EXHIBIT (d)(2)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between DELAWARE GROUP DIVIDEND AND INCOME FUND,
INC., a Maryland corporation (the "Company") severally on behalf of each series
of shares of common stock of the Company that is listed on Exhibit A to this
Agreement, as that Exhibit may be amended from time to time (each such series of
shares is hereinafter referred to as a "Fund" and, together with other series of
shares listed on such Exhibit, the "Funds"), and DELAWARE MANAGEMENT COMPANY, a
series of Delaware Management Business Trust (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Company has been organized and operates as an investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act") ;
WHEREAS, each Fund engages in the business of investing and reinvesting
its assets in securities; and
WHEREAS, the Investment Manager is registered under the Investment
Advisers Act of 1940 as an investment adviser and engages in the business of
providing investment management services; and
WHEREAS, the Company, severally on behalf of each Fund, and the
Investment Manager desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it is
agreed as follows:
1. The Company hereby employs the Investment Manager to manage
the investment and reinvestment of each Fund's assets and to administer the
Company's affairs, subject to the direction of the Company's Board of Directors
and officers for the period and on the terms hereinafter set forth. The
Investment Manager hereby accepts such employment and agrees during such period
to render the services and assume the obligations herein set forth for the
compensation herein provided. The Investment Manager shall for all purposes
herein be deemed to be an independent contractor, and shall, unless otherwise
expressly provided and authorized, have no authority to act for or represent the
Company in any way, or in any way be deemed an agent of the Company. The
Investment Manager shall regularly make decisions as to what securities and
other instruments to purchase and sell on behalf of each Fund and shall effect
the purchase and sale of such investments in furtherance of each Fund's
objectives and policies and shall furnish the Board of Directors of the Company
with such information and reports regarding each Fund's investments as the
Investment Manager deems appropriate or as the Directors of the Company may
reasonably request.
2. The Company shall conduct its own business and affairs and
shall bear the expenses and salaries necessary and incidental thereto,
including, but not in limitation of the foregoing, the costs incurred in: the
maintenance of its corporate existence; the maintenance of its own books,
records and procedures; dealing with its own shareholders; the payment of
dividends; transfer of shares, including issuance, redemption and repurchase of
shares; preparation of share certificates; reports and notices to shareholders;
calling and holding of shareholders' and Directors' meetings; miscellaneous
office expenses; brokerage commissions; custodian fees; legal and accounting
fees; taxes; and federal and state registration fees. Directors, trustees,
officers and employees of the Investment Manager may be directors, trustees,
officers and employees of any of the investment companies within the Delaware
Investments family (including the Company). Directors, trustees, officers and
employees of the Investment Manager who are directors, trustees, officers and/or
employees of these investment companies shall not receive any compensation from
such companies for acting in such dual capacity.
In the conduct of the respective businesses of the parties hereto and
in the performance of this Agreement, the Company and Investment Manager may
share facilities common to each, which may include legal and accounting
personnel, with appropriate proration of expenses between them.
3. (a) Subject to the primary objective of obtaining the best
execution, the Investment Manager will place orders for the purchase and sale of
portfolio securities and other instruments with such broker/dealers selected who
provide statistical, factual and financial information and services to the
Company, to the Investment Manager, to any sub-adviser (as defined in Paragraph
5 hereof, a "Sub-Adviser") or to any other fund for which the Investment Manager
or any Sub-Adviser provides investment advisory services and/or with
broker/dealers who sell shares of the Company or who sell shares of any other
investment company (or series thereof) for which the Investment Manager or any
Sub-Adviser provides investment advisory services. Broker/dealers who sell
shares of any investment companies or series thereof for which the Investment
Manager or Sub-Adviser provide investment advisory services shall only receive
orders for the purchase or sale of portfolio securities to the extent that the
placing of such orders is in compliance with the Rules of the Securities and
Exchange Commission and NASD Regulation, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above
and subject to such policies and procedures as may be adopted by the Board of
Directors and officers of the Company, the Investment Manager may cause a Fund
to pay a member of an exchange, broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange, broker or dealer would have charged for effecting that
transaction, in such instances where the Investment Manager has determined in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker or
dealer, viewed in terms of either that particular transaction or the Investment
Manager's overall responsibilities with respect to the Company on behalf of the
Funds and to other investment companies (or series thereof) and other advisory
accounts for which the Investment Manager or any Sub-Adviser exercises
investment discretion.
4. As compensation for the services to be rendered to a
particular Fund by the Investment Manager under the provisions of this
Agreement, that Fund shall pay monthly to the Investment Manager exclusively
from that Fund's assets, a fee based on the average weekly net assets of that
Fund during the month. Such fee shall be calculated in accordance with the fee
schedule applicable to that Fund as set forth in Exhibit A hereto, which Exhibit
may be amended from time to time as provided in Paragraphs 10(b) and (c) of this
Agreement.
If this Agreement is terminated prior to the end of any calendar month
with respect to a particular Fund, the management fee for such Fund shall be
prorated for the portion of any month in which this Agreement is in effect with
respect to such Fund according to the proportion which the number of calendar
days during which the Agreement is in effect bears to the number of calendar
days in the month, and shall be payable within 10 calendar days after the date
of termination.
5. The Investment Manager may, at its expense, select and
contract with one or more investment advisers registered under the Investment
Advisers Act of 1940 ("Sub-Advisers") to perform some or all of the services for
a Fund for which it is responsible under this Agreement. The Investment Manager
will compensate any Sub-Adviser for its services to the Fund. The Investment
Manager may terminate the services of any Sub-Adviser at any time in its sole
discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected and the
requisite approval of the Fund's shareholders is obtained. The Investment
Manager will continue to have responsibility for all advisory services furnished
by any Sub-Adviser.
2
6. The services to be rendered by the Investment Manager to the
Company on behalf of each Fund under the provisions of this Agreement are not to
be deemed to be exclusive, and the Investment Manager shall be free to render
similar or different services to others so long as its ability to render the
services provided for in this Agreement shall not be impaired thereby.
7. The Investment Manager, its directors, officers, employees,
agents and shareholders may engage in other businesses, may render investment
advisory services to other investment companies, or to any other corporation,
association, firm or individual, and may render underwriting services to the
Company or to any other investment company, corporation, association, firm or
individual.
8. It is understood and agreed that so long as the Investment
Manager and/or its advisory affiliates shall continue to serve as the investment
adviser to any of the Company's Funds, other investment companies as may be
sponsored or advised by the Investment Manager or its affiliates shall have the
right permanently to adopt and to use the words "Delaware," "Delaware
Investments" or "Delaware Group" in their names and in the names of any series
or class of shares of such funds.
9. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of its duties as the
Investment Manager to the Company on behalf of any Fund, the Investment Manager
shall not be subject to liability to the Company or to any Fund or to any
shareholder of the Company for any action or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security, or otherwise.
10. (a) This Agreement shall be executed and become effective as
of the date written below, and shall become effective with respect to a
particular Fund as of the effective date set forth in Exhibit A for that Fund,
only if approved by the vote of a majority of the outstanding voting securities
of that Fund. It shall continue in effect for an initial period of two years for
each Fund and may be renewed thereafter only so long as such renewal and
continuance is specifically approved at least annually by the Board of Directors
or by the vote of a majority of the outstanding voting securities of that Fund
and only if the terms and the renewal hereof have been approved by the vote of a
majority of the Directors of the Company who are not parties hereto or
interested persons of any such party ("Independent Directors"), cast in person
at a meeting called for the purpose of voting on such approval.
(b) Except as provided in Paragraph 10(c) below, no amendment
to this Agreement (or to Exhibit A hereto) shall be effective with respect to
any Fund unless approved by: (i) a majority of the Directors of the Company,
including a majority of Independent Directors; and (ii) a majority of the
outstanding voting securities of the particular Fund. Any such amendment that
pertains to a Fund will not change, or otherwise affect the applicability of,
this Agreement with respect to other Funds.
(c) The Agreement (and Exhibit A hereto) may be amended with
respect to a Fund without the approval of a majority of the outstanding voting
securities of that Fund if the amendment relates solely to a management fee
reduction or other change that is permitted or not prohibited under federal law,
rule, regulation or SEC staff interpretation thereof to be made without
shareholder approval. This Agreement may be amended from time to time to add or
remove one or more Funds, or to reflect changes in management fees, by an
amendment to Exhibit A hereto executed by the Company and the Investment
Manager. Any such amendment that pertains to a Fund will not change, or
otherwise affect the applicability of, this Agreement with respect to other
Funds.
3
(d) This Agreement may be terminated as to any Fund by the
Company at any time, without the payment of a penalty, on sixty days' written
notice to the Investment Manager of the Company's intention to do so, pursuant
to action by the Board of Directors of the Company or pursuant to the vote of a
majority of the outstanding voting securities of the affected Fund. The
Investment Manager may terminate this Agreement at any time, without the payment
of a penalty, on sixty days' written notice to the Fund of its intention to do
so. Upon termination of this Agreement, the obligations of all the parties
hereunder shall cease and terminate as of the date of such termination, except
for any obligation to respond for a breach of this Agreement committed prior to
such termination, and except for the obligation of the Company on behalf of a
Fund to pay to the Investment Manager the fee provided in Paragraph 4 hereof,
prorated to the date of termination. This Agreement shall automatically
terminate in the event of its assignment.
11. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
12. For the purposes of this Agreement, the terms "vote of a
majority of the outstanding voting securities"; "interested persons"; and
"assignment" shall have the meaning defined in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers and duly attested as of the 1st day of
January, 1999.
DELAWARE MANAGEMENT COMPANY, DELAWARE GROUP DIVIDEND
a series of Delaware Management Business Trust AND INCOME FUND, INC.
on behalf of the Funds listed on Appendix A
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
------------------- ------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxx
Title: President Title: Chairman
Attest: /s/ Xxxxx X. X'Xxxxxx Attest: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------- -------------------------
Name: Xxxxx X. X'Xxxxxx Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President Title: Assistant Vice President
Assistant Secretary Assistant Secretary
4
EXHIBIT A
THIS EXHIBIT to the Investment Management Agreement between DELAWARE
GROUP DIVIDEND AND INCOME FUND, INC. and DELAWARE MANAGEMENT COMPANY, a series
of Delaware Management Business Trust (the "Investment Manager") entered into as
of the 1st day of January, 1999 (the "Agreement") provides the management fee
rate schedule for the Company and the date on which the Agreement became
effective for the Company.
Management Fee Schedule
(as a percentage of
average weekly net assets)
Fund Name Effective Date Annual Rate*
--------- -------------- --------------------------
Delaware Group Dividend January 1, 1999 0.55%
and Income Fund, Inc.
*For the purposes of calculating the fee, the Fund's average weekly net assets
will be deemed to be average weekly value of the Fund's total assets minus the
sum of the Fund's liabilities (which liabilities exclude the aggregate
liquidation preference of any outstanding preferred stock or the outstanding
amount of borrowing or short-term debt securities).
5
