EXHIBIT N(12)
IVY FUND
PLAN PURSUANT TO RULE 18F-3
UNDER THE
INVESTMENT COMPANY ACT OF 1940
(As Amended and Restated on August 25, 2000)
I. INTRODUCTION
In accordance with Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"), this Plan describes the multi-class structure that
will apply to certain series of Ivy Fund (each a "Fund" and, collectively, the
"Funds"), including the separate class arrangements for the service and
distribution of shares, the method for allocating the expenses and income of
each Fund among its classes, and any related exchange privileges and conversion
features that apply to the different classes.
II. THE MULTI-CLASS STRUCTURE
Each of the following Funds is authorized to issue four classes of
shares identified as Class A, Class B, Class C and an Advisor Class: Ivy Asia
Pacific Fund, Ivy Bond Fund, Ivy Canada Fund, Ivy China Region Fund, Ivy Cundill
Value Fund, Ivy Developing Nations Fund, Ivy European Opportunities Fund, Ivy
Global Fund, Ivy Global Natural Resources Fund, Ivy Global Science & Technology
Fund, Ivy Growth Fund, Ivy Growth with Income Fund, Ivy High Yield Fund, Ivy
International Fund, Ivy International Small Companies Fund, Ivy International
Fund II, Ivy International Strategic Bond Fund, Ivy Next Wave Internet Fund, Ivy
South America Fund, Ivy Money Market Fund[FN1][The separation of Ivy Money
Market Fund shares into three separate classes has been authorized as a means of
enabling the Funds' transfer agent to track the contingent deferred sales charge
period that applies to Class B and Class C shares of other Funds that are being
exchanged for shares of Ivy Money Market Fund. In all other relevant respects,
the three classes of Ivy Money Market Fund shares are identical (i.e., having
the same arrangement for shareholder services and the distribution of
securities), and are not subject to any sales load other than in connection with
the redemption of Class B or Class C shares that have been acquired pursuant to
an exchange from another Fund. (See Section III.D.)], Ivy Pan-Europe Fund, Ivy
US Blue Chip Fund and Ivy US Emerging Growth Fund. Ivy Bond Fund, Ivy Cundill
Value Fund, Ivy European Opportunities Fund, Ivy Global Science & Technology
Fund, Ivy High Yield Fund, Ivy International Fund, Ivy International Fund II,
Ivy International Small Companies Fund, Ivy International Strategic Bond Fund,
Ivy Next Wave Internet Fund and Ivy US Blue Chip Fund are also authorized to
issue an additional class of shares identified as Class I.
Shares of each class of a Fund represent an equal pro rata interest in
the underlying assets of that Fund, and generally have identical voting,
dividend, liquidation, and other rights, preferences, powers, restrictions,
limitations, qualifications and terms and conditions, except that: (a) each
class shall have a different designation; (b) each class shall bear certain
class-specific expenses, as described more fully in Section III.C.2., below; (c)
each class shall have exclusive voting rights on any matter submitted to
shareholders that relates solely to its arrangement; and (d) each class shall
have separate voting rights on any matter submitted to shareholders in which the
interests of one class differ from the interests of any other class. Each class
of shares shall also have the distinct features described in Section III, below.
III. CLASS ARRANGEMENTS
A. FRONT-END SALES CHARGES AND CONTINGENT DEFERRED SALES CHARGES
Class A shares shall be offered at net asset value plus a front-end
sales charge. The front-end sales charge shall be in such amount as is disclosed
in each Fund's current prospectus and shall be subject to reductions for larger
purchases and such waivers or reductions as are determined or approved by the
Board of Trustees. Class A shares generally will not be subject to a contingent
deferred sales charge (a "CDSC"), although a CDSC may be imposed in certain
limited cases as disclosed in each Fund's current prospectus or prospectus
supplement.
Class B and Class C shares shall be offered at net asset value without
the imposition of a front-end sales charge. A CDSC in such amount as is
described in each Fund's current prospectus or prospectus supplement shall be
imposed on Class B and Class C shares, subject to such waivers or reductions as
are determined or approved by the Board of Trustees.
Advisor Class and Class I shares are not subject to a front-end sales
charge or a CDSC.
B. RULE 12B-1 PLANS
Each Fund (other than Ivy Money Market Fund) has adopted a service and
distribution plan pursuant to Rule 12b-1 under the 1940 Act (a "12b-1 plan")
under which it pays to Ivy Mackenzie Distributors, Inc. (the "Distributor") an
annual fee based on the average daily net assets value of the Fund's outstanding
Class A, Class B and Class C shares, respectively.[FN2][Advisor Class and Class
I shares are not subject to Rule 12b-1 service or distribution fees.] The
maximum fees currently charged to each Fund under its 12b-1 plan are set forth
in the table below, and are expressed as a percentage of the Fund's average
daily net assets.[FN3][Fees for services in connection with the Rule 12b-1 plans
will be consistent with any applicable restriction imposed by the National
Association of Securities Dealers, Inc.]
The services that the Distributor provides in connection with each Rule
12b-1 plan for which service fees[FN4][Each Fund pays the Distributor at the
annual rate of up to 0.25% of the average daily net asset value attributable to
its Class A, Class B and Class C shares, respectively. Ivy Canada Fund pays an
additional service-related fee of 0.15% of the average daily net asset value
attributable to its Class A shares. In addition, each Fund (other than Ivy
Canada Fund) pays the Distributor a fee for other distribution services at the
annual rate of 0.75% of the Fund's average daily net assets attributable to its
Class B and Class C shares. Ivy Canada Fund pays the Distributor an additional
amount for other distribution services at the annual rate of 0.60% of average
daily net assets attributable to its Class B and Class C shares.] are paid
include, among other things, advising clients or customers regarding the
purchase, sale or retention of a Fund's Class A, Class B or Class C shares,
answering routine inquiries concerning the Fund, assisting shareholders in
changing options or enrolling in specific plans and providing shareholders with
information regarding the Fund and related developments.
The other distribution services provided by the Distributor in
connection with each Fund's Rule 12b-1 plan include any activities primarily
intended to result in the sale of the Fund's Class B and Class C shares. For
such distribution services, the Distributor is paid for, among other things,
compensation to broker-dealers and other entities that have entered into
agreements with the Distributor; bonuses and other incentives paid to
broker-dealers or such other entities; compensation to and expenses of employees
of the Distributor who engage in or support distribution of a Fund's Class B or
Class C shares; telephone expenses; interest expense (only to the extent not
prohibited by a regulation or order of the SEC); printing of prospectuses and
reports for other than existing shareholders; and preparation, printing and
distribution of sales literature and advertising materials.
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RULE 12b-1 FEES
CLASS B AND
CLASS A CLASS A CLASS C SHARES
SHARES SHARES (SERVICE AND
(SERVICE (DISTRIBUTION DISTRIBUTION
FUND NAME FEE) FEES) FEES)
Ivy Asia Pacific Fund 0.25% 0.00% 1.00%
Ivy Bond Fund 0.25% 0.00% 1.00%
Ivy Canada Fund 0.25% 0.15% 1.00%
Ivy China Region Fund 0.25% 0.00% 1.00%
Ivy Cundill Value Fund 0.25% 0.00% 1.00%
Ivy Developing Nations 0.25% 0.00% 1.00%
Fund
Ivy European Opportunities 0.25% 0.00% 1.00%
Fund
Ivy Global Fund 0.25% 0.00% 1.00%
Ivy Global Natural
Resources Fund 0.25% 0.00% 1.00%
Ivy Global Science &
Technology Fund 0.25% 0.00% 1.00%
Ivy Growth Fund 0.25% 0.00% 1.00%
Ivy Growth with Income
Fund 0.25% 0.00% 1.00%
Ivy High Yield Fund 0.25% 0.00% 1.00%
Ivy International Fund 0.25% 0.00% 1.00%
Ivy International
Fund II 0.25% 0.00% 1.00%
Ivy International
Small Companies Fund 0.25% 0.00% 1.00%
Ivy International
Strategic Bond Fund 0.25% 0.00% 1.00%
Ivy South America
Fund 0.25% 0.00% 1.00%
Ivy Next Wave Internet Fund 0.25% 0.00% 1.00%
Ivy Money Market Fund* 0.00% 0.00% 0.00%
Ivy Pan-Europe
Fund 0.25% 0.00% 1.00%
Ivy US Blue Chip Fund 0.25% 0.00% 1.00%
Ivy US Emerging Growth
Fund 0.25% 0.00% 1.00%
* See footnote 1.
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C. ALLOCATION OF EXPENSES AND INCOME
1. "TRUST" AND "FUND" EXPENSES
The gross income, realized and unrealized capital gains and losses and
expenses (other than "Class Expenses," as defined below) of each Fund shall be
allocated to each class on the basis of its net asset value relative to the net
asset value of the Fund. Expenses so allocated include expenses of Ivy Fund that
are not attributable to a particular Fund or class of a Fund ("Trust Expenses")
and expenses of a Fund not attributable to a particular class of the Fund ("Fund
Expenses"). Trust Expenses include, but are not limited to, Trustees' fees and
expenses; insurance costs; certain legal fees; expenses related to shareholder
reports; and printing expenses. Fund Expenses include, but are not limited to,
certain registration fees (i.e., state registration fees imposed on a Fund-wide
basis and SEC registration fees); custodial fees; transfer agent fees; advisory
fees; fees related to the preparation of separate documents of a particular
Fund, such as a separate prospectus; and other expenses relating to the
management of the Fund's assets.
2. "CLASS" EXPENSES
The types of expenses attributable to a particular class ("Class
Expenses") include: (a) payments pursuant to the Rule 12b-1 plan for that
class[FN5][Advisor Class and Class I shares bear no distribution or service
fees.]; (b) transfer agent fees attributable to a particular class; (c) printing
and postage expenses related to preparing and distributing shareholder reports,
prospectuses and proxy materials; (d) registration fees (other than those set
forth in Section C.1. above); (e) the expense of administrative personnel and
services as required to support the shareholders of a particular
class[FN6][Class I shares bear lower administrative services fees relative to
these Funds' other classes of shares (i.e., Class I shares of the Funds pay a
monthly administrative services fee based upon each Fund's average daily net
assets at the annual rate of only 0.01%, while Class A, Class B, Class C and
Advisor Class shares pay a fee at the annual rate of 0.10%).]; (f) litigation or
other legal expenses relating solely to a particular class; (g) Trustees' fees
incurred as a result of issues relating to a particular class; and (h) the
expense of holding meetings solely for shareholders of a particular class.
Expenses described in subpart (a) of this paragraph must be allocated to the
class for which they are incurred. All other expenses described in this
paragraph may (but need not) be allocated as Class Expenses, but only if Ivy
Fund's Board of Trustees determines, or Ivy Fund's President and
Secretary/Treasurer have determined, subject to ratification by the Board of
Trustees, that the allocation of such expenses by class is consistent with
applicable legal principles under the 1940 Act and the Internal Revenue Code of
1986, as amended.
In the event that a particular expense is no longer reasonably
allocable by class or to a particular class, it shall be treated as a Trust
Expense or Fund Expense, and in the event a Trust Expense or Fund Expense
becomes reasonably allocable as a Class Expense, it shall be so allocated,
subject to compliance with Rule 18f-3 and to approval or ratification by the
Board of Trustees.
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3. WAIVERS OR REIMBURSEMENTS OF EXPENSES
Expenses may be waived or reimbursed by any adviser to Ivy Fund, by Ivy
Fund's underwriter or any other provider of services to Ivy Fund without the
prior approval of Ivy Fund's Board of Trustees.
D. EXCHANGE PRIVILEGES
Shareholders of each Fund have exchange privileges with the other
Funds. [FN7][Other exchange privileges, not described herein, exist under
certain other circumstances, as described in each Fund's current prospectus or
prospectus supplement.]
1. CLASS A:
INITIAL SALES CHARGE SHARES. Class A shareholders may exchange their
Class A shares ("outstanding Class A shares") for Class A shares of another Fund
(or for shares of another Fund that currently offers only a single class of
shares) ("new Class A Shares") on the basis of the relative net asset value per
Class A share, plus an amount equal to the difference, if any, between the sales
charge previously paid on the outstanding Class A shares and the sales charge
payable at the time of the exchange on the new Class A shares. Incremental sales
charges are waived for outstanding Class A shares that have been invested for 12
months or longer.
CONTINGENT DEFERRED SALES CHARGE SHARES. Class A shareholders may
exchange their Class A shares subject to a contingent deferred sales charge
("CDSC"), as described in the Prospectus ("outstanding Class A shares"), for
Class A shares of another Fund (or for shares of another Fund that currently
offers only a single class of shares) ("new Class A shares") on the basis of the
relative net asset value per Class A share, without the payment of a CDSC that
would otherwise be due upon the redemption of the outstanding Class A shares.
Class A shareholders of a Fund exercising the exchange privilege will continue
to be subject to the Fund's CDSC schedule (or period) following an exchange,
unless the CDSC schedule that applies to the new Class A shares is higher (or
such period is longer) than the CDSC schedule (or period), if any, applicable to
the outstanding Class A shares, in which case the schedule (or period) of the
Fund into which the exchange is made shall apply.
2. CLASS B AND CLASS C:
Shareholders may exchange their Class B or Class C shares ("outstanding
Class B shares" or "outstanding Class C shares," respectively) for the same
class of shares of another Fund ("new Class B shares" or "new Class C shares,"
respectively) on the basis of the net asset value per Class B or Class C share,
as the case may be, without the payment of any CDSC that would otherwise be due
upon the redemption of the outstanding Class B or Class C shares. Class B and
Class C shareholders of a Fund exercising the exchange privilege will continue
to be subject to the Fund's CDSC schedule (or period) following an exchange,
unless, in the case of Class B shareholders, the CDSC schedule that applies to
the new Class B shares is higher (or such period is longer) than the CDSC
schedule (or period) applicable to the outstanding Class B shares, in which case
the schedule (or period) of the Fund into which the exchange is made shall
apply.
3. ADVISOR CLASS AND CLASS I:
Advisor Class and Class I shareholders may exchange their outstanding
Advisor Class or Class I shares for shares of the same class of another Fund on
the basis of the net asset value per Advisor Class or Class I share, as the case
may be.
4. GENERAL:
Shares resulting from the reinvestment of dividends and other
distributions will not be charged an initial sales charge or CDSC when exchanged
into another Fund.
With respect to Fund shares subject to a CDSC, if less than all of an
investment is exchanged out of the Fund, the shares exchanged will reflect, pro
rata, the cost, capital appreciation and/or reinvestment of distributions of the
original investment as well as the original purchase date, for purposes of
calculating any CDSC for future redemptions of the exchanged shares.
E. CONVERSION FEATURE
Class B shares of a Fund convert automatically to Class A shares of the
Fund as of the close of business on the first business day after the last day of
the calendar quarter in which the eighth anniversary of the purchase date of the
Class B shares occurs. The conversion will be based on the relative net asset
values per share of the two classes, without the imposition of any sales load,
fee or other charge. For purposes of calculating the eight year holding period,
the "purchase date" shall mean the date on which the Class B shares were
initially purchased, regardless of whether the Class B shares that are subject
to the conversion were obtained through an exchange (or series of exchanges)
from a different Fund. For purposes of conversion of Class B shares, Class B
shares acquired through the reinvestment of dividends and capital gain
distributions paid in respect of Class B shares will be held in a separate
sub-account. Each time any Class B shares in the shareholder's regular account
(other than those shares in the sub-account) convert to Class A shares, a pro
rata portion of the Class B shares in the sub-account will also convert to Class
A shares. The portion will be determined by the ratio that the shareholder's
Class B shares converting to Class A shares bears to the shareholder's total
Class B shares not acquired through the reinvestment of dividends and capital
gain distributions.
IV. BOARD REVIEW
A. INITIAL APPROVAL
The Board of Trustees of Ivy Fund, including a majority of the Trustees
who are not interested persons of Ivy Fund, as defined under the 1940 Act (the
"Independent Trustees"), at a meeting held on December 1-2, 1995, initially
approved this Plan based on a determination that the Plan, including the expense
allocation, is in the best interests of each class of shares of each Fund
individually and Ivy Fund as a whole.[FN8][The Plan, as initially approved,
pertained only to the Class A and Class B shares of the Funds, and the Class I
shares of Ivy Bond Fund and Ivy International Fund. The Plan was amended and
restated on April 30, 1996 to reflect the establishment and designation of Class
C shares of the Funds. The Plan was further amended and restated on June 8, 1996
to reflect the establishment and designation of Ivy Global Science and
Technology Fund. The Plan was further amended and restated on December 7, 1996
to reflect the establishment and designation of Ivy Global Natural Resources
Fund, Ivy Asia Pacific Fund and Ivy International Small Companies Fund. The Plan
was further amended and restated on February 8, 1997 to reflect the
establishment and designation of Ivy Pan-Europe Fund. The Plan was further
amended and restated on April 30, 1997 to reflect the establishment and
designation of Ivy International Fund II. The Plan was further amended and
restated on December 6, 1997 to reflect the establishment and designation of the
Fund's Advisor Class of shares. The Plan was further amended and restated on
February 7, 1998 to reflect the redesignation of Ivy International Bond Fund as
Ivy High Yield Fund. The Plan was further amended and restated on September 19,
1998 to reflect the redesignation of Ivy US Blue Chip Fund. The Plan was further
amended and restated on February 6, 1999 to reflect the establishment and
designation of Ivy European Opportunities Fund and Ivy International Strategic
Bond Fund. The Plan was further amended and restated on February 4, 2000 to
reflect the establishment and designation of Ivy Cundill Value Fund. The Plan
was further amended and restated on April 14, 2000 to reflect the establishment
and designation of Ivy Next Wave Internet Fund. The Plan was further amended and
restated as of the date set forth on the first page hereof to reflect the
establishment of an Advisor Class of Ivy International Fund.
B. APPROVAL OF AMENDMENTS
Before any material amendments to this Plan, Ivy Fund's Board of
Trustees, including a majority of the Independent Trustees, must find that the
Plan, as proposed to be amended (including any proposed amendments to the method
of allocating Class and/or Fund Expenses), is in the best interests of each
class of shares of each Fund individually and Ivy Fund as a whole. In
considering whether to approve any proposed amendment(s) to the Plan, the
Trustees of Ivy Fund shall request and evaluate such information as they
consider reasonably necessary to evaluate the proposed amendment(s) to the Plan.
Such information shall address the issue of whether any waivers or
reimbursements of advisory or administrative fees could be considered a
cross-subsidization of one class by another, and other potential conflicts of
interest between classes.
C. PERIODIC REVIEW
The Board of Trustees of Ivy Fund shall review the Plan as frequently
as it deems necessary, consistent with applicable legal requirements.
V. EFFECTIVE DATE
The Plan first became effective as of January 1, 1996.
