DPT PRE 14A as filed August 27, 2009
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss. 240.14a-12
DELAWARE POOLED(R)TRUST
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(Name of Registrant as Specified in its Charter)
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Delaware
Investments(R)
A member of Lincoln Financial Group
Delaware Pooled Trust
2005 Market Street
Philadelphia, Pennsylvania 19103
September [ ], 2009
Dear Shareholder:
We wish to provide you with some important information concerning your
investment. As a shareholder of The Intermediate Fixed Income Portfolio (the
"Fixed Income Portfolio" or the "Acquired Fund"), a series of Delaware Pooled
Trust, we wish to inform you that the Board of Trustees (the "Board") of
Delaware Pooled Trust has approved the reorganization of the Fixed Income
Portfolio into the Delaware Core Bond Fund (the "Core Bond Fund" or the
"Surviving Fund" and together with the Fixed Income Portfolio, the "Funds"),
which is a series of Delaware Group Income Funds. The Acquired Fund and the
Surviving Fund pursue identical investment objectives, possess substantially
similar investment strategies, and are managed by the same portfolio managers.
The action of the Board to reorganize the Fixed Income Portfolio into the Core
Bond Fund is subject to approval of the Fixed Income Portfolio's shareholders.
This solicitation is being made on the terms and subject to the conditions
set forth in the accompanying Consent Solicitation Statement that describes the
terms of the proposed reorganization. Also enclosed you will find your written
consent card and return envelope. Please complete, date and sign the written
consent card and return it in the enclosed, postage-prepaid envelope or by
facsimile. Consent must be submitted to the Secretary of Delaware Pooled Trust
by 3:00 p.m., Eastern time, on September 15, 2009.
Your response to this solicitation is important. Failure to return the
enclosed written consent card will have the effect of a vote against the
approval of the reorganization. The Board recommends that all shareholders
consent to the reorganization of the Fixed Income Portfolio into the Core Bond
Fund.
Your continued interest in and support of the Funds are greatly
appreciated.
Sincerely,
Patrick P. Coyne
President
Delaware Pooled Trust
DELAWARE POOLED TRUST
2005 Market Street
Philadelphia, Pennsylvania 19103
_____________________________
NOTICE OF SOLICITATION OF CONSENTS
To the Shareholders of The Intermediate Fixed Income Portfolio (the "Fixed
Income Portfolio"):
This Notice of Solicitation of Consents and accompanying Consent Solicitation
Statement are furnished to you by Delaware Pooled Trust (the "Trust") in
connection with the solicitation, on behalf of the Trust's Board of Trustees
(the "Board"), of written consents from the holders of the Fixed Income
Portfolio's outstanding shares to take action without a shareholders' meeting.
The Board is requesting the shareholders of the Fixed Income Portfolio to
consent to a reorganization (the "Reorganization") of the Fixed Income Portfolio
into the Delaware Core Bond Fund, which is a series of Delaware Group Income
Funds.
We have established the close of business on August 1, 2009 as the record date
(the "Record Date") for determining shareholders entitled to submit written
consents.
We request that each shareholder complete, date and sign the enclosed written
consent card and promptly return it in the enclosed postage-prepaid envelope or
fax it to the Secretary of the Trust at (215) 255-1640. To be counted, your
properly completed written consent card must be received at or before 3:00 p.m.,
Eastern time, on September 15, 2009 (the "Expiration Date"), subject to
extension by the Board.
Your response is important. If you do not return the enclosed written consent
card, this will be treated as a failure to consent to the proposed
Reorganization. We recommend that all shareholders consent to the Reorganization
by marking the box entitled "CONSENT" with respect to the proposal on the
enclosed written consent card. If you sign and send in the written consent card
but do not indicate that you want to consent to the proposed Reorganization, we
will treat this as a consent to the proposal.
Consents may be revoked by shareholders at any time prior to the time that we
receive and accept the written consent of the holders of a majority of the
outstanding shares of the Fixed Income Portfolio entitled to act.
IT IS VERY IMPORTANT THAT EVERY SHAREHOLDER CONSENT. WE URGE YOU TO SIGN, DATE
AND RETURN THE ENCLOSED WRITTEN CONSENT AS PROMPTLY AS POSSIBLE.
By Order of the Board of Trustees,
_____________________________
Philadelphia, Pennsylvania David F. Connor
September [ ], 2009 Secretary
DELAWARE POOLED TRUST
2005 Market Street
Philadelphia, Pennsylvania 19103
_____________________________
CONSENT SOLICITATION STATEMENT
_____________________________
General
This Consent Solicitation Statement is being furnished in connection with
the solicitation of written consents of the shareholders of The Intermediate
Fixed Income Portfolio (the "Fixed Income Portfolio" or the "Acquired Fund"), a
series of Delaware Pooled Trust (the "Trust") to approve the reorganization (the
"Reorganization") of the Fixed Income Portfolio into the Delaware Core Bond Fund
(the "Core Bond Fund" or the "Surviving Fund" and together with the Fixed Income
Portfolio, the "Funds"), which is a series of Delaware Group Income Funds. This
Consent Solicitation Statement contains important information for you to
consider when deciding how to vote on this matter. Please read it carefully.
The Trust's Board of Trustees (the "Board") has elected to obtain
shareholder approval of the Reorganization by written consent, rather than by
calling a special meeting of shareholders. Written consents are being solicited
from all of the Fixed Income Portfolio's shareholders pursuant to the Trust's
Amended and Restated By-Laws.
Voting materials, which include this Consent Solicitation Statement and a
written consent card, are being mailed to all shareholders on or about September
[ ], 2009. The Board set the close of business on August 1, 2009 as the as the
record date (the "Record Date") for determining shareholders entitled to act
with respect to the consent. As of the Record Date, the Fixed Income Portfolio
had outstanding 712,210 shares (the "Shares"), held of record by 6 registered
holders.
Vote Required
In order to approve the Reorganization, we must receive the written consent
of a majority of the outstanding Shares (the "Requisite Consent"). Each
shareholder of record on the Record Date will be entitled to one vote for each
full share and a fractional vote for each fractional share that they hold in
connection with the Reorganization. Because all outstanding Shares are held
directly with the Fixed Income Portfolio's transfer agent, there will not be any
broker non-votes. Abstentions will be treated as votes against the proposal. If
you do not consent to the Reorganization or if you do not vote at all (abstain),
and we do not otherwise obtain enough consents to approve the Reorganization,
the Reorganization will not be approved. The Board recommends that you CONSENT
to the Reorganization.
How to Submit Consents
All written consents that are properly completed, signed and delivered
prior to the Expiration Date, and not revoked prior to our acceptance of the
written consents, will be accepted. If you have any questions about the consent
solicitation or how to vote or revoke your written consent, or if you should
need additional copies of this Consent Solicitation Statement or voting
materials, please contact Mary Ellen Carrozza at (215) 255-8687.
Shareholders of record who desire to consent to the Reorganization may do
so by mailing or delivering the applicable written consent to the Secretary of
the Trust using the enclosed, postage pre-paid envelope and in accordance with
the instructions contained in the written consent.
If the written consent is properly completed and signed, the shareholder
will be deemed to have consented to the Reorganization of the Fixed Income
Portfolio into the Core Bond Fund. Failure to return the enclosed written
consent card will have the same effect as a vote against approval of the
Reorganization.
Written consents by the shareholder(s) must be executed in exactly the same
manner as the name(s) appear(s) on the share certificates or account
registration. If shares to which a written consent relates are held of record by
two or more joint holders, all such holders must sign the written consent. If a
signature is by a trustee, executor, administrator, guardian, proxy,
attorney-in-fact, officer of a corporation or other record holder acting in a
fiduciary or representative capacity, such person should so indicate when
signing and must submit proper evidence satisfactory to us of such person's
authority so to act. If shares are registered in different names, separate
written consents must be executed covering each form of registration.
A SHAREHOLDER MUST COMPLETE, SIGN, DATE AND DELIVER THE WRITTEN CONSENT (OR
PHOTOCOPY THEREOF) FOR SUCH HOLDER'S SHARES TO THE SECRETARY OF THE TRUST. SUCH
WRITTEN CONSENT MAY BE DELIVERED TO THE SECRETARY OF THE TRUST BY HAND, MAIL,
FACSIMILE OR BY OVERNIGHT COURIER.
Expiration Date; Amendments
The term "Expiration Date" means 3:00 p.m., Eastern time, on September 15,
2009, unless the requisite consents are received prior to such date, in which
case, this solicitation will expire on the date that such requisite consents are
obtained.
Notwithstanding anything to the contrary set forth in this Consent
Solicitation Statement, the Trust reserves the right, at any time prior to the
Expiration Date, to amend or terminate the solicitation, or to delay accepting
written consent cards.
Revocation of Consents
Written consents may be revoked or withdrawn by the shareholders at any
time prior to the date we have received the requisite consents and have accepted
them or prior to 3:00 p.m., Eastern time, on the Expiration Date. To be
effective, a written or facsimile revocation or withdrawal of the written
consent card must be received by the Secretary of the Trust prior to such time
and addressed as follows: Secretary, Delaware Pooled Trust, 2005 Market Street,
29th Floor, Philadelphia, PA 19103; or by facsimile to (215) 255-1640. A notice
of revocation or withdrawal must specify the shareholder's name and the number
of shares being withdrawn. After the Expiration Date, all written consents
previously executed and delivered and not revoked will become irrevocable.
Solicitation of Consents
The Board is sending you this Consent Solicitation Statement in connection
with its solicitation of consents to approve the Reorganization. Certain
Trustees or officers of the Trust or employees of Delaware Management Company
(the "Manager") may solicit written consents by mail, facsimile or in person.
The Manager will pay for the costs of solicitation.
PROPOSAL: TO APPROVE THE REORGANIZATION OF THE INTERMEDIATE FIXED INCOME
PORTFOLIO INTO THE DELAWARE CORE BOND FUND, A SERIES OF DELAWARE GROUP INCOME
FUNDS
The Board has approved the reorganization of the Fixed Income Portfolio
into the Delaware Core Bond Fund, which is a series of Delaware Group Income
Funds, subject to shareholder approval. Shareholders of record of the Fixed
Income Portfolio on the Record Date are entitled to submit written consents.
Each share of record on the Record Date is entitled to one vote (and a
proportionate fractional vote for each fractional share) on the Reorganization
proposal.
This Consent Solicitation Statement should be kept for future reference.
The Fixed Income Portfolio's most recent annual shareholder report, including
financial statements, for the fiscal year ended October 31, 2008 is available on
the Internet at www.delawareinvestments.com and has been previously mailed to
shareholders. If you would like to receive additional copies of the annual
shareholder report free of charge, or copies of any subsequent shareholder
report, please contact Delaware Investments by writing to the address set forth
on the first page of this Proxy Statement or by calling 1-(800) 231-8002. The
prospectus for Delaware Core Bond Fund will accompany this Consent Solicitation
Statement.
The Reorganization.
The proposed Reorganization would involve the transfer of all of the assets
of the Acquired Fund to the Surviving Fund in exchange for Class A Shares of the
Surviving Fund. The transfer of assets by the Acquired Fund will occur at its
then-current market value as determined in accordance with the Acquired Fund's
valuation procedures. Class A Shares of the Surviving Fund will be distributed
to shareholders of the Acquired Fund in exchange for their shares of the
Acquired Fund. The front-end sales load applicable to Class A Shares of the
Surviving Fund will not be charged for the shares received in the Reorganization
or for future purchases of shares of the Surviving Fund made by shareholders of
the Acquired Fund. After completion of the Reorganization, each shareholder of
the Acquired Fund will own Class A Shares of the Surviving Fund equal in value
to the current net asset value of such shareholder's shares of the Acquired
Fund. Following the completion of the Reorganization, the Acquired Fund will be
liquidated and its registration under the Investment Company Act of 1940, as
amended (the "1940 Act"), will be terminated.
The Reorganization is intended to be a tax-free transaction for federal
income tax purposes. This means that shareholders of the Acquired Fund will
become shareholders of the Surviving Fund without realizing any gain or loss for
federal income tax purposes. This also means that the Reorganization will be a
tax-free transaction for the Surviving Fund.
The implementation of the Reorganization is subject to a number of
conditions set forth in the Agreement and Plan of Reorganization (the "Plan"),
which is attached hereto as Exhibit A. Among the more significant conditions is
the receipt by the Funds of an opinion of counsel to the effect that the
Reorganization will be treated as a tax-free transaction to the Funds and their
shareholders for federal income tax purposes, as described further below. The
Acquired Fund does not expect to sell securities held in the portfolio in
connection with effectuating the Reorganization. For more information about the
Reorganization, see "Information About the Reorganization" below.
The Manager has undertaken to bear and pay all expenses in connection with
the Reorganization.
Comparison of the Investment Objectives and Strategies of the Funds.
The Acquired Fund and Surviving Fund have identical investment objectives:
to seek maximum long term total return, consistent with reasonable risk.
The Acquired Fund and the Surviving Fund pursue substantially similar
investment strategies. Both Funds seek to achieve their objectives by investing
primarily in a diversified portfolio of investment grade fixed income
obligations, including securities issued or guaranteed by the U.S. government,
its agencies, or instrumentalities (U.S. government securities), mortgage-backed
securities, asset-backed securities, corporate bonds, and other fixed income
securities.
For further information about the Funds' investment objectives and
strategies, see "Comparison of the Funds-- Investment Objectives, Principal
Investment Strategies, and Portfolio Management."
Fees and Expenses.
The following table sets forth: (i) the fees and expenses of the Acquired
Fund as of Junes 30, 2009; and (ii) the estimated fees and expenses of the Class
A Shares of the Surviving Fund on a pro forma basis after giving effect to the
Reorganization. The fees and expenses for the Surviving Fund are based on
estimates because the Fund had not yet commenced operations as of the date of
this Solicitation of Consent.
Annual Fund Operating Expenses for the Acquired Fund and the Surviving Fund
--------------------------------------------------- ----------------- ------------------
Shareholder Fees Acquired Fund Pro-Forma
(fees paid directly from your investment) -Surviving Fund
(Class A
Shares) after
Reorganization
Maximum Sales Charge (Load) Imposed on Purchases... None 4.50%
Maximum Deferred Sales Charge (Load)............... None None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends.......................................... None None
Redemption Fee..................................... None None
Exchange Fee....................................... None None
--------------------------------------------------- ----------------- ------------------
Annual Fund Operating Expenses
(expenses deducted from Fund assets)
Management Fees.................................... 0.40%(1) 0.50%(2)
Distribution and Service (12b-1) Fees.............. None 0.30%(3)
Other Expenses..................................... 0.74% 1.72%
Total Annual Fund Operating Expenses............... 1.14% 2.52%
Fee waivers and payments........................... (0.71%) (1.62%)
Net expenses....................................... 0.43% 0.90%
--------------------------------------------------- ----------------- ------------------
1. The Manager has voluntarily agreed to waive all or a portion of its
investment advisory fees and/or reimburse expenses in order to prevent total
annual fund operating expenses (excluding any 12b-1 fees, taxes, interest,
inverse floater program expenses, brokerage fees, certain insurance costs, and
nonroutine expenses or costs, including, but not limited to, those relating to
reorganizations, litigation, conducting shareholder meetings, and liquidations)
from exceeding, in an aggregate amount, 0.43% of the Portfolio's average daily
net assets from March 1, 2009 until such time as the waiver is discontinued.
These waivers may be discontinued at any time because they are voluntary, and
they apply only to expenses paid directly by the Portfolio.
2. The Manager has agreed to contractually waive all or a portion of its
investment advisory fees and/or pay/reimburse expenses (excluding any 12b-1 plan
expenses, taxes, interest, inverse floater program expenses, brokerage fees,
certain insurance costs, and nonroutine expenses or costs, including, but not
limited to, those relating to reorganizations, litigation, conducting
shareholder meetings, and liquidations(collectively, non-routine expenses)) in
order to prevent annual fund operating expenses from exceeding, in an aggregate
amount, 0.65% of the Fund's average daily net assets from August 26, 2009
through November 30, 2010. For purposes of these waivers and reimbursements,
non-routine expenses may also include such additional costs and expenses as may
be agreed upon from time to time by the Fund's Board of Trustees and the
Manager. The Manager's fee waivers and expense reimbursements apply only to
expenses paid directly by the Fund.
3. The Fund's distributor, Delaware Distributors, L.P. (Distributor), has
contracted to limit the Class A Shares' Rule 12b-1 fee for the Fund from
commencement of operations through November 30, 2010 to no more than 0.25% of
average daily net assets.
Expense Examples.
The following Expense Examples are intended to help you compare the cost of
investing in the Acquired Fund with the cost of investing in the Surviving Fund.
Each Example assumes that you invest $10,000 in each Fund for the time period
indicated and then redeem all of your shares at the end of those periods. Each
Example also assumes that your investment has a 5% return each year. These are
examples only, and do not represent future expenses, which may be greater or
less than those shown below.
1 Year 3 Years 5 Years 10 Years
Acquired Fund $116 $362 $628 $1,386
Surviving Fund(1) $694 $1,199 $1,730 $3,177
(1) The pro forma expense example shown above does not reflect the waiver of
the Class A Shares front-end sales load for Acquired Fund shareholders who
will receive Surviving Fund shares in connection with the Reorganization.
If the pro forma expense example reflected the waiver of the Class A Shares
front-end sales load for Acquired Fund shareholders, the 1 year, 3 years, 5
years, and 10 years expenses would be as follows: $688; $1,185; $1,706; and
$3,130, respectively.
The projected post-Reorganization pro forma Annual Fund Operating Expenses
and Example Expenses presented above are based on numerous material assumptions,
including that certain fixed costs involved in operating the Acquired Fund will
be eliminated. Although these projections represent good faith estimates, there
can be no assurance that any particular level of expenses or expense savings
will be achieved because expenses depend on a variety of factors, including the
future level of the Surviving Fund's assets, many of which are beyond the
control of the Surviving Fund or the Manager.
Comparison of Sales Load and Distribution Arrangements.
The Acquired Fund offers one class of shares that does not charge a
front-end sales load at the time of purchase or a contingent-deferred sales load
at the time of redemption.
The Surviving Fund offers four classes of shares: Class A, Class C, Class R
and Institutional Class. The Surviving Fund's Class A Shares charge a front-end
load of 4.50% at the time of purchase. The front-end sales load applicable to
Class A Shares of the Surviving Fund will be waived for the shares received in
the Reorganization or for future purchases of shares of the Surviving Fund made
by shareholders of the Acquired Fund.
The Surviving Fund's Class C Shares do not charge front-end loads at the
time of purchase, but do charge a contingent deferred sales load of 1.00% for
shares sold within 12 months after purchasing them. The Surviving Fund's Class R
Shares do not charge a front-end sales load at the time of purchase or a
contingent-deferred sales load at the time of redemption. The Surviving Fund's
Class A, Class C and Class R Shares have each adopted plans pursuant to Rule
12b-1 under the 1940 Act. Pursuant to the plans, the Class A, Class C and Class
R Shares of the Surviving Fund may pay certain third parties fees at an annual
rate of up to 0.30%, 1.00% and 0.60%, respectively, of their average daily net
assets for the provision of distribution and/or shareholder support services.
The Surviving Fund's Institutional Class Shares do not charge front-end or
contingent deferred sales loads, and have not adopted a plan pursuant to Rule
12b-1.
Comparison of Purchase and Redemption Procedures; Exchange Procedures;
Dividends, Distributions and Pricing.
Procedures for purchasing and selling shares of the Surviving Fund differ
to some degree from that of the Acquired Fund because the Surviving Fund will be
sold to retail investors while the Acquired Fund is offered only to institutions
and high net worth individual investors. Both Funds permit shareholders to
exchange shares of the Funds with other Delaware Investments(R)Funds. In
addition, both Funds permit the purchase of shares through the mail, by wire
transfer, or through a financial intermediary. However, the Acquired Fund
requires a minimum initial investment of $1,000,000 and requires that certain
eligibility requirements be satisfied. The Acquired Fund may also, in its sole
discretion, permit investors to make an investment by a contribution of
securities in-kind or by following another procedure that will have the same
economic effect as an in-kind purchase. In either case, such investors will be
required to pay the brokerage or other transaction costs arising in connection
with acquiring the subject securities.
The Acquired Fund's Shares may be exchanged for shares of other series of
the Trust or the institutional class shares of the other Delaware
Investments(R)Funds based on the respective net asset values per share ("NAVs")
of the shares involved so long as the minimum purchase requirements are
satisfied. While there are no minimum purchase requirements for the
institutional class shares of other Delaware Investments(R)Funds, certain
eligibility requirements must still be satisfied. The Surviving Fund shares may
generally be exchanged for the same class of another Delaware
Investments(R)Fund. If you exchange shares to a fund that has a sales charge,
you will pay any applicable sales charges on your new shares. However, you do
not pay sales charges on shares you acquired through the reinvestment of
dividends. You may have to pay taxes on your exchange. Institutional Class
shares of the Surviving Fund may not be exchanged for Class A shares of another
Delaware Investments(R)Fund, other than Delaware Cash Reserve Fund, and may not
be exchanged for Class C or Class R shares of another Delaware
Investments(R)Fund.
Additionally, each Fund intends to pay out as dividends substantially all
of its net income and net short-term and long-term capital gains (after
reduction by any available capital loss carry-forwards). Each Fund's policy is
to declare dividends daily and distribute all of its net investment income, if
any, to shareholders as dividends monthly. The Acquired Fund will distribute net
realized capital gains, if any, at least annually, usually in December. The
Surviving Fund will distribute net realized capital gains, if any, twice each
year.
The Funds determine their net asset value per share as of the close of
regular trading hours on the New York Stock Exchange ("NYSE") (normally 4:00
p.m., Eastern time). Both Funds have adopted procedures for valuing portfolio
assets. The table below describes how each Fund prices its shares and values its
portfolio securities.
Surviving Fund Acquired Fund
Share Price. The price you pay for shares of the Share Price. The Acquired Fund's Shares may be
Surviving Fund will depend on when the Fund receives your purchased at the Fund's NAV per share. Orders will be
purchase order. If an authorized agent or the Fund priced at the next NAV calculated after the order is
receives your order before the close of trading on the accepted by the Fund. Except in the case of in-kind
NYSE, you will pay that day's closing share prices, which purchases, an order will be accepted by the Fund after
is based on the Fund's NAV. If your order is received (1) the Fund is notified by telephone, email,
after the close of regular trading on the NYSE, your will facsimile, or other means acceptable to the Fund of a
pay the next business day's price. A business day is any purchase order and (2) Federal Funds have been
day that the NYSE is open for business. delivered to the Fund's agent. If notice is given or
Federal Funds are delivered after that time, the
purchase order will be priced at the close of the NYSE
on the following business day that the NYSE is open for
business. The purchase price per share for investors
purchasing shares by an in-kind procedure or by such
other permitted procedure will be the NAV next
determined after acceptance by the Fund of the
investor's purchase order.
NAV Determination. The Surviving Fund determines the NAV NAV Determination. The Acquired Fund determines the
per share for each class of the Fund at the close of NAV per share at the close of regular trading on the
regular trading on the NYSE on each business day that the NYSE on each business day the NYSE is open for
NYSE is open for business. The NAV per share for each business. The Fund calculates this value by adding the
class of the Surviving Fund is calculated by subtracting market value of all the securities and assets in the
the liabilities of each class from its total assets and Fund's portfolio, deducting all liabilities, and
dividing the resulting number by the number of shares dividing the resulting number by the number of shares
outstanding for that class. The Fund generally prices outstanding. The result is the NAV per share. The Fund
securities and other assets for which market quotations generally prices securities and other assets for which
are readily available at their market value. For a fund market quotations are readily available at their market
that invests in foreign securities, the fund's NAV may value. For a fund that invests in foreign securities,
change on days when a shareholder will not be able to the NAV may change on days when the shareholders will
purchase or sell fund shares because foreign markets are not be able to purchase or redeem Fund shares. The
open at times and on days when U.S. markets are not. The Fund prices fixed income securities on the basis of
Fund prices fixed income securities on the basis of valuations provided to the Fund by an independent
valuations provided to the Fund by an independent pricing pricing service that uses methods approved by the
service that uses methods approved by the Fund's Board of Board. The Fund prices any fixed income securities that
Trustees. For all other securities, the Fund uses methods have a maturity of less than 60 days at amortized cost,
approved by the Fund's Board that are designed to price which approximates market value. For all other
securities at their fair market value. securities, the Fund uses methods approved by the Board
that are designed to price securities at their fair
market value.
Fair Valuation. When the Surviving Fund uses fair value Fair Valuation. When the Acquired Fund uses fair value
pricing, it may take into account any factors it deems pricing, it may take into account any factors it deems
appropriate. The Fund may determine fair value based upon appropriate. The Fund may determine fair value based
developments related to a specific security, current upon developments related to a specific security,
valuations of foreign stock indices (as reflected in U.S. current valuations of foreign stock indices (as
futures markets), and/or U.S. sector or broader stock reflected in U.S. futures markets), and/or U.S. sector
market indices. The price of securities used by the Fund or broader stock market indices. The prices of
to calculate its NAV may differ from quoted or published securities used by the Fund to calculate its NAV may
prices for the same securities. Fair value pricing may differ from quoted or published prices for the same
involve subjective judgments and it is possible that the securities. Fair value pricing may involve subjective
fair value determined for a security is materially judgments and it is possible that the fair value
different than the value that could be realized upon the determined for a security is materially different than
sale of that security. the value that could be realized upon the sale of that
security.
The Surviving Fund anticipates using fair value pricing
for securities primarily traded on U.S. exchanges only The Acquired Fund anticipates using fair value pricing
under very limited circumstances, such as the early for securities primarily traded on U.S. exchanges only
closing of the exchange on which a security is traded or under very limited circumstances, such as the early
suspension of trading in the security. The Fund may use closing of the exchange on which a security is traded
fair value pricing more frequently for securities traded or suspension of trading in the security. The Fund may
primarily in non-U.S. markets because, among other things, use fair value pricing more frequently for securities
most foreign markets close well before the Fund values its primarily traded in non-U.S. markets because, among
securities at 4:00 p.m. Eastern time. The earlier close of other things, most foreign markets close well before
these foreign markets gives rise to the possibility that the Fund values its securities at 4:00 p.m. Eastern
significant events, including broad market moves, may time. The earlier close of these foreign markets gives
have occurred in the interim. To account for this, the rise to the possibility that significant events,
Fund may frequently value many foreign equity securities including broad market moves, may have occurred in the
using fair value prices based on third-party vendor interim. To account for this, the Fund may frequently
modeling tools to the extent available. value many foreign equity securities using fair value
prices based on third-party vendor modeling tools to
The Surviving Fund's Board of Trustees has delegated the extent available.
responsibility for valuing the Fund's assets to a Pricing
Committee of the Manager, which operates under the The Board has delegated responsibility for valuing the
policies and procedures approved by the Board and which is Fund's assets to a Pricing Committee of the Manager,
subject to the Board's oversight. which operates under the policies and procedures
approved by the Board, and which is subject to the
Board's oversight.
PRINCIPAL RISK FACTORS.
Like all investments, an investment in each Fund involves risk. There is no
assurance that a Fund will meet its investment objective. A Fund's ability to
achieve its investment objective will depend, among other things, on the
portfolio managers' analytical and portfolio management skills. As with most
investments in mutual funds, the best results are achieved when investments in
the Funds are held for a number of years.
Investments in the Funds are subject to several risks. The Funds' primary risks
are summarized below.
Market risk. Market risk is the risk that all or a majority of the securities in
a certain market-like the stock or bond market-will decline in value because of
economic conditions, future expectations, or investor confidence.
Index swaps are subject to the same market risks as the investment market or
sector that the index represents. Depending on the actual movements of the index
and how well the portfolio manager forecasts those movements, the fund could
experience a higher or lower return than anticipated.
Interest rate risk. Interest rate risk is the risk that securities, particularly
bonds with longer maturities, will decrease in value if interest rates rise and
increase in value if interest rates fall. Investments in equity securities
issued by small and medium sized companies, which often borrow money to finance
operations, may also be adversely affected by rising interest rates.
Swaps may be particularly sensitive to interest rate changes. Depending on the
actual movements of interest rates and how well the portfolio manager
anticipates them, a portfolio could experience a higher or lower return than
anticipated. For example, if a fund holds interest rate swaps and is required to
make payments based on variable interest rates, it will have to make increased
payments if interest rates rise, which will not necessarily be offset by the
fixed-rate payments it is entitled to receive under the swap agreement.
Industry and security risk. Industry risk is the risk that the value of
securities in a particular industry (such as financial services or
manufacturing) will decline because of changing expectations for the performance
of that industry. Security risk is the risk that the value of an individual
stock or bond will decline because of changing expectations for the performance
of the individual company issuing the stock or bond (due to situations that
could range from decreased sales to events such a pending merger or actual or
threatened bankruptcy).
Credit risk. Credit risk is risk that an issuer of a debt security, including a
governmental issuer, may be unable to make interest payments and repay principal
in a timely manner. Changes in an issuer's financial strength or in a security's
credit rating may affect a security's value, which would impact a fund's
performance.
Liquidity risk. Liquidity risk is the possibility that securities cannot be
readily sold within seven days at approximately the price at which a fund has
valued them. Illiquid securities may trade at a discount from comparable, more
liquid investments, and may be subject to wide fluctuations in market value. A
fund also may not be able to dispose of illiquid securities at a favorable time
or price during periods of infrequent trading of an illiquid security.
Foreign risk. Foreign risk is the risk that foreign securities may be adversely
affected by political instability, changes in currency exchange rates, foreign
economic conditions, or inadequate regulatory and accounting standards.
Currency risk. Currency risk is the risk that the value of an investment may be
negatively affected by changes in foreign currency exchange rates. Adverse
changes in exchange rates may reduce or eliminate any gains produced by
investments that are denominated in foreign currencies and may increase losses.
Prepayment risk. Prepayment risk is the risk that homeowners will prepay
mortgages during periods of low interest rates, forcing a fund to reinvest its
money at interest rates that might be lower than those on the prepaid mortgage.
Prepayment risk may also affect other types of debt securities, but generally to
a lesser extent than mortgage securities.
Bank loans and other direct indebtedness risk. Bank loans and other direct
indebtedness risk involves the risk that a fund will not receive payment of
principal, interest, and other amounts due in connection with these investments
and will depend primarily on the financial condition of the borrower. Loans that
are fully secured offer a fund more protection than unsecured loans in the event
of nonpayment of scheduled interest or principal, although there is no assurance
that the liquidation of collateral from a secured loan would satisfy the
corporate borrower's obligation, or that the collateral can be liquidated. Some
loans or claims may be in default at the time of purchase. Certain of the loans
and the other direct indebtedness acquired by a fund may involve revolving
credit facilities or other standby financing commitments which obligate a fund
to pay additional cash on a certain date or on demand. These commitments may
require a fund to increase its investment in a company at a time when that fund
might not otherwise decide to do so (including at a time when the company's
financial condition makes it unlikely that such amounts will be repaid). To the
extent that a fund is committed to advance additional funds, it will at all
times hold and maintain in a segregated account cash or other high-grade debt
obligations in an amount sufficient to meet such commitments.
Government and regulatory risk. Governments or regulatory authorities have, from
time to time, taken or considered actions that could adversely affect various
sectors of the securities markets. Government involvement in the private sector
may, in some cases, include government investment in, or ownership of, companies
in certain commercial business sectors; wage and price controls; or imposition
of trade barriers and other protectionist measures. For example, an economic or
political crisis may lead to price controls, forced mergers of companies,
expropriation, the creation of government monopolies, or other measures that
could be detrimental to the investments of a fund.
Derivatives risk. Derivatives risk is the possibility that a fund may experience
a significant loss if it employs a derivatives strategy (including a strategy
involving futures, options and swaps) related to a security or a securities
index and that security or index moves in the opposite direction from what the
portfolio management team had anticipated. Derivatives also involve additional
expenses, which could reduce any benefit or increase any loss to a fund from
using the strategy.
Counterparty risk. If a fund enters into a derivative contract (such as a swap,
futures, or options contract) or a repurchase agreement, it will be subject to
the risk that the counterparty to such a contract or agreement may fail to
perform its obligations under the contract or agreement due to financial
difficulties (such as a bankruptcy or reorganization). As a result, the fund may
experience significant delays in obtaining any recovery, may only obtain a
limited recovery, or may obtain no recovery at all.
INFORMATION ABOUT THE REORGANIZATION
Material Features of the Plan.
The Plan sets forth the terms and conditions of the Reorganization. Certain
provisions of the Plan are summarized below; however, this summary is qualified
in its entirety by reference to the Plan, a form of which is attached as
Appendix A to this Solicitation of Consent.
At the consummation of the Reorganization, which is expected to occur at
the close of business on or about September 30, 2009, (the "Effective Time"),
all of the assets of the Acquired Fund will be transferred to the Surviving Fund
in exchange for Class A Shares of the Surviving Fund, such that at and after the
Effective Time, the assets of the Acquired Fund will become the assets of the
Surviving Fund. The transfer of assets by the Acquired Fund will occur at their
then-current market value as determined in accordance with the Acquired Fund's
valuation procedures and shares of the Surviving Fund to be issued to the
Acquired Fund shall be valued at their then-current net asset value determined
in accordance with the Surviving Fund's valuation procedures. Class A Shares of
the Surviving Fund will be distributed to shareholders of the Acquired Fund in
exchange for the Acquired Fund shares. After completion of the Reorganization,
each shareholder of the Acquired Fund will own Class A Shares of the Surviving
Fund equal in value to the current net asset value of such shareholder's shares
of the Acquired Fund. The front-end sales load applicable to Class A Shares of
the Surviving Fund will not be charged for the shares received in the
reorganization or for future purchases of shares of the Surviving Fund made by
shareholders of the Acquired Fund. Following the completion of the
Reorganization, the Acquired Fund will be liquidated and the registration of the
Acquired Fund under the 1940 Act will be terminated.
The Plan provides that the Acquired Fund's Board will declare a dividend or
dividends, as necessary, with respect to the Acquired Fund prior to the
Effective Time. This dividend, together with all previous dividends, will have
the effect of distributing to the shareholders of the Acquired Fund all
undistributed ordinary income earned and net capital gains recognized up to and
including the time at which the Acquired Fund's net asset value is determined
for purposes of the Reorganization (the "Valuation Date"). The shareholders of
the Acquired Fund will recognize ordinary income and capital gain with respect
to this distribution and such income and gain may be subject to federal, state
and/or local taxes.
The stock transfer books of the Trust with respect to the Acquired Fund
will be permanently closed as of the close of business on the Valuation Date,
which is the day immediately preceding the Effective Time. Redemption requests
received thereafter by the Trust with respect to the Acquired Fund will be
deemed to be redemption requests for shares of the Surviving Fund issued
pursuant to the Plan. If any shares of the Acquired Fund are represented by a
share certificate, the certificate must be surrendered to the Trust's transfer
agent for cancellation before the Surviving Fund shares issuable to the
shareholder pursuant to this Plan will be issued. Any special options relating
to a shareholder's account in the Acquired Fund will transfer over to the
Surviving Fund without the need for the shareholder to take any action.
The Reorganization is subject to a number of conditions as set forth in the
Plan attached hereto as Appendix A. The Trust, by consent of its Board or an
officer authorized by the Board, may waive any condition to the obligations of
the Acquired Fund or the Surviving Fund under the Plan. The Plan may be
terminated, and the Reorganization abandoned, at any time prior to the Closing:
(i) by mutual consent by the Trust and the Delaware Group Income Funds; (ii) by
the Delaware Group Income Funds if certain conditions have not been fulfilled,
or waived by it; and (iii) by the Trust if certain conditions have not been
fulfilled, or waived by it. The Plan provides further that the Plan may be
amended only by mutual consent of the Trust and the Delaware Group Income Funds
in writing.
The Manager has undertaken to bear and pay all expenses in connection with
the Reorganization.
Reasons For Reorganization.
The Acquired Fund's Board considered the Reorganization at a meeting held
on May 19-21, 2009, and approved the Plan. In considering the Plan, the Board
received information from representatives of the Manager detailing the
Reorganization, including: (i) the specific terms of the Plan, including
information regarding comparative expenses; (ii) the proposed plans for ongoing
management, distribution and operation of the Surviving Fund; (iii) the
management, financial position and business of the Manager and its affiliates;
and (iv) the impact of the Reorganization on the Acquired Fund and its
shareholders. In approving the Reorganization, the Board of the Acquired Fund
determined that (i) participation in the Reorganization is in the best interest
of the Acquired Fund's shareholders; and (ii) the interests of the Acquired
Fund's shareholders will not be diluted as a result of the Reorganization.
In making this determination, the Board of the Acquired Fund considered a
number of factors, including the following:
o The investment objectives of the Acquired Fund and the Surviving Fund are
identical;
o The investment strategies and risks of the Acquired Fund and the Surviving
Fund are substantially similar;
o The Acquired Fund's portfolio managers will serve as the portfolio managers
for the Surviving Fund;
o The future prospects of the Acquired Fund if the Reorganization were not
effected, including the Acquired Fund's continuing viability as a series of
the Trust;
o Shareholders of the Acquired Fund will likely benefit from economies of
scale as a result of the Manager's efforts to increase the size of the
Surviving Fund;
o The Reorganization is intended to be tax-free for federal income tax
purposes for shareholders of the Acquired Fund; and
o The Acquired Fund's shareholders will not bear any costs of the
Reorganization.
Federal Income Tax Consequences
The Reorganization is intended to qualify as a tax-free reorganization for
federal income tax purposes under Section 368(a)(1) of the Code. Based on
certain assumptions made and representations to be made on behalf of the
Acquired Fund and the Surviving Fund, it is expected that Stradley Ronon Stevens
& Young, LLP will provide a legal opinion to the effect that, for federal income
tax purposes:(i) shareholders of the Acquired Fund will not recognize any gain
or loss as a result of the exchange of their shares of the Acquired Fund for
shares of the Surviving Fund; (ii) no gain or loss will be recognized by the
Acquired Fund (a) upon the transfer of its assets to the Surviving Fund in
exchange for the Surviving Fund shares and the assumption by the Surviving Fund
of the liabilities of the Acquired Fund or (b) upon the distribution of the
Surviving Fund shares by the Acquired Fund to its shareholders in liquidation,
as contemplated in the Plan; (iii) neither the Surviving Fund nor its
shareholders will recognize any gain or loss upon receipt of the assets of the
Acquired Fund; and (iv) the holding period and aggregate tax basis for Surviving
Fund shares that are received by the Acquired Fund shareholder will be the same
as the holding period and aggregate tax basis of the shares of the Acquired Fund
previously held by such shareholder.
Neither the Trust nor the Delaware Group Income Funds has sought a tax
ruling from the Internal Revenue Service ("IRS"). The opinion of counsel is not
binding on the IRS nor does it preclude the IRS from adopting a contrary
position.
Capital losses can generally be carried forward to each of the eight (8)
years succeeding the loss year to offset future capital gains. The Surviving
Fund will inherit the tax attributes of the Acquired Fund, including any
available capital loss carryforwards, as of the closing date. In general, it is
not expected that any such capital loss carryforwards will be subject to an
annual limitation for federal income tax purposes in connection with the
Reorganization because the Reorganization should either: (i) qualify as a type
"F" tax-free reorganization under the Code, including a mere change in identity,
form or place of reorganization of one corporation, however effected; or (ii)
not involve more than a 50% change of ownership.
After the Reorganization, shareholders will continue to be responsible for
tracking the adjusted tax basis and holding period for shares for federal income
tax purposes. You should consult your tax advisor regarding the effect, if any,
of the Reorganization in light of your individual circumstances. You should also
consult your tax advisor about the state and local tax consequences, if any, of
the Reorganization because this discussion only relates to the federal income
tax consequences.
Although the Acquired Fund and the Surviving Fund have identical investment
objectives and substantially similar investment strategies, some portion of the
Acquired Fund's securities holdings may be sold prior to or immediately
following the Reorganization. To the extent that the Acquired Fund's securities
holdings are sold prior to the Reorganization, the proceeds of such sales will
be held in temporary investments or reinvested in assets that the Surviving Fund
may hold. The possible need for the Acquired Fund to dispose of certain
portfolio investments prior to the Reorganization could result in selling such
investment at a disadvantageous time. The sale of securities either prior to the
Reorganization or shortly thereafter could result in the Acquired Fund or the
Surviving Fund realizing gains (which may be taxable) or losses that would not
otherwise have been realized but for the Reorganization. Such a sale of assets
and the reinvestment of the proceeds would involve brokerage and other
transactional costs.
Shareholder Rights, Description of the Securities to be Issued.
The Acquired Fund is organized as a series of the Trust, which is a
Delaware statutory trust. The Surviving Fund is organized as a separate series
of the Delaware Group Income Funds, which is also a Delaware statutory trust.
Each Fund is authorized to issue an unlimited number of shares of beneficial
interest with no par value. The operations of the Acquired Fund and the
Surviving Fund are governed by their trust documents; by-laws; and Delaware
state law. Each Fund must also adhere to the 1940 Act, the rules and regulations
promulgated by the U.S. Securities and Exchange Commission (the "Commission")
thereunder, and any applicable state securities laws.
Each of the Funds is governed by a board of trustees. The composition of
the boards of trustees for each Fund is identical, both in terms of membership
and the number of independent trustees. Both Funds indemnify their respective
trustees and officers against liabilities and expenses incurred in connection
with their proceedings relating to their positions with the Funds, except if the
trustee or officer would otherwise be subject to liability by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such person's office.
Under the Trust's Agreement and Declaration of Trust, the Acquired Fund's
shareholders have the power to vote only (i) for the election of Trustees,
including the filling of any vacancies in the Board of Trustees; (ii) with
respect to such additional matters relating to the Trust as may be required by
the Agreement and Declaration of Trust, the Trust's By-Laws, the 1940 Act or any
registration statement of the Trust filed with the Commission; and (iii) on such
other matters as the Board may consider necessary or desirable. The shareholder
of record (as of the record date established pursuant to the Agreement and
Declaration of Trust) of each Share is entitled to one vote for each full Share,
and a fractional vote for each fractional Share. Shareholders are not entitled
to cumulative voting in the election of Trustees or on any other matter. Shares
may be voted in person or by proxy.
Under the Delaware Group Income Funds' Agreement and Declaration of Trust,
the Surviving Fund's shareholders have power to vote only (i) for the election
of Trustees, including the filling of any vacancies in the Board of Trustees;
(ii) with respect to such additional matters relating to the Trust as may be
required by the Agreement and Declaration of Trust, the Delaware Group Income
Funds' By-Laws, the 1940 Act or any registration statement of the Delaware Group
Income Funds filed with the Commission; and (iii) on such other matters as the
Board of Trustees may consider necessary or desirable. The shareholder of record
(as of the record date established pursuant to the Agreement and Declaration of
Trust) of each share is entitled to one vote for each full share, and a
fractional vote for each fractional Share. Shareholders are not be entitled to
cumulative voting in the election of Trustees or on any other matter. Shares may
be voted in person or by proxy.
Neither Fund is required to hold an annual shareholder meeting. A special
meeting of the Acquired Fund or the Surviving Fund may be called by each Fund's
Board of Trustees. If a shareholder meeting is held, the Funds have
substantially similar notice, quorum, and voting requirements. Both Funds
typically require a majority vote of the shares present to decide any questions
related to a particular matter, except a plurality shall elect a trustee.
Capitalization.
The capitalization table, as of June 30, 2009, sets forth the
capitalization of the Surviving Fund, and the estimated capitalization of the
Surviving Fund as adjusted to give effect to the proposed Reorganization. The
Surviving Fund has not yet commenced operations but will do so at the time the
Reorganization. The following are examples of the number of shares of the
Surviving Fund that would have been exchanged for the shares of the Acquired
Fund if the Reorganization had been consummated on June 30, 2009 and do not
reflect the number of shares or value of shares that would actually be received
if the Reorganization, as depicted, occurs. Each shareholder of the Acquired
Fund will receive the number of full and fractional shares of the Surviving Fund
equal in value to the value (as of the last Valuation Date) of the shares of the
Acquired Fund. The Surviving Fund is a new fund, without assets or liabilities,
and is being created solely for the purpose of acquiring the assets of the
Acquired Fund. The Acquired Fund will be the accounting survivor for financial
statement purposes.
Pro Forma - Surviving Fund
after Reorganization
Acquired Fund (unaudited)* (estimated)
---------------------------- --------------------------- -------------------------------
Net assets (millions) $6.96 $6.96
Total shares outstanding 709,628.435 709,628.435
Net asset value per share $9.81 $9.81
* As of June 30, 2009.
This table is for informational purposes only. There is no assurance that
the Reorganization will be consummated. Moreover, if consummated, the
capitalization of the Acquired Fund and the Surviving Fund is likely to be
different at the Effective Time as a result of daily share purchase and
redemption activity in the Acquired Fund. Accordingly, the foregoing should not
be relied upon to reflect the number of shares of the Surviving Fund that
actually will be received on or after such date.
ADDITIONAL INFORMATION ABOUT THE
SURVIVING FUND AND THE ACQUIRED FUND
Comparison of Investment Objectives, Principal Investment Strategies, and
Portfolio Management.
The investment objectives and portfolio management of the Funds are
identical and the principal investment strategies of the Funds are substantially
similar. The following tables describe such objectives, strategies and
management for each of the Acquired Fund and the Surviving Fund.
ACQUIRED FUND
Investment The Fixed Income Portfolio seeks maximum long-term total
Objective return, consistent with reasonable risk. Although the
Portfolio will strive to achieve its goal, there is no
assurance that it will.
Principal The Fund invests primarily in a diversified portfolio of
Investment investment grade fixed income obligations, including
Strategies securities issued or guaranteed by the U.S. government, its
agencies, or instrumentalities (U.S. government securities),
mortgage-backed securities, asset-backed securities,
corporate bonds, and other fixed income securities.
Under normal circumstances, the Fund will invest at least
80% of its net assets in fixed income securities (80%
Policy). The Fund's 80% Policy may be changed without
shareholder approval. However, shareholders will be given
notice at least 60 days prior to any such change.
The Fund will have a dollar-weighted average effective
maturity of more than three years, but less than 10 years.
Short- and intermediate-term debt securities (under 10
years) form the core of the Fund. Long-term bonds (over 10
years) are purchased when we believe they will enhance
return without significantly increasing risk. Average
effective maturity may exceed the above range when we
believe opportunities for enhanced returns exceed risk.
Typically, approximately 50% of the Fund's assets will be
invested in U.S. government securities, mortgage-backed
securities, and asset-backed securities. All securities
purchased by the Fund will have an investment grade rating
at the time of purchase. Investment grade fixed income
obligations will be those rated BBB or better by S&P or Baa
or better by Moody's or those that we deem to be of
comparable quality. To the extent that the rating of a debt
obligation held by the Fund falls below BBB or Baa, the
Fund, as soon as practicable, will dispose of the security,
unless such disposal would be detrimental to the Fund in
light of market conditions.
The Fund may invest up to 20% of its assets in foreign
securities. The Fund intends to invest its foreign assets
primarily in fixed income securities of issuers organized or
having a majority of their assets or deriving a majority of
their operating income in foreign countries. These
securities encompass both U.S. dollar-denominated securities
of foreign issuers issued in the U.S. (such as Yankee bonds)
and non- dollar-denominated securities traded outside of the
U.S. Presently, the Fund plans on investing its foreign
assets primarily in the following types of foreign fixed
income securities: Yankee bonds; supranational entities
established or financially supported by the national
governments of one or more countries to promote
reconstruction or development; and bonds which are issued by
a foreign noncorporate entity (such as the Province of
Ontario) and denominated in U.S. dollars.
Portfolio Paul Grillo, Roger A. Early and Thomas H. Chow have
Management day-to-day responsibilities for making investment decisions
for the Fund.
SURVIVING FUND
Investment The Core Bond Fund seeks maximum long term total return,
Objective consistent with reasonable risk. Although the Fund will
strive to achieve its goal, there is no assurance that it
will.
Principal The Fund will invest primarily in a diversified portfolio of
Investment investment grade, fixed income obligations, including
Strategies securities issued or guaranteed by the U.S. government, its
agencies, or instrumentalities (U.S. government securities),
mortgage-backed securities, asset-backed securities,
corporate bonds, and other fixed income securities.
Under normal circumstances, the Fund will invest at least
80% of its net assets in fixed income securities (80%
Policy). The Fund's 80% Policy may be changed without
shareholder approval. However, shareholders will be given
notice at least 60 days prior to any such change.
The Fund will invest principally in debt obligations issued
or guaranteed by the U.S. government and by U.S.
corporations. The U.S. government securities in which the
Fund may invest include a variety of securities which are
issued or guaranteed as to the payment of principal and
interest by the U.S. government, and by various agencies or
instrumentalities which have been established or sponsored
by the U.S. government. The corporate debt obligations in
which the Fund may invest include, but are not limited to,
bonds, notes, debentures, and commercial paper of U.S.
companies.
The Fund's assets may also be invested in mortgage-backed
securities issued or guaranteed by the U.S. government, its
agencies, or instrumentalities or by government-sponsored
corporations. Other mortgage-backed securities in which the
Fund may invest are issued by certain private,
non-government entities. Subject to quality limitations, the
Fund may also invest in securities which are backed by
assets such as receivables on home equity and credit card
loans, automobile, mobile home, recreational vehicle and
other loans, wholesale dealer floor plans, and leases.
All securities purchased by the Fund will have an investment
grade rating at the time of purchase. Investment grade fixed
income obligations will be those rated BBB or better by S&P
or Baa or better by Moody's or those that we deem to be of
comparable quality. To the extent that the rating of a debt
obligation held by the Fund falls below BBB or Baa, the
Fund, as soon as practicable, will dispose of the security,
unless such disposal would be detrimental to the Fund in
light of market conditions.
The Fund may invest up to 20% of its assets in foreign
securities. The Fund intends to invest its foreign assets
primarily in fixed income securities of issuers organized or
having a majority of their assets or deriving a majority of
their operating income in foreign countries. These fixed
income securities include foreign government securities,
debt obligations of foreign companies, and securities issued
by supranational entities. The Fund may invest in securities
issued in any currency and may hold foreign currencies.
Presently, the Fund intends to invest its foreign assets
primarily in U.S. dollar-denominated fixed income securities
in a manner consistent with the foreign securities weighting
in the Fund's benchmark, the Barclays Capital U.S. Aggregate
Index.
In unusual market conditions, in order to meet redemption
requests, for temporary defensive purposes, and pending
investment, the Fund may hold a substantial portion of its
assets in cash or short-term fixed income obligations.
Subject to certain limitations, the Fund will also be
permitted to use various derivative instruments, including
options, futures contracts, options on futures contracts,
foreign currency transactions, interest rate swaps, and
index swap agreements.
Portfolio Paul Grillo, Roger A. Early and Thomas H. Chow have
Management day-to-day responsibilities for making investment decisions
for the Fund.
Comparison of Fundamental Investment Policies.
The fundamental investment restrictions of the Acquired Fund and the
Surviving Fund are identical. Each Fund shall not:
1. Make investments that will result in the concentration (as that term may
be defined in the 1940 Act, any rule or order thereunder, or U.S. Securities and
Exchange Commission ("SEC") staff interpretation thereof) of its investments in
the securities of issuers primarily engaged in the same industry, provided that
this restriction does not limit the Fund from investing in obligations issued or
guaranteed by the U.S. government, its agencies, or instrumentalities, or in
tax-exempt obligations or certificates of deposit.
2. Borrow money or issue senior securities, except as the 1940 Act, any
rule or order thereunder, or SEC staff interpretation thereof, may permit.
3. Underwrite the securities of other issuers, except that the Fund may
engage in transactions involving the acquisition, disposition, or resale of its
portfolio securities, under circumstances where it may be considered to be an
underwriter under the Securities Act of 1933, as amended ("1933 Act").
4. Purchase or sell real estate, unless acquired as a result of ownership
of securities or other instruments and provided that this restriction does not
prevent the Fund from investing in issuers which invest, deal, or otherwise
engage in transactions in real estate or interests therein, or investing in
securities that are secured by real estate or interests therein.
5. Purchase or sell physical commodities, unless acquired as a result of
ownership of securities or other instruments and provided that this restriction
does not prevent the Fund from engaging in transactions involving futures
contracts and options thereon or investing in securities that are secured by
physical commodities.
6. Make loans, provided that this restriction does not prevent the Fund
from purchasing debt obligations, entering into repurchase agreements, loaning
its assets to broker/dealers or institutional investors, and investing in loans,
including assignments and participation interests.
Performance Information.
The Surviving Fund will not commence investment operations until the
closing of the Reorganization, and therefore does not have any performance
information to disclose. It is expected that as a result of the Reorganization,
the Surviving Fund will succeed to the performance and financial history of the
Acquired Fund.
* * *
More information about the Acquired Fund and the Surviving Fund is included
in: (i) the Acquired Fund's Prospectus dated February 27, 2009 (as it may be
amended), which is incorporated by reference herein and considered a part of
this Consent Solicitation Statement; (ii) the Statement of Additional
Information dated February 27, 2009 (as it may be amended) relating to the
Acquired Fund's Prospectus; (iii) the Surviving Fund's Prospectus dated August
26, 2009, which accompanies this Consent Solicitation Statement and is
incorporated by reference and considered a part of this Consent Solicitation
Statement; and (iv) the Statement of Additional Information dated August 26,
2009 relating to the Surviving Fund's Prospectus.
You may request free copies of the Acquired Fund's Prospectus or Statement
of Additional (including any supplement) by calling 1-(800) 231-8002 or by
writing via U.S. mail to Delaware Pooled Trust, 2005 Market Street,
Philadelphia, PA 19103-7094. You may request free copies of the Surviving Fund's
Prospectus or Statement of Additional Information by calling 1-(800) 523-1918,
or by writing to Delaware Group Income Funds, at P.O. Box 219656, Kansas City,
MO 64121-9656 by regular mail or 430 W. 7th Street, Kansas City, MO 64105-1407
by overnight courier service.
This Consent Solicitation Statement omits certain information contained in
the registration statements for each of the Acquired Fund and the Surviving
Fund. Reference is hereby made to each registration statement and to the
exhibits and amendments thereto for further information with respect to the
Acquired Fund and the Surviving Fund and the shares offered. Statements
contained herein concerning the provisions of documents are necessarily
summaries of such documents, and each such statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
Commission.
Each Fund also files proxy materials, reports, and other information with
the Commission in accordance with the informational requirements of the
Securities Exchange Act of 1934, as amended, and the 1940 Act. These materials
can be inspected and copied at the public reference facilities maintained by the
Commission in Washington, DC located at Room 1580, 100 F Street, N.E.,
Washington, D.C. 20549. Copies of such material can be obtained at prescribed
rates from the Public Reference Branch, Office of Consumer Affairs and
Information Services, SEC, Washington DC 20549, or obtained electronically from
the EDGAR database on the Commission's website (www.sec.gov).
PRINCIPAL SHAREHOLDERS
As of August 1, 2009, the officers and Trustees of the Acquired Fund as a
group owned or controlled less than 1% of the Fund. As of August 1, 2009, the
following shareholders owned, of record, or to the knowledge of the Acquired
Fund, beneficially, 5% or more of the outstanding shares of the Acquired Fund.
Name and Address of Record or Beneficial Owner Percentage of Acquired Fund
DMH Corp. 78.17%
Attn: Rick Salus
2005 Market Street, 9th Floor
Philadelphia, PA 19103-7007
Plumbers Local Union 690 6.84%
Industry Funds Employee's Pension Plan
2791 Southampton Road
Philadelphia, PA 19154-1211
Richard Bland College 10.88%
Foundation Fund
11301 Johnson Road
Petersburg, VA 23805-7100
The percentage of the Surviving Fund that would be owned by the above named
shareholders upon consummation of the Reorganization is expected to be the same.
CONTROL PERSONS
Persons or organizations beneficially owning 25% or more of the outstanding
shares of a fund may be presumed to "control" a fund. As a result, those persons
or organizations could have the ability to vote a majority of the shares of a
fund on any matter requiring the approval of the shareholders of that fund. As
of August 1, 2009, DMH Corp., an affiliate of the Manager, was record owner of
78.17% of the outstanding shares of the Acquired Fund. Accordingly, DMH Corp. is
deemed to control the Acquired Fund.
ADDITIONAL INFORMATION
Investment Manager. The Manager, located at 2005 Market Street,
Philadelphia, PA 19103-7094, furnishes investment management services to each
Fund, subject to the supervision and direction of each Fund's Board. For its
services to the Acquired Fund, the Manager is entitled to an annual management
fee as a percentage of average daily net assets equal to 0.40%. For its services
to the Surviving Fund, the Manager is entitled an annual management fee as a
percentage of average daily net assets equal to: 0.50% on the first $500
million; 0.475% on the next $500 million; 0.45% on the next $1.5 billion; and
0.425% on assets in excess of $2.5 billion.
In addition, an affiliate of the Manager, DMH Corp., owns a substantial
amount of voting shares of the Acquired Fund, and thus "controls" the Fund, as
that term is defined in the 1940 Act. As a result of such control, DMH Corp. has
the ability to vote a majority of the shares of the Fund on all shareholder
proposals, including the proposed written consent. It intends to vote its shares
in favor of the Reorganization, consistent with the Board's recommendation.
Although the Manager and its affiliates stand to profit from the approval of the
Reorganization due to the increase in the management fee, as described in more
detail above, the Manager recommended that the Board approve the Reorganization
because it believed that the Reorganization is in the best interest of the
Acquired Fund's shareholders.
Distributor. Delaware Distributors, L.P. ("DDLP"), located at 2005 Market
Street, Philadelphia, PA 19103-7094, serves as the Distributor of the shares of
both the Acquired Fund and the Surviving Fund. Under separate Distribution
Agreements with the Funds, DDLP sells shares of each Fund upon the terms and at
the current offering price described in each Fund's prospectus. DDLP is not
obligated to sell any certain number of shares of a Fund. DDLP is an indirect,
wholly owned subsidiary of Delaware Management Holdings, Inc. and is an
affiliate of the Manager.
Lincoln Financial Distributors, Inc. ("LFD"), an affiliate of the Manager,
serves as each Fund's financial intermediary wholesaler pursuant to a Third
Amended and Restated Financial Intermediary Distribution Agreement with DDLP.
LFD is primarily responsible for promoting the sale of each Fund's shares
through broker/dealers, financial advisors, and other financial intermediaries.
The address of LFD is 130 N. Radnor-Chester Rd., Radnor, Pa 19087-5221. The fees
associated with LFD's services are borne exclusively by DDLP and not by the
Funds.
Transfer Agent. Delaware Services Company, Inc. ("DSC"), an affiliate of
the Manager, is located at 2005 Market Street, Philadelphia, PA 19103-7094, and
serves as each Fund's shareholder servicing, dividend disbursing, and transfer
agent (the "Transfer Agent") pursuant to separate Shareholder Services
Agreements. The Transfer Agent is an indirect subsidiary of DMHI and, therefore,
of Lincoln National Corporation. The Transfer Agent also acts as shareholder
servicing, dividend disbursing, and transfer agent for other Delaware
Investments(R)Funds. The Transfer Agent is paid a fee by the Surviving Fund for
providing these services consisting of an annual per account charge of $27.00
for each open and $10.00 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. The Transfer Agent is paid 0.01% of the Acquired Fund's average
daily net assets annually.
Fund Accountants. The Bank of New York Mellon ("BNY Mellon"), One Wall
Street, New York, NY 10286-0001, provides fund accounting and financial
administration services to each Fund.
DSC also provides fund accounting and financial administration oversight
services to the Funds. For these services, each Fund pays DSC an asset-based
fee, plus certain out-of-pocket expenses and transactional charges.
Custodian. BNY Mellon also serves as the custodian of each Fund's
securities and cash.
FINANCIAL HIGHLIGHTS
Because the Surviving Fund had not commenced operations as of the date of
this Consent Solicitation Statement, there are no financial statements or
financial highlights available for this Fund.
Philadelphia, PA Delaware Pooled Trust
September [ ], 2009
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), made as of
this [__] day of [___] 2009, by and between Delaware Group Income Funds, a
statutory trust created under the laws of the State of Delaware ("Acquiring
Trust"), with its principal place of business at 2005 Market Street,
Philadelphia, Pennsylvania 19103, on behalf of its series, Delaware Core Bond
Fund ("Acquiring Fund"), and Delaware Pooled Trust, a statutory trust created
under the laws of the State of Delaware ("Acquired Fund Trust"), with its
principal place of business also at 2005 Market Street, Philadelphia,
Pennsylvania 19103, on behalf of its series, The Intermediate Fixed Income
Portfolio ("Acquired Fund").
PLAN OF REORGANIZATION
The reorganization (hereinafter referred to as the "Plan") will consist of:
(i) the acquisition by Acquiring Trust on behalf of Acquiring Fund of
substantially all of the property, assets and goodwill of Acquired Fund in
exchange solely for shares of beneficial interest, without par value, of
Acquiring Fund - Class A ("Acquiring Fund Class A Shares"); (ii) the
distribution of Acquiring Fund Class A Shares to the holders of Acquired Fund -
Original Class ("Acquired Fund Original Class); and (iii) the dissolution of
Acquired Fund as soon as practicable after the closing (as referenced in Section
3 hereof, hereinafter called the "Closing"), all upon and subject to the terms
and conditions of this Agreement hereinafter set forth.
AGREEMENT
In order to consummate the Plan and in consideration of the premises and of
the covenants and agreements hereinafter set forth, and intending to be legally
bound, the parties hereto covenant and agree as follows:
1. Sale and Transfer of Assets, Liquidation and Dissolution of Acquired
Fund
(a) Subject to the terms and conditions of this Agreement, and in reliance
on the representations and warranties of Acquiring Trust herein contained, and
in consideration of the delivery by Acquiring Trust of the number of its shares
of beneficial interest of Acquiring Fund hereinafter provided, Acquired Fund
Trust, on behalf of Acquired Fund, agrees that it will sell, convey, transfer
and deliver to Acquiring Trust, on behalf of Acquiring Fund, at the Closing
provided for in Section 3, all of the then existing assets of Acquired Fund as
of the close of business (which hereinafter shall be, unless otherwise noted,
the regular close of business of the New York Stock Exchange, Inc. ("NYSE"))
("Close of Business") on the valuation date (as defined in Section 3 hereof,
hereinafter called the "Valuation Date"), free and clear of all liens,
encumbrances, and claims whatsoever (other than shareholders' rights of
redemption and such restrictions as might arise under the Securities Act of
1933, as amended (the "1933 Act"), with respect to privately placed or otherwise
restricted securities that Acquired Fund may have acquired in the ordinary
course of business), except for cash, bank deposits, or cash equivalent
securities in an estimated amount necessary (1) to pay Acquired Fund's costs and
expenses of carrying out this Agreement (including, but not limited to, fees of
counsel and accountants, and expenses of its liquidation and dissolution
contemplated hereunder), which costs and expenses shall be established on the
books of Acquired Fund as liability reserves, (2) to discharge all of Acquired
Fund's Liabilities (as defined below) on its books at the Close of Business on
the Valuation Date including, but not limited to, its income dividends and
capital gains distributions, if any, payable for any period prior to, and
through, the Close of Business on the Valuation Date, and (3) to pay such
contingent liabilities as the trustees of Acquired Fund Trust shall reasonably
deem to exist against Acquired Fund, if any, at the Close of Business on the
Valuation Date, for which contingent and other appropriate liability reserves
shall be established on the books of Acquired Fund (hereinafter "Net Assets").
Acquired Fund Trust, on behalf of Acquired Fund, shall also retain any and all
rights that it may have over and against any person that may have accrued up to
and including the Close of Business on the Valuation Date. Acquired Fund Trust
agrees to use commercially reasonable efforts to identify all of Acquired Fund's
liabilities, debts, obligations and duties of any nature, whether accrued,
absolute, contingent or otherwise ("Liabilities") prior to the Valuation Date
and to discharge all such known Liabilities on or prior to the Valuation Date.
In no event will Acquiring Fund assume or otherwise be responsible for any
Liabilities of Acquired Fund.
(b) Subject to the terms and conditions of this Agreement, and in reliance
on the representations and warranties of Acquired Fund Trust on behalf of
Acquired Fund herein contained, and in consideration of such sale, conveyance,
transfer, and delivery, Acquiring Trust agrees at the Closing to deliver to
Acquired Fund Trust, on behalf of Acquired Fund, the number of Acquiring Fund
Class A Shares determined by dividing the net asset value per share of Acquired
Fund Class A Shares as of the Close of Business on the Valuation Date by the net
asset value per share of Acquiring Fund Class A Shares as of Close of Business
on the Valuation Date, and multiplying the result by the number of outstanding
Acquired Fund Class A Shares as of Close of Business on the Valuation Date. All
such values shall be determined in the manner and as of the time set forth in
Section 2 hereof.
(c) As soon as practicable following the Closing, Acquired Fund Trust shall
dissolve Acquired Fund and distribute pro rata to Acquired Fund's shareholders
of record as of the Close of Business on the Valuation Date, the shares of
beneficial interest of Acquiring Fund received by Acquired Fund pursuant to this
Section 1. Such dissolution and distribution shall be accomplished by the
establishment of accounts on the share records of Acquiring Fund of the type and
in the amounts due such shareholders pursuant to this Section 1 based on their
respective holdings of shares of Acquired Fund as of the Close of Business on
the Valuation Date. Fractional shares of beneficial interest of Acquiring Fund
shall be carried to the third decimal place. No certificates representing shares
of beneficial interest of Acquiring Fund will be issued to shareholders of
Acquired Fund shares irrespective of whether such shareholders hold their shares
in certificated form.
(d) At the Closing, each outstanding certificate that, prior to Closing,
represented shares of beneficial interest of Acquired Fund, shall be cancelled
and shall no longer evidence ownership thereof.
(e) At the Closing, each shareholder of record of Acquired Fund as of the
record date (the "Distribution Record Date") with respect to any unpaid
dividends and other distributions that were declared prior to the Closing,
including any dividend or distribution declared pursuant to Section 9(e) hereof,
shall have the right to receive such unpaid dividends and distributions with
respect to the shares of Acquired Fund that such person had on such Distribution
Record Date.
2. Valuation
(a) The value of Acquired Fund's Net Assets to be acquired by Acquiring
Fund hereunder shall be computed as of Close of Business on the Valuation Date
using the valuation procedures set forth in Acquired Fund's currently effective
prospectus and statement of additional information.
(b) The net asset value of Acquired Fund Class A Shares shall be determined
to the nearest full cent as of the Close of Business on the Valuation Date,
using the valuation procedures as set forth in Acquired Fund's currently
effective prospectus and statement of additional information.
3. Closing and Valuation Date
The Valuation Date shall be [________], 2009, or such later date as the
parties may mutually agree. The Closing shall take place at the principal office
of Acquiring Trust, 2005 Market Street, Philadelphia, Pennsylvania 19103 at
approximately 9:00 a.m., Eastern Time, on the first business day following the
Valuation Date. Notwithstanding anything herein to the contrary, in the event
that on the Valuation Date (a) the NYSE shall be closed to trading or trading
thereon shall be restricted or (b) trading or the reporting of trading on such
exchange or elsewhere shall be disrupted so that, in the judgment of Acquiring
Trust or Acquired Fund Trust, accurate appraisal of the value of the net assets
of Acquired Fund or Acquiring Fund is impracticable, the Valuation Date shall be
postponed until the first business day after the day when trading shall have
been fully resumed without restriction or disruption, reporting shall have been
restored and accurate appraisal of the value of the net assets of Acquired Fund
and Acquiring Fund is practicable in the judgment of Acquiring Trust and
Acquired Fund Trust. Acquired Fund Trust shall have provided for delivery as of
the Closing of those Net Assets of Acquired Fund to be transferred to Acquiring
Trust' Custodian, The Bank of New York Mellon, One Wall Street, New York, NY
10286. Also, Acquired Fund Trust shall deliver at the Closing a list (which may
be in electronic form) of names and addresses of the shareholders of record of
its Acquired Fund shares, and the number of full and fractional shares of
beneficial interest of such classes owned by each such shareholder, indicating
thereon which such shares are represented by outstanding certificates and which
by book-entry accounts, all as of the Close of Business on the Valuation Date,
certified by its transfer agent, or by its President or Vice-President to the
best of their knowledge and belief. Acquiring Trust shall provide evidence
satisfactory to Acquired Fund Trust in such manner as Acquired Fund Trust may
reasonably request that such shares of beneficial interest of Acquiring Fund
have been registered in an open account on the books of Acquiring Fund.
4. Representations and Warranties by Acquired Fund Trust
Acquired Fund Trust represents and warrants to Acquiring Trust that:
(a) Acquired Fund Trust is a statutory trust created under the laws of the
State of Delaware on December 15, 1999, and is validly existing and in good
standing under the laws of that State. Acquired Fund Trust, of which Acquired
Fund is a separate series, is duly registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end, management investment
company. Such registration is in full force and effect as of the date hereof and
will be in full force and effect as of the Closing.
(b) Acquired Fund Trust is authorized to issue an unlimited number of
shares of beneficial interest of Acquired Fund, with no par value. Each
outstanding share of Acquired Fund is validly issued, fully paid, non-assessable
and has full voting rights.
(c) The financial statements appearing in Acquired Fund's Annual Report to
Shareholders for the fiscal year ended October 31, 2008, audited by Ernst &
Young, LLP, copies of which have been delivered to Acquiring Trust, and any
unaudited financial statements since that date, copies of which may be furnished
to Acquiring Trust, fairly present the financial position of Acquired Fund as of
the date indicated, and the results of its operations for the period indicated,
in conformity with generally accepted accounting principles applied on a
consistent basis.
(d) The books and records of Acquired Fund, including FIN 48 work papers
and supporting statements, made available to Acquiring Trust and/or its counsel
are true and correct in all material respects and contain no material omissions
with respect to the business and operations of Acquired Fund.
(e) The statement of assets and liabilities to be furnished by Acquired
Fund Trust as of the Close of Business on the Valuation Date for the purpose of
determining the number of shares of beneficial interest of Acquiring Fund to be
issued pursuant to Section 1 hereof will accurately reflect the Net Assets of
Acquired Fund and outstanding shares of beneficial interest, as of such date, in
conformity with generally accepted accounting principles applied on a consistent
basis.
(f) At the Closing, Acquired Fund Trust, on behalf of Acquired Fund, will
have good and marketable title to all of the securities and other assets shown
on the statement of assets and liabilities referred to in subsection (e) above,
free and clear of all liens or encumbrances of any nature whatsoever except such
restrictions as might arise under the 1933 Act with respect to privately placed
or otherwise restricted securities that it may have acquired in the ordinary
course of business and such imperfections of title or encumbrances as do not
materially detract from the value or use of the assets subject thereto, or
materially affect title thereto.
(g) Acquired Fund Trust has the necessary trust power and trust authority
to conduct its business and the business of Acquired Fund as such businesses are
now being conducted.
(h) Acquired Fund Trust is not a party to or obligated under any provision
of its Agreement and Declaration of Trust, By-Laws, or any material contract or
any other material commitment or obligation, and is not subject to any order or
decree that would be violated by its execution of or performance under this
Agreement.
(i) Acquired Fund Trust has full trust power and trust authority to enter
into and perform its obligations under this Agreement, subject to approval of
this Agreement by Acquired Fund's shareholders. Except as provided in the
immediately preceding sentence, the execution, delivery and performance of this
Agreement have been validly authorized, and this Agreement constitutes its
legal, valid and binding obligation enforceable against it in accordance with
its terms, subject as to enforcement to the effect of bankruptcy, insolvency,
reorganization, arrangement among creditors, moratorium, fraudulent transfer or
conveyance, and other similar laws of general applicability relating to or
affecting creditor's rights and to general equity principles.
(j) Neither Acquired Fund Trust nor Acquired Fund is under the jurisdiction
of a court in a Title 11 or similar case within the meaning of Section
368(a)(3)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
(k) Acquired Fund Trust does not have any unamortized or unpaid
organizational fees or expenses.
(l) Acquired Fund Trust has elected to treat Acquired Fund as a regulated
investment company ("RIC") for federal income tax purposes under Part I of
Subchapter M of the Code, Acquired Fund is a "fund" as defined in Section
851(g)(2) of the Code, has qualified as a RIC for each taxable year since its
inception and will qualify as a RIC as of the Closing, and consummation of the
transactions contemplated by the Plan will not cause it to fail to be qualified
as a RIC as of the Closing.
5. Representations and Warranties by Acquiring Trust
Acquiring Trust represents and warrants to Acquired Fund Trust that:
(a) Acquiring Trust is a statutory trust created under the laws of the
State of Delaware on September 29, 1999, and is validly existing and in good
standing under the laws of that State. Acquiring Trust, of which Acquiring Fund
is a separate series of shares, is duly registered under the 1940 Act as an
open-end, management investment company, such registration is in full force and
effect as of the date hereof and will be in full force and effect as of the
Closing.
(b) Acquiring Trust is authorized to issue an unlimited number of shares of
beneficial interest, without par value, of Acquiring Fund. Each outstanding
share of Acquiring Fund is fully paid, non-assessable and has full voting
rights. The shares of beneficial interest of Acquiring Fund to be issued
pursuant to Section 1 hereof will, upon their issuance, be validly issued and
fully paid and non-assessable and have full voting rights.
(c) At the Closing, each class of shares of beneficial interest of
Acquiring Fund to be issued pursuant to this Agreement will be eligible for
offering to the public in those states of the United States and jurisdictions in
which the corresponding class of shares of Acquired Fund are presently eligible
for offering to the public, and there are an unlimited number of shares
registered under the 1933 Act such that there is a sufficient number of such
shares to permit the transfers contemplated by this Agreement to be consummated.
(d) Acquiring Trust has the necessary trust power and trust authority to
conduct its business and the business of Acquiring Fund as such businesses are
now being conducted.
(e) Acquiring Trust is not a party to or obligated under any provision of
its Agreement and Declaration of Trust, By-Laws, or any material contract or any
other material commitment or obligation, and is not subject to any order or
decree that would be violated by its execution of or performance under this
Agreement.
(f) Acquiring Trust has full trust power and trust authority to enter into
and perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been validly authorized, and this Agreement
constitutes its legal, valid and binding obligation enforceable against it in
accordance with its terms, subject, as to enforcement, to the effect of
bankruptcy, insolvency reorganization, arrangements among creditors, moratorium,
fraudulent transfer or conveyance, and other similar laws of general
applicability relating to or affecting creditors rights and to general equity
principles.
(h) Neither Acquiring Trust nor Acquiring Fund is under the jurisdiction of
a court in a Title 11 or similar case within the meaning of Section 368(a)(3)(A)
of the Code.
(i) The books and records of Acquiring Fund, including FIN 48 work papers
and supporting statements, made available to Acquired Fund Trust and/or its
counsel are true and correct in all material respects and contain no material
omissions with respect to the business and operations of Acquiring Fund.
(j) Acquiring Trust has elected to treat Acquiring Fund as a RIC for
federal income tax purposes under Part I of Subchapter M of the Code, Acquiring
Fund is a "fund" as defined in Section 851(g)(2) of the Code, has qualified as a
RIC for each taxable year since its inception and will qualify as a RIC as of
the Closing, and consummation of the transactions contemplated by the Plan will
not cause it to fail to be qualified as a RIC as of the Closing.
6. Representations and Warranties by Acquired Fund Trust and Acquiring
Trust
Acquired Fund Trust and Acquiring Trust each represents and warrants to the
other that:
(a) Except as discussed in its currently effective prospectus, there are no
legal, administrative or other proceedings or investigations against it, or, to
its knowledge, threatened against it, that would materially affect its financial
condition or its ability to consummate the transactions contemplated by this
Agreement. It is not charged with or, to its knowledge, threatened with, any
violation or investigation of any possible violation of any provisions of any
federal, state or local law or regulation or administrative ruling relating to
any aspect of its business.
(b) There are no known actual or proposed deficiency assessments with
respect to any taxes payable by it.
(c) It has duly and timely filed, on behalf of Acquired Fund or Acquiring
Fund, as appropriate, all Tax (as defined below) returns and reports (including
information returns), which are required to be filed by such Acquired Fund or
Acquiring Fund, and all such returns and reports accurately state the amount of
Tax owed for the periods covered by the returns, or, in the case of information
returns, the amount and character of income required to be reported by such
Acquired Fund or Acquiring Fund. On behalf of Acquired Fund or Acquiring Fund,
as appropriate, it has paid or made provision and properly accounted for all
Taxes (as defined below) due or properly shown to be due on such returns and
reports. The amounts set up as provisions for Taxes in the books and records of
Acquired Fund or Acquiring Fund, as appropriate, as of the Close of Business on
the Valuation Date will, to the extent required by generally accepted accounting
principles, be sufficient for the payment of all Taxes of any kind, whether
accrued, due, absolute, contingent or otherwise, which were or which may be
payable by Acquired Fund or Acquiring Fund, as appropriate, for any periods or
fiscal years prior to and including the Close of Business on the Valuation Date,
including all Taxes imposed before or after the Close of Business on the
Valuation Date that are attributable to any such period or fiscal year. No
return filed by it, on behalf of Acquired Fund or Acquiring Fund, as
appropriate, is currently being audited by the Internal Revenue Service or by
any state or local taxing authority. As used in this Agreement, "Tax" or "Taxes"
means all federal, state, local and foreign (whether imposed by a country or
political subdivision or authority thereunder) income, gross receipts, excise,
sales, use, value added, employment, franchise, profits, property, ad valorem or
other taxes, stamp taxes and duties, fees, assessments or charges, whether
payable directly or by withholding, together with any interest and any
penalties, additions to tax or additional amounts imposed by any taxing
authority (foreign or domestic) with respect thereto. To its knowledge, there
are no levies, liens or encumbrances relating to Taxes existing, threatened or
pending with respect to the assets of Acquired Fund or Acquiring Fund, as
appropriate.
(d) All information provided to Acquired Fund Trust by Acquiring Trust, and
by Acquired Fund Trust to Acquiring Trust, for inclusion in, or transmittal
with, the Proxy Statement with respect to this Agreement pursuant to which
approval of Acquired Fund's shareholders will be sought, shall not contain any
untrue statement of a material fact, or omit to state a material fact required
to be stated therein in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading.
(e) Except in the case of Acquired Fund Trust with respect to the approval
of Acquired Fund's shareholders of this Agreement, no consent, approval,
authorization or order of any court or governmental authority, or of any other
person or entity, is required for the consummation of the transactions
contemplated by this Agreement, except as may be required by the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, or
state securities laws or Delaware statutory trust laws (including, in the case
of each of the foregoing, the rules and regulations thereunder).
7. Covenants of Acquired Fund Trust
(a) Acquired Fund Trust covenants to operate the business of Acquired Fund
as presently conducted between the date hereof and the Closing.
(b) Acquired Fund Trust undertakes that Acquired Fund will not acquire the
shares of beneficial interest of Acquiring Fund for the purpose of making
distributions thereof other than to Acquired Fund's shareholders.
(c) Acquired Fund Trust covenants that by the Closing, all of Acquired
Fund's federal and other Tax returns and reports required by law to be filed on
or before such date shall have been filed and all federal and other Taxes shown
as due on said returns either shall have been paid or adequate liability
reserves shall have been provided for the payment of such Taxes.
(d) Acquired Fund Trust will at the Closing provide Acquiring Trust with:
(1) A statement of the respective tax basis of all investments to be
transferred by Acquired Fund to Acquiring Fund.
(2) A copy (which may be in electronic form) of the shareholder ledger
accounts including, without limitation, the name, address and taxpayer
identification number of each shareholder of record, the number of shares of
beneficial interest held by each shareholder, the dividend reinvestment
elections applicable to each shareholder, and the backup withholding and
nonresident alien withholding certifications, notices or records on file with
Acquired Fund with respect to each shareholder, for all of the shareholders of
record of Acquired Fund as of the Close of Business on the Valuation Date, who
are to become holders of Acquiring Fund as a result of the transfer of assets
that is the subject of this Agreement, certified by its transfer agent or its
President or its Vice-President to the best of their knowledge and belief.
(3) All FIN 48 work papers and supporting statements pertaining to the
Acquired Fund.
(e) The Board of Trustees of Acquired Fund Trust shall take all actions
reasonably necessary to obtain the approval from the Acquired Fund's
shareholders of the transactions contemplated herein. The Board of Trustees of
Acquired Fund Trust shall cause to be filed with the U.S. Securities and
Exchange Commission (the "Commission"), and mailed to each shareholder of record
of the Acquired Fund, a Proxy Statement that complies in all material respects
with the applicable provisions of the Section 14(a) of the 1934 Act and Section
20(a) of the 1940 Act, and the rules and regulations promulgated thereunder.
(f) Acquired Fund Trust shall supply to Acquiring Trust, at the Closing,
the statement of the assets and liabilities described in Section 4(e) of this
Agreement in conformity with the requirements described in such Section.
8. Covenants of Acquiring Trust
(a) Acquiring Trust covenants that the shares of beneficial interest of
Acquiring Fund to be issued and delivered to Acquired Fund pursuant to the terms
of Section 1 hereof shall have been duly authorized as of the Closing and, when
so issued and delivered, shall be registered under the 1933 Act, validly issued,
and fully paid and non-assessable, and no shareholder of Acquiring Fund shall
have any statutory or contractual preemptive right of subscription or purchase
in respect thereof, other than any rights created pursuant to this Agreement.
(b) Acquiring Trust covenants that by the Closing, all of Acquiring Fund's
federal and other Tax returns and reports required by law to be filed on or
before such date shall have been filed and all federal and other Taxes shown as
due on said returns shall have either been paid or adequate liability reserves
shall have been provided for the payment of such Taxes.
(c) Acquiring Trust shall have filed with the Commission a Proxy Statement
on Schedule 14A ("Proxy Statement"), relating to the shares of beneficial
interest of Acquiring Fund issuable hereunder, and shall have used its best
efforts to provide that such Proxy Statement becomes effective as promptly as
practicable. At the time such Proxy Statement becomes effective, it (i) complied
in all material respects with the applicable provisions of the 1933 Act, the
1934 Act and the 1940 Act, and the rules and regulations promulgated thereunder;
and (ii) will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. At the time the Proxy Statement becomes
effective, at the time of Acquired Fund's shareholders' meeting, and at the
Closing, the prospectus and statement of additional information included in the
Proxy Statement did not and will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
9. Conditions Precedent to be Fulfilled by Acquired Fund Trust and
Acquiring Trust
The obligations of Acquired Fund Trust and Acquiring Trust to effectuate
this Agreement and the Plan hereunder shall be subject to the following
respective conditions:
(a) That (1) all the representations and warranties of the other party
contained herein shall be true and correct in all material respects as of the
Closing with the same effect as though made as of and at such date; (2) the
other party shall have performed all obligations required by this Agreement to
be performed by it at or prior to the Closing; and (3) the other party shall
have delivered to such party a certificate signed by the President or
Vice-President and by the Secretary or equivalent officer to the foregoing
effect.
(b) That the other party shall have delivered to such party a copy of the
resolutions approving this Agreement adopted by the other party's Board of
Trustees, certified by the Secretary or equivalent officer.
(c) That the Commission shall not have issued an unfavorable advisory
report under Section 25(b) of the 1940 Act, nor instituted nor threatened to
institute any proceeding seeking to enjoin the consummation of the
reorganization contemplated hereby under Section 25(c) of the 1940 Act, and no
other legal, administrative or other proceeding shall be instituted or
threatened that would materially and adversely affect the financial condition of
either party or would prohibit the transactions contemplated hereby.
(d) That this Agreement, the Plan and the transactions contemplated hereby
shall have been approved by the appropriate action of the shareholders of
Acquired Fund at an annual or special meeting or any adjournment thereof.
(e) That Acquired Fund shall have declared a distribution or distributions
on or prior to the Valuation Date that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its ordinary income, capital gain net income and net interest income
excludable under Section 103(a) of the Code, if any, for the period from the
close of its last fiscal year to the Close of Business on the Valuation Date,
and (ii) any undistributed ordinary income, capital gain net income and net
interest income excludable under Section 103(a) of the Code from any prior
period. Capital gain net income has the meaning given such term by Section
1222(g) of the Code.
(f) That all required consents of other parties and all other consents,
orders and permits of federal, state and local authorities (including those of
the Commission and of state Blue Sky securities authorities, including any
necessary "no-action" positions or exemptive orders from such federal and state
authorities) to permit consummation of the transaction contemplated hereby shall
have been obtained, except where failure to obtain any such consent, order or
permit would not involve risk of material adverse effect on the assets and
properties of Acquired Fund or Acquiring Fund.
(g) That prior to or at the Closing, Acquired Fund Trust and Acquiring
Trust shall receive an opinion from Stradley Ronon Stevens & Young, LLP ("SRSY")
to the effect that, provided the acquisition contemplated hereby is carried out
in accordance with the applicable laws of the State of Delaware, this Agreement
and in accordance with customary representations provided by Acquired Fund Trust
and Acquiring Trust in certificates delivered to SRSY:
(1) The acquisition by Acquiring Fund of substantially all of the
assets of Acquired Fund in exchange solely for Acquiring Fund shares to be
issued pursuant to Section 1 hereof, followed by the distribution by
Acquired Fund to its shareholders of Acquiring Fund shares in complete
liquidation of Acquired Fund, will qualify as a reorganization within the
meaning of Section 368(a)(1) of the Code, and Acquiring Fund and Acquired
Fund will each be a "party to the reorganization" within the meaning of
Section 368(b) of the Code;
(2) No gain or loss will be recognized by Acquired Fund upon the
transfer of substantially all of its assets to Acquiring Fund in exchange
solely for the voting shares of Acquiring Fund (to be issued in accordance
with Section 1 hereof) under Section 361(a) and Section 357(a) of the Code;
(3) No gain or loss will be recognized by Acquiring Fund upon the
receipt by it of substantially all of the assets of Acquired Fund in
exchange solely for the voting shares of Acquiring Fund (to be issued in
accordance with Section 1 hereof) under Section 1032(a) of the Code;
(4) No gain or loss will be recognized by Acquired Fund upon the
distribution of Acquiring Fund shares to Acquired Fund shareholders in
accordance with Section 1 hereof in liquidation of Acquired Fund under
Section 361(c)(1) of the Code;
(5) The basis of the assets of Acquired Fund received by Acquiring
Fund will be the same as the basis of such assets to Acquired Fund
immediately prior to the exchange under Section 362(b) of the Code;
(6) The holding period of the assets of Acquired Fund received by
Acquiring Fund will include the period during which such assets were held
by Acquired Fund under Section 1223(2) of the Code;
(7) No gain or loss will be recognized by the shareholders of Acquired
Fund upon the exchange of their shares in Acquired Fund for the voting
shares (including fractional shares to which they may be entitled) of
Acquiring Fund (to be issued in accordance with Section 1 hereof) under
Section 354(a) of the Code;
(8) The basis of Acquiring Fund shares received by Acquired Fund
shareholders in accordance with Section 1 hereof (including fractional
shares to which they may be entitled) will be the same as the basis of the
shares of Acquired Fund exchanged therefor under Section 358(a)(1) of the
Code;
(9) The holding period of Acquiring Fund's shares received by Acquired
Fund's shareholders in accordance with Section 1 hereof (including
fractional shares to which they may be entitled) will include the holding
period of Acquired Fund's shares surrendered in exchange therefor, provided
that Acquired Fund shares were held as a capital asset on the date of the
Reorganization under Section 1223(l) of the Code; and
(10) Acquiring Fund will succeed to and take into account as of the
date of the transfer (as defined in Section 1.381(b)-1(b) of the
regulations issued by the United States Treasury (the "Treasury
Regulations")) the items of Acquired Fund described in Section 381(c) of
the Code, subject to the conditions and limitations specified in Sections
381, 382, 383 and 384 of the Code, and the Treasury Regulations.
(h) That Acquiring Trust shall have received an opinion in form and
substance reasonably satisfactory to it from SRSY, counsel to Acquired Fund
Trust, to the effect that, subject in all respects to the effects of bankruptcy,
insolvency, arrangement among creditors, moratorium, fraudulent transfer or
conveyance, and other similar laws of general applicability relating to or
affecting creditor's rights and to general equity principles:
(1) Acquired Fund Trust was created as a statutory trust (formerly
known as a business trust) under the laws of the State of Delaware on
December 15, 1999, and is validly existing and in good standing under the
laws of the State of Delaware;
(2) Acquired Fund Trust is authorized to issue an unlimited number of
shares of beneficial interest, without par value, of Acquired Fund;
(3) Acquired Fund Trust is an open-end, investment company of the
management type registered as such under the 1940 Act;
(4) Except as disclosed in Acquired Fund's currently effective
prospectus, such counsel does not know of any material suit, action, or
legal or administrative proceeding pending or threatened against Acquired
Fund Trust, the unfavorable outcome of which would materially and adversely
affect Acquired Fund Trust or Acquired Fund;
(5) To such counsel's knowledge, no consent, approval, authorization
or order of any court, governmental authority or agency is required for the
consummation by Acquired Fund Trust of the transactions contemplated by
this Agreement, except such as have been obtained under the 1933 Act, the
1934 Act, the 1940 Act, and Delaware laws (including, in the case of each
of the foregoing, the rules and regulations thereunder) and such as may be
required under state securities laws;
(6) Neither the execution, delivery nor performance of this Agreement
by Acquired Fund Trust violates any provision of its Agreement and
Declaration of Trust, its By-Laws, or the provisions of any agreement or
other instrument, known to such counsel to which Acquired Fund Trust is a
party or by which Acquired Fund Trust is otherwise bound; and
(7) This Agreement has been validly authorized and executed by
Acquired Fund Trust and represents the legal, valid and binding obligation
of Acquired Fund Trust and is enforceable against Acquired Fund Trust in
accordance with its terms.
In giving the opinions set forth above, SRSY may state that it is relying
on certificates of the officers of Acquired Fund Trust with regard to matters of
fact and certain certifications and written statements of governmental officials
with respect to the good standing of Acquired Fund Trust.
(i) That Acquired Fund Trust shall have received an opinion in form and
substance reasonably satisfactory to it from SRSY, counsel to Acquiring Trust,
to the effect that, subject in all respects to the effects of bankruptcy,
insolvency, arrangement among creditors, moratorium, fraudulent transfer or
conveyance, and other similar laws of general applicability relating to or
affecting creditor's rights and to general equity principles:
(1) Acquiring Trust was created as a statutory trust (formerly known
as a business trust) under the laws of the State of Delaware on September
29, 1999, and is validly existing and in good standing under the laws of
the State of Delaware;
(2) Acquiring Trust is authorized to issue an unlimited number of
shares of beneficial interest, without par value, of Acquiring Fund;
(3) Acquiring Trust is an open-end investment company of the
management type registered as such under the 1940 Act;
(4) Except as disclosed in Acquiring Fund's currently effective
prospectus, such counsel does not know of any material suit, action, or
legal or administrative proceeding pending or threatened against Acquiring
Trust, the unfavorable outcome of which would materially and adversely
affect Acquiring Trust or Acquiring Fund;
(5) The shares of beneficial interest of Acquiring Fund to be issued
pursuant to the terms of Section 1 hereof have been duly authorized and, when
issued and delivered as provided in this Agreement, will have been validly
issued and fully paid and will be non-assessable by Acquiring Trust or Acquiring
Fund, and to such counsel's knowledge, no shareholder has any preemptive right
to subscription or purchase in respect thereof other than any rights that may be
deemed to have been granted pursuant to this Agreement;
(6) To such counsel's knowledge, no consent, approval, authorization or
order of any court, governmental authority or agency is required for the
consummation by Acquiring Trust of the transactions contemplated by this
Agreement, except such as have been obtained under the 1933 Act, the 1934 Act,
the 1940 Act, and Delaware laws (including, in the case of each of the
foregoing, the rules and regulations thereunder) and such as may be required
under state securities laws;
(7) Neither the execution, delivery nor performance of this Agreement by
Acquiring Trust violates any provision of its Agreement and Declaration of
Trust, its By-Laws, or the provisions of any agreement or other instrument,
known to such counsel to which Acquiring Trust is a party or by which Acquiring
Trust is otherwise bound; and
(8) This Agreement has been validly authorized and executed by Acquiring
Trust and represents the legal, valid and binding obligation of Acquiring Trust
and is enforceable against Acquiring Trust in accordance with its terms.
In giving the opinions set forth above, SRSY may state that it is relying
on certificates of the officers of Acquiring Trust with regard to matters of
fact and certain certifications and written statements of governmental officials
with respect to the good standing of Acquiring Trust.
(j) That Acquiring Trust' Proxy Statement with respect to the shares of
beneficial interest of Acquiring Fund to be delivered to Acquired Fund's
shareholders in accordance with Section 1 hereof shall have become effective,
and no stop order suspending the effectiveness of the Proxy Statement or any
amendment or supplement thereto, shall have been issued prior to the Closing or
shall be in effect at the Closing, and no proceedings for the issuance of such
an order shall be pending or threatened on that date.
(k) That the shares of beneficial interest of Acquiring Fund to be
delivered in accordance with Section 1 hereof shall be eligible for sale by
Acquiring Trust with each state commission or agency with which such eligibility
is required in order to permit the shares lawfully to be delivered to each
Acquired Fund shareholder.
(l) That at the Closing, Acquired Fund Trust, on behalf of Acquired Fund,
transfers to Acquiring Fund aggregate Net Assets of Acquired Fund comprising at
least 90% in fair market value of the total net assets and 70% in fair market
value of the total gross assets recorded on the books of Acquired Fund at the
Close of Business on the Valuation Date.
10. Fees and Expenses The expenses of entering into and carrying out the
provisions of this Agreement, whether or not consummated, shall be borne by
Delaware Management Company, a series of Delaware Management Business Trust.
11. Termination; Waiver; Order
(a) Anything contained in this Agreement to the contrary notwithstanding,
this Agreement may be terminated and the Plan abandoned at any time (whether
before or after adoption thereof by the shareholders of Acquired Fund) prior to
the Closing as follows:
(1) by mutual consent of Acquired Fund Trust and Acquiring Trust;
(2) by Acquiring Trust if any condition precedent to its obligations
set forth in Section 9 has not been fulfilled or waived by Acquiring Trust;
or
(3) by Acquired Fund Trust if any condition precedent to its
obligations set forth in Section 9 has not been fulfilled or waived by
Acquired Fund Trust.
(b) If the transactions contemplated by this Agreement have not been
consummated by December 31, 2009, this Agreement shall automatically terminate
on that date, unless a later date is agreed to by both Acquired Fund Trust and
Acquiring Trust.
(c) In the event of termination of this Agreement pursuant to the
provisions hereof, the same shall become void and have no further effect, and
there shall not be any liability on the part of either Acquired Fund Trust or
Acquiring Trust or persons who are their trustees, officers, agents or
shareholders in respect of this Agreement.
(d) At any time prior to the Closing, any of the terms or conditions of
this Agreement may be waived by either Acquired Fund Trust or Acquiring Trust,
respectively (whichever is entitled to the benefit thereof).
(e) The respective representations, warranties and covenants contained in
Sections 4-8 hereof shall expire with, and be terminated by, the consummation of
the Plan, and neither Acquired Fund Trust nor Acquiring Trust, nor any of their
officers, trustees, agents or shareholders shall have any liability with respect
to such representations or warranties after the Closing. This provision shall
not protect any officer, trustee, agent or shareholder of Acquired Fund Trust or
Acquiring Trust against any liability to the entity for which that officer,
trustee, agent or shareholder so acts or to its shareholders to which that
officer, trustee, agent or shareholder would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties in the conduct of such office.
(f) If any order or orders of the Commission with respect to this Agreement
shall be issued prior to the Closing and shall impose any terms or conditions
that are determined by action of the Board of Trustees of Acquired Fund Trust or
the Board of Trustees of Acquiring Trust to be acceptable, such terms and
conditions shall be binding as if a part of this Agreement without further vote
or approval of the shareholders of Acquired Fund, unless such further vote is
required by applicable law or by mutual consent of the parties.
12. Liability of Acquiring Trust and Acquired Fund Trust
(a) Each party acknowledges and agrees that all obligations of Acquiring
Trust under this Agreement are binding only with respect to Acquiring Fund; that
any liability of Acquiring Trust under this Agreement with respect to Acquiring
Fund, or in connection with the transactions contemplated herein with respect to
Acquiring Fund, shall be discharged only out of the assets of Acquiring Fund;
that no other series of Acquiring Trust shall be liable with respect to this
Agreement or in connection with the transactions contemplated herein; and that
neither Acquired Fund Trust nor Acquired Fund shall seek satisfaction of any
such obligation or liability from the shareholders of Acquiring Trust, the
trustees, officers, employees or agents of Acquiring Trust, or any of them.
(b) Each party acknowledges and agrees that all obligations of Acquired
Fund Trust under this Agreement are binding only with respect to Acquired Fund;
that any liability of Acquired Fund Trust under this Agreement with respect to
Acquired Fund, or in connection with the transactions contemplated herein with
respect to Acquired Fund, shall be discharged only out of the assets of Acquired
Fund; that no other series of Acquired Fund Trust shall be liable with respect
to this Agreement or in connection with the transactions contemplated herein;
and that neither Acquiring Trust nor Acquiring Fund shall seek satisfaction of
any such obligation or liability from the shareholders of Acquired Fund Trust,
the trustees, officers, employees or agents of Acquired Fund Trust, or any of
them.
13. Final Tax Returns and Forms 1099 of Acquired Fund
(a) After the Closing, Acquired Fund Trust shall or shall cause its agents
to prepare any federal, state or local Tax returns, including any Forms 1099,
required to be filed by Acquired Fund Trust with respect to Acquired Fund's
final taxable year ending with its complete liquidation and for any prior
periods or taxable years and shall further cause such Tax returns and Forms 1099
to be duly filed with the appropriate taxing authorities.
(b) Notwithstanding the provisions of Section 1 hereof, any expenses
incurred by Acquired Fund Trust or Acquired Fund (other than for payment of
Taxes) in connection with the preparation and filing of said Tax returns and
Forms 1099 after the Closing, shall be borne by Acquired Fund to the extent such
expenses have been or should have been accrued by Acquired Fund in the ordinary
course without regard to the Plan contemplated by this Agreement; any excess
expenses shall be borne by Delaware Management Company, a series of Delaware
Management Business Trust, at the time such Tax returns and Forms 1099 are
prepared.
14. Cooperation and Exchange of Information
Acquiring Trust and Acquired Fund Trust will provide each other and their
respective representatives with such cooperation, assistance and information as
either of them reasonably may request of the other in filing any Tax returns,
amended return or claim for refund, determining a liability for Taxes, or in
determining the financial reporting of any tax position, or a right to a refund
of Taxes or participating in or conducting any audit or other proceeding in
respect of Taxes. Each party or their respective agents will retain for a period
of six (6) years following the Closing all returns, schedules and work papers
and all material records or other documents relating to Tax matters and
financial reporting of tax positions of Acquired Fund and Acquiring Fund for its
taxable period first ending after the Closing and for all prior taxable periods.
15. Entire Agreement and Amendments
This Agreement embodies the entire Agreement between the parties and there
are no agreements, understandings, restrictions, or warranties between the
parties other than those set forth herein or herein provided for. This Agreement
may be amended only by mutual consent of the parties in writing. Neither this
Agreement nor any interest herein may be assigned without the prior written
consent of the other party.
16. Counterparts
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts together shall
constitute but one instrument.
17. Notices
Any notice, report, or demand required or permitted by any provision of
this Agreement shall be in writing and shall be deemed to have been given if
delivered or mailed, first class postage prepaid, addressed to Acquired Fund
Trust or Acquiring Trust at 2005 Market Street, Philadelphia, PA 19103,
Attention: Secretary.
18. Governing Law
This Agreement shall be governed by and carried out in accordance with the
laws of the State of Delaware.
19. Effect of Facsimile Signature
A facsimile signature of an authorized officer of a party hereto on this
Agreement and/or any transfer document shall have the same effect as if executed
in the original by such officer.
IN WITNESS WHEREOF, Acquired Fund Trust and Acquiring Trust have each
caused this Agreement and Plan of Reorganization to be executed on its behalf by
its duly authorized officers, all as of the day and year first-above written.
Delaware Pooled Trust, on behalf of the
The Intermediate Fixed Income Portfolio
By:____________________________________
Delaware Group Income Funds, on behalf
of the Delaware Core Bond Fund
By:____________________________________
DELAWARE POOLED TRUST
2005 Market Street
Philadelphia, Pennsylvania 19103
_____________________________
CONSENT
THIS CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby (i) acknowledges receipt of the notice dated September [
], 2009 of the solicitation of consents from the shareholders of The
Intermediate Fixed Income Portfolio, a series of Delaware Pooled Trust, a
Delaware statutory trust, and the Consent Solicitation Statement related thereto
and (ii) votes all of his/her/their shares of The Intermediate Fixed Income
Portfolio held of record by the undersigned on August 1, 2009, in the manner
designated herein.
THIS CONSENT, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATION MADE HEREIN. IF NO SPECIFICATION IS MADE, THIS CONSENT WILL BE
COUNTED AS A "CONSENT" IN FAVOR OF THE PROPOSAL.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS PROVIDE THEIR CONSENT TO
THE PROPOSAL. PLEASE REVIEW CAREFULLY THE CONSENT SOLICITATION STATEMENT
DELIVERED WITH THIS CONSENT.
1. To authorize the Reorganization of The Intermediate Fixed Income
Portfolio, a series of Delaware Pooled Trust, into Delaware Core Bond Fund, a
series of Delaware Group Income Funds.
CONSENT CONSENT WITHHELD ABSTAIN
[_] [_] [_]
Name:______________________________
Date:______________________________
Name:______________________________
Date:______________________________
NOTE: PLEASE DATE THIS CONSENT AND SIGN YOUR NAME OR NAMES EXACTLY AS SET FORTH
HEREON. FOR JOINTLY OWNED SHARES, EACH OWNER SHOULD SIGN. IF SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE INDICATE THE
CAPACITY IN WHICH YOU ARE ACTING. CONSENTS EXECUTED BY CORPORATIONS SHOULD BE
SIGNED BY A DULY AUTHORIZED OFFICER AND SHOULD BEAR THE CORPORATE SEAL.
PLEASE DATE AND SIGN THIS CONSENT AND FAX IT PROMPTLY TO (215) 255-1640.