SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the
Securities Exchange Act of 1934 (Amendment
No.__ )
Filed by the Registrant 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 Rule 14a-11(c) or Rule 14a-12
IVY FUND
(Name of Registrant as Specified in Its Charter/Declaration of Trust)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identity the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
<PAGE>
PRELIMINARY COPIES
IVY FUND
Ivy Pan-Europe Fund
Ivy International Small Companies Fund
December 17, 1998
Dear Shareholders:
You are cordially invited by the Board of Trustees of Ivy Fund (the
"Trust"), on behalf of Ivy Pan-Europe Fund and Ivy International Small Companies
Fund (each a "Fund"), to attend a Special Meeting of Shareholders (the "Special
Meeting") on January 29, 1999 at 10:00 a.m., Eastern time, to consider a
recommendation which is important to you and your Fund.
The proposal to be voted on at the Special Meeting is reviewed in
detail in the enclosed Notice and Proxy Statement. The proposal seeks your
approval of a subadvisory agreement pursuant to which Henderson Investment
Management Limited ("Henderson") will serve as subadviser to your Fund. PLEASE
NOTE THAT THE SUBADVISORY AGREEMENT WILL NOT RESULT IN ANY CHANGES IN ADVISORY
FEES OR OTHER EXPENSES FOR EITHER OF THE FUNDS. Approval of the subadvisory
agreement will enable the Funds to benefit from the significant international
investment experience of Henderson, a registered investment adviser which,
together with its affiliates, has over $69 billion under management.
The Board of Trustees has carefully considered the proposal to be voted
on at this Special Meeting and unanimously recommends your approval of the new
subadvisory agreement.
If you have any questions related to the Special Meeting and/or the
Proxy Statement, please call us at 1-800-777-6472.
Thank you for your participation in this process and your investment in
our Funds.
Sincerely,
Michael G. Landry
Chairman of the Board
WE URGE YOU TO COMPLETE, SIGN, DATE AND RETURN YOUR PROXY CARD(S) IN THE
ENCLOSED POSTAGE-PAID ENVELOPE TO ENSURE A QUORUM AT THE SPECIAL MEETING. YOUR
VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
<PAGE>
PRELIMINARY COPIES
NOTICE OF SPECIAL MEETING
OF THE SHAREHOLDERS OF
IVY FUND
Ivy Pan-Europe Fund
Ivy International Small Companies Fund
A Special Meeting of the Shareholders (the "Special Meeting") of Ivy
Fund (the "Trust"), on behalf of Ivy Pan-Europe Fund and Ivy International Small
Companies Fund (each a "Fund"), will be held on January 29, 1999, at 10:00 a.m.,
Eastern time, at 700 South Federal Highway, Boca Raton, Florida 33432 for the
following purpose:
Proposal: To approve or disapprove a Subadvisory Agreement for the Trust,
on behalf of each Fund, between Ivy Management, Inc. and Henderson Investment
Management Limited.
The appointed proxies will vote in their discretion on any other
business as may properly come before the Special Meeting or any adjournments
thereof.
Shareholders of record at the close of business on December 8, 1998 are
entitled to notice of and to vote at the Special Meeting and at any adjournments
thereof.
In the event that the necessary quorum to transact business or the vote
required to approve the Proposal is not obtained at the Special Meeting with
respect to either or both of the Funds, the persons named as proxies may propose
one or more adjournments of the Special Meeting, in accordance with applicable
law, to permit further solicitation of proxies. The persons named as proxies
will vote in favor of such adjournment those proxies which they are entitled to
vote in favor of the Proposal and will vote against any such adjournment those
proxies to be voted against the Proposal.
C. William Ferris
Secretary
December [ ], 1998
IMPORTANT -- We urge you to complete, sign and date the enclosed proxy card(s)
and return it in the enclosed addressed envelope which requires no postage and
is intended for your convenience. Your prompt return of the enclosed proxy
card(s) may save the necessity and expense of further solicitations to ensure a
quorum at the Special Meeting. If you can attend the Special Meeting and wish to
vote your shares in person at that time, you will be able to do so.
<PAGE>
PRELIMINARY COPIES
IVY FUND
Ivy Pan-Europe Fund
Ivy International Small Companies Fund
Via Mizner Financial Plaza
700 South Federal Highway
Boca Raton, Florida 33432
PROXY STATEMENT
DECEMBER 17, 1998
This Proxy Statement is given to you to provide information you should
review before voting on the matter listed in the Notice of Special Meeting on
the previous page for Ivy Fund (the "Trust"), on behalf of Ivy Pan-Europe Fund
("Pan-Europe Fund") and Ivy International Small Companies Fund ("Small Companies
Fund") (each a "Fund"). Your Fund's Board of Trustees (the "Trustees") is
soliciting your vote for a Special Meeting of Shareholders of each Fund (the
"Special Meeting") to be held at 700 South Federal Highway, Boca Raton, Florida
33432, on January 29, 1999, at 10:00 a.m., Eastern time, and, if the Special
Meeting is adjourned, at any adjournment of that Meeting.
This Proxy Statement describes the matter that will be voted on at the
Special Meeting (the "Proposal"). The solicitation of votes is made by the
mailing of this Proxy Statement and the accompanying proxy card on or about
December 18, 1998. Ivy Management, Inc. ("IMI") and its affiliates may contact
Fund shareholders directly commencing in January 1999 to discuss the Proposal.
The expenses incurred in connection with preparing this Proxy Statement and its
enclosures and of all solicitations will be borne by IMI.
A copy of each Fund's Annual Report for the fiscal year ended December
31, 1997, was mailed to its shareholders on or about February 28, 1998, and each
Fund's Semiannual Report for the period ended June 30, 1998 was mailed to its
shareholders on or about August 30, 1998. If you did not receive an Annual
Report or Semiannual Report for your Fund, you may request one by writing to Ivy
Mackenzie Services Corp., P.O. Box 3022, Boca Raton, Florida 33431-0922, or by
calling 1-800-777-6472.
Shareholders of record on December 8, 1998 (the "Record Date") are
entitled to be present and to vote at the Special Meeting or any adjourned
meeting. As of the Record Date, each Fund offered Class A, Class B, Class C and
Advisor Class shares, and Ivy International Small Companies Fund also offered
Class I shares. All classes of shares of a Fund have the same rights, privileges
and preferences, except with respect to: (a) the effect of sales charges, if
any; (b) the different distribution and/or service fees borne by each class; (c)
the expenses allocable exclusively to each class; (d) voting rights on matters
exclusively affecting a single class; and (e) the exchange privilege of each
class. Shareholders of each Fund will vote as a single class regardless of which
class of the Fund's shares they own. The table provided in Appendix 1 hereto
sets forth the number of shares outstanding for each class of the Funds as of
the Record Date.
Appendix 2 sets forth the beneficial owners of at least 5% of each
class of a Fund's shares. To the best of the Trust's knowledge, as of the Record
Date, no person owned beneficially more than 5% of any class of a Fund, except
as stated in Appendix 2.
Appendix 3 hereto sets forth the number of shares of each class of a
Fund owned beneficially by the Trustees and the executive officer[s] of the
Trust.
In the event that a quorum of shareholders is not represented at the
Special Meeting, the Meeting may be adjourned until a quorum exists, or, even if
a quorum is represented, the Meeting may be adjourned until sufficient votes to
approve the proposal are received. A majority of the shares of a Fund entitled
to vote must be present at the Special Meeting to have a quorum to conduct
business. For purposes of determining the presence of a quorum for transacting
business at the Special Meeting, abstentions and broker "non-votes" will be
treated as shares that are present but which have not been voted. Broker
non-votes are proxies received by a Fund from brokers or nominees when the
broker or nominee has neither received instructions from the beneficial owner or
other persons entitled to vote nor has discretionary power to vote on a
particular matter. The persons named as proxies may propose and vote for one or
more adjournments of the Special Meeting in accordance with applicable law.
Adjourned meetings must be held within a reasonable time after the date
originally set for the meeting. Solicitation of votes may continue to be made
without any obligation to provide any additional notice of the adjournment. The
persons named as proxies will vote Fund shares in favor of such adjournment
those proxies which they are entitled to vote in favor and will vote against any
such adjournment those proxies to be voted against the Proposal.
The Proposal requires the vote of a "majority of the outstanding voting
securities" of a Fund. A "majority of the outstanding voting securities" of a
Fund means the lesser of: (i) 67% of that Fund's shares present at the Special
Meeting, if the holders of more than 50% of the shares of that Fund then
outstanding are present in person or by proxy; or (ii) more than 50% of the
outstanding voting securities of that Fund. As noted above, shareholders of each
Fund will vote as a single class regardless of which class of the Fund's shares
they own. If the vote is determined on the basis of the affirmative vote of 67%
of the Fund's shares present at the Special Meeting, as described in clause (i)
of the first sentence of this paragraph, abstentions will not constitute "yes"
or "no" votes for the Proposal and will be disregarded in determining the voting
securities present, while broker non-votes will be treated as shares that are
present and will have the effect of a "no" vote on the Proposal. If the Proposal
is determined on the basis of obtaining the affirmative vote of more than 50% of
all the outstanding voting securities of the Fund, as described in clause (ii)
above, broker non-votes will have the effect of a "no" vote on the Proposal.
The number of shares that you may vote is the total of the number shown
on the proxy card accompanying this Proxy Statement. Shareholders are entitled
to one vote for each full share and a proportionate vote for each fractional
share held. Votes may be revoked by written notice to IMI prior to the Special
Meeting or by attending the Meeting in person and indicating that you want to
vote your shares.
The appointed proxies will vote in their discretion on any other
business as may properly come before the Special Meeting or any adjournments or
postponements thereof. Additional matters would only include matters that were
not anticipated as of the date of this Proxy Statement.
MATTER TO BE ACTED UPON
PROPOSAL
APPROVAL OF SUBADVISORY AGREEMENT
FOR EACH FUND
The Trustees, including the Trustees who are not "interested persons"
of the Trust (the "Independent Trustees"), as defined by the Investment Company
Act of 1940, as amended (the "1940 Act"), have unanimously approved, and
recommend that the shareholders of each Fund approve, a subadvisory agreement
for the Trust, on behalf of each Fund (the "Subadvisory Agreement"), between IMI
and Henderson Investment Management Limited ("Henderson").
Shareholders of each Fund are being asked to approve the Subadvisory
Agreement for their Fund. A copy of the form of the Subadvisory Agreement is
included with this Proxy Statement as Exhibit A.
Shareholders should also be aware that it is anticipated that the name
of the Pan-Europe Fund will be changed to Ivy European Opportunities Fund in the
near future.
WHAT ARE THE SIGNIFICANT PROVISIONS OF THE TRUST'S INVESTMENT ADVISORY AGREEMENT
WITH IMI?
IMI acts as investment adviser to each Fund pursuant to a Master
Business Management and Investment Advisory Agreement dated December 31, 1991,
as amended, entered into between IMI and the Trust, on behalf of each Fund and
the other series of the Trust (the "Advisory Agreement"). The Advisory Agreement
was approved on behalf of Small Companies Fund and Pan-Europe Fund by the
Trust's Board of Trustees on December 7, 1996 and February 8, 1997,
respectively, and by each Fund's sole shareholder on December 13, 1996 and April
30, 1997, respectively. The Advisory Agreement gives IMI the authority to select
securities for each Fund subject to policy decisions adopted by the Trust's
Board of Trustees. Under the Advisory Agreement, IMI may, subject to a Fund's
obtaining initial and periodic approvals required under Section 15 of the 1940
Act, retain a subadviser with respect to that Fund, at IMI's own cost and
expense.
The Advisory Agreement states that IMI is responsible for supervising
each Fund's business and affairs and providing such services reasonably
necessary for the operation of the Funds as are not provided by employees or
other agents engaged by the Funds; provided that IMI will not have any
obligation to provide any direct or indirect services to the Funds'
shareholders, any services related to the distribution of the Funds' shares, or
any other services which are the subject of a separate agreement or arrangement
between the Funds and IMI. Subject to the foregoing, in providing business
management services under the Advisory Agreement, IMI, at its expense, is
responsible for coordinating with the Funds' custodian and monitoring the
services it provides to the Funds; coordinating with and monitoring any other
third parties furnishing services to the Funds; providing the Funds with
necessary office space, telephones and other communications facilities as are
adequate for the Funds' needs; providing the services of individuals competent
to perform administrative and clerical functions which are not performed by
employees or other agents engaged by the Funds or by IMI acting in some other
capacity pursuant to a separate agreement or arrangement with the Funds;
maintaining or supervising the maintenance by third parties of such books and
records of the Trust as may be required by applicable federal and state law;
authorizing and permitting IMI's directors, officers and employees who may be
elected or appointed as trustees or officers of the Trust to serve in such
capacities; and taking such other action with respect to the Trust, after
approval by the Trust, as may be required by applicable law, including without
limitation the rules and regulations of the Securities and Exchange Commission
(the "SEC") and of state securities commissions and other regulatory agencies.
Except as provided in the foregoing paragraph or in any separate
agreement between the Funds and IMI, the Trust is responsible under the Advisory
Agreement for all of its expenses and liabilities, including: the fees and
expenses of the Trust's Independent Trustees; the salaries and expenses of any
of the Trust's officers or employees who are not affiliated with IMI; interest
expenses; taxes and governmental fees, including any original issue taxes or
transfer taxes applicable to the sale or delivery of shares or certificates
therefor; brokerage commissions and other expenses incurred in acquiring or
disposing of portfolio securities; the expenses of registering and qualifying
shares for sale with the SEC and with various state securities commissions;
accounting and legal costs; insurance premiums; fees and expenses of the Trust's
custodian and transfer agent and any related services; expenses of obtaining
quotations of portfolio securities and of pricing shares; expenses of
maintaining the Trust's legal existence and of shareholders' meetings; expenses
of preparation and distribution to existing shareholders of periodic reports,
proxy materials and prospectuses; and fees and expenses of membership in
industry organizations.
The Advisory Agreement provides that it will be effective with respect
to a Fund from year to year so long as the continuance is approved at least
annually (i) by the vote of a majority of the outstanding voting securities of
the Fund (as defined in the 1940 Act) or by the Trust's entire Board of
Trustees, and (ii) by the vote cast in person at a meeting called for that
purpose, of a majority of the Trust's Independent Trustees. The Advisory
Agreement will terminate automatically if there is an assignment of the
Agreement, as defined in the 1940 Act. It can be terminated with respect to a
Fund at any time, without the payment of any penalty, by a vote of a majority of
the outstanding voting securities of the Fund or by a vote of a majority of the
Trust's entire Board of Trustees on 60 days' written notice to IMI or by IMI on
60 days' written notice to the Trust.
WHAT IS THE FUNDS' POLICY REGARDING BROKERAGE TRANSACTIONS?
The Advisory Agreement allows IMI to place trades through brokers of
its choosing. Under the Advisory Agreement, on occasions when IMI deems the
purchase or sale of a security to be in the best interest of a Fund as well as
other customers, IMI, 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. As set forth in each Fund's disclosure
documents, IMI 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 IMI
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.
All portfolio transactions are effected at the best price and execution
obtainable. IMI selects broker-dealers to execute transactions and evaluates the
reasonableness of commissions on the basis of quality, quantity, and the nature
of the firms' professional services. Commissions to be charged and the rendering
of investment services, including statistical, research, and counseling services
by brokerage firms, are factors to be considered in the placing of brokerage
business. The types of research services provided by brokers may include general
economic and industry data, and information on securities of specific companies.
Research services furnished by brokers through whom the Trust effects securities
transactions may be used by IMI in servicing all of its accounts. In addition,
not all of these services may be used by IMI in connection with the services it
provides to a particular Fund or the Trust. IMI may consider sales of shares of
a Fund as a factor in the selection of broker-dealers and may select
broker-dealers who provide it with research services. IMI does not, however,
execute brokerage transactions other than at the best price and execution.
WHO IS IMI?
IMI is a Massachusetts corporation organized in 1983. It currently has
its principal offices at Via Mizner Financial Plaza, 700 South Federal Highway,
Boca Raton, Florida. IMI, registered with the SEC as an investment adviser, is a
wholly-owned subsidiary of Mackenzie Investment Management Inc. ("MIMI"). MIMI,
a Delaware corporation with its principal offices at Via Mizner Financial Plaza,
700 South Federal Highway, Boca Raton, Florida, has approximately 10% of its
outstanding common stock listed for trading on the Toronto Stock Exchange
("TSE"). MIMI is a subsidiary of Mackenzie Financial Corporation ("MFC"), 150
Bloor Street West, Toronto, Ontario, Canada, a public corporation organized
under the laws of Ontario and registered in Ontario as a mutual fund dealer
whose shares are listed for trading on the TSE. MFC provides investment advisory
services to certain other series of the Trust.
The principal occupations and positions of IMI's principal executive
officer, directors and certain other executive officers are as follows:
NAME* PRINCIPAL OCCUPATION
Michael G. Landry** Director and Chairman of
IMI; President, Chief Executive Officer
and Director of MIMI.
James W. Broadfoot President and Chief Investment Officer of IMI;
Senior Vice President of MIMI.
Keith J. Carlson Director and Senior Vice President of IMI;
Executive Vice President and Chief Operating Officer of
MIMI.
C.William Ferris Senior Vice President of IMI; Senior Vice
President and Chief Financial Officer of MIMI.
Harold P. Hands Director of IMI; Executive Vice President, Legal of
MFC.
James L. Hunter Director of IMI; President and Chief Executive
Officer of MFC.
Neil Lovatt Director of IMI; Chairman of MIMI; Vice Chairman and
Chief Investment Officer of MFC.
* The principal business address of Messrs. Landry, Broadfoot,
Carlson and Ferris is 700 South Federal Highway, Boca Raton,
Florida 33432. The principal business address of Messrs.
Hands, Hunter and Lovatt is 150 Bloor Street, West, Toronto,
Ontario, M5S 3B5 Canada.
** Principal Executive Officer of IMI.
Mr. Landry serves as a Trustee and Chairman of the Trust, Mr. Carlson as a
Trustee and President of the Trust, Mr. Broadfoot as a Vice President of the
Trust and Mr. Ferris as the Trust's Secretary and Treasurer.
For its services to each Fund, IMI receives a fee monthly at the annual
rate of 1.00% of the applicable Fund's average net assets. As of November 30,
1998, the net assets of Small Companies Fund and Pan-Europe Fund were $[ ] and
$[ ], respectively. For Small Companies Fund's fiscal year ended December 31,
1997 and for Pan-Europe Fund's fiscal period from May 13, 1997 (commencement of
operations) to December 31, 1997, IMI received investment advisory fees totaling
$28,799 and $1,974, respectively. During such fiscal periods, IMI had
voluntarily agreed to limit each Fund's total operating expenses (excluding
taxes, 12b-1 fees, brokerage commissions, interest, litigation and
indemnification expenses, and other extraordinary expenses) to an annual rate of
1.95% of the applicable Fund's average net assets. Accordingly, IMI reimbursed
expenses of $68,465 and $51,522 to Small Companies Fund and Pan-Europe Fund,
respectively. This voluntary expense limitation may be terminated or revised at
any time with respect to a Fund, at which time the Fund's expenses may increase
and its return may be reduced.
WHO ARE THE FUNDS' AFFILIATED SERVICE PROVIDERS AND WHAT FEES DID THEY RECEIVE
FROM THE FUNDS LAST YEAR?
MIMI provides certain accounting and pricing services for the Fund and
also furnishes various administrative services for the Funds, such as
maintaining the registration of Fund shares under state "Blue Sky" laws, and
assisting with the preparation of federal and state income tax returns,
financial statements, and periodic reports to shareholders, as well as assisting
the Trust's legal counsel with the filing of registration statements, proxies
and other required filings under federal and state law. Ivy Mackenzie
Distributors, Inc. ("IMDI"), an affiliate of IMI with its principal offices
located at the same address as IMI, serves as each Fund's distributor. Ivy
Mackenzie Services Corp. ("IMSC"), an affiliate of IMI located at P.O. Box 3022,
Boca Raton, Florida 33431-0922, is the transfer agent and dividend-paying agent
for the Funds, and also provides certain shareholder-related services. These
entities will continue to provide services to the Funds if the Subadvisory
Agreement is approved.
The table below describes the fees that each Fund paid to service
providers affiliated with IMI for providing their respective services for Small
Companies Fund's fiscal year ended December 31, 1997 and for Pan-Europe Fund's
fiscal period from May 13, 1997 (commencement of operations) to December 31,
1997. Information is not provided for each Fund's Advisor Class shares, which
had not commenced operations as of December 31, 1997.
<TABLE>
<S> <C> <C> <C> <C> <C>
MIMI: MIMI:
Fund Administrative IMDI: IMDI:
Accounting Services Underwriting* 12b-1 Fees** IMSC
Pan-Europe Fund $11,543 $198 $418
Class A $471 $375
Class B $90 $41
Class C $0 $0
Small Companies Fund $18,633 $2,880 $5,425
Class A $2,266 $2,306
Class B $6,742 $2,114
Class C $12,992 $3,023
Class I $0
</TABLE>
* As underwriter and distributor of each Fund's shares, IMDI purchases shares
from the Fund at net asset value to settle orders from investment dealers. The
amount shown represents the net amount of underwriting discount retained by IMDI
during the period.
** Under service and distribution plans adopted pursuant to
Rule 12b-1 under the 1940 Act, each Fund reimburses IMDI for service fee
payments made to brokers with respect to its Class A, B and C shares. Class B
and Class C shares are also subject to an ongoing distribution fee. IMDI may use
such distribution fee for purposes of advertising and marketing shares of each
Fund.
WHY IS IMI PROPOSING A SUBADVISORY ARRANGEMENT?
IMI believes that the addition of Henderson as subadviser to the Funds
will expand the investment expertise available to IMI in managing each Fund's
investments in international markets, particularly Europe, due to Henderson's
demonstrated ability to identify international investment opportunities.
Henderson's investment style is top down. The process is designed to add value
to Henderson's clients' portfolios from asset allocation, sector and theme
selection and stock selection. This is important from a risk control veiwpoint
as Henderson are not reliant on any one aspect of their investment process to
achieve their clients' performance targets. IMI believes that the expertise of
Henderson in managing assets internationally will help each Fund to better
achieve its investment objective.
WHO IS HENDERSON?
Henderson, an United Kingdom corporation organized in 1984, maintains
its primary office at 3 Finsbury Avenue, London, England EC2M 2PA. Henderson, a
wholly-owned subsidiary of Henderson plc, which is located at the same address
as Henderson, is registered with the SEC as an investment adviser and provides
international and global investment management services to institutional and
individual investors and investment companies. Henderson plc is owned by AMP
Limited, an Australian life insurance and financial services company located at
AMP Building, 24th Floor, 33 Alfred Street, Sydney, New South Wales 2000
Australia. Henderson plc is a wholly owned subsidiary of AMP Limited. As of
November 30, 1998, Henderson, together with its affiliates, managed in excess of
$69 billion of assets.
Dugald M. Eadie is the principal executive officer of Henderson and
Michael D. Hooper, Director of Compliance of Henderson Investors Limited, is
Director of Compliance of Henderson. Henderson is governed by a Management
Committee comprised of the following individuals:
NAME* PRINCIPAL OCCUPATION
- ---- --------------------
George Ian Buckley Director of Investment
Iain C. Clark Director and Chief Investment Officer
Dugald M. Eadie Chief Executive Officer
Mark J. Lund Director of Global Distribution
Anthony C. J. Solway Director of Administration
Michael H. Robinson Director of Human Resources
Mark V. Phythian-Adams Director of Legal Counsel
Christian R. Jago Director of Operations
N. Toby Hiscock Director of Finance
Michael D. Hooper Compliance Officer
* Each person's principal business address is 3 Finsbury Avenue, London EC2M
2PA, England.
No officer or Trustee of the Trust is an officer, employee or director
of Henderson. No officer or Trustee of the Trust owns any securities of, or has
any other material direct or indirect interest in, Henderson or any of its
affiliates. No Trustee of the Trust has had any direct or indirect material
interest in any material transaction since January 1, 1997, or in any material
proposed transactions, to which Henderson or any subsidiary was or is to be a
party. There is no arrangement or understanding in connection with the
Subadvisory Agreement with respect to the composition of the Trust's Board of
Trustees or of Henderson's Board of Directors, or with respect to the selection
or appointment of any person to any office of any such company.
Henderson currently serves as subadviser for investment portfolios of
other investment companies. A table setting forth the net assets of those
investment companies for which Henderson currently serves as subadviser, and
which have investment objectives similar to those of the Funds, and the
subadvisory fee rates received by Henderson with respect to such investment
companies, is attached as Exhibit B to this Proxy Statement.
WHAT ARE THE MATERIAL TERMS OF THE PROPOSED SUBADVISORY AGREEMENT
WITH HENDERSON?
The Subadvisory Agreement contemplates that Henderson will act as
investment counsel with respect to 100% of the portfolio assets of Pan-Europe
Fund and 50% of Small Companies Fund's portfolio assets. Under the Subadvisory
Agreement, Henderson is authorized 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 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. Henderson is obligated to
manage the Funds in accordance with its best judgment and subject to the stated
investment policies and restrictions of the Funds in accordance with the Trust's
Declaration of Trust, as amended, and By-laws, the 1940 Act and the provisions
of the Internal Revenue Code of 1986, as amended, 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 furnished to Henderson,
In determining the securities to be purchased or sold with respect to
the portion of each Fund's portfolio assets being managed by it, Henderson may
purchase securities from or through and sell securities to or through such
persons, brokers or dealers as it 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, the
Subadvisory Agreement recognizes that Henderson will seek the most favorable
price and execution, and, consistent with such policy, may give consideration to
the research services furnished by brokers or dealers to it for its use and to
such other considerations as the Trust's Board of Trustees may direct or
authorize from time to time.
On occasions when Henderson deems the purchase or sale of a security to
be in the best interest of a Fund as well as other customers, Henderson, 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. Henderson 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, are
to be made by Henderson 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 IMI, Henderson, IMDI, or any affiliated person of either the Trust, the
Manager, Henderson or IMDI, acting as principal in the transaction, except to
the extent permitted by the SEC and the 1940 Act.
Under the Subadvisory Agreement, Henderson is obligated to 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 to
supply such additional reports and information as the Trust's officers or Board
of Trustees shall reasonably request. Henderson must provide the Funds'
custodian on each business day with information relating to all transactions
concerning each Fund's assets and shall provide IMI with such information upon
its request. The investment advisory services provided by Henderson under the
Subadvisory Agreement are not to be deemed exclusive and Henderson is free to
render similar services to others, as long as such services do not impair the
services rendered to IMI or the Trust. Furthermore, Henderson must promptly
notify IMI of any financial condition that is likely to impair its ability to
fulfill its commitment under the Agreement.
The Subadvisory Agreement, if approved, will be effective [ ], 1999 or,
if the Special Meeting is adjourned, on the first day of the next month
following the date on which the shareholders approve the Subadvisory Agreement.
It will continue in effect until [ ], 2001 and thereafter from year to year if
approved by the Trustees on behalf of the applicable Fund, including a majority
of the Independent Trustees. The Subadvisory Agreement will terminate
automatically if the Advisory Agreement terminates or if there is a change in
control of Henderson. It can 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 IMI or by Henderson upon 60 days' written notice. If the Subadvisory
Agreement terminates, IMI, each Fund's investment adviser, would automatically
assume all management functions for the Funds. Henderson can be held liable to
the Trust or IMI as a result of the willful misconduct, bad faith, or gross
negligence of Henderson, any of its employees, representatives or affiliates
arising out of its responsibilities as subadviser of the Funds under the
Subadvisory Agreement.
WHAT WILL IMI PAY HENDERSON UNDER THE SUBADVISORY AGREEMENT ON BEHALF OF EACH
FUND?
The Subadvisory Agreement for each Fund provides that, for the duration
of the Agreement, Henderson's subadvisory fee will be paid monthly at an annual
rate of 0.50% of the portion of the applicable Fund's average net assets managed
by Henderson.
IMI believes this proposed compensation is fair and reasonable for the
services being provided by Henderson. The fees are not charged back to, or paid
by, a Fund; they are paid by IMI out of its own resources, including fees and
charges it receives from or in connection with each Fund.
WHAT ROLE WILL IMI PLAY WITH RESPECT TO THE FUNDS IF THE SUBADVISORY AGREEMENT
IS APPROVED?
The fees paid by IMI to Henderson are intended to reflect the value of
Henderson's services to IMI (and indirectly, each Fund) relative to the total
mix of business management and supervisory responsibilities assumed by IMI under
its contractual arrangement with each Fund. Under the Advisory Agreement, IMI
performs many functions for the Funds beyond portfolio management including
reporting to the Board on Fund performance and providing other reports on
request; coordinating with, and monitoring, the Fund's other service providers
(e.g., its custodian, distributor, and transfer agent); providing office space,
telephones and other necessary operational facilities; and providing whatever
personnel may be needed to perform administrative or clerical services not
performed by the Fund's other service providers. If the Subadvisory Arrangement
is approved, IMI, subject to the limitations in the Subadvisory Agreement, will
be responsible for monitoring Henderson's compliance with each Fund's investment
objective and policies (and applicable federal and state securities laws). As is
now the case, IMI will oversee, monitor and coordinate the performance of all of
the Funds' outside service providers, including its subadvisers. IMI will also
continue to assume a primary role in reporting to the Board, providing the Board
with information necessary to assure the Trustees of the proper and correct
functioning of all of the Funds' services and operations. If appointed,
Henderson will serve IMI (and indirectly, each Fund) purely as an investment
manager. Henderson will focus on its portfolio management function and will not
assume any of IMI's responsibilities of dealing on an ongoing basis with
inquiries from broker-dealers, shareholders and the Board or of assuring the
smooth functioning and overall success of the Funds.
WHAT IS THE BOARD OF TRUSTEES' RECOMMENDATION?
The Board of Trustees unanimously recommends that shareholders of each
Fund vote FOR approval of the Subadvisory Agreement.
WHAT FACTORS DID THE BOARD OF TRUSTEES CONSIDER IN REACHING ITS RECOMMENDATION?
The Trustees considered the proposed Subadvisory Agreement with respect
to each Fund at a meeting held on December 4, 1998. In preparation for the Board
meetings, the Trustees were provided with certain relevant information,
including: Henderson's Form ADV, as well as a detailed background of the firm
and its principals, Henderson's financial statements, Henderson's performance
record achieved on behalf of its clients and assets under management,
Henderson's Code of Ethics, information with respect to Henderson's compliance
record, Henderson's record of client service and communication, and a copy of
the form of subadvisory agreement.
The Trustees acknowledged that approval of the Subadvisory Agreement
would mean that the shareholders would receive the benefits of the talents of
IMI and Henderson working for each Fund at no additional cost to shareholders.
In recommending the approval of the Subadvisory Agreement to the
shareholders of each Fund, the Board of Trustees considered such factors as it
deemed reasonably necessary and appropriate, including: (1) the nature and
quality of the services to be provided to each Fund; (2) the compensation to be
paid to Henderson; (3) Henderson's financial soundness; (4) the proposed
portfolio manager's experience generally and in connection with his management
of funds with similar objectives; (5) the performance of the portfolio manager
relative to the performance of comparably managed mutual funds; (6) Henderson's
personnel, resources, investment methodology, and investment management
experience; (7) the total fees paid by each Fund; and (8) the fact that none of
the expenses incurred in connection with this proxy solicitation and the related
transactions would be borne by the Funds. The Board of Trustees also noted that
the advisory fees paid by each Fund to IMI would remain the same and that IMI
would pay all fees to Henderson under the Subadvisory Agreement. After
considering the above factors, the Board of Trustees, including the Independent
Trustees, concluded that the Subadvisory Agreement was in the best interest of
shareholders of each Fund.
WHAT HAPPENS IF THE SUBADVISORY AGREEMENT IS NOT APPROVED?
If the Subadvisory Agreement is not approved for a Fund, IMI would
continue as investment adviser to that Fund. IMI reserves the right to adjourn
the meeting if it reasonably believes that the shareholders of either Fund will
not vote to approve the Proposal.
OTHER BUSINESS
The management of the Trust knows of no other business to be presented
at the Special Meeting other than the matter set forth in this Proxy Statement.
If any other business properly comes before the Special Meeting, the proxies
will exercise their best judgment in deciding how to vote on such matters.
SHAREHOLDER PROPOSALS
The Articles of Incorporation and the By-Laws of the Trust provide that
the Trust need not hold annual shareholder meetings, except as required by the
1940 Act. Therefore, it is probable that no annual meeting of shareholders will
be held in 1998 or in subsequent years until so required. For those years in
which annual shareholder meetings are held, proposals which shareholders of a
Fund intend to present for inclusion in the proxy materials with respect to the
annual meeting of shareholders must be received by the Trust within a reasonable
period of time before the solicitation is made.
Please complete the enclosed proxy card and return it promptly in the
enclosed self-addressed postage-paid envelope. You may revoke your proxy at any
time prior to the Special Meeting by written notice to IMI or by submitting a
proxy card bearing a later date.
C. William Ferris
Secretary
<PAGE>
Exhibit A
SUBADVISORY AGREEMENT
AGREEMENT made as of the [ ] day of [ ], 1999, between IVY MANAGEMENT,
INC., 700 South Federal Highway, Boca Raton, Florida 33432 U.S.A., a
Massachusetts corporation (hereinafter called the "Manager"), and HENDERSON
INVESTMENT MANAGEMENT LIMITED, 3 Finsbury Avenue, London, England EC2M 2PA, an
United Kingdom 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");
and
WHEREAS, the Manager has entered into a Master Business Management and
Investment Advisory Agreement dated December 31, 1991, as amended (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"); and
WHEREAS, the Manager desires to utilize the services of the Subadviser
as investment sub-adviser 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 sub-adviser with respect to certain
portfolio assets of each Fund, as set forth on the attached
Schedule A.
(a) As investment sub-adviser 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 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 (i) 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, and
(ii) provide such other services as the Subadviser
shall from time to time determine to be necessary or
useful to the administration of the Funds.
(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 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 instructs 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 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 most favorable price and execution,
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; or (ii) the Subadviser from providing
investment advice and other services to other funds or
clients.
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 continue in full
force and effect until [ ], 2001, 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 [ ] or prior to [ ] 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 1940 Act) 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 consent of the
parties hereto provided that the consent of the applicable
Fund is obtained in accordance with the requirements of the
1940 Act.
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 the Funds of which the
Subadviser has knowledge (the "Subadviser and Fund
Information") 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 of which the Subadviser has knowledge
and do not omit any statement of a material fact 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 Manager and the
Fund upon the occurrence of any event that 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 organizational 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 Manager of any changes relating to it
or the provision of services by it that would cause the
Registration Statement, prospectuses or statements of
additional information (including amendments) for the
Funds to contain any untrue statement of a material
fact or to omit to state a material fact which is
required to be stated therein or is necessary to make
the statements contained therein not misleading, in
each case relating to Subadviser and Fund Information;
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 Ivy Management, Inc, and abbreviations or
logos associated with those names, are the valuable
property of 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 Ivy
Management, Inc., 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, Subadviser agrees to obtain
prior written approval from Manager before using or
referring to Ivy Fund, and Ivy Management, Inc, 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 "Henderson" and
"Henderson Investors" and abbreviations or logos
associated with those names are valuable proerty of the
AMP group of companies and are distinctive in
connection with investment advisory and related
services provided by the Subadviser, the "Henderson"
name is a property right of the Subadviser, and the
"Henderson" and "Henderson 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 "Henderson" and "Henderson
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. 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, to review the Funds and to discuss the
management of them. 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 within the meaning of
Section 2(a)(3) of the 1940 Act ("affiliated person") of the
Subadviser and each person, if any who, within the meaning of
Section 15 of the 1933 Act, controls ("controlling person")
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 by 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 irrevocably submits 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 proposal and
the agreement contemplated herein. The Subadviser
irrevocably waives, to the fullest extent permitted by law,
any objection which it may have to the laying of the venue
of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding
brought in such a court has been brought in an inconvenient
forum. The Subadviser agrees that final judgment in any such
suit, action or proceeding brought in such a court shall be
conclusive and binding upon the Subadviser, and may be
enforced to the extent permitted by applicable law in any
court of the jurisdiction of which the Subadviser is subject
by a suit upon such judgment, provided that service of
process is effected upon the Subadviser in the manner
specified in the following paragraph or as otherwise
permitted by law.
As long as the agreement contemplated herein remains in
effect, the Subadviser will at all times have an authorized
agent in the Commonwealth of Massachusetts upon whom process
may be served in any legal action or proceeding in a 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 proposal or the agreement contemplated
herein. The Subadviser hereby appoints [ ] as its agent for
such purpose, and covenants and agrees that service of process
in any such legal action or proceeding may be made upon it at
the office of such agent at [address] (or at such other
address in the Commonwealth of Massachusetts, as said agent
may designate by written notice to the Subadviser and the
Manager). The Subadviser hereby consents to the process being
served in any suit, action or proceeding of the nature
referred to in the preceding paragraph by service upon such
agent together with the mailing of a copy thereof by
registered or certified mail, postage prepaid, return receipt
requested, to the address of the Subadviser set forth in
Section 15 below or to any other address of which the
Subadviser shall have given written notice to the Manager. The
Subadviser irrevocably waives, to the fullest extent permitted
by law, all claim of error by reason of any such service (but
does not waive any right to assert lack of subject matter
jurisdiction) and agrees that such service (i) shall be deemed
in every respect effective service of process upon the
Subadviser in any suit, action or proceeding and (ii) shall,
to the fullest extent permitted by law, be taken and held to
be valid personal service upon and personal delivery to the
Subadviser.
Nothing in this Section 14 shall affect the right of the
Manager to serve process in any manner permitted by law or
limit the right of the Manager to bring proceedings against
the Subadviser in the courts of any jurisdiction or
jurisdictions.
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: IVY MANAGEMENT, INC.
Via Mizner Financial Plaza
700 South Federal Highway
Boca Raton, FL 33432, U.S.A.
Attention: C. William Ferris
If to the Trust: IVY FUND
Via Mizner Financial Plaza
700 South Federal Highway
Boca Raton, FL 33432, U.S.A.
Attention: C. William Ferris
If to the Subadviser:
HENDERSON INVESTMENT MANAGEMENT LIMITED
3 Finsbury Avenue
London EC2M 2PA
United Kingdom
Attention: Sean Dranfield and the 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, IVY MANAGEMENT, INC. AND HENDERSON INVESTMENT
MANAGEMENT LIMITED have each caused this instrument to be signed in duplicate on
its behalf by the officer designated below thereunto duly authorized.
IVY MANAGEMENT, INC.
By: ________________________________
Title
HENDERSON INVESTMENT MANAGEMENT LIMITED
By: ________________________________
Title
<PAGE>
SCHEDULE A
TO SUBADVISORY AGREEMENT BETWEEN
IVY MANAGEMENT, INC. AND HENDERSON INVESTMENT MANAGEMENT LIMITED
DATED [ ], 1999
Funds:
Ivy Pan-Europe Fund - 100% of Fund's assets
Ivy International Small Companies Fund - 50% of Fund's assets
<PAGE>
SCHEDULE B
TO SUBADVISORY AGREEMENT BETWEEN
IVY MANAGEMENT, INC. AND HENDERSON INVESTMENT MANAGEMENT LIMITED
DATED [ ], 1999
Fee schedule:
Ivy Pan-Europe Fund: 0.50%
Ivy International Small Companies Fund: 0.50%
<PAGE>
Exhibit B
The table below sets forth the net assets and the subadvisory fee rates
paid by J. & W. Seligman & Co. Incorporated to Henderson (or its predecessor)
for the fiscal year ended October 31, 1998 with respect to each series of
Seligman Henderson Global Fund Series, Inc. and other investment companies which
have investment objectives similar to the Funds:
<TABLE>
<S> <C> <C>
Approximate Net Assets
As Of October 31, 1998 Fiscal 1998 Subadvisory
(000's omitted) Fee as a % of Average
Name Of Investment Company Daily Net Assets
Seligman Henderson Global
Fund Series, Inc.:
International Fund $83,233 0.90%
Global Growth Opportunities Fund $117,663 0.90%
Global Smaller Companies Fund $471,140 0.90%
Global Technology Fund $296,924 0.90%
Seligman Portfolios, Inc.:*
Seligman Henderson International Portfolio $9,182 0.33%
Seligman Henderson Global Growth Opportunities $5,449 0.29%
Portfolio
Seligman Henderson Global Smaller Companies $20,505 0.84%
Portfolio
Seligman Henderson Global Technology Portfolio $3,686 0.30%
</TABLE>
- ---------------------------------
* Seligman Portfolios, Inc. is the underlying investment vehicle for certain
variable annuity insurance products. The net assets and subadvisory fee rates
shown above are as of/for the year ended December 31, 1997. The subadvisory fee
rate is 0.50% per annum of the average daily net assets of each Portfolio;
however, Henderson voluntarily waived portions of its fee for each Portfolio.
<PAGE>
Appendix 1
Fund Shares Outstanding
The table below sets forth the number of shares of each class of the
Funds outstanding as of the Record Date.
Number of Shares
Outstanding as of December 8, 1998
Pan-Europe Fund
Class A
Class B
Class C
Advisor Class
Small Companies Fund
Class A
Class B
Class C
Class I
Advisor Class
<PAGE>
Appendix 2
Beneficial Owners of 5% or More of Any Class of a Fund
(1)Title of Class (2)Name and Address of (3) Amount and Nature of (4) Percent
Beneficial Owner Beneficial Ownership of Class
<PAGE>
Appendix 3
Fund Shares Owned by Trustees and Executive Officer[s]
(1)Title of Class (2)Name of (3) Amount and Nature of (4) Percent
Beneficial Owner Beneficial Ownership of Class
<PAGE>
PRELIMINARY COPIES
IVY FUND
[Ivy Pan-Europe Fund]
[Ivy International Small Companies Fund]
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD
OF TRUSTEES OF IVY FUND
THIS PROXY CARD, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY
CARD WILL BE VOTED FOR APPROVAL OF THE PROPOSAL.
Please sign exactly as name appears on this card. When account is joint tenants,
all should sign. When signing as administrator, trustee or guardian, please give
title. If a corporation or partnership, sign in entity's name and by authorized
persons.
X______________________
X______________________
Dated: __________________, 199__
Please refer to the Proxy Statement for a discussion of these matters. This
proxy card is solicited in connection with the special meeting of the
shareholders of [Ivy Pan-Europe Fund] [Ivy International Small Companies Fund]
to be held at [9:00 a.m.], Eastern Time, on January 29, 1999, and at any
adjournment thereof. THIS PROXY CARD, WHEN PROPERLY EXECUTED, DIRECTS KEITH J.
CARLSON AND C. WILLIAM FERRIS TO VOTE THE SHARES LISTED ON THE FRONT OF THIS
CARD AS DIRECTED AND REVOKES ALL PRIOR PROXY CARDS.
Please vote by filling in the appropriate box below, as shown, using blue or
black ink or dark pencil. Do not use red ink.
[ ] [box is filled in solidly]
To approve the Subadvisory Agreement between Ivy Management, Inc.
and Henderson Investment Management
Limited.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS, INCLUDING ANY ADJOURNMENT OF THE
MEETING, AS MAY PROPERLY COME BEFORE THE MEETING.
