Exhibit 10.29

 

 

SHAREHOLDER SERVICING AGREEMENT

 

 

THIS AGREEMENT, effective as of January 30, 2009, is entered into by and between
Waddell & Reed Advisors Funds (the “Trust”) and Waddell & Reed Services Company
(“WRSCO”).

 

W I T N E S S E T H :

 

WHEREAS, the Trust wishes to appoint WRSCO to be its shareholder servicing agent
with respect to each of its series listed in Appendix A (each, a “Fund”) upon,
and subject to, the terms and provisions of this Agreement;

 

NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties agree as follows:

 

1.                                    Appointment as Shareholder Servicing
Agent; Acceptance.

 

(1)        The Trust hereby appoints WRSCO to act as Shareholder Servicing Agent
for each Fund upon, and subject to, the terms and provisions of this Agreement.

 

(2)        WRSCO hereby accepts the appointment as Shareholder Servicing Agent
for each Fund and agrees to act as such upon, and subject to, the terms and
provisions of this Agreement.

 

(3)        WRSCO may appoint an entity or entities approved by the Trust in
writing to perform any portion of WRSCO’s duties hereunder (the “Subagent”).

 

2.         Definitions.

 

(1)                              In this Agreement -

 

(a)        The term the “Act” means the Investment Company Act of 1940 as
amended from time to time;

 

(b)        The term “account” means the shares of each Fund registered on the
books of the Trust in the name of a shareholder under a particular account
registration number and includes shares subject to instructions by the
shareholder with respect to periodic redemptions and/or reinvestment in
additional shares of any dividends payable on said shares;

 

(c)        The term “affiliate” of a person shall mean a person controlling,
controlled by, or under common control with that person;

 

(d)        The term “Class” shall mean each separate sub-class of a class of
shares of the Trust, as may now or in the future exist;

 

(e)        The term “Fund” shall mean each separate class of shares of the
Trust, as may now or in the future exist;

 

 

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(f)         The term “officers’ instruction” means an instruction given on
behalf of the Trust to WRSCO and signed on behalf of the Trust by any one or
more persons authorized to do so by the Trust’s Board of Trustees;

 

(g)        The term “prospectus” means the prospectus and statement of
additional information of the applicable Fund or Class from time to time in
effect;

 

(h)        The term “shares” means shares including fractional shares of each
Fund, whether or not such shares are evidenced by an outstanding stock
certificate issued by the Fund;

 

(i)         The term “shareholder” shall mean the owner of record of shares of a
Fund; and

 

(j)         The term “share certificate” means a certificate representing shares
of a Fund in the form then currently in use by the Fund.

 

3.                                    Duties of WRSCO.

 

WRSCO shall perform such duties as shall be set forth in this Paragraph 3 and in
accordance with the practice stated in Exhibit A of this Agreement or any
amendment thereof, any or all of which duties may be delegated to or performed
by one or more Subagents pursuant to Paragraph (1 ) above.

 

(1)                              Transfers.

 

Subject to the provisions of this Agreement WRSCO hereby agrees to perform the
following functions as transfer agent for each Fund:

 

(a)        Recording the ownership, transfer, exchange and cancellation of
ownership of shares of each Fund on the books of the Trust;

 

(b)        Causing the issuance, transfer, exchange and cancellation of share
certificates;

 

(c)        Establishing and maintaining records of accounts;

 

(d)        Computing and causing to be prepared and mailed or otherwise
delivered to shareholders payment checks including bank wire transfers and
notices of reinvestment in additional shares of dividends, stock dividends or
stock splits declared by each Fund on shares and of redemption proceeds due by
each Fund on redemption of shares;

 

(e)        Causing checking accounts to be available and maintained for
shareholders who elect to redeem shares by drawing checks on such accounts,
including accepting or rejecting signatures on all checks drawn on the checking
account and notifying the payor bank to dishonor any check WRSCO deems not to be
validly signed;

 

(f)         Furnishing to shareholders such information as may be reasonably
required by the Trust, including appropriate income tax information;

 

 

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(g)        Addressing and mailing to shareholders prospectuses, annual and
semi-annual reports and proxy materials for shareholder meetings prepared by or
on behalf of the Funds;

 

(h)        Replacing allegedly lost, stolen or destroyed share certificates in
accordance with and subject to procedures and conditions agreed upon and set out
in officers’ instructions;

 

(i)         Maintaining such books and records relating to transactions effected
by WRSCO pursuant to this Agreement as are required by the Act, or by rules or
regulations thereunder, or by any other applicable provisions of law, to be
maintained by the Trust or its transfer agent with respect to such transactions;
preserving, or causing to be preserved, any such books and records for such
periods as may be required by any such law, rule or regulation; furnishing the
Trust such information as to such transactions and at such time as may be
reasonably required by it to comply with applicable laws and regulations; and

 

(j)         Providing such services and carrying out such responsibilities on
behalf of the Trust , or imposed on WRSCO as the Funds’ transfer agent, not
otherwise expressly provided for in this Paragraph 3, as may be required by or
be reasonably necessary to comply with any statute, act, governmental rule,
regulation or directive or court order, including, without limitation, the
requirements imposed by the Tax Equity and Fiscal Responsibility Act of 1982 and
the Income and Dividend Tax Compliance Act of 1983 relating to the withholding
of tax from distributions to shareholders.

 

(2)                              Correspondence.

 

WRSCO agrees to deal with and answer all correspondence from or on behalf of
shareholders relating to its functions under this Agreement.

 

(3)                              Anti-Money Laundering Delegation.

 

(a)        Delegation.  Each Fund hereby delegates to WRSCO, as agent for such
Fund, responsibility for the implementation and operation of the following
policies and procedures in connection with the Fund’s Anti-Money Laundering
(“AML”) Program, as applicable to WRSCO’s functions as defined in the
Agreement:  (i) know-your-customer policies; (ii) monitoring accounts and
identifying high risk accounts; (iii) policies and procedures for reliance on
third parties; (iv) policies and procedures for correspondent accounts for
foreign financial institutions and for private banking accounts for non-U.S.
persons; (v) no cash policy; (vi) detecting and reporting suspicious activity;
and (vii) all related recordkeeping requirements, and WRSCO accepts such
delegation.  WRSCO further agrees to cooperate with the Fund’s AML Compliance
Officer in the performance of WRSCO’s responsibilities under the AML Program.

 

(b)        The AML Program.  WRSCO hereby represents and warrants that WRSCO has
received a copy of each Fund’s AML Program and undertakes to perform all
responsibilities imposed on WRSCO as a “Service Provider” thereunder.  Each Fund
hereby agrees to provide to WRSCO any amendment(s) to the AML Program promptly
after adoption of any such amendment(s) by the Fund.

 

(c)        Consent to Examination.  WRSCO hereby consents to:  (a) provide to
federal examination authorities information and records relating to the AML
Program maintained by

 

 

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WRSCO; and (b) the inspection of WRSCO by federal examination authorities for
purposes of the AML Program.

 

(d)        Anti-Money Laundering Program.  WRSCO hereby represents and warrants
that WRSCO has implemented and enforces an anti-money laundering program
(“AMLP”) reasonably designed to comply with laws, regulations and regulatory
guidance applicable to the Fund and WRSCO, and includes, if applicable:

 

a.         know-your-customer policies;

 

b.         due diligence policies for correspondent accounts for foreign
financial institutions and for private banking accounts for non-U.S. persons;

 

c.         reasonable internal procedures and controls to detect and report
suspicious activities;

 

d.         monitoring accounts and identifying high-risk accounts;

 

e.         a compliance officer or committee with responsibility for the
anti-money laundering program;

 

f.          employee training, including that:  (i) new employees receive AML
training upon the commencement of their employment; and (ii) existing employees
receive AML training at the time such employees assume duties that bring them
into contact with possible money laundering activities;

 

g.         an independent audit function; and

 

h.         recordkeeping requirements.

 

(e)        Delivery of Documents.  WRSCO agrees to furnish to each Fund the
following documents:

 

a.         a copy of WRSCO’s AMLP as in effect on the date hereof, and any
material amendment thereto promptly after the adoption of any such amendment;

 

b.         a copy of any deficiency letter sent by federal examination
authorities concerning WRSCO’s AMLP; and

 

c.         no less frequently than annually, a report on WRSCO’s anti-money
laundering program that includes a certification to the Fund concerning WRSCO’s

 

implementation of, and ongoing compliance with, its anti-money laundering
program and a copy of any audit report prepared with respect to WRSCO’s
anti-money laundering program.

 

(f)         Reports.  WRSCO will provide periodic reports concerning WRSCO’s
compliance with WRSCO’s AMLP and/or each Fund’s AML Program at such times as may
be reasonably requested by the Trust’s Board of Trustees or the Anti-Money
Laundering Compliance Officer.

 

 

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4.                                    Compensation of WRSCO.

 

With respect to each Fund, the Trust agrees to pay WRSCO for its services under
this Agreement in accordance with the schedule as then in effect set forth in
Exhibit B of this Agreement or any amendment thereof.  In addition, the Trust
agrees to reimburse WRSCO for the following “out-of-pocket” expenses of WRSCO
within five days after receipt of an itemized statement of such expenses, to the
extent that payment of such expenses has not been or is not to be made directly
by the Trust : (i) costs of stationery, appropriate forms, envelopes, checks,
postage, printing and mailing charges, including returned mail and proxies,
incurred by WRSCO with respect to materials and communications sent to
shareholders in carrying out its duties to the Trust under this Agreement, bank
charges for wire transfers pursuant to Section 3(1)(c) herein above, and
maintenance of shareholder checking accounts pursuant to Section 3(1)(e) herein
above; (ii) long distance telephone costs incurred by WRSCO for telephone
communications and microfilm and storage costs for transfer agency records and
documents; (iii) costs of all ancillary and supporting services and related
expenses (other than insurance premiums) reasonably required by and provided to
WRSCO, other than by its employees or employees of an affiliate, with respect to
functions of the Trust being performed by it in its capacity as shareholder
servicing agent hereunder, including legal advice and representation in
litigation to the extent that such payments are permitted under Paragraph 7 of
this Agreement and charges to shareholder servicing agent made by any Subagent;
(iv) costs for special reports or information furnished on request pursuant to
this Agreement and not specifically required by WRSCO by Paragraph 3 of this
Agreement; and (v) reasonable costs and expenses incurred by WRSCO in connection
with the duties of WRSCO described in Paragraph (3)(1)(i).  In addition, the
Trust agrees to promptly pay over to WRSCO any fees or payment of charges it may
receive from a shareholder for services furnished to the shareholder by WRSCO.

 

Services and operations incident to the sale and distribution of each Fund’s
shares, including sales communications, confirmations of investments (not
including reinvestment of dividends) and the clearing or collection of payments
will not be for the account or at the expense of the Trust under this Agreement.

 

5.                                    Right of Corporation to Inspect Records,
etc.

 

The Trust will have the right under this Agreement to perform on site inspection
of records and accounts and to perform audits directly pertaining to the Trust’s
shareholder accounts serviced by WRSCO hereunder at WRSCO’s or any Subagent’s
facilities in accordance with reasonable procedures and at the frequency
necessary to assure proper administration of the Agreement.  WRSCO will
cooperate with the Trust’s auditors or representatives of appropriate regulatory
agencies and furnish all reasonably requested records and data.

 

6.                                    Insurance.

 

WRSCO now has the insurance coverage described in Exhibit C, attached hereto,
and WRSCO will not take any action to eliminate or decrease such coverage during
the term of this Agreement without receiving the approval of the Trust in
advance of any change, except WRSCO, after giving reasonable notice to the
Trust, may eliminate or decrease any coverage if the premiums for such coverage
are substantially increased.

 

 

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Each Fund, at its expense, will include as part of its insurance coverages
maintained pursuant to Section 17(j) of the Act fidelity insurance with respect
to forgery or alteration of checks drawn on its checking account referred to in
Section 3(1)(e) of this Agreement subject to such deductible for this particular
coverage as it may deem appropriate.  WRSCO will maintain at is expense such
insurance coverages with respect to WRSCO’s duties under Section 3(1)(e) for
loss caused by errors or omissions as it deems appropriate.  Any loss to a Fund
by reason of the deductible on coverages maintained by it hereunder shall be
paid by WRSCO.

 

7.                                    Standard of Care; Indemnification.

 

WRSCO will at all times exercise due diligence and good faith in performing its
duties hereunder.  WRSCO will make every reasonable effort and take all
reasonably available measures to assure the adequacy of its personnel and
facilities as well as the accurate performance of all services to be performed
by it hereunder within, at a minimum, the time requirements of any applicable
statutes, rules or regulations or as set forth in the prospectus.

 

WRSCO shall not be responsible for, and the Trust agrees to indemnify WRSCO for
any losses, damages or expenses (including reasonable counsel fees and expenses)
(i) resulting from any claim, demand, action or suit not resulting from WRSCO’s
failure to exercise good faith or due diligence and arising out of or in
connection with WRSCO’s duties on behalf of the Trust hereunder; (ii) for any
delay, error or omission by reason of circumstances beyond its control,
including acts of civil or military authority, national emergencies, labor
difficulties (except with respect to WRSCO’s employees), fire, mechanical
breakdown beyond its control, flood or catastrophe, acts of God, insurrection,
war, riots, terrorist attacks or failure beyond its control of transportation,
communication or power supply; or (iii) for any action taken or omitted to be
taken by WRSCO in good faith in reliance on (a) the authenticity of any
instrument or communication reasonably believed by it to be genuine and to have
been properly made and signed or endorsed by an appropriate person, (b) the
accuracy of any records or information provided to it by the Trust, (c) any
authorization or instruction contained in any officers’ instruction, or (d) with
respect to the functions performed for the Trust listed under Paragraph 3(1) of
this Agreement, any advice of counsel approved by the Trust who may be
internally employed counsel or outside counsel, in either case for the Trust
and/or WRSCO.

 

In order for the rights to indemnification to apply, it is understood that if in
any case the Trust may be asked to indemnify or hold WRSCO harmless, the Trust
shall be advised of all pertinent facts concerning the situation in question,
and it is further understood that WRSCO will use reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present a claim for indemnification against the Trust.  The Trust
shall have the option to defend WRSCO against any claim which may be the subject
of this indemnification and, in the event that the Trust so elects, it will so
notify WRSCO and thereupon the Trust shall take over complete defense of the
claim and WRSCO shall sustain no further legal or other expenses in such
situation for which WRSCO shall seek indemnification under this Paragraph. 
WRSCO will in no case confess any claim or make any compromise in any case in
which the Trust will be asked to indemnify WRSCO except with the Trust’s prior
written consent.

 

8.                                    Term of the Agreement; Taking Effect;
Amendments.

 

This Agreement shall become effective as to each Fund at the start of business
on the date hereof and shall continue, unless terminated as hereinafter
provided, for a period of one year and

 

 

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from year to year thereafter, provided that such continuance shall be
specifically approved as provided below.

 

This Agreement shall go into effect, or may be continued, or may be amended or a
new agreement between the Trust and WRSCO covering the substance of this
Agreement may be entered into as to a Fund only if the terms of this Agreement,
such continuance, the terms of such amendment or the terms of such new agreement
have been approved by the Board of Trustees of the Trust, including the vote of
a majority of the trustees who are not “interested persons,” as defined in the
Act, of either party to this Agreement or of Waddell & Reed Investment
Management Company, cast in person at a meeting called for the purpose of voting
on such approval.  Such a vote is hereinafter referred to as a “disinterested
trustee vote.”

 

Any disinterested trustee vote shall include a determination that (i) the
Agreement, amendment, new agreement or continuance in question is in the best
interests of each affected Fund and its shareholders; (ii) the services to be
performed under the Agreement, the Agreement as amended, new agreement or
agreement to be continued, are services required for the operation of the Fund;
(iii) WRSCO can provide services the nature and quality of which are at least
equal to those provided by others offering the same or similar services; and
(iv) the fees for such services are fair and reasonable in the light of the
usual and customary charges made by others for services of the same nature and
quality.

 

9.                                    Termination.

 

(1)        This Agreement may be terminated as to a Fund by WRSCO at any time
without penalty upon giving the Trust 120 days’ written notice (which notice may
be waived by the Trust) and may be terminated as to a Fund by the Trust at any
time without penalty upon giving WRSCO sixty (60) days’ written notice (which
notice may be waived by WRSCO), provided that such termination by the Trust
shall be directed or approved by the vote of a majority of the Board of Trustees
of the Trust in office at the time or by the vote of a majority of the
outstanding voting securities (as defined in or under the Act) of the Fund.

 

(2)        On termination, WRSCO will deliver to the Trust or its designee all
files, documents and records of the affected Fund used, kept or maintained by
WRSCO in the performance of its services hereunder, including such of the Fund’s
records in machine readable form as may be maintained by WRSCO, as well as such
summary and/or control data relating thereto used by or available to WRSCO.

 

(3)        In the event of any termination which involves the appointment of a
new shareholder servicing agent, including the Trust’s acting as such on its own
behalf, the Trust shall have the non-exclusive right to the use of the data
processing programs used by WRSCO in connection with the performance of its
duties under this Agreement without charge.

 

(4)        In addition, on such termination or in preparation therefore, at the
request of the Trust and at the Trust’s expense WRSCO shall provide to the
extent that its capabilities then permit such documentation, personnel and
equipment as may be reasonably necessary in order for a new agent or the Trust
to fully assume and commence to perform the agency functions described in this
Agreement with a minimum disruption to each affected Fund’s activities.

 

 

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10.                            Construction; Governing Law.

 

The headings used in this Agreement are for convenience only and shall not be
deemed to constitute a part hereof.  Whenever the context requires, words
denoting singular shall be read to include the plural.  This Agreement and the
rights and obligations of the parties hereunder, shall be construed and
interpreted in accordance with the laws of the State of Kansas, except to the
extent that the laws of the State of Delaware apply with respect to share
transactions.

 

11.                            Representations and Warranties of WRSCO.

 

WRSCO represents and warrants that it is a corporation duly organized and
existing and in good standing under the laws of the State of Missouri, that it
is duly qualified to carry on its business in the State of Kansas and wherever
its duties require, that it has the power and authority under laws and by its
Articles of Incorporation and Bylaws to enter into this Shareholder Servicing
Agreement and to perform the services contemplated by this Agreement.

 

12.                            Entire Agreement.

 

This Agreement and the Exhibits annexed hereto constitutes the entire and
complete agreement between the parties hereto relating to the subject matter
hereof, supersedes and merges all prior discussions between the parties hereto,
and may not be modified or amended orally.

 

 

[The remainder of this page intentionally left blank]

 

 

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IN WITNESS WHEREOF, the parties have hereto caused this Agreement to be duly
executed on October 1, 2009.

 

 

WADDELL & REED ADVISORS

 

FUNDS

 

 

 

 

 

By:

/s/ Henry J. Herrmann

 

 

 

Henry J. Herrmann, President

 

 

ATTEST:

 

 

By:

/s/ Mara Herrington

 

 

Mara Herrington, Secretary

 

 

WADDELL & REED SERVICES COMPANY

 

 

 

 

 

By:

/s/ Michael D. Strohm

 

 

 

Michael D. Strohm, President

 

 

ATTEST:

 

 

By:

/s/ Wendy J. Hills

 

 

Wendy J. Hills, Secretary

 

 

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Exhibit 10.29

 

APPENDIX A

List of Funds

 

 

Waddell & Reed Advisors Accumulative Fund

Waddell & Reed Advisors Asset Strategy Fund

Waddell & Reed Advisors Bond Fund

Waddell & Reed Advisors Cash Management Fund

Waddell & Reed Advisors Continental Income Fund

Waddell & Reed Advisors Core Investment Fund

Waddell & Reed Advisors Dividend Opportunities Fund

Waddell & Reed Advisors Energy Fund

Waddell & Reed Advisors Global Bond Fund

Waddell & Reed Advisors Government Securities Fund

Waddell & Reed Advisors High Income Fund

Waddell & Reed Advisors International Growth Fund

Waddell & Reed Advisors Municipal Bond Fund

Waddell & Reed Advisors Municipal High Income Fund

Waddell & Reed Advisors New Concepts Fund

Waddell & Reed Advisors Science and Technology Fund

Waddell & Reed Advisors Small Cap Fund

Waddell & Reed Advisors Tax-Managed Equity Fund

Waddell & Reed Advisors Value Fund

Waddell & Reed Advisors Vanguard Fund

 

 

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EXHIBIT A

 

A.        DUTIES IN SHARE TRANSFERS AND REGISTRATION

 

1.         WRSCO in carrying out its duties shall follow general commercial
practices and the Rules of the Stock Transfer Association, Inc. except as they
may conflict or be inconsistent with the specific provisions of the Trust
Instrument and Bylaws, prospectus, applicable Federal and state laws and
regulations and this Agreement.

 

2.         WRSCO shall not require that the signature of the appropriate person
be guaranteed, witnessed or verified in order to affect a redemption, transfer,
exchange or change of address except as may from time to time be directed by the
Trust as set forth in an officers’ instruction.  In the event a signature
guarantee is required by the Trust, WRSCO shall not inquire as to the
genuineness of the guarantee.

 

3.         WRSCO shall not replace a lost, stolen or misplaced share certificate
without requiring and being furnished with an open penalty surety bond
protecting the Trust and WRSCO against loss.

 

B.         The practices, procedures and requirements specified in A above may
be modified, altered, varied or supplemented as from time to time may be
mutually agreed upon by the Trust and WRSCO and evidenced on behalf of the Trust
by an officers’ instruction.  Any such change shall not be deemed to be an
amendment to the Agreement within the meaning of Paragraph 8 of the Agreement.

 

 

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EXHIBIT B

COMPENSATION

 

CLASS A SHARES OF ENERGY FUND, NEW CONCEPTS FUND, SMALL CAP FUND, TAX-MANAGED
EQUITY FUND, AND VALUE FUND

An amount payable on the first day of each month of $1.5042 for each Class A
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

Class A Shares of Accumulative Fund, International Growth Fund, Science and
Technology Fund and Vanguard Fund

An amount payable on the first day of each month of $1.5292 for each Class A
account of the Fund which was in existence during any portion of the immediately
preceding month

 

Class A Shares of Asset Strategy Fund, Continental Income Fund, Core Investment
Fund and Dividend Opportunities Fund

An amount payable on the first day of each month of $1.5792 for each Class A
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

CLASS A SHARES OF BOND FUND, GLOBAL BOND FUND, GOVERNMENT SECURITIES FUND, HIGH
INCOME FUND, MUNICIPAL BOND FUND AND MUNICIPAL HIGH INCOME FUND

An amount payable on the first day of each month of $1.6958 for each Class A
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

Class A Shares of Cash Management

An amount payable on the first day of each month of $1.75 for each Class A
account of the Fund which was in existence during any portion of the immediately
preceding month.  The Fund shall also pay WRSCO a fee of $.75 for each
shareholder check it processes.

 

 

CLASS B SHARES OF ENERGY FUND, NEW CONCEPTS FUND, SMALL CAP FUND, TAX-MANAGED
EQUITY FUND, AND VALUE FUND

An amount payable on the first day of each month of $1.5042 for each Class B
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

Class B Shares of Accumulative Fund, International Growth Fund, Science and
Technology Fund and Vanguard Fund

An amount payable on the first day of each month of $1.5292 for each Class B
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

Class B Shares of Asset Strategy Fund, Continental Income Fund, Core Investment
Fund and Dividend Opportunities Fund

An amount payable on the first day of each month of $1.5792 for each Class B
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

Class B Shares of Bond Fund, Global Bond Fund, Government Securities Fund, High
Income Fund, Municipal Bond Fund and Municipal High Income Fund

 

 

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An amount payable on the first day of each month of $1.6958 for each Class B
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

Class B Shares of Cash Management

An amount payable on the first day of each month of $1.75 for each Class B
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

CLASS C SHARES OF ENERGY FUND, NEW CONCEPTS FUND, SMALL CAP FUND, TAX-MANAGED
EQUITY FUND, AND VALUE FUND

An amount payable on the first day of each month of $1.5042 for each Class C
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

Class C Shares of Accumulative Fund, International Growth Fund, Science and
Technology Fund and Vanguard Fund

An amount payable on the first day of each month of $1.5292 for each Class C
account of the Fund which was in existence during any portion of the immediately
preceding month

 

Class C Shares of Asset Strategy Fund, Continental Income Fund, Core Investment
Fund and Dividend Opportunities Fund

An amount payable on the first day of each month of $1.5792 for each Class C
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

Class C Shares of Bond Fund, Global Bond Fund, Government Securities Fund, High
Income Fund, Municipal Bond Fund and Municipal High Income Fund

An amount payable on the first day of each month of $1.6958 for each Class C
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

Class C Shares of Cash Management

An amount payable on the first day of each month of $1.75 for each Class C
account of the Fund which was in existence during any portion of the immediately
preceding month.

 

CLASS Y SHARES OF ASSET STRATEGY FUND, ACCUMULATIVE FUND, BOND FUND, CONTINENTAL
INCOME FUND, CORE INVESTMENT FUND, DIVIDEND OPPORTUNITIES FUND, ENERGY FUND,
GLOBAL BOND FUND, GOVERNMENT SECURITIES FUND, INTERNATIONAL GROWTH FUND, HIGH
INCOME FUND,  NEW CONCEPTS FUND,  SCIENCE AND TECHNOLOGY FUND, SMALL CAP FUND,
VANGUARD FUND AND VALUE FUND

An amount payable on the first day of each month equal to 1/12 of .15 of 1% of
the average daily net Class Y assets of the Fund for the preceding month.

 

 

Volume Discount

 

The above-referenced per account fees for Class A, Class B and Class C shall be
reduced if the total number of accounts for which WRSCO provides shareholder
services reaches the following levels:

 

 

     A reduction of 5% of the per account fee for the number of accounts in
excess of 2.5 million but less than 3.0 million; and

 

 

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    A reduction of 10% of the per account fee for the number of accounts in
excess of 3.0 million.

 

When considering the total number of accounts for the purpose of the reductions
listed above, Class A, Class B, Class C, Class E and Advisors Class accounts in
each of the Ivy Funds, Ivy Funds, Inc. and Waddell &Reed Advisors Funds are
included; however, accounts in Class I, Class R and Class Y of each such fund
and Waddell & Reed InvestEd accounts are excluded.

 

Networking Fees

The above-referenced per account fees shall be reduced for certain networked
accounts to $6.00 per account on an annualized basis computed and payable on the
first day of each month for each account which was in existence during any
portion of the immediately preceding month with the affected Fund’s bearing the
remainder of the costs charged by the financial services companies.  If the
aggregate annual rate of the WRSCO transfer agent fee and the costs charged by
the financial services companies exceed $18.00 per account for a Fund, the
amount in excess of $18.00 will be reimbursed to the Fund by WRSCO.

 

Omnibus and/or Recordkeeping Fees

The Funds shall bear the costs charged by unaffiliated third parties for
providing recordkeeping and other administrative services with respect to
accounts of participants in retirement plans or other beneficial owners of Fund
shares whose interests are generally held in an omnibus account.  If the annual
rate of the third-party per account charges for a Fund exceeds $18.00 or the
annual fee is based on average net assets exceed 0.30 of 1% of the average daily
net assets of a Fund, the amount in excess of these caps will be reimbursed to
the Fund by WRSCO.

 

Originally Approved on January 30, 2009

 

As Amended, Effective and Approved on October 1, 2009

 

 

14

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EXHIBIT C

 

 

 

Bond or

 

Name of Bond

 

Policy No.

Insurer

------------

 

---------

-------

Investment Company

 

87015109B

ICI

Blanket Bond Form

 

 

Mutual

 

 

 

Insurance

 

 

 

Company

Fidelity

$30,300,000

 

 

Audit Expense

50,000

 

 

On Premises

30,300,000

 

 

In Transit

30,300,000

 

 

Forgery or Alteration

30,300,000

 

 

Securities

30,300,000

 

 

Counterfeit Currency

30,300,000

 

 

Uncollectible Items of

 

 

 

Deposit

25,000

 

 

Phone-Initiated Transactions

30,300,000

 

 

Computer Security

30,300,000

 

 

 

 

 

 

 

 

 

 

Directors and Officers/

 

87015109D

ICI

Errors and Omissions Liability

 

 

Mutual

Insurance Form

 

 

Insurance

Total Limit

$30,000,000

 

Company

 

 

 

 

 

 

 

 

Blanket Undertaking Lost Instrument

 

42SUN339806

Hartford

Waiver of Probate

 

 

Casualty

 

 

 

Insurance

 

 

 

 

 

 

 

 

Effective May 31, 2009

 

 

 

 

 

15

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