SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. _____________)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss. 240.14a-12
DELAWARE VIP TRUST
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(Name of Registrant as Specified In Its Charter)
(specify)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
The Lincoln National Life Insurance Company
1300 South Clinton Street
Fort Wayne, IN 46802
Dear Variable Contract Owner:
You are an owner of a variable annuity or life contract (the "variable
contract") issued by The Lincoln National Life Insurance Company ("Lincoln").
Shares of the Delaware VIP Global Bond Series (the "Fund") of the Delaware VIP
Trust (the "Trust") have been purchased at your direction by Lincoln through one
or more of its separate accounts (the "Accounts") to support contract values or
fund benefits payable under your variable contract.
As a record owner of such Fund shares, Lincoln has been asked by the Fund's
board of trustees to approve a plan to liquidate the Fund and distribute the
liquidation proceeds to the Fund's respective shareholders. The Fund's only
record shareholders are separate accounts that support contract values or fund
benefits payable under variable contracts.
As is more fully explained in the attached proxy statement, the Fund is
scheduling a meeting of its shareholders (the "Meeting") to consider approval of
a plan to liquidate the Fund (the "Liquidation Plan") and distribute the
liquidation proceeds to the Fund's shareholders. As you may know, your variable
contract gives you the right to provide Lincoln with instructions on how to vote
the Fund shares supporting your contract at the Meeting. WE ARE WRITING TO YOU
TO ASK THAT YOU FILL OUT THE ENCLOSED VOTING INSTRUCTION FORM AND RETURN IT TO
US IN ORDER THAT WE MAY VOTE ON YOUR BEHALF AT THE MEETING.
Under the Liquidation Plan, the Fund will, by the liquidation date, (1)
sell its portfolio securities for cash or permit them to mature and reduce any
other assets to cash or cash equivalents, (2) pay any liabilities, and (3)
distribute any realized capital gains and net investment income in the form of
dividends. The Liquidation Plan provides that as of the liquidation date, the
Fund will: (1) distribute its assets to shareholders by liquidating their shares
for cash, (2) wind up its operations, and (3) terminate its existence.
At any time prior to the proposed liquidation, you may instruct Lincoln to
transfer your contract value currently allocated to the Fund into other
investment options available under your contract. If you do not provide transfer
instructions prior to the liquidation, then immediately following the
distribution of liquidation proceeds, Lincoln will reinvest the cash proceeds
attributable to your variable contract by transferring the proceeds from the
subaccount that held Fund shares to the subaccount that invests in shares of
Lincoln's VIP Money Market Fund (the "Money Market Fund"). THEREFORE, A SECOND
REASON THAT WE ARE WRITING TO YOU IS TO ASK THAT YOU PROVIDE US WITH TRANSFER
INSTRUCTIONS IN ORDER THAT WE MAY TRANSFER YOUR CONTRACT VALUE CURRENTLY
INVESTED IN THE FUND TO ANOTHER INVESTMENT OPTION OR OPTIONS UNDER YOUR VARIABLE
CONTRACT. PLEASE CALL LINCOLN NATIONAL LIFE INSURANCE COMPANY AT 1-(800)
338-0355 IF YOU OWN AN E-ANNUITY VARIABLE ANNUITY CONTRACT ("E-ANNUITY") OR, IF
YOU OWN A MULTIFUND VARIABLE UNIVERSAL LIFE POLICY ("MULTIFUND VUL") PLEASE CALL
1-(877) 200-8213 TO MAKE TRANSFER ARRANGEMENTS FOR YOUR VARIABLE CONTRACT.
The proposed Fund liquidation is described in detail in the attached proxy
statement, but here are some facts about the liquidation that may be useful to
you:
1. The Fund's liquidation will have no impact on your right to transfer
contract values among and between other investment options offered
under your variable contract. You may transfer contract values out of
any subaccount invested in the Fund free of any otherwise applicable
transfer charge at any time without that transfer counting as one of a
limited number of transfers permitted during any period. If contract
values are transferred to the Money Market Fund in the absence of
transfer instructions from you, then for thirty days following the
liquidation, you may transfer such contract values out of the
subaccount investing in the Money Market Fund free of any otherwise
applicable transfer charge and without that transfer counting as one
of a limited number of transfers permitted during any period.
2. The Fund's liquidation will not alter your rights or the obligations
of Lincoln under your variable contract.
3. The Fund's liquidation, as well as contract value transfers in
anticipation of or subsequent to the liquidation, will not create
federal income tax liability for you in connection with your variable
contract.
Delaware Management Company, the Fund's investment manager, proposed the
liquidation because the Fund has lacked broad market appeal, has failed to
generate sufficient assets to operate efficiently, and is not expected to
achieve efficient investment operations or economies of scale in the future. At
a recent meeting, the Trust's board of trustees (the "Board") considered
information provided by the investment manager on the Fund's loss of assets,
limited potential for growth, low demand and limited sales opportunities in the
variable insurance investment marketplace and the Fund's expenses.
After carefully considering the merits of the proposal, the Board has
determined that it is in the best interests of the Fund and its shareholders and
the variable contract owners indirectly invested in the Fund to liquidate the
Fund. Among the factors considered by the Board in reaching this conclusion was
the fact that variable contract owners are encouraged to provide prior
instructions as to transferring contract value to alternative investment options
and the fact that transfers will have no adverse tax consequences for contract
owners.
The Board recommends that you read the enclosed materials carefully and
then instruct Lincoln to vote FOR the liquidation proposal applicable to the
Fund.
YOUR VOTE IS IMPORTANT. PLEASE TAKE A MOMENT NOW TO SIGN AND RETURN THE
VOTING INSTRUCTION FORM IN THE ENCLOSED POSTAGE PRE-PAID ENVELOPE. FOR MORE
INFORMATION, PLEASE CALL DELAWARE FUNDS AT 1-(800) 523-1918.
YOUR CONTRACT VALUE TRANSFER INSTRUCTIONS ALSO ARE IMPORTANT. PLEASE TAKE A
MOMENT NOW TO CALL THE LINCOLN NATIONAL LIFE INSURANCE COMPANY AT 1-(800)
338-0355 (E-ANNUITY) OR 1-(877) 200-8213 (MULTIFUND VUL) SO THAT YOU MAY PROVIDE
US WITH YOUR TRANSFER INSTRUCTIONS.
Sincerely,
The Lincoln National Life Insurance Company
January 5, 2007
Commonwealth Annuity and Life Insurance Company
First Allmerica Financial Life Insurance Company
P.O. Box 758550
Topeka, KS 66675-8550
Dear Variable Contract Owner:
You are an owner of a variable annuity contract (the "variable contract")
issued by either Commonwealth Annuity and Life Insurance Company (formerly known
as Allmerica Financial Life Insurance Company")("Commonwealth Annuity") or First
Allmerica Financial Life Insurance Company ("FAFLIC"). Shares of the Delaware
VIP Global Bond Series (the "Fund") of the Delaware VIP Trust (the "Trust") have
been purchased at your direction by either Commonwealth Annuity or FAFLIC
through one or more of their respective separate accounts (the "Accounts") to
support contract values or fund benefits payable under your variable contract.
Commonwealth Annuity or FAFLIC is the record owner of Fund shares held in
connection with your variable contract by the Account through which your
contract was issued.
As a record owner of such Fund shares, Commonwealth Annuity or FAFLIC has
been asked by the Fund's board of trustees to approve a proposal to liquidate
the Fund and distribute the liquidation proceeds to the Fund's shareholders. The
Fund's only record shareholders are the Accounts and certain separate accounts
of one other insurance company.
As is more fully explained in the attached proxy statement, the Fund is
holding a meeting of its shareholders (the "Meeting") to consider approval of a
plan to liquidate the Fund (the "Liquidation Plan") and distribute the
liquidation proceeds to the Fund's shareholders. As you may know, your variable
contract gives you the right to instruct Commonwealth Annuity or FAFLIC on how
to vote the Fund shares supporting your contract at the Meeting.
WE ARE WRITING TO YOU TO ASK THAT YOU FILL OUT THE ENCLOSED VOTING INSTRUCTION
FORM AND RETURN IT TO US IN ORDER THAT WE MAY VOTE ON YOUR BEHALF AT THE
MEETING.
Under the Liquidation Plan, the Fund will, by the liquidation date, (1)
sell its portfolio securities for cash or permit them to mature and reduce any
other assets to cash or cash equivalents, (2) pay any liabilities, and (3)
distribute any realized capital gains and net investment income in the form of
dividends. The Liquidation Plan provides that as of the liquidation date, the
Fund will: (1) distribute its assets to shareholders by liquidating their shares
for cash, (2) wind up its operations, and (3) terminate its existence.
At any time prior to the proposed liquidation, you may instruct
Commonwealth Annuity or FAFLIC to transfer your contract value currently
allocated to the Fund into other investment options available under your
contract. If you do not provide transfer instructions prior to the liquidation,
then immediately following the distribution of liquidation proceeds,
Commonwealth Annuity or FAFLIC will reinvest the cash proceeds attributable to
your variable contract by transferring the proceeds from the subaccount that
held Fund shares to the subaccount that invests in shares of the Delaware VIP
Cash Reserve Series (the "Money Market Fund").
THEREFORE, A SECOND REASON THAT WE ARE WRITING TO YOU IS TO ASK THAT YOU PROVIDE
US WITH TRANSFER INSTRUCTIONS IN ORDER THAT WE MAY TRANSFER YOUR CONTRACT VALUE
CURRENTLY INVESTED IN THE FUND TO ANOTHER INVESTMENT OPTION OR OPTIONS UNDER
YOUR VARIABLE CONTRACT. PLEASE CALL COMMONWEALTH ANNUITY AT 800-533-2124 OR
FAFLIC AT 800-533-2124 TO MAKE TRANSFER ARRANGEMENTS FOR YOUR VARIABLE CONTRACT.
The proposed Fund liquidation is described in detail in the attached proxy
statement, but here are some facts about the liquidation that may be useful to
you:
1. The Fund liquidation will have no impact on your right to transfer
contract values among and between other investment options offered
under your variable contract. You may transfer contract values out of
any subaccount invested in the Fund free of any otherwise applicable
transfer charge at any time without that transfer counting as one of a
limited number of transfers permitted during any period. If contract
values are transferred to the Money Market Fund in the absence of
transfer instructions from you, then for thirty days following the
liquidation, you may transfer such contract values out of the
subaccount investing in the Money Market Fund free of any otherwise
applicable transfer charge and without that transfer counting as one
of a limited number of transfers permitted during any period.
2. The Fund's liquidation will not alter your rights or the obligations
of Commonwealth Annuity or FAFLIC under your variable contract.
3. The Fund's liquidation, as well as contract value transfers in
anticipation of or subsequent to the liquidation, will not create
federal income tax liability for you in connection with your variable
contract.
YOUR VOTE IS IMPORTANT. PLEASE TAKE A MOMENT NOW TO SIGN AND RETURN THE VOTING
INSTRUCTION FORM IN THE ENCLOSED POSTAGE PRE-PAID ENVELOPE. For more
information, please call 800-523-1918.
YOUR CONTRACT VALUE TRANSFER INSTRUCTIONS ALSO ARE IMPORTANT. PLEASE TAKE A
MOMENT NOW TO CALL COMMONWEALTH ANNUITY AT 800-533-2124 OR FAFLIC AT
800-533-2124 SO THAT YOU MAY PROVIDE US WITH YOUR TRANSFER INSTRUCTIONS.
Sincerely,
Commonwealth Annuity and Life Insurance Company
First Allmerica Financial Life Insurance Company
January 5, 2007
Delaware Investments (sm)
A member of Lincoln Financial Group (R)
PROXY MATERIALS
DELAWARE VIP TRUST
Delaware VIP Global Bond Series
Dear Shareholders and Variable Contract Owners:
I am writing to let you know that a meeting of shareholders of the Delaware VIP
Global Bond Series (the "Fund") will be held on February 28, 2007. The purpose
of the meeting is to vote on an important proposal that affects the Fund and
your investment in it. The Fund is a separate series of Delaware VIP Trust (the
"Trust"). The shares of the Fund are sold only to separate accounts of certain
life insurance companies (each, a "Participating Insurance Company" and,
collectively, the "Participating Insurance Companies") to fund benefits payable
under certain variable annuity contracts and variable life insurance policies
(each, a "Variable Contract" and, collectively, "Variable Contracts") issued by
the Participating Insurance Companies. The Participating Insurance Companies
hereby solicit and agree to vote at the meeting, to the extent required, the
shares of the Fund that are held in their separate accounts in accordance with
timely instructions received from owners of the Variable Contracts. With respect
to all other shareholders, the Board of Trustees of the Trust is soliciting your
votes.
As a shareholder, you have the opportunity to voice your opinion on the matters
that affect your Fund. As a Variable Contract owner, you have the right to
instruct the relevant Participating Insurance Company as to the manner in which
the Fund shares attributable to your Variable Contract should be voted. This
package contains information about the proposal being presented for your
consideration and requests your prompt attention and vote by mail using the
enclosed proxy card(s) or voting instruction form.
Please read the enclosed materials and cast your vote. PLEASE VOTE YOUR SHARES
ON THE PROXY CARD OR SUBMIT YOUR VOTING INSTRUCTION FORM PROMPTLY. YOUR VOTING
INSTRUCTION FORM MUST BE RECEIVED BY THE APPROPRIATE PARTICIPATING INSURANCE
COMPANY NO LATER THAN 4 P.M., EASTERN TIME, ON FEBRUARY 28, 2007, IN ORDER TO BE
COUNTED. YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
The proposal has been carefully reviewed by the Board of Trustees. The Trustees,
most of whom are not affiliated with Delaware Investments, are responsible for
protecting your interests as a shareholder. The Trustees believe this proposal
is in the best interests of shareholders. They recommend that you vote FOR the
proposal. The proposal is described in greater detail in the enclosed Proxy
Statement.
VOTING IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED. To cast your vote,
simply complete the proxy card(s) or voting instruction form enclosed in this
package. Be sure to sign the card or voting instruction form before mailing it
in the postage-paid envelope. In addition, you may be able to vote by telephone
or through the Internet, 24 hours a day. If your account is eligible, separate
instructions from your Participating Insurance Company are enclosed.
If you have any questions before you vote, please call Delaware Investments at
1-800-523-1918. We'll be glad to help you get your vote in quickly. Thank you
for your participation in this important initiative.
Sincerely,
Patrick P. Coyne
Chairman and Chief Executive Officer
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on February 28, 2007
Delaware VIP Global Bond Series
(a separate series of Delaware VIP Trust)
To the Shareholders of the Delaware VIP Global Bond Series (the "Fund"),
which is a separate series of Delaware VIP Trust (the "Trust") and to the owners
of Variable Annuity Contracts or Variable Life Insurance Policies entitled to
give voting instructions to the Shareholders of the Fund:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the Fund
(the "Meeting") has been called by the Board of Trustees of the Trust and will
be held at the offices of Delaware Investments located at 2001 Market Street,
2nd Floor Auditorium, Philadelphia, PA 19103, on February 28, 2007 at 4:00 p.m.,
Eastern Time. The Meeting is being called for the following reasons:
1. To approve the Plan of Liquidation and Dissolution for the Fund.
2. To vote upon any other business as may properly come before the
Meeting or any adjournment thereof.
Proposal 1 set forth above is more fully described in the attached Proxy
Statement.
The shares of the Fund are sold only to separate accounts of certain life
insurance companies (each, a "Participating Insurance Company" and,
collectively, the "Participating Insurance Companies") to fund benefits payable
under certain variable annuity contracts and variable life insurance policies
(each, a "Variable Contract" and, collectively, "Variable Contracts") issued by
the Participating Insurance Companies. The Participating Insurance Companies
hereby solicit and agree to vote at the Meeting, to the extent required, the
shares of the Fund that are held in their separate accounts in accordance with
timely instructions received from owners of the Variable Contracts. With respect
to all other shareholders, the Board of Trustees of the Trust is soliciting your
votes.
If you are a shareholder of record of the Fund as of the close of business
on December 19, 2006, you have the right to direct the persons listed on the
enclosed proxy card as to how your shares in the Fund should be voted. If you
are a Variable Contract owner of record at the close of business on December 19,
2006, you have the right to instruct the relevant Participating Insurance
Company as to the manner in which the Fund shares attributable to your Variable
Contract should be voted. To assist you, a voting instruction form is enclosed.
In addition, a Proxy Statement describing the matters to be voted on at the
Meeting or any adjournment(s) thereof is attached to this Notice. YOUR VOTE IS
IMPORTANT.
By Order of the Board of Trustees,
David F. Connor
Secretary
January 5, 2007
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TO SECURE THE LARGEST POSSIBLE REPRESENTATION, PLEASE MARK YOUR PROXY CARD OR
VOTING INSTRUCTION FORM, SIGN IT, AND RETURN IT IN THE ENCLOSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. PROXY CARDS AND
VOTING INSTRUCTION FORMS MUST BE RECEIVED BEFORE THE MEETING IN ORDER
TO BE COUNTED. YOU MAY REVOKE YOUR PROXY OR VOTING INSTRUCTIONS
BEFORE THE MEETING.
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PROXY STATEMENT
TABLE OF CONTENTS
Page
Introduction...................................................................1
Proposal - To Approve The Plan Of Liquidation And Dissolution .................2
Voting Information.............................................................5
More Information About the Trust...............................................8
Principal Holders of Shares....................................................9
EXHIBITS:
Exhibit A - Plan of Liquidation and Dissolution..............................A-1
Exhibit B - Principal Holders of Shares as of December 19, 2006..............B-1
PROXY STATEMENT
Dated January 5, 2007
Delaware VIP Global Bond Series
(a separate series of Delaware Vip Trust)
INTRODUCTION
This Proxy Statement solicits proxies to be voted at a Special Meeting of
Shareholders (the "Meeting") of Delaware VIP Global Bond Series (the "Fund"),
which is a separate series of Delaware VIP Trust (the "Trust"). The Meeting has
been called by the Board of Trustees of the Trust (the "Board" or the "Board of
Trustees") to vote to approve a Plan of Liquidation and Dissolution (which is
described more fully below).
The principal offices of the Trust are located at 2005 Market Street,
Philadelphia, PA 19103. YOU CAN REQUEST A FREE COPY OF THE ANNUAL REPORT TO
SHAREHOLDERS OF THE FUND FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005 AND THE
SEMI-ANNUAL REPORT TO SHAREHOLDERS FOR THE SIX-MONTH FISCAL PERIOD ENDED JUNE
30, 2006, BY CALLING 1-800-523-1918, OR BY WRITING TO THE TRUST AT ATTENTION:
ACCOUNT SERVICES, 2005 MARKET STREET, PHILADELPHIA, PA 19103.
The Meeting will be held at the offices of Delaware Investments located at
2001 Market Street, 2nd Floor Auditorium, Philadelphia, PA 19103, on February
28, 2007 at 4:00 p.m., Eastern Time. The Board, on behalf of the Fund, is
soliciting these proxies.
This Proxy Statement is also being furnished in connection with the
solicitation of voting instructions by certain life insurance companies (each, a
"Participating Insurance Company" and, collectively, the "Participating
Insurance Companies") from owners of certain variable annuity contracts and
variable insurance policies (collectively, "Variable Contracts") having contract
values on December 19, 2006 allocated to a subaccount of one of the
Participating Insurance Companies' separate accounts invested in shares of the
Fund. For purposes of this Proxy Statement, the terms "you," "your," and
"shareholder" refer to the direct shareholders of the Fund and to owners of
Variable Contracts who invested in the Fund through their Variable Contracts.
This Proxy Statement and forms of proxy card and voting instruction will
first be sent to shareholders and variable contract owners on or about January
12, 2007.
The Board urges you to complete, sign and return the proxy card or voting
instruction form included with this Proxy Statement whether or not you intend to
be present at the Meeting. It is important that you promptly return the signed
proxy card or voting instruction form, as applicable, to help assure a quorum
for the Meeting.
PROPOSAL - TO APPROVE THE PLAN OF LIQUIDATION AND DISSOLUTION
The Liquidation in General
Delaware Management Company, a series of Delaware Management Business
Trust, as the investment manager of the Fund ("DMC"), and Delaware Distributors,
L.P., as principal underwriter of the Fund ("DDLP") (collectively, "Delaware"),
recommended to the Board of Trustees of the Trust that the Fund be liquidated
and dissolved pursuant to the provisions of the Plan of Liquidation and
Dissolution (the "Plan"). The Board of Trustees approved the Plan at its meeting
held on November 16, 2006. At that meeting, the Board of Trustees determined
that an orderly liquidation of the Fund's assets was in the best interests of
the Fund and its shareholders. The Plan, a copy of which is attached to this
Proxy Statement as Appendix A, provides for the complete liquidation of all of
the assets of the Fund. If the Plan is approved by the requisite shareholder
vote, DMC will undertake to liquidate the Fund's assets as soon as practicable,
in an orderly manner at market prices and on such terms and conditions as DMC
determines to be reasonable and in the best interests of the Fund and its
shareholders. If approved by shareholders and all other regulatory requirements
are satisfied, the liquidation is expected to be completed on or about March 21,
2007. Liquidation proceeds paid to the applicable separate accounts of the
Participating Insurance Companies will be reinvested in other investment options
available under the applicable Variable Contracts pursuant to transfer
instructions timely received from Variable Contract owners, or, if no transfer
instructions are timely received, in the money market fund option within the
relevant Variable Contract (the "Money Market Fund"). After the liquidation
proceeds are distributed, the Trust will terminate the Fund's existence.
If the Plan is not approved by the shareholders of the Fund, the Fund will
continue to be operated and be managed in accordance with the Fund's current
investment objective and policies, and the Board will consider what other action
should be taken. Assuming shareholder approval, the Fund believes that all
regulatory requirements will have been satisfied as of the Meeting date.
Although portions of the Plan are summarized in this Proxy Statement, these
summaries are qualified in their entirety by reference to the Plan itself.
Reasons for the Liquidation
The Fund is a separate series of the Trust and began operations in May 2,
1996. As of September 30, 2006, the Fund had net assets of approximately $5.9
million. The Fund has experienced large redemptions and DMC does not anticipate
that the Fund will be able to attract sufficient additional assets in the
foreseeable future given the current low demand for global fixed-income
portfolios in the variable insurance investment marketplace. In addition, there
are limited sales opportunities for the Fund because it is not offered through
an actively sold variable product.
The reduced asset size of the Fund affects both the efficient portfolio
management of the Fund and the costs borne by the remaining shareholders. The
Fund's small asset size impedes efficient portfolio management because it makes
it difficult for the portfolio manager to attain sufficient diversification in
investments or to acquire positions in desired amounts or on favorable terms.
Moreover, Fund management does not believe that it is likely that the asset size
of the Fund will increase significantly in the future so as to enable efficient
portfolio management.
The reduced asset size also limits the Fund's ability to benefit from
economies of scale because its fixed expenses are borne across a small amount of
assets and a small shareholder base. Moreover, the substantial reduction in
assets makes the Fund a less cost-effective investment for shareholders because
the remaining shareholders bear a greater proportion of the Fund's fixed
expenses. Under an agreement with the Trust, DMC has agreed to reimburse the
Fund for certain operating expenses in excess of 1.00% of the Fund's average
daily net assets until April 30, 2007. Although the Fund's annualized expense
ratio, including the management fee of 0.75%, for the fiscal year ending
December 31, 2006, is not expected to exceed 1.00%, current expenses are running
well above the 1.00% expense limitation. If the Liquidation were not to take
place in 2007, the estimated annual expense ratio could meet or exceed 1.58%.
Although DMC has agreed to waive its fees and reimburse the Fund for certain
expenses in order to maintain the Fund's viability as an investment option under
the Variable Contracts, DMC has advised the Board that it does not intend to
subsidize the Fund indefinitely.
In evaluating alternatives for the Fund, DMC considered both merger and
liquidation options for the Fund. DMC concluded that there were no other series
in the Trust that have an objective and strategy comparable to the Fund that
would be an appropriate acquiring fund partner for a merger. In addition, the
limited assets invested in the Fund would make the merger alternative
unattractive for an unaffiliated acquiring fund from a cost/benefit perspective.
Finally, there are substantial costs associated with a merger, such as legal,
solicitation and proxy printing costs. The small asset base and the reduced
shareholder base would dramatically increase the impact of any merger costs on
shareholders.
Therefore, given the Fund's small asset base and lack of an appropriate
merger partner, DMC recommended that the Board approve the proposed liquidation
of the Fund as being in the best interests of shareholders and the only viable
alternative. DMC has agreed to bear the expenses associated with obtaining
shareholder approval of the proposed Liquidation. Contract Owners may choose to
transfer out of the Fund up until the date that the Fund is liquidated or,
alternatively, a Contract Owner's investment remaining in the Fund on the date
of liquidation will be transferred automatically to the Money Market Fund.
Board Considerations and Determinations
At the November 16, 2006 Board meeting, the Board of Trustees considered
the proposal to liquidate the Fund. In particular, the Board considered the
Fund's operating history, including the Fund's performance, and the historical
and anticipated sales activity of the Fund, as well as the lack of prospects for
growth based upon DMC's belief that there is low demand for global fixed income
portfolios in the variable insurance investment marketplace.
The Board considered various alternatives for the Fund, including
reorganizing the Fund with other mutual funds with similar investment objectives
and focus. The Board considered the fact that the Fund's assets were too small
to make a merger with other unaffiliated mutual funds realistic because of the
costs involved with these transactions. In addition, the Board considered the
fact that there was no viable fund merger partner with a similar investment
objective and strategies within the Trust. Finally, the proposed dissolution
would not involve potential adverse tax consequences to Variable Contract
owners.
The Board, including all of the Trustees who are not "interested persons"
of the Trust (as that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act")), then unanimously adopted resolutions approving the
Plan, declaring the proposed liquidation and dissolution advisable, and
directing that the Plan be submitted to the shareholders of the Fund for their
consideration. DMC has agreed to bear the costs associated with obtaining
shareholder approval of the liquidation of the Fund. These costs include legal
and administrative expenses, and costs associated with the filing, printing and
mailing of these proxy materials and conducting the Meeting. The costs of
liquidating the Fund's portfolio, including brokerage commissions and dealer
spreads, will be borne by the Fund.
Liquidation Value
If the Plan is adopted by the Fund's shareholders at the Meeting, as soon
as practicable the liquidation process will commence in accordance with the
terms of the Plan. The Fund will sell all of the Fund's portfolio securities and
pay (or make provision for payment of) all of the Fund's known expenses,
charges, liabilities and other obligations, including those expenses incurred in
connection with implementing the liquidation, and the payment of ordinary and
capital gains dividends. After this process is completed, each shareholder of
the Fund, meaning the separate accounts of the Participating Insurance
Companies, will receive a cash distribution in an amount equal to the net asset
value, together with accrued and unpaid dividends and distributions, of the
shareholder's shares in the Fund (the "Liquidating Distribution"). Such net
asset value will be determined in accordance with the Fund's current Prospectus
and Statement of Additional Information. The Liquidating Distribution for the
Fund shall be paid to the Participating Insurance Companies which will invest
such proceeds applicable to each Variable Contract's interest in the Fund either
(i) by purchasing shares of another investment option available under such
owner's Variable Contract according to transfer instructions timely provided by
the owner or (ii) if no instructions are timely provided, by purchasing shares
of the Money Market Fund.
In addition, prior to the Liquidation Date (as defined below), Variable
Contract owners with contract values allocated to the Fund will still be
entitled to exchange out of the Fund into another fund (or funds) available in
the applicable Variable Contract prior to the liquidation. The rights of the
Fund's shareholders to redeem their interests in the Fund at the current net
asset value will not be affected if the Plan is adopted. Variable Contract
owners will also continue to have the same rights to redeem contract values of
the Fund under their Variable Contracts if the Plan is adopted. Also, the
entities currently providing services to the Fund will continue to do so until
the Fund is completely liquidated and dissolved and its affairs wound up.
Tax Consequences
The Trust anticipates that the Fund will retain its qualifications as a
regulated investment company under the Internal Revenue Code of 1986, as amended
(the "Code"), during the liquidation period. Accordingly, any gain recognized by
the Fund on the sale of its assets following the adoption of the Plan will be
offset by a deduction for dividends paid to its shareholders. Variable Contract
owners, for whose Variable Contracts shares of the Fund are underlying
investments, will not recognize a gain or loss for federal income tax purposes
as a result of the liquidation of the Fund (meaning there will be no federal tax
liability).
The Participating Insurance Companies' separate accounts that have shares
of the Fund as underlying investments in their Variable Contracts will not incur
tax on any dividends or Liquidation Distributions that may be paid to them by
the Fund pursuant to the Plan, and will not impose any charges under the
Variable Contracts as a result of the liquidation of the Fund.
The foregoing is only a summary of the principal federal income tax
consequences of the liquidation and should not be considered tax advice. There
can be no assurance that the Internal Revenue Service will concur on all or any
of the issues discussed above. You may wish to consult with your own tax
advisers regarding the federal, state and local tax consequences with respect to
the foregoing matters and any other considerations that may apply in your
particular circumstances.
Liquidating Distribution
At present, the date on which the Fund will be liquidated and on which the
Fund will pay Liquidating Distributions to the applicable separate accounts and
other shareholders is uncertain, but it is anticipated that, if the Plan is
adopted by the shareholders of the Fund, the Fund's liquidation would occur on
or about March 21, 2007 (the "Liquidation Date"). If the Plan is approved,
separate accounts holding Fund shares as of the close of business on March 20,
2007, would receive their Liquidation Distribution on the Liquidation Date. Any
liquidation proceeds allocable to a Variable Contract that have not been
reallocated to other investment options pursuant to transfer instructions timely
provided by the Variable Contract owner would be invested in the Money Market
Fund until further instructions regarding allocation from the Variable Contract
owner are received.
The right of a Variable Contract owner to reallocate his or her contract
amounts currently allocated to the Fund at the then current net asset value to
any other option available under his or her Variable Contract will not be
impaired by the proposal to liquidate the Fund or the adoption of the Plan. A
Variable Contract owner, therefore, may reallocate his or her contract values
allocated to the Fund in accordance with procedures set forth in the applicable
Variable Contract and its prospectus without the necessity of waiting for the
Fund to take any action. Any transfers, whether (1) made pursuant to transfer
instructions received and implemented prior to the Liquidation Date, (2) made by
transferring contract amounts into the Money Market Fund on the Liquidation
Date, or (3) made pursuant to transfer instructions out of the Money Market Fund
received within 30 days after the Liquidation Date, will be made free of any
charges and will not be considered transfers for the purposes of any limit on
the number of transfers permitted under the Variable Contracts.
Current prospectuses for the mutual funds available as investment options
under the Variable Contracts, as well as copies of the various statements of
additional information, may be obtained without charge by calling Lincoln
National Life Insurance Company at 800-338-0355 if you own an E-Annuity Variable
Annuity Contract or 877-200-8213 if you own a Multifund Variable Universal Life
Policy; Commonwealth Annuity and Life Insurance Company at 800-533-2124 or First
Allmerica Financial Life Insurance Company at 800-533-2124. These prospectuses
set forth important information about the other mutual funds that a Variable
Contract owner should know before providing transfer instructions relating to
the reallocation of his or her contract values.
Required Vote. Provided that one third (33 1/3%) of the shares entitled to
vote at the Meeting are present in person or represented by proxy at the Meeting
("Quorum"), approval of the Plan requires the affirmative vote of a majority of
the shares of the Fund.
THE BOARD UNANIMOUSLY RECOMMEND THAT YOU VOTE "FOR"
APPROVAL OF THE PLAN
VOTING INFORMATION
How will the shareholder voting be handled?
Only shareholders of record of the Fund at the close of business on
December 19, 2006 (the "Record Date"), will be entitled to notice of and to vote
at the Meeting, and 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 the Proposal are not received by the date of the Meeting, the Meeting
may be adjourned to permit further solicitations of proxies. The holders of a
majority of shares of the Fund entitled to vote on the Proposal at the Meeting
and present in person or by proxy (whether or not sufficient to constitute a
Quorum) may adjourn the Meeting. The Meeting may also be adjourned by the
chairperson of the Meeting. It is anticipated that the persons named as proxies
on the enclosed proxy cards will use the authority granted to them to vote on
adjournment in their discretion.
Abstentions will be included for purposes of determining whether a Quorum
is present at the Meeting for a particular matter, and will have the same effect
as a vote "against" the Proposal.
The rules of the U.S. Securities and Exchange Commission require that the
Trust disclose in this Proxy Statement the effect of "broker non-votes." Broker
non-votes are proxies from brokers or nominees indicating that such persons have
not received voting instructions from the beneficial owner or other person
entitled to vote shares on a particular matter with respect to which the brokers
or nominees do not have discretionary power. As described further above, each
Participating Insurance Company, as the shareholder of record of the Fund's
shares, generally is required to vote shares attributable to Variable Contracts
as to which no voting instructions are received in proportion (for, against or
abstain) to those for which timely instructions are received by the
Participating Insurance Companies just as any other shares for which the
Participating Insurance Companies do not receive proper voting instructions. The
Trust, therefore, does not anticipate receiving any broker non-votes.
How do I ensure my vote is accurately recorded?
You may attend the Meeting and vote in person. You may also vote by
completing, signing and returning the enclosed proxy card or voting instruction
form in the enclosed postage paid envelope. If you return your signed proxy
card, your votes will be officially cast at the Meeting by the persons appointed
as proxies. A proxy card is, in essence, a ballot. If you simply sign and date
the proxy card, but give no voting instructions, your shares will be voted in
favor of the Proposal and in accordance with the views of management upon any
unexpected matters that come before the Meeting or adjournment of the Meeting.
Variable Contract owners should complete the enclosed voting instruction
form and mail it in the enclosed postage paid envelope. If a duly executed and
dated voting instruction form is received that does not specify a choice, the
Participating Insurance Company will consider its timely receipt as an
instruction to vote "FOR" the Proposal. If you do not return a voting
instruction form, your Participating Insurance Company will vote, if required,
your shares in proportion to those for which timely instructions are received.
Please see your Variable Contract prospectus for further voting information and
on how to contact your Participating Insurance Company.
May I revoke my proxy or voting instruction?
Shareholders may revoke their proxy at any time before it is voted by
sending a written notice to the Trust expressly revoking their proxy, by signing
and forwarding to the Trust a later-dated proxy, or by attending the Meeting and
voting in person. Variable Contract owners may revoke previously submitted
voting instructions by sending a written notice to their Participating Insurance
Company expressly revoking their instructions, by signing and forwarding to
their Participating Insurance Company later-dated voting instructions, or
otherwise giving notice of revocation at the Meeting. Variable Contract owners
should contact their Participating Insurance Company for further information on
how to revoke previously given voting instructions, including any applicable
deadlines. Please see your Variable Contract prospectus for information on how
to contact your Participating Insurance Company.
What other matters will be voted upon at the Meeting?
The Board does not intend to bring any other matters before the Meeting
with respect to the Fund other than that described in this Proxy Statement. The
Board is not aware of any other matters to be brought before the Meeting with
respect to the Fund by others. If any other matter legally comes before the
Meeting, proxies for which discretion has been granted will be voted in
accordance with the views of management.
Who is entitled to vote?
Only shareholders of record on the Record Date will be entitled to vote at
the Meeting. There were 507,213.83 outstanding shares of the Fund entitled to
vote as of the Record Date. Variable Contract owners of record at the close of
business on the Record Date have the right to instruct their Participating
Insurance Company as to the manner in which the Fund shares attributable to
their variable contract should be voted. If a Variable Contract owner does not
complete and return his or her voting instruction form, the Participating
Insurance Company will still vote its portion of the Fund's shares attributable
to such variable contract in proportion to how all other Variable Contract
owners give voting instructions to the Participating Insurance Company, even if
only a small number of Variable Contract owners provide voting instructions.
What other solicitations will be made?
This proxy solicitation is being made by the Board for use at the Meeting.
The cost of this proxy solicitation will be borne by DMC. In addition to
solicitation by mail, solicitations also may be made by advertisement,
telephone, telegram, facsimile transmission or other electronic media, or
personal contacts. The Fund and the Participating Insurance Companies will
request broker-dealer firms, custodians, nominees and fiduciaries to forward
proxy materials to the beneficial owners of the shares of record. DMC may
reimburse broker-dealer firms, custodians, nominees and fiduciaries for their
reasonable expenses incurred in connection with such proxy solicitation. In
addition to solicitations by mail, officers and employees of the Trust, without
extra pay, may conduct additional solicitations by telephone, telecopy and
personal interviews. If the Trust does not receive your proxy card or voting
instruction by a certain time, you may receive a telephone call from one of the
officers or employees of the Participating Insurance Company asking you to vote.
Who will pay the expenses of the Proposal?
The costs of obtaining shareholder approval of the Proposal, including the
costs of soliciting proxies, will be borne by DMC and will not be passed on to
Variable Contract owners.
How do I submit a shareholder proposal?
The Trust is not required to, and does not intend to, hold regular annual
shareholders' meetings. A shareholder wishing to submit a proposal for
consideration for inclusion in a proxy statement and form or forms of proxy card
or voting instruction form for the next shareholders' meeting, should send his
or her written proposal to the offices of the Trust, directed to the attention
of its Secretary, at the address of its principal executive office printed on
the first page of this Proxy Statement, so that it is received within a
reasonable time before any such meeting. The inclusion and/or presentation of
any such proposal is subject to the applicable requirements of the proxy rules
under the Securities Exchange Act of 1934, as amended. Submission of a proposal
by a shareholder does not guarantee that the proposal will be included in the
Trust's proxy statement and form(s) of proxy card or voting instruction form, or
presented at the meeting.
MORE INFORMATION ABOUT THE TRUST
Investment Manager. As described further above, DMC, 2005 Market Street,
Philadelphia, Pennsylvania 19103, serves as the investment manager for the Fund.
Administration, Transfer Agency and Fund Accounting Services. Delaware
Service Company, Inc. ("DSC"), 2005 Market Street, Philadelphia, Pennsylvania
19103, an affiliate of DMC, acts as the administrator, shareholder servicing,
dividend disbursing and transfer agent for the Fund, and for other mutual funds
in the Delaware Investments Family of Funds. DSC also provides fund accounting
services to the Fund. Those services include performing all functions related to
calculating the Fund's net asset value and providing all financial reporting
services, regulatory compliance testing and other related accounting services.
For its transfer agency, shareholder services, fund accounting and
administration services, DSC is paid fees by the Fund according to fee schedules
that are the same for each retail Fund in the Delaware Investments Family of
Funds. These fees are charged to the Fund on a pro rata basis.
Distribution Services. Pursuant to an underwriting agreement relating to
the Fund, Delaware Distributors, L.P. (the "Distributor"), 2005 Market Street,
Philadelphia, Pennsylvania 19103, serves as the national distributor for the
Fund. The Distributor pays the expenses of the promotion and distribution of the
Fund's shares, except for payments by the Fund on behalf of Service Class shares
under its 12b-1 Plan (the Fund's Standard Class shares do not have a 12b-1
Plan). The Distributor is an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc. and an affiliate of DMC.
Pursuant to a contractual arrangement with the Distributor, Lincoln
Financial Distributors, Inc. ("LFD"), 2001 Market Street, Philadelphia,
Pennsylvania 19103, is primarily responsible for promoting the sale of Fund
shares through insurance companies, broker/dealers, financial advisors and other
financial intermediaries. LFD is also an affiliate of the Distributor and DMC.
PRINCIPAL HOLDERS OF SHARES
On the Record Date, the officers and Trustees of the Trust, as a group,
owned less than 1% of the outstanding voting shares of the Fund, or any class
thereof.
To the best knowledge of the Trust, as of the Record Date, no person,
except as set forth in Exhibit B, owned of record 5% or more of the outstanding
shares of any class of the Fund. Except as noted in Exhibit B, the Trust has no
knowledge of any other beneficial ownership.
EXHIBITS TO
PROXY STATEMENT
Exhibit
Exhibit A - Plan of Liquidation and Dissolution
Exhibit B - Principal Holders of Shares as of December 19, 2006
EXHIBIT A
Delaware VIP Trust, on behalf of its series:
The Delaware Global Bond Series
Plan of Liquidation and Dissolution
The following Plan of Liquidation and Dissolution (the "Plan") of the
Delaware VIP Global Bond Series (the "Fund"), a series of Delaware VIP Trust
(the "Trust"), a Delaware statutory trust organized and existing under the
Delaware Statutory Trust Act (12 Del. C. ss.3801, et. seq.) (the "Delaware Act")
and an open-end management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), is intended to constitute a
plan of liquidation under Section 331 or, if applicable, Section 332 of the
Internal Revenue Code of 1986, as amended (the "Code"), and is also intended to
accomplish the complete dissolution of the Fund, in conformity with the
Delaware Act.
WHEREAS, on November 16, 2006, the Trust's Board of Trustees unanimously
determined that it is in the best interest of the Fund and its shareholders, to
liquidate and dissolve the Fund and has considered and adopted this Plan as the
method of accomplishing such actions;
WHEREAS, the Trust's Board of Trustees has directed that this Plan be
submitted to the holders of outstanding voting shares of the Fund for the Plan's
adoption or rejection at a meeting of shareholders of the Fund and has
authorized the distribution of a proxy statement in connection with the
solicitation of proxies for this meeting.
NOW, THEREFORE, the liquidation and dissolution of the Series shall be
carried out in the manner hereinafter set forth:
1. Effective Date of Plan. The Plan shall be and become effective on the
date on which the Plan is approved by the Fund's shareholders (the "Effective
Date").
2. Dissolution. Promptly following the Effective Date, the Fund shall be
dissolved, and its affairs shall be wound up, all in accordance with the Trust's
Agreement and Declaration of Trust and Section 3808 of the Delaware Act.
3. Cessation of Business. After the Effective Date, the Fund shall cease
its business and shall not engage in any business activities except for the
purposes of satisfying redemption requests and winding up its business and
affairs, preserving the value of its assets and distributing the remaining
assets of the Fund to the shareholders of the Fund, in accordance with the
provisions of the Plan, after discharging or making reasonable provision for the
liabilities of the Fund; provided, however, that the Fund may continue to carry
on its activities as an investment company, as described in its current
prospectus and any supplements thereto, with regard to its existing shareholders
and assets, until the final liquidating distribution to its shareholders is
made.
4. Filing of IRS Form 966. Within thirty (30) days after the Effective
Date, the Fund shall cause to be filed with the appropriate Internal Revenue
Service Center a duly completed federal Form 966 and any required enclosures.
5. Restriction of Transfer and Redemption of Shares. The interests of the
shareholders in the assets of the Fund shall be fixed on the basis of its
holdings at the close of business on the Effective Date of the Plan or such
later date as is determined by the Trust's officers, which date shall not be
more than 120 days after the Effective Date (the "Valuation Date"). On the
Valuation Date, the books of the Fund shall be closed. Thereafter, unless the
books are reopened because the Plan cannot be carried into effect, or because
the Plan is abandoned by the Board of Trustees, the shareholders' interests in
the Fund's assets shall not be transferable by a request for redemption, a
negotiation of share certificates or otherwise.
6. Liquidation of Assets and Payment of Debts. As soon as is reasonable and
practicable after the Effective Date, the officers of the Trust shall pay, or
make reasonable provision to pay, all claims and obligations in full, including
all contingent, conditional or unmatured claims and obligations of the Fund
known to the Trust, and all claims and obligations of the Fund which are known
to the Trust but for which the identity of the claimant is unknown. If there are
sufficient assets, such claims and obligations shall be paid in full and any
such provisions for payment shall be made in full. If there are insufficient
assets, such claims and obligations of the Fund shall be paid or provided for
according to their priority and, among claims and obligations of equal priority,
ratably to the extent of assets available therefor.
7. Liquidating Distribution. Within 7 days after the Valuation Date, the
Fund shall mail or otherwise distribute to each shareholder a liquidating
distribution equal to such shareholder's interest in the net assets of the Fund
after the payment of the Fund's debts. Any accrued income or gains will also be
distributed as part of the liquidating distribution. The Fund will provide
shareholders with information indicating the proportion, if any, of the
liquidating distribution that is comprised of: (i) income dividends; (ii)
capital gain dividends; (iii) redemption proceeds relating to redemption
requests on file with the Fund prior to the Valuation Date; and (iv) proceeds
from the liquidation of shares pursuant to the Plan.
8. Management and Expenses of the Series Subsequent to the Liquidating
Distribution. The Fund's investment manager, Delaware Management Company, a
series of Delaware Management Business Trust ("DMC") shall bear the expenses
incurred in carrying out this Plan including, but not limited to, printing,
legal, accounting, custodian and transfer agency fees, and the expenses of
reports to, or communications with, shareholders (collectively, "Liquidation
Expenses") provided, however, in the event there is a securities class action
settlement or similar event relating to a security held in the Fund prior to
liquidation and winding down of the Fund that causes the Trust to receive cash
or securities on behalf of the Fund after the Valuation Date, such proceeds
shall be distributed and applied in the following order of priority to the
extent thereof: (i) to the Trust to the extent the Trust did not adequately
reserve for the Fund's expenses other than Liquidation Expenses; (ii) to DMC in
reimbursement of Liquidation Expenses; (iii) to the Trust and then allocated
among the Trust's remaining series on a relative net asset value basis; or (iv)
if there are no other series in the Trust, to the various other accounts managed
by DMC that held the security and for which DMC submitted the documentation that
resulted in such accounts' participation in the settlement based on the relative
amounts of the security held by such accounts at the date the securities matter
commenced.
9. Power of Board of Trustees. The officers shall have authority to do or
authorize any acts and things as provided for in the Plan and as they may
consider necessary or desirable to carry out the purposes of the Plan, including
the execution and filing of certificates, tax returns and other papers. The
death, resignation or disability of any Trustee or any officer of the Trust
shall not impair the authority of the surviving or remaining Trustees or
officers to exercise any of the powers provided for in the Plan.
10. Amendment of Plan. The Board of Trustees shall have the authority to
authorize variations from or amendments to the provisions of this Plan as may be
necessary or appropriate without the approval of shareholders to effect the
Liquidation of the Fund, the distribution of the Fund's net assets to its
shareholders in accordance with the laws of the State of Delaware, the 1940 Act,
the Code, and the Trust's Agreement and Declaration of Trust and By-Laws, and
the winding up of the affairs of the Fund, if the Board of Trustees determines
that such action would be advisable and in the best interests of the Fund and
its shareholders. If the Board of Trustees determines that any variations from
or amendments to the Plan are necessary, and in the judgment of the Board, will
materially and adversely affect the interests of the Fund's shareholders, such
an amendment will be submitted to the shareholders for approval. In addition,
the Board may abandon the Plan without approval of shareholders at any time
prior to the Liquidation Date if the Board determines that abandonment would be
advisable and in the best interests of the Fund and its shareholders.
Approved by Board of Trustees: November 16, 2006
EXHIBIT B
PRINCIPAL HOLDERS OF SHARES AS OF DECEMBER 19, 2006
Shareholder/Address Shares (Standard Class) Percentage
--------------------------------------------------------------------------------
The Lincoln National Life 48,282.01 9.53%
Insurance Company
1300 South Clinton Street
Fort Wayne, IN 46802
First Allmerica Financial Life 449,991.51 88.86%
Insurance Company
440 Lincoln Steret
Worcester, MA 01653-0002
Shareholder/Address Shares (Standard Class) Percentage
--------------------------------------------------------------------------------
Delaware Investments 825.28 100%
2005 Market Street
Philadelphia, PA 19103-7042
----------------------------------------------------------------------------------------
To vote by Telephone To vote by Internet To vote by Mail
1) Read the Proxy Statement 1) Read the Proxy Statement 1) Read the Proxy Statement
Prospectus and have the Prospectus and have the Prospectus.
Voting Instruction Form Voting Instruction Form
2) Check the appropriate box
2) Call 1-888-221-0697. 2) Go to www.proxyweb.com on the reverse side.
3) Follow the recorded 3) Follow the on-line 3) Sign, date and return the
instructions. instructions. Voting Instruction Form
in the envelope provided.
----------------------------------------------------------------------------------------
Unless you're voting by Telephone or Internet, please sign, date and return
promptly in the return envelope. NO POSTAGE IS REQUIRED.
INSURANCE COMPANY NAME PRINTS HERE SPECIAL MEETING OF SHAREHOLDERS -
DELAWARE VIP GLOBAL BOND SERIES FEBRUARY 28, 2007
VOTING INSTRUCTIONS
By signing below, I instruct the insurance company to vote the shares of the
Delaware VIP Global Bond Series (the "Fund") related to my contract at the
meeting of shareholders of the Fund to be held at the offices of Delaware
Investments located at 2001 Market Street, 2nd Floor Auditorium, Philadelphia,
PA 19103, on February 28, 2007 at 4:00 p.m., Eastern Time, and any adjournment
of the Meeting as indicated on the reverse side of this card.
THESE VOTING INSTRUCTIONS ARE REQUESTED BY THE ABOVE-NAMED INSURANCE COMPANY IN
CONNECTION WITH A SOLICITATION OF PROXIES BY THE TRUSTEES OF DELAWARE VIP TRUST
(THE "TRUST") ON BEHALF OF THE FUND.
This Voting Instruction Card, if properly executed, will be voted by your
insurance company in the manner directed by you. If this voting instruction card
is executed and no direction is made, this voting instruction card will be voted
FOR the proposal and, in the discretion of the insurance company, upon such
other business as may properly come before the Meeting.
Date: ___________________, 2007
-------------------------------
-------------------------------
Signature(s): (Sign in the box)
Please date and sign name(s)
as printed above. If a
contract is held jointly,
each contract owner should
sign. If only one signs, it
will be binding. If a
contract owner is a business
entity, please indicate the
title of the person signing.
Please fill in box as shown using black or blue ink or number 2 pencil. Please
do not use fine point pens. [X]
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
Proposal 1.
To approve a Plan of Liquidation FOR AGAINST ABSTAIN
and Dissolution for the Fund [ ] [ ] [ ]
This is described more fully in the Proxy Statement.
PLEASE BE SURE TO DATE AND SIGN YOUR VOTING INSTRUCTION ON THE REVERSE SIDE.
DELAWARE VIP TRUST SPECIAL MEETING OF SHAREHOLDERS -
DELAWARE VIP GLOBAL BOND SERIES FEBRUARY 28, 2007
(THE "FUND") PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) A.G. Ciavarelli,
David F. Connor and Michael E. Dresnin or any of them, attorneys, with full
power of substitution, to vote all shares of the Fund, as indicated above, that
the undersigned is entitled to vote at the above stated Special Meeting of
Shareholders to be held at the offices of Delaware Investments located at 2001
Market Street, 2nd Floor Auditorium, Philadelphia, PA 19103 on February 28, 2007
at 4:00 p.m., Eastern Time, and at any adjournments thereof. All powers may be
exercised by two or more of said proxy holders or substitutes voting or acting
or, if only one votes and acts, then by that one. This proxy shall be voted on
the proposal described in the Proxy Statement as specified on the reverse side.
Receipt of the Notice of Meeting and the accompanying Proxy Statement is hereby
acknowledged.
Date: ____________________, 2007
----------------------------------------------------
----------------------------------------------------
Signature(s) (Joint Owners) (Please sign within box)
THIS PROXY CARD IS ONLY VALID WHEN SIGNED: To avoid
the additional expense to the Fund of further
solicitation, please date and sign name(s) above as
printed on this card to authorize the voting of your
shares as indicated. Where shares are registered
with joint owners, one or more joint owners may
sign. Persons signing as executor, administrator,
trustee or other representative should give full
title as such.
Please fill in box as shown using black or blue ink or number 2 pencil. Please
do not use fine point pens. [X]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES WITH RESPECT TO THE
FUND. THE FOLLOWING MATTER IS PROPOSED BY THE FUND. THE BOARD OF TRUSTEES
RECOMMENDS A VOTE FOR THE PROPOSAL. IF NO SPECIFICATION IS MADE AND THIS PROXY
IS SIGNED AND RETURNED, THE PROXY SHALL BE VOTED FOR THE PROPOSAL. PLEASE REFER
TO THE PROXY STATEMENT FOR A DISCUSSION OF THE PROPOSAL. IF OTHER MATTERS
PROPERLY COME BEFORE THE MEETING TO BE VOTED ON, THE SHARES REPRESENTED BY THE
PROXY HOLDERS WILL BE VOTED AND CONSENTED ON THOSE MATTERS IN ACCORDANCE WITH
THE VIEWS OF MANAGEMENT.
For Against Abstain
1. To approve a Plan of Liquidation [ ] [ ] [ ]
and Dissolution for the Fund.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTATE IS REQUIRED.