1
EXHIBIT (d)(29)
INTERIM MASTER BUSINESS MANAGEMENT AND
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 18th day of April, 2001, by Ivy Fund (the "Fund")
and Ivy Management, Inc. (the "Manager").
WHEREAS, the Fund is an open-end investment company organized as a
Massachusetts business trust and consists of one or more separate investment
portfolios as may be established and designated from time to time;
WHEREAS, the Fund engages in the business of investing and reinvesting
the assets of the portfolios in the manner and in accordance with the investment
objectives and restrictions specified in the currently effective prospectuses
and statements of additional information (the "Prospectus") relating to the
portfolios included in the Fund's Registration Statement, as amended from time
to time, filed by the Fund under the Investment Company Act of 1940 (the "1940
Act") and the Securities Act of 1933;
WHEREAS, the Fund and the Manager have entered into a Master Business
Management and Investment Advisory Agreement dated the 31st day of December,
1991, as supplemented from time to time, pursuant to which the Manager renders
business management and investment advisory services to the portfolios listed on
Schedule A attached hereto (each a "Portfolio" and, collectively, the
"Portfolios");
WHEREAS, such Master Business Management and Investment Advisory
Agreement, by its terms and in accordance with certain provisions of the 1940
Act, will terminate upon its assignment;
WHEREAS, in connection with the proposed change in control (an
"assignment" under the 0000 Xxx) of the Manager resulting from the contemplated
acquisition (the "Acquisition") by Investors Group Inc. of Mackenzie Financial
Corporation, of which the Manager is an indirect subsidiary, an automatic
termination of the Master Business Management and Investment Advisory Agreement
will occur;
WHEREAS, Rule 15a-4 under the 1940 Act prevents funds from being harmed
by losing investment advisory services due to an assignment of an advisory
agreement before shareholders can approve a new agreement by providing a
temporary exemption from the shareholder approval requirement and permitting the
fund to be advised under a short-term agreement until shareholders can vote on a
new agreement;
WHEREAS, the Board of Trustees of the Trust, including a majority of
the Independent Trustees, has voted in person at its March 15, 2001 meeting to
approve this interim master business management and investment advisory
agreement (the "Interim Agreement") so that the Manager may continue to provide
management and advisory services to the Portfolios
2
until such time as the shareholders of each Portfolio will have voted on the
approval or disapproval of a new master business and investment advisory
agreement; and
WHEREAS, the Fund wishes to utilize the services of the Manager as
manager and investment adviser under the Interim Agreement with respect to
certain portfolio assets of each Portfolio;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. Appointment. The Fund hereby appoints the Manager to provide
the business management and investment advisory services specified in this
Interim Agreement, and the Manager hereby accepts such appointment.
2. Investment Advisory Services.
(a) As investment adviser to the Portfolios, the Manager
shall make investments for the account of each Portfolio in accordance with the
Manager's best judgment and within the investment objectives and restrictions
set forth in the Prospectus applicable to the Portfolios, the 1940 Act and the
provisions of the Internal Revenue Code relating to regulated investment
companies, subject to policy decisions adopted by the Fund's Board of Trustees.
(b) The Manager will determine the securities to be
purchased or sold by each Portfolio and will place orders pursuant to its
determinations with any broker or dealer who deals in such securities. The
Manager also shall (i) comply with all reasonable requests of the Fund for
information, including information required in connection with the Fund's filing
with the Securities and Exchange Commission (the "SEC") and state securities
commissions, and (ii) provide such other services as the Manager shall from time
to time determine to be necessary or useful to the administration of the
Portfolios.
(c) The Manager shall furnish to the Fund's Board of
Trustees periodic reports on the investment performance of each Portfolio and on
the performance of its obligations under this Interim Agreement and shall supply
such additional reports and information as the Fund's officers or Board of
Trustees shall reasonably request.
(d) On occasions when the Manager deems the purchase or
sale of a security to be in the best interest of a Portfolio as well as other
customers, the Manager, to the extent permitted by applicable law, may aggregate
the securities to be so sold or purchased in order to obtain the best execution
or lower brokerage commissions, if any. The Manager also may purchase or sell a
particular security for one or more customers in different amounts. On either
occasion, and to the extent permitted by applicable law and regulations,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Manager in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Portfolio involved and to such other customers.
-2-
3
3. Business Management Services.
(a) The Manager shall supervise the Portfolios' business
and affairs and shall provide such services reasonably necessary for the
operation of the Portfolios as are not provided by employees or other agents
engaged by the Portfolios; provided, that the Manager shall not have any
obligation to provide under this Interim Agreement any direct or indirect
services to the Portfolios' shareholders, any services related to the
distribution of the Portfolios' shares, or any other services which are the
subject of a separate agreement or arrangement between the Portfolios and the
Manager. Subject to the foregoing, in providing business management services
hereunder, the Manager shall, at its expense, (1) coordinate with the
Portfolios' Custodian and monitor the services it provides to the Portfolios;
(2) coordinate with and monitor any other third parties furnishing services to
the Portfolios; (3) provide the Portfolios with the necessary office space,
telephones and other communications facilities as are adequate for the
Portfolios' needs; (4) provide the services of individuals competent to perform
administrative and clerical functions which are not performed by employees or
other agents engaged by the Portfolios or by the Manager acting in some other
capacity pursuant to a separate agreement or arrangement with the Portfolios;
(5) maintain or supervise the maintenance by third parties of such books and
records of the Fund as may be required by applicable Federal or state law; (6)
authorize and permit the Manager's directors, officers and employees who may be
elected or appointed as trustees or officers of the Fund to serve in such
capacities; and (7) take such other action with respect to the Fund, after
approval by the Fund, as may be required by applicable law, including without
limitation the rules and regulations of the SEC and of state securities
commissions and other regulatory agencies.
(b) The Manager may retain third parties to provide these
services to the Fund, at the Manager's own cost and expense. The Manager shall
make periodic reports to the Fund's Board of Trustees on the performance of its
obligations under this Interim Agreement, other than services provided to the
Fund by third parties retained in accordance with the previous sentence.
4. Expenses of the Fund. Except as provided in paragraph 3 or as
provided in any separate agreement between the Portfolios and the Manager, the
Fund shall be responsible for all of its expenses and liabilities, including:
(1) the fees and expenses of the Fund's Trustees who are not parties to this
Interim Agreement or "interested persons" (as defined in the 0000 Xxx) of any
such party ("Independent Trustees"); (2) the salaries and expenses of any of the
Fund's officers or employees who are not affiliated with the Manager; (3)
interest expenses; (4) taxes and governmental fees, including any original issue
taxes or transfer taxes applicable to the sale or delivery of shares or
certificates therefor; (5) brokerage commissions and other expenses incurred in
acquiring or disposing of portfolio securities; (6) the expenses of registering
and qualifying shares for sale with the SEC and with various state securities
commissions; (7) accounting and legal costs; (8) insurance premiums; (9) fees
and expenses of the Fund's Custodian and Transfer Agent and any related
services; (10) expenses of obtaining quotations of portfolio securities and of
pricing shares; (11) expenses of maintaining the Fund's legal existence and of
shareholders' meetings; (12) expenses of preparation and distribution to
existing
-3-
4
shareholders of periodic reports, proxy materials and prospectuses; and (13)
fees and expenses of membership in industry organizations.
5. Standard of Care. The Manager shall give the Fund the benefit
of the Manager's best judgment and efforts in rendering business management and
investment advisory services pursuant to paragraphs 2 and 3 of this Interim
Agreement. As an inducement to the Manager's undertaking to render these
services, the Fund agrees that the Manager shall not be liable under this
Interim Agreement for any mistake in judgment or in any other event whatsoever
except for lack of good faith, provided that nothing in this Interim Agreement
shall be deemed to protect or purport to protect the Manager against any
liability to the Fund or its shareholders to which the Manager would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of the Manager's duties under this Interim Agreement or by
reason of the Manager's reckless disregard of its obligations and duties
hereunder.
[The remainder of this page is intentionally left blank.]
-4-
5
6. Fees. In consideration of the services to be rendered by the
Manager pursuant to paragraphs 2 and 3 of this Interim Agreement, each Portfolio
shall pay a monthly fee on the first business day of each month, based on the
average daily value (as determined on each business day at the time set forth in
the Prospectus of the Portfolio for determining net asset value per share) of
the net assets of the Portfolio during the preceding month at the following
annual rates:
Fee Rate
Portfolio (as a percentage of average net assets)
--------- ---------------------------------------
Ivy Bond Fund 0.50% of the first $500 million;
0.40% over $500 million
Xxx Xxxxxxx Value Fund 1.00%
Ivy Developing Markets Fund 1.00%
Ivy European Opportunities Fund 1.00% of the first $250 million;
0.85% of the next $250 million;
0.75% over $500 million
Ivy Global Fund 1.00% of the first $500 million;
0.75% over $500 million
Ivy Global Science & Technology Fund 1.00%
Ivy Growth Fund 0.85% of the first $350 million;
0.75% over $350 million
Ivy International Fund 1.00% of the first $2.0 billion;
0.90% of the next $500 million;
0.80% of the next $500 million;
0.70% over $3 billion
Ivy International Growth Fund 1.00%
Ivy International Small Companies Fund 1.00%
Ivy International Value Fund 1.00%
Ivy Money Market Fund 0.40%
Ivy Pacific Opportunities Fund 1.00%
Ivy US Blue Chip Fund 0.75%
Ivy US Emerging Growth Fund 0.85%
Such fees earned shall be maintained in an interest-bearing escrow
account with the Fund's custodian or a bank. If a majority of the applicable
Portfolio's outstanding voting securities (as defined in the 1940 Act) approves
a new Master Business and Investment Advisory Agreement within 150 days
following the date of this Interim Agreement, the amount in escrow (including
interest earned) with respect to such Portfolio will be paid to the Manager. If
a
-5-
6
majority of the applicable Portfolio's outstanding voting securities does not
approve a new Master Business and Investment Advisory Agreement, the Manager
will be paid from the escrow account the lesser of (i) any costs incurred in
performing the Interim Agreement (plus interest earned on that amount while in
escrow) with respect to such Portfolio; or (ii) the total amount in the escrow
account (plus interest earned) with respect to such Portfolio. If the fees
payable pursuant to this paragraph 6 begin to accrue before the end of any month
or if this Interim Agreement terminates before the end of any month, the fees
for the period from that date to the end of that month or from the beginning of
that month to the date of termination, as the case may be, shall be prorated
according to the proportion which the period bears to the full month in which
the effectiveness or termination occurs. For purposes of calculating the monthly
fees, the value of the net assets of a Portfolio shall be computed in the manner
specified in the Portfolio's Prospectus for the computation of net asset value.
For purposes of this Interim Agreement, a "business day" is any day on which the
New York Stock Exchange is open for trading.
7. Ownership of Records. All records required to be maintained
and preserved by the Portfolios pursuant to the provisions or rules or
regulations of the SEC under Section 31(a) of the 1940 Act and maintained and
preserved by the Manager on behalf of the Portfolios are the property of the
Portfolios and shall be surrendered by the Manager promptly on request by the
Portfolios; provided, that the Manager may at its own expense make and retain
copies of any such records.
8. Duration and Termination. This Interim Agreement shall become
effective on the date first written above or on such later date as the
Acquisition may take place, and shall continue in effect, unless sooner
terminated as provided herein, for a period not to exceed 150 days following
such date, or until the majority of the applicable Portfolio's outstanding
voting securities approves a new master business and investment advisory
agreement with the Manager. This Interim Agreement is terminable at any time, by
either party, without payment of any penalty, on not more than ten (10) days'
written notice to the other party. This Interim Agreement will be terminated
automatically in the event of its assignment (as defined in the 1940 Act).
All transactions already initiated hereunder at the time of termination
shall be completed in accordance with the Manager's usual practice.
9. Retention of Sub-Advisers. Subject to a Portfolio's obtaining
any initial and periodic approvals that are required under Section 15 of the
1940 Act, the Manager may retain a sub-adviser with respect to that Portfolio,
at the Manager's own cost and expense.
10. Services to Other Clients. Nothing herein contained shall
limit the freedom of the Manager or any affiliated person of the Manager to
render investment supervisory and administrative services to other investment
companies, to act as investment adviser or investment counselor to other
persons, firms or corporations, or to engage in other business activities.
-6-
7
11. Miscellaneous.
(a) This Interim Agreement shall be construed in
accordance with the laws of the State of Florida, provided that nothing herein
shall be construed in a manner inconsistent with the 1940 Act.
(b) The captions in this Interim Agreement are included
for convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
(c) The Fund's Declaration of Trust has been filed with
the Secretary of State of The Commonwealth of Massachusetts. The obligations of
the Fund are not personally binding upon, nor shall resort be had to the private
property of, any of the Trustees, shareholders, officers, employees or agents of
the Fund, but only the Fund's property shall be bound. It is further understood
and acknowledged that all persons dealing with any Portfolio must look solely to
the property of such Portfolio for the enforcement of any claims against that
Portfolio as neither the Trustees, shareholders, officers, employees or agents
assume any personal liability for obligations entered into on behalf of any
Portfolio. No Portfolio shall be liable for the obligations or liabilities of
any other Portfolio.
IN WITNESS WHEREOF, the parties hereto have caused this Interim
Agreement to be executed as of the date first above written.
IVY FUND
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Title: President
IVY MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Title: President
-7-
8
SCHEDULE A
TO INTERIM MASTER BUSINESS MANAGEMENT
AND INVESTMENT ADVISORY AGREEMENT BETWEEN
IVY FUND AND IVY MANAGEMENT, INC.
DATED APRIL 18, 2001
FUNDS:
Ivy Bond Fund
Xxx Xxxxxxx Value Fund
Ivy Developing Markets Fund
Ivy European Opportunities Fund
Ivy Global Fund
Ivy Global Science & Technology Fund
Ivy Growth Fund
Ivy International Fund
Ivy International Growth Fund
Ivy International Small Companies Fund
Ivy International Value Fund
Ivy Money Market Fund
Ivy Pacific Opportunities Fund
Ivy US Blue Chip Fund
Ivy US Emerging Growth Fund
-8-
