Co. | | | | |
| | | | | | (January 1984 – | | | | |
| | | | | | March 2004) | | | | |
|
John A. Fry | | Trustee | | Since | | President — | | 81 | | Director — |
2005 Market Street | | | | January 2001 | | Franklin & | | | | Community Health |
Philadelphia, PA | | | | | | Marshall College | | | | Systems |
19103 | | | | | | (June 2002 – | | | | |
| | | | | | Present) | | | | |
May 1960 | | | | | | | | | | |
| | | | | | Executive Vice | | | | |
| | | | | | President — | | | | |
| | | | | | University of | | | | |
| | | | | | Pennsylvania | | | | |
| | | | | | (April 1995 – | | | | |
| | | | | | June 2002) | | | | |
|
Anthony D. Knerr | | Trustee | | Since April | | Founder and | | 81 | | None |
2005 Market Street | | | | 1990 | | Managing | | | | |
Philadelphia, PA | | | | | | Director — | | | | |
19103 | | | | | | Anthony Knerr | | | | |
| | | | | | & Associates | | | | |
December 1938 | | | | | | (Strategic | | | | |
| | | | | | Consulting) | | | | |
| | | | | | (1990 – Present) | | | | |
|
Lucinda S. Landreth | | Trustee | | Since March | | Chief | | 81 | | None |
2005 Market Street | | | | 2005 | | Investment | | | | |
Philadelphia, PA | | | | | | Officer — | | | | |
19103 | | | | | | Assurant, Inc. | | | | |
| | | | | | (Insurance) | | | | |
June 1947 | | | | | | (2002 – 2004) | | | | |
| Registrants / Funds | Autex Code | Class A | Class C | Class R | Class R6 | Institutional Class | Class L |
| Voyageur Mutual Funds |
| Delaware Minnesota High-Yield Municipal Bond Fund | VL | 9,954,357.495 | 1,262,991.915 | N/A | N/A | 9,265,237.483 | N/A |
| Delaware National High-Yield Municipal Bond Fund | VQ | 20,333,111.909 | 4,766,993.857 | N/A | N/A | 119,579,053.616 | N/A |
| Delaware Tax-Free California Fund | V6 | 6,812,680.046 | 303,686.597 | N/A | N/A | 3,744,032.603 | N/A |
| Delaware Tax-Free Idaho Fund | VF | 6,114,329.181 | 545,231.758 | N/A | N/A | 4,655,482.328 | N/A |
| Delaware Tax-Free New York Fund | VS | 13,381,618.659 | 384,398.640 | N/A | N/A | 4,275,656.873 | N/A |
| Voyageur Mutual Funds II |
| Delaware Tax-Free Colorado Fund | V8 | 14,170,567.902 | 580,666.141 | N/A | N/A | 6,751,069.226 | N/A |
| Voyageur Mutual Funds III |
| Delaware Select Growth Fund | V1 | 7,895,687.890 | 314,841.630 | 91,661.166 | N/A | 1,283,391.692 | N/A |
| Voyageur Tax Free Funds |
| Delaware Tax-Free Minnesota Fund | VO | 29,501,224.542 | 1,329,984.842 | N/A | N/A | 17,283,499.624 | N/A |
Delaware VIP® Trust | Standard | Service |
Delaware VIP® Emerging Markets Series | N1 | 13,037,782.235 | 12,840,214.759 |
Delaware VIP® Small Cap Value Series | F2 | 11,578,805.086 | 24,636,229.785 |
Delaware VIP® Equity Income Series | FL1 | 6,533,677.627 | N/A |
Delaware VIP® Fund for Income Series | FLA | 14,916,629.817 | N/A |
Delaware VIP® Growth and Income Series | FL2 | 15,639,394.607 | N/A |
Delaware VIP® Growth Equity Series | FL3 | 5,167,100.393 | N/A |
Delaware VIP® International Series | FL6 | 11,030,773.514 | 41,497.053 |
| | | | | | | | Number of | | |
| | | | | | | | Portfolios | | |
| | | | | | Principal | | in Fund | | Other |
| | Position(s) | | | | Occupation(s) | | Complex | | Directorships |
Name, Address, | | Held with | | Length of | | During Past | | Overseen | | Held by |
and Birth Date | | the Trusts | | Time Served | | 5 Years | | by Trustee | | Trustee |
Independent Trustees (continued) | | | | | | | | | | |
|
Ann R. Leven | | Coordinating | | Since | | Consultant — | | 81 | | None |
2005 Market Street | | Trustee | | October | | ARL Associates | | | | |
Philadelphia, PA | | | | 1989 | | (Financial | | | | |
19103 | | | | | | Planning) | | | | |
| | | | | | (1983 – Present) | | | | |
November 1940 | | | | | | | | | | |
|
Thomas F. Madison | | Trustee | | Since May | | President and | | 81 | | Director and Chair |
2005 Market Street | | | | 19973 | | Chief Executive | | | | of Compensation |
Philadelphia, PA | | | | | | Officer — MLM | | | | Committee, Governance |
19103 | | | | | | Partners, Inc. | | | | Committee Member — |
| | | | | | (Small Business | | | | CenterPoint Energy |
February 1936 | | | | | | Investing & | | | | |
| | | | | | Consulting) | | | | Lead Director and |
| | | | | | (January 1993 – | | | | Chair of Audit |
| | | | | | Present) | | | | and Governance |
| | | | | | | | | | Committees, Member |
| | | | | | | | | | of Compensation |
| | | | | | | | | | Committee — |
| | | | | | | | | | Digital River Inc. |
|
| | | | | | | | | | Director and Chair of |
| | | | | | | | | | Governance Committee, |
| | | | | | | | | | Audit Committee |
| | | | | | | | | | Member — |
| | | | | | | | | | Rimage Corporation |
|
| | | | | | | | | | Director and Chair |
| | | | | | | | | | of Compensation |
| | | | | | | | | | Committee — |
| | | | | | | | | | Spanlink |
| | | | | | | | | | Communications |
|
| | | | | | | | | | Lead Director |
| | | | | | | | | | and Member of |
| | | | | | | | | | Compensation |
| | | | | | | | | | and Governance |
| | | | | | | | | | Committees — Valmont |
| | | | | | | | | | Industries, Inc. |
____________________Delaware VIP® Trust | Standard | Service |
Delaware VIP® Investment Grade Series | FL9 | 5,161,528.842 | 1,029.970 |
Delaware VIP® Limited Duration Bond Series | FL8 | 2,776,161.084 | N/A |
Delaware VIP® Opportunity Series | FL4 | 4,694,531.891 | N/A |
Delaware VIP® Special Situations Series | FL5 | 7,366,715.171 | N/A |
Delaware VIP® Total Return Series | FL7 | 4,058,388.185 | 848.994 |
3 | | In 1997, several funds managed by Voyageur Fund Managers, Inc. (the “Voyageur Funds”) were incorporated into the Delaware Investments®Family of Funds. Mr. Madison served as a director of the Voyageur Funds from 1993 until 1997.
|
B-3
| | | | | | | | Number of | | |
| | | | | | | | Portfolios | | |
| | | | | | Principal | | in Fund | | Other |
| | Position(s) | | | | Occupation(s) | | Complex | | Directorships |
Name, Address, | | Held with | | Length of | | During Past | | Overseen | | Held by |
and Birth Date | | the Trusts | | Time Served | | 5 Years | | by Trustee | | Trustee |
Independent Trustees (continued) | | | | | | | | | | |
|
Janet L. Yeomans | | Trustee | | Since April | | Vice President | | 81 | | None |
2005 Market Street | | | | 1999 | | and Treasurer | | | | |
Philadelphia, PA | | | | | | (January 2006 – | | | | |
19103 | | | | | | Present), | | | | |
| | | | | | Vice President | | | | |
July 1948 | | | | | | — Mergers & | | | | |
| | | | | | Acquisitions | | | | |
| | | | | | (January | | | | |
| | | | | | 2003 – January | | | | |
| | | | | | 2006), and Vice | | | | |
| | | | | | President | | | | |
| | | | | | (July 1995 – | | | | |
| | | | | | January 2003) | | | | |
| | | | | | 3M Corporation | | | | |
|
J. Richard Zecher | | Trustee | | Since March | | Founder — | | 81 | | Director and Audit |
2005 Market Street | | | | 2005 | | Investor | | | | Committee Member — |
Philadelphia, PA | | | | | | Analytics | | | | Investor Analytics |
19103 | | | | | | (Risk | | | | |
| | | | | | Management) | | | | |
July 1940 | | | | | | (May 1999 – | | | | |
| | | | | | Present) | | | | |
|
| | | | | | Founder — | | | | |
| | | | | | Sutton Asset | | | | |
| | | | | | Management | | | | |
| | | | | | (Hedge Fund) | | | | |
| | | | | | (September | | | | |
| | | | | | 1996 – Present) | | | | |
B-4
APPENDIX C —
DELAWARE FUNDS® BY MACQUARIE
NOMINATING AND CORPORATE
GOVERNANCE COMMITTEE CHARTER
Nominating and Corporate Governance Committee Charter
DELAWARE INVESTMENTS FAMILY OF FUNDS
Nominating and Corporate Governance Committee Membership The Nominating and Corporate Governance Committee (the “Committee”)
of the Board of Directors/Trustees (the “Board”) shall be composed of
not less thanat least three members, each of whom shall be,
in the unanimous opinion of the members of the Committee after consultation with legal counsel to the independent trustees of the Board, independent as defined in Rule 10A-3(b)
(1) promulgated under the Securities Exchange Act of 1934,
as amended, and the listing standards of any national securities exchange on which any fund of the Delaware
Investments Family of Funds
® by Macquarie (each a “Fund”) is listed, and the
Coordinating Trustee,Board Chair, as an
ex officio member.
The members of the Committee shall be elected by the Board. One member of the Committee shall be designated by the Board as
Chairperson.the Committee’s Chair (the “Chair”). The
ChairpersonChair shall preside at all Committee meetings at which he or she is present and
membersshall have such other duties and authority as may be determined by the Committee. The Board may remove any member of the Committee
shall have one year terms, renewable for a maximum of six (6) terms.(including the Chair) at any time with or without cause. The
ChairpersonChair and members of the Committee shall receive such compensation for their service on the Committee as the Board may determine from time to time.
Board Nominations
| 1. | | Independent Directors/Trustees.Trustees Independent Directors/Trustees for the open and closed-end Funds are to be selected and nominated solely by incumbent independent Directors/Trustees.. The Committee shall make recommendations forto the Board regarding nominations for independent director/trustee membershipindividuals to serve as Independent Director/Trustee on the Board of Directors/Trustees to the incumbent independent Directors/Trustees. The Committee shall also be responsible for nominating qualified candidates for independent Director/Trustee membership in connection with filling vacancies that arise in between meetings of shareholders.Board. The Committee shall evaluate candidates’ qualifications for Board membership and their independence from the Funds’ managerinvestment adviser, affiliates of such investment adviser, and other affiliates and principal service providers. Persons selected must be independent in terms of both the letter and spirit of the governing rules, regulations, and listing standards. The Committee shall also consider the effect of any relationships beyond those delineated in the governing rules, regulations and listing standards that might impair independence, e.g., business, financial, or family relationships with managers or service providers. In addition to evaluating a candidate’s independence, the Committee shall consider other factors that the Committee may deem relevant, which may include but shall not be limited to:
|
|
the person’s educational background; business, professional training or practice (e.g., accounting or law); public service or academic positions; experience from service as a board member (including the Board) or as an executive of investment funds, public companies or significant private or not-for-profit entities or other organizations, and/or other life experiences.
whether the person’s professional experience, education, skills and other individual qualities and attributes, including gender, race or national origin, would provide beneficial diversity of skills, experience or perspective to the Board’s membership and collective attributes. Such considerations will vary based on the Board’s existing membership and other factors, such as the strength of a potential nominee’s overall qualifications relative to diversity considerations;
the character and integrity of the person;
whether or not the person has any criminal convictions (other than traffic violations) or felony or misdemeanor convictions involving the purchase or sale of a security;
whether or not the person has been the subject of any order, judgment or decree (which was not subsequently reversed, suspended or vacated) of any federal or state authority finding that the individual violated or is in violation of any federal or state securities laws;
whether or not the person is willing to serve, and willing and able to commit the time necessary for the performance of the duties of a Director/Trustee of the Funds; and
whether or not the selection and nomination of the person would be consistent with the requirements of the Funds’ retirement policy.
| 2. | | Chair of the Board.Board. The Committee shall nominate an individual to serve as the Chair of the Board.
|
|
| 3. | | Committees.Committees. The Committee shall annually review the membership of and annually recommend to the Board persons to serve as chairpersons and members of each standing committee of the Board. The Committee shall also review the continued appropriateness
|
C-1
| | of existing committees and consider the addition of new committees. The Committee shall also make recommendations forto the Board regarding persons to serve as chairpersons and members of any new standing committee established by the Board. |
|
| 4. | | Affiliated Directors/ Trustees.Trustees. The Committee shall evaluate candidates’ qualifications and make recommendations for affiliated director/trusteeto the Board regarding Director/Trustee membership on the Board for “interested persons” (as defined in the Investment Company Act of Directors/Trustees1940). |
| 5. | Shareholder Recommendations. In the event that there is a vacancy on the Board, the Committee shall consider any recently received shareholder recommendations for nominations to the full Board. |
|
5. | | Shareholder Recommendations. The At all other times, the Committee shall respondmay but need not consider any shareholder recommendations for nominations to shareholders who communicate with the Board. |
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| 6. | | Board Composition.Composition. The Committee shall periodically review the composition of the Board, of Directors/Trustees, including the number of Directors/Trustees and Board diversity, to determine whether it may be appropriate to addrecommend the addition of individuals with different backgrounds or skill sets from those already on the Board. |
Corporate Governance
| 1. | The Committee shall review and make recommendations to the Board with respect to the size, structure, processes, and practices of the Board and the committees of the Board. |
| 2. | The Committee shall review the continued appropriateness of existing committees of the Board, and consider the addition of new committees of the Board. |
| 3. | The Committee shall evaluate annually the ability toof each Director/Trustee to function effectively in the discharge of his/her oversight and fiduciary responsibilities as a Director/Trustee. The ChairmanChair of the Committee shall undertake appropriate action as required based on the Committee’s evaluation. |
| 4. | In accordance with the Statement of Policy Regarding Service on Competitive Boards, the Committee shall make such inquiries as it deems necessary with respect to proposed or continuing board service by Independent Directors/Trustees, and shall periodically re- examine existing board positions held by Independent Directors/Trustees. |
2. | 5. | The Committee shall review on an annual basis the total of each Independent Director’s/Trustee’s investments in the Funds to monitor compliance with the Policy Regarding Mandatory Investment in the Funds by Directors/Trustees. |
| 6. | The Committee shall oversee educational sessions of the meetings of the Board and shall, at least annually, conduct a review of Director/Trustee education on current industry issues. |
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3.7. | | At least annually, theThe Committee shall oversee the purpose, content, organization, and effectiveness of the orientation process for new Directors/Trustees. |
| 8. | The Committee shall periodically review the amount of compensation payable to the independentIndependent Directors/Trustees and report its findings and recommendations to the Board. Compensation shall be based on the responsibilities and duties of the independentIndependent Directors/Trustees and the time required to perform these duties. Every year, the Committee shall invite an independent consultant to review the Board’s compensation structure. |
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4. | 9. | The Committee shall periodically monitor the performance of legal counsel for the independentIndependent Directors/Trustees. |
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5. | 10. | The Committee shall establish procedures to facilitate shareholder communications to the Funds’ Board of Directors/Trustees.and shall review and respond, as appropriate, to shareholders who communicate with the Board. |
Other PowersAuthority and Responsibilities
| 1. | | The Committee shall have the resources and authority appropriate to discharge its responsibilities, including authority to retain special counsel and other experts or consultants at the expense of the appropriate Fund(s). Without intending any limitation on the generality of the foregoing, the Committee is authorized to engage an independent consultant to review the Board’s compensation structure. |
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| 2. | | The Committee shall review this Charter at least annually and recommend any changes to the full Board of Directors/Trustees.Board. |
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| 3. | | The Committee shall review annually the Board of Directors/Trustees Policies and Practices.Practices and recommend any changes to the Board. |
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| 4. | | The Committee shall review annually a summary and report of Director/Trustee expenses reimbursed in accordance with the Travel and& Entertainment Policy. |
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| 5. | The Committee shall conduct an annual performance evaluation of the Committee. |
| 6. | The Committee shall conduct an annual performance evaluation of the Board and report its findings and recommendations to the Committee of Independent Directors/Trustees. |
| 7. | The Committee shall review annually Director and Officer insurance matters and report its findings and recommendations to the Board. |
| 8. | The Committee shall review annually the compensation for the Funds’ Chief Compliance Officer and report its findings and recommendations to the Board. |
| 9. | The Committee shall, at least annually, review the Charter of the Committee of Independent Directors/Trustees and recommend any changes to the Board. |
| 10. | The Committee shall perform such other functions that shall beand exercise such other authority as delegated to it from time to time by the Board. |
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APPENDIX D —
TRUSTEE NOMINEES’ OWNERSHIP OF FUNDSHAREBENEFICIAL SHARES
AS OF THE RECORD DATE
| Name | Dollar Range of Equity Securities in the Funds | Aggregate Dollar Range of Equity Securities* in all Registered Investment Companies Overseen by Trustee in Family of Investment Companies |
| Interested Trustee |
| Shawn K. Lytle | $10,001 - $50,000 Delaware Group Equity Funds II – Delaware Value Fund Over $100,000 Delaware Group Equity Funds V -Delaware Wealth Builder Fund $10,001 - $50,000 Delaware Group Equity Funds V -Delaware Small Cap Core Fund $10,001 - $50,000 Delaware Group Global & International Funds – Delaware Emerging Markets Fund $10,001 - $50,000 Delaware Group Income Funds – Delaware Floating Rate Fund | Over $100,000 |
| Independent Trustees |
| Jerome D. Abernathy | $50,001 - $100,000 Delaware Group Equity Funds II – Delaware Value Fund $10,001 - $50,000 Delaware Group Equity Funds IV -Delaware Smid Cap Growth Fund $10,001 - $50,000 Delaware Group Global & International Funds – Delaware Emerging Markets Fund | Over $100,000 |
| Thomas L. Bennett | Over $100,000 Delaware Group Equity Funds II – Delaware Value Fund Over $100,000 Delaware Group Equity Funds V -Delaware Small Cap Value Fund | Over $100,000 |
| Ann D. Borowiec | Over $100,000 Delaware Group Equity Funds IV -Delaware Smid Cap Growth Fund Over $100,000 Delaware Group Equity Funds V -Delaware Small Cap Core Fund Over $100,000 Delaware Group Global & International Funds – Delaware Emerging Markets Fund | Over $100,000 |
| Joseph W. Chow | $1 - $10,000 Delaware Group Cash Reserve – Delaware Investments Ultrashort Fund Over $100,000 Delaware Group Equity Funds IV -Delaware Healthcare Fund Over $100,000 Delaware Group Equity Funds V -Delaware Small Cap Core Fund | Over $100,000 |
| John A. Fry | $10,001 - $50,000 Delaware Group Adviser Funds – Delaware Diversified Income Fund $50,001 - $100,000 Delaware Group Equity Funds II – Delaware Value Fund Over $100,000 Delaware Group Equity Funds V -Delaware Small Cap Core Fund | Over $100,000 |
| Frances A. Sevilla-Sacasa | $50,001 - $100,000 Delaware Group Adviser Funds – Delaware U.S. Growth Fund $10,001 - $50,000 Delaware Group Equity Funds II – Delaware Value Fund $10,001 - $50,000 Delaware Group Equity Funds IV -Delaware Wealth Builder Fund Over $100,000 Delaware Group Foundation Funds – Delaware Strategic Allocation Fund $10,001 - $50,000 Delaware Group Income Funds – Delaware Floating Rate Fund | Over $100,000 |
| Thomas K. Whitford | Over $100,000 Delaware Group Equity Funds II – Delaware Value Fund Over $100,000 Delaware Group Equity Funds V -Delaware Small Cap Core Fund | Over $100,000 |
| Christianna Wood | $50,001 - $100,000 Delaware Group Equity Funds II – Delaware Value Fund Over $100,000 Delaware Group Equity Funds IV -Delaware Smid Cap Growth Fund Over $100,000 Delaware Group Equity Funds V -Delaware Small Cap Value Fund | Over $100,000 |
| Janet L. Yeomans | Over $100,000 Delaware Group Equity Funds II – Delaware Value Fund Over $100,000 Delaware Group Equity Funds V -Delaware Small Cap Core Fund | Over $100,000 |
* The ranges for equity securities ownership by each Trustee are: none; $1-$10,000; $10,001-$50,000; $50,001-$100,000; or over $100,000.
