Exhibit (d)(9)
SUBADVISORY AGREEMENT
AGREEMENT made as of the 31st day of December, 2002, between XXXXXXX
& XXXX XXX INVESTMENT COMPANY, 0000 Xxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxx
00000, U.S.A., a Delaware corporation (hereinafter called the "Manager"),
and XXXXXXXXX GLOBAL INVESTORS (NORTH AMERICA) INC., 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, a Delaware corporation
(hereinafter called the "Subadviser").
WHEREAS, Ivy Fund (the "Trust") is a Massachusetts business trust
organized with one or more series of shares, and is registered as an
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act");
WHEREAS, the Manager has entered into a Master Business Management
and Investment Advisory Agreement dated December 31, 2002 (the "Advisory
Agreement"), with the Trust, pursuant to which the Manager acts as
investment adviser to a specified portion of the portfolio assets of
certain series of the Trust listed on Schedule A hereto, as amended from
time to time (each a "Fund" and, collectively, the "Funds");
WHEREAS, the Manager desires to utilize the services of the
Subadviser as investment subadviser with respect to certain portfolio
assets of each Fund; and
WHEREAS, the Subadviser is willing to perform such services on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
1. Duties of the Subadviser. The Subadviser will serve the
Manager as investment subadviser with respect to certain portfolio assets
of each Fund, as set forth on the attached Schedule A.
(a) As investment subadviser to the Funds, the Subadviser
is hereby authorized and directed and hereby agrees, in accordance with
the Subadviser's best judgment and subject to the stated investment
objectives, policies and restrictions of the Funds as set forth in the
current prospectuses and statements of additional information of the Trust
(including amendments) and in accordance with the Trust's Declaration of
Trust, as amended, and By-laws governing the offering of its shares
(collectively, the "Trust Documents"), the 1940 Act and the provisions of
the Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code"), relating to regulated investment companies, and subject to such
resolutions as from time to time may be adopted by the Trust's Board of
Trustees, and provided that the Trust Documents and such resolutions are
all furnished to the Subadviser, to develop, recommend and implement such
investment program and strategy for the Funds as may from time to time be
most appropriate to the achievement of the investment objectives of the
Funds as stated in the aforesaid prospectuses, to provide research and
analysis relative to the investment program and investments of the Funds,
to determine what securities should be purchased and sold and to monitor
on a continuing basis the performance of the portfolio securities of the
Funds.
(b) The Subadviser shall comply with all reasonable
requests of the Trust for information, including information required in
connection with the Trust's filings with the Securities and Exchange
Commission (the "SEC") and state securities commissions.
(c) The Subadviser shall furnish to the Trust's Board of
Trustees periodic reports on the investment performance of each Fund and
on the performance of its obligations under this Agreement and shall
supply such additional reports and information as the Trust's officers or
Board of Trustees shall reasonably request.
(d) On occasions when the Subadviser deems the purchase or
sale of a security to be in the best interest of a Fund as well as other
customers, the Subadviser, to the extent permitted by applicable law, may
aggregate the securities to be so sold or purchased in order to obtain the
best execution under the circumstances or lower brokerage commissions, if
any. The Subadviser 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 Subadviser in the manner it considers to
be the most equitable and consistent with its fiduciary obligations to the
Fund involved and to such other customers. In no instance, however, will a
Fund's assets be purchased from or sold to the Manager, the Subadviser,
the Trust's principal underwriter, or any affiliated person of either the
Trust, the Manager, the Subadviser or the principal underwriter, acting as
principal in the transaction, except to the extent permitted by the SEC
and the 1940 Act.
(e) The Subadviser shall provide the Funds' custodian on
each business day with information relating to all transactions concerning
each Fund's assets and shall provide the Manager with such information
upon request of the Manager.
(f) The investment advisory services provided by the
Subadviser under this Agreement are not to be deemed exclusive and the
Subadviser shall be free to render similar services to others, as long as
such services do not impair the services rendered to the Manager or the
Trust.
(g) The Subadviser shall promptly notify the Manager of
any financial condition that is likely to impair the Subadviser's ability
to fulfill its commitment under this Agreement.
(h) The Subadviser shall review all proxy solicitation
materials and be responsible for voting and handling all proxies in
relation to the securities held in a Fund's portfolio. The Manager shall
instruct the custodian and other parties providing services to the Fund to
promptly forward misdirected proxies to the Subadviser.
2. Delivery of Documents to the Manager. The Subadviser has
furnished the Manager with copies of each of the following documents:
(a) The Subadviser's current Form ADV and any amendments
thereto;
(b) The Subadviser's most recent balance sheet;
(c) Separate lists of persons whom the Subadviser wishes
to have authorized to give written and/or oral instructions to the
custodian and the fund accounting agent of Trust assets for the Funds; and
(d) The Code of Ethics of the Subadviser as currently in
effect.
The Subadviser will furnish the Manager from time to time with
copies, properly certified or otherwise authenticated, of all material
amendments of or supplements to the foregoing, if any. Additionally, the
Subadviser will provide to the Manager such other documents relating to
its services under this Agreement as the Manager may reasonably request on
a periodic basis. Such amendments or supplements as to items (a) through
(d) above will be provided within 30 days of the time such materials
became available to the Subadviser.
3. Expenses. The Subadviser shall pay all of its expenses
arising from the performance of its obligations under Section 1.
4. Compensation. The Manager shall pay to the Subadviser for
its services hereunder, and the Subadviser agrees to accept as full
compensation therefor, a fee with respect to each Fund as set forth on
Schedule B. Such fee shall be accrued daily on the basis of the value of
the portion of the average daily net assets of the applicable Fund as are
then being managed by the Subadviser and shall be payable monthly. If the
Subadviser shall serve hereunder for less than the whole of any month, the
fee hereunder shall be prorated accordingly.
5. Purchase and Sale of Securities. The Subadviser will
determine the securities to be purchased or sold with respect to the
portion of each Fund's portfolio assets being managed by it, and shall
purchase securities from or through and sell securities to or through such
persons, brokers or dealers as the Subadviser shall deem appropriate in
order to carry out the policy with respect to allocation of portfolio
transactions as set forth in the prospectuses and statements of additional
information (including amendments) of the Funds or as the Trust's Board of
Trustees may direct from time to time. In providing the Funds with
investment management and supervision, it is recognized that the
Subadviser will seek the best price and execution under the circumstances,
and, consistent with such policy, may give consideration to the research
services furnished by brokers or dealers to the Subadviser for its use and
to such other considerations as the Trust's Board of Trustees may direct
or authorize from time to time.
Nothing in this Agreement shall be implied to prevent (i) the
Manager from engaging other subadvisers to provide investment advice and
other services in relation to series of the Trust, or a portion of the
portfolio assets of any such series, for which the Subadviser does not
provide such services, or to prevent the Manager from providing such
services itself in relation to such series; (ii) the Subadviser from
providing investment advice and other services to other funds or clients;
or (iii) the Subadviser from engaging as subadviser an affiliated party to
perform all or part of the Subadviser's responsibilities hereunder, at the
Subadviser's own cost and expense, provided that the Subadviser shall have
the same responsibilities and liabilities under this Agreement as if it
were performing the duties.
In the performance of its duties hereunder, the Subadviser is
and shall be an independent contractor and except as expressly provided
herein or otherwise authorized in writing, shall have no authority to act
for or represent the Trust, the Funds, any other series of the Trust or
the Manager in any way or otherwise be deemed to be an agent of the Trust,
the Funds, any other series of the Trust or the Manager.
6. Term of Agreement. This Agreement shall become effective as
of the date first written above or such later date as the shareholders may
approve this Agreement, and shall continue in full force and effect until
December 31, 2003, and from year to year thereafter if such continuance is
approved in the manner required by the 1940 Act, if the Subadviser shall
not have notified the Manager in writing at least 60 days prior to such
date or prior to December 31 of any year thereafter that it does not
desire such continuance. This Agreement may be terminated at any time,
without payment of penalty by a Fund, by vote of the Trust's Board of
Trustees or a majority of the outstanding voting securities of the
applicable Fund (as defined by the 1940 Act), or by the Manager or by the
Subadviser upon 60 days' written notice. This Agreement will automatically
terminate in the event of its assignment (as defined by the 0000 Xxx) or
upon the termination of the Advisory Agreement or if (a) either party is
unable to pay its debts or an administrative or insolvency order is made
in respect of a party pursuant to its relevant governing and applicable
laws and regulations or (b) a party commits a material breach of any of
the terms or conditions of this Agreement and such breach shall continue
30 days after notice in writing, specifying the breach and requiring the
same to be remedied, has been given.
7. Amendments. This Agreement may be amended by written
consent of the parties hereto provided that the amendment is approved in a
manner consistent with the 1940 Act and the rules and regulations
thereunder and any applicable SEC exemptive order therefrom, SEC no-action
letter or SEC interpretive guidance.
8. Confidential Treatment. It is understood that any
information or recommendation supplied by the Subadviser in connection
with the performance of its obligations hereunder is to be regarded as
confidential and for use only by the Manager, the Trust or such persons as
the Manager may designate in connection with the Funds. It is also
understood that any information supplied to the Subadviser in connection
with the performance of its obligations hereunder, particularly, but not
limited to, any list of securities which, on a temporary basis, may not be
bought or sold for the Funds, is to be regarded as confidential and for
use only by the Subadviser in connection with its obligation to provide
investment advice and other services to the Funds.
9. Representations and Warranties. The Subadviser hereby
represents and warrants as follows:
(a) The Subadviser is registered with the SEC as an
investment adviser under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), and such registration is current, complete and in
full compliance with all material applicable provisions of the Advisers
Act and the rules and regulations thereunder;
(b) The Subadviser has all requisite authority to enter
into, execute, deliver and perform the Subadviser's obligations under this
Agreement;
(c) The Subadviser's performance of its obligations under
this Agreement does not conflict with any law, regulation or order to
which the Subadviser is subject; and
(d) The Subadviser has reviewed the portion of (i) the
registration statement filed with the SEC, as amended from time to time,
for the Funds ("Registration Statement"), and (ii) each Fund's
prospectuses and statements of additional information (including
amendments) thereto, in each case in the form received from the Manager,
with respect to the disclosure about the Subadviser and except as advised
in writing to the Manager such Registration Statement, prospectuses and
statements of additional information (including amendments) contain, as of
their respective dates, no untrue statement of any material fact regarding
the Subadviser of which the Subadviser has knowledge and do not omit any
statement of a material fact regarding the Subadviser of which the
Subadviser has knowledge which was required to be stated therein or
necessary to make the statements contained therein not misleading.
10. Covenants. The Subadviser hereby covenants and agrees that,
so long as this Agreement shall remain in effect:
(a) The Subadviser shall maintain the Subadviser's
registration as an investment adviser under the Advisers Act, and such
registration shall at all times remain current, complete and in full
compliance with all material applicable provisions of the Advisers Act and
the rules and regulations thereunder;
(b) The Subadviser's performance of its obligations under
this Agreement shall not conflict with any law, regulation or order to
which the Subadviser is then subject;
(c) The Subadviser shall at all times comply with the
Advisers Act and the 1940 Act, and all rules and regulations thereunder,
and all other applicable laws and regulations, and the Registration
Statement, prospectuses and statements of additional information
(including amendments) and with any applicable procedures adopted by the
Trust's Board of Trustees, provided that such procedures are substantially
similar to those applicable to similar funds for which the Trust's Board
of Trustees is responsible and that such procedures are identified in
writing to the Subadviser;
(d) The Subadviser shall promptly notify the Manager and
the Fund upon the occurrence of any event that under federal, state or
foreign securities laws might disqualify or prevent the Subadviser from
performing its duties under this Agreement. The Subadviser shall promptly
notify the Manager and the Fund if there are any changes to its ownership
structure or the Subadviser has become the subject of any adverse
regulatory action imposed by any regulatory body or self-regulatory
organization. The Subadviser further agrees to notify the Manager of any
changes relating to it or the provision of services by it that would be
required to be disclosed in the Registration Statement, prospectuses or
statements of additional information (including amendments) for the Funds;
and
(e) The Subadviser will manage the portion of each Fund's
portfolio assets for which it serves as subadviser under this Agreement in
a manner consistent with the Fund's status as a regulated investment
company under Subchapter M of the Internal Revenue Code.
11. Use of Names.
(a) The Subadviser acknowledges and agrees that the names
Ivy Fund and Xxxxxxx & Xxxx Xxx Investment Company, and abbreviations or
logos associated with those names, are the valuable property of the
Manager and its affiliates; that the Funds, the Manager and their
affiliates have the right to use such names, abbreviations and logos; and
that the Subadviser shall use the names Ivy Fund and Xxxxxxx & Xxxx Xxx
Investment Company, and associated abbreviations and logos, only in
connection with the Subadviser's performance of its duties hereunder.
Further, in any communication with the public and in any marketing
communications of any sort, the Subadviser agrees to obtain prior written
approval from the Manager before using or referring to Ivy Fund, and
Xxxxxxx & Xxxx Xxx Investment Company, or the Funds or any abbreviations
or logos associated with those names; provided that nothing herein shall
be deemed to prohibit the Subadviser from referring to the performance of
the Funds in the Subadviser's marketing material as long as such marketing
material does not constitute "sales literature" or "advertising" for the
Funds, as those terms are used in the rules, regulations and guidelines of
the SEC and the National Association of Securities Dealers, Inc.
(b) The Manager acknowledges that "Xxxxxxxxx" and
"Xxxxxxxxx Global Investors" and abbreviations or logos associated with
those names are valuable property of the AMP group of companies and are
distinctive in connection with investment advisory and related services
provided by the Subadviser, the "Xxxxxxxxx" name is a property right of
the Subadviser, and the "Xxxxxxxxx" and "Xxxxxxxxx Global Investors" names
are understood to be used by each Fund upon the conditions hereinafter set
forth; provided that each Fund may use such names only so long as the
Subadviser shall be retained as the investment subadviser of the Fund
pursuant to the terms of this Agreement.
(c) The Subadviser acknowledges that each Fund and its
agents may use the "Xxxxxxxxx" and "Xxxxxxxxx Global Investors" names in
connection with accurately describing the activities of the Fund,
including use with marketing and other promotional and informational
material relating to the Fund with the prior written approval always of
the Subadviser. In the event that the Subadviser shall cease to be the
investment subadviser of a Fund, then the Fund at its own or the Manager's
expense, upon the Subadviser's written request: (i) shall cease to use
the Subadviser's name for any commercial purpose; and (ii) shall use its
best efforts to cause the Fund's officers and trustees to take any and all
actions which may be necessary or desirable to effect the foregoing and to
reconvey to the Subadviser all rights which a Fund may have to such name.
The Manager agrees to take any and all reasonable actions as may be
necessary or desirable to effect the foregoing and Subadviser agrees to
allow the Funds and their agents a reasonable time to effectuate the
foregoing.
(d) The Subadviser hereby agrees and consents to the use
of the Subadviser's name upon the foregoing terms and conditions.
12. Reports by the Subadviser and Records of the Funds. The
Subadviser shall furnish the Manager monthly, quarterly and annual reports
concerning transactions and performance of the Funds, including
information required to be disclosed in the Trust's Registration
Statement, in such form as may be mutually agreed. The Subadviser shall
permit the financial statements, books and records with respect to the
Funds to be inspected and audited by the Trust, the Manager or their
agents at all reasonable times during normal business hours. The
Subadviser shall immediately notify and forward to both the Manager and
legal counsel for the Trust any legal process served upon it on behalf of
the Manager or the Trust. The Subadviser shall promptly notify the Manager
of any changes in any information concerning the Subadviser of which the
Subadviser becomes aware that would be required to be disclosed in the
Trust's Registration Statement.
In compliance with the requirements of Rule 31a-3 under the 1940
Act, the Subadviser agrees that all records it maintains for the Trust are
the property of the Trust and further agrees to surrender promptly to the
Trust or the Manager any such records upon the Trust's or the Manager's
request. The Subadviser further agrees to maintain for the Trust the
records the Trust is required to maintain under Rule 31a-1(b) insofar as
such records relate to the investment affairs of each Fund. The Subadviser
further agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act the records it maintains for the Trust.
13. Indemnification. The Subadviser agrees to indemnify and
hold harmless the Manager, any affiliated person within the meaning of
Section 2(a)(3) of the 1940 Act ("affiliated person") of the Manager and
each person, if any, who, within the meaning of Section 15 of the
Securities Act of 1933, as amended (the "1933 Act"), controls
("controlling person") the Manager, against any and all losses, claims,
damages, liabilities or litigation (including reasonable legal and other
expenses), to which the Manager, the Trust or such affiliated person or
controlling person may become subject under the 1933 Act, the 1940 Act,
the Advisers Act, under any other statute, at common law or otherwise,
arising out of Subadviser's responsibilities as subadviser of the Funds
(1) to the extent of and as a result of the willful misconduct, bad faith,
or gross negligence of the Subadviser, any of the Subadviser's employees
or representatives or any affiliate of or any person acting on behalf of
the Subadviser, or (2) as a result of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, prospectuses or statements of additional information covering
the Funds or the Trust or any amendment thereof or any supplement thereto
or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement therein
not misleading, if such a statement or omission was made in reliance upon
written information furnished by the Subadviser to the Manager, the Trust
or any affiliated person of the Manager or the Trust expressly for use in
the Trust's Registration Statement, or upon verbal information confirmed
by the Subadviser in writing expressly for use in the Trust's Registration
Statement or (3) to the extent of, and as a result of, the failure of the
Subadviser to execute, or cause to be executed, portfolio transactions
according to the standards and requirements of the 1940 Act; provided,
however, that in no case is the Subadviser's indemnity in favor of the
Manager or any affiliated person or controlling person of the Manager
deemed to protect such person against any liability to which any such
person would otherwise be subject by reason of willful misconduct, bad
faith or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement.
The Manager agrees to indemnify and hold harmless the
Subadviser, any affiliated person of the Subadviser and each controlling
person of the Subadviser against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses),
to which the Subadviser or such affiliated person or controlling person
may become subject under the 1933 Act, the 1940 Act, the Advisers Act,
under any other statute, at common law or otherwise, arising out of the
Manager's responsibilities as investment manager of the Funds (1) to the
extent of and as a result of the willful misconduct, bad faith, or gross
negligence of the Manager, any of the Manager's employees or
representatives or any affiliate of or any person acting on behalf of the
Manager, or (2) as a result of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement,
prospectuses or statements of additional information covering the Funds or
the Trust or any amendment thereof or any supplement thereto or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statement therein not
misleading, if such a statement or omission was made by the Trust other
than in reliance upon written information furnished by the Subadviser, or
any affiliated person of the Subadviser, expressly for use in the Trust's
Registration Statement or other than upon verbal information confirmed by
the Subadviser in writing expressly for use in the Trust's Registration
Statement; provided, however, that in no case is the Manager's indemnity
in favor of the Subadviser or any affiliated person or controlling person
of the Subadviser deemed to protect such person against any liability to
which any such person would otherwise be subject by reason of willful
misconduct, bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement.
14. Jurisdiction. The Subadviser consents to the jurisdiction
of any state or U.S. federal court sitting in the Commonwealth of
Massachusetts over any suit, action or proceeding arising out of or
relating to this Agreement.
15. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered
or sent by pre-paid first class letter post to the following addresses or
to such other address as the relevant addressee shall hereafter notify for
such purpose to the others by notice in writing and shall be deemed to
have been given at the time of delivery.
If to the Manager: XXXXXXX & XXXX XXX INVESTMENT COMPANY
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000, X.X.X.
Attention: President
If to the Trust: IVY FUND
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000, X.X.X.
Attention: Xxxxxxx Xxxxxxxx
If to the Subadviser: XXXXXXXXX GLOBAL INVESTORS (NORTH AMERICA) INC.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000, U.S.A.
Attention: Company Secretary
16. Limitation of Liability of the Trust, its Trustees, and
Shareholders. It is understood and expressly stipulated that none of the
trustees, officers, agents, or shareholders of any series of the Trust
shall be personally liable hereunder. It is understood and acknowledged
that all persons dealing with any series of the Trust must look solely to
the property of such series for the enforcement of any claims against that
series as neither the trustees, officers, agents or shareholders assume
any personal liability for obligations entered into on behalf of any
series of the Trust. No series of the Trust shall be liable for the
obligations or liabilities of any other series of the Trust.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Massachusetts. Anything herein to the contrary notwithstanding, this
Agreement shall not be construed to require, or to impose any duty upon
either of the parties, to do anything in violation of any applicable laws
or regulations.
18. Severability. Should any part of this Agreement be held
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute a single instrument.
IN WITNESS WHEREOF, XXXXXXX & XXXX XXX INVESTMENT COMPANY AND
XXXXXXXXX GLOBAL INVESTORS (NORTH AMERICA) INC. have each caused this
instrument to be signed in duplicate on its behalf by the officer
designated below thereunto duly authorized.
XXXXXXX & XXXX XXX INVESTMENT COMPANY
By:_______________________________
Xxxxx X. Xxxxxxxx
Title: President
XXXXXXXXX GLOBAL INVESTORS (NORTH AMERICA) INC.
By:________________________________
Title:
SCHEDULE A
TO SUBADVISORY AGREEMENT BETWEEN
XXXXXXX & XXXX XXX INVESTMENT COMPANY AND XXXXXXXXX GLOBAL INVESTORS
(NORTH AMERICA) INC.
DATED DECEMBER 31, 2002
Funds:
Ivy International Small Companies Fund - 100% of Fund's net assets
Ivy European Opportunities Fund - 100% of Fund's net assets
SCHEDULE B
TO SUBADVISORY AGREEMENT BETWEEN
XXXXXXX & XXXX XXX INVESTMENT COMPANY AND XXXXXXXXX GLOBAL INVESTORS
(NORTH AMERICA) INC.
DATED DECEMBER 31, 2002
Fee schedule:
Ivy International Small Companies Fund: payable monthly at an annual
rate of 0.45% of the first $100,000,000 of net assets and 0.40% thereafter
of that portion of the Fund's average daily net assets managed by the
Subadviser.
Ivy European Opportunities Fund: payable monthly at an annual rate of
0.45% of the first $100,000,000 of net assets and 0.40% thereafter of that
portion of the Fund's average daily net assets managed by the Subadviser.
