Exhibit 10.27


 


 


INVESTMENT
MANAGEMENT AGREEMENT


 


 


THIS AGREEMENT, dated as
of April 10, 2009, is entered into by and between Ivy Funds Variable
Insurance Portfolios (the “Trust”) and Waddell & Reed Investment
Management Company (“WRIMCO”), with respect to each series of the Trust listed
in Appendix A (each, a “Fund”).


 


WITNESSETH:


 


In consideration of the
mutual promises and agreements herein contained and other good and valuable
consideration, the receipt of which is hereby acknowledged, it is hereby agreed
by and between the parties hereto as follows:


 


I.            In General


 


WRIMCO agrees to act as
investment adviser to each Fund with respect to the investment of its assets
and in general to supervise the investments of each Fund, subject at all times
to the direction and control of the Board of Trustees of the Trust, all as more
fully set forth herein.


 


II.           Duties of WRIMCO with respect to
investment of assets of the Trust


 


A. WRIMCO shall regularly
provide investment advice to each Fund and shall, subject to the succeeding
provisions of this section, continuously supervise the investment and
reinvestment of cash, securities or other property comprising the assets of the
investment portfolios of each Fund; and in furtherance thereof, WRIMCO shall as
to each Fund:


 


1.    obtain and evaluate pertinent information
about significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally or one
or more of the portfolios of the Fund, and whether concerning the individual
companies whose securities are included in the Fund’s portfolios or the
industries in which they engage, or with respect to securities which WRIMCO
considers desirable for inclusion in the Fund’s portfolio;


 


2.    furnish continuously an investment program
for the Fund;


 


3.    determine what securities shall be purchased
or sold by the Fund; and


 


4.    take, on behalf of the Fund, all actions
which appear to WRIMCO necessary to carry into effect such investment programs
and supervisory functions as aforesaid, including the placing of purchase and
sell orders.


 


B. Subject to the
provisions of this Agreement and the requirements of the Investment Company Act
of 1940 (and any rules or regulations in force thereunder), WRIMCO is
authorized


 


 

















 


to appoint one or more
qualified investment sub-advisers
(each, a “Sub-Adviser”) to provide the Funds with certain services required by
this Agreement. Each Sub-Adviser shall have such investment discretion and
shall make all determinations with respect to the investment of the Funds’
assets as shall be assigned to that Sub-Adviser by WRIMCO and the purchase and
sale of portfolio securities and other financial instruments with respect to
those assets.


 


Subject to the
supervision and direction of the Board of Trustees of each Fund WRIMCO shall:


 


1.   have overall supervisory responsibility for
the general management and investment of the Fund’s assets;


 


2.   determine the allocation and reallocation of
assets among the Sub-Advisers, if any; and


 


3.   have full investment discretion to make all
determinations with respect to the investment of a Funds’ assets not otherwise
assigned to a Sub-Adviser.


 


WRIMCO shall research and
evaluate each Sub-Adviser, if any, including: performing initial due diligence
on prospective Sub-Advisers and monitoring each Sub-Adviser’s ongoing
performance; communicating performance expectations and evaluations to each
Sub-Adviser; and recommending to the Board of Trustees of each Fund whether a
Sub-Adviser’s contract should be renewed, modified or terminated. When
appropriate, WRIMCO shall also recommend to the Board of Trustees of each Fund
changes or additions to the Sub-Advisers.


 


C. WRIMCO shall make
appropriate and regular reports to the Board of Trustees of the Trust on the
actions it takes pursuant to Section ILA. above. Any investment programs
furnished by WRIMCO under this section, or any supervisory function taken
hereunder by WRIMCO shall at all times conform to and be in accordance with any
requirements imposed by:


 


1.   the provisions of the Investment Company Act
of 1940 Act, as amended (“1940 Act”) and any rules or regulations in force
thereunder;


 


2.   any other applicable provision of law;


 


3.   the provisions of the Trust Instrument of the
Trust as amended from time to time;


 


4.   the provisions of the Bylaws of the Trust as
amended from time to time;


 


5.   the terms of the registration statements of
the Trust, as amended from time to time, under the Securities Act of 1933 and
the 1940 Act.


 


D. Any investment
programs furnished by WRIMCO under this section or any supervisory functions
taken hereunder by WRIMCO shall at all times be subject to any directions of
the Board of Trustees of the Trust, its Executive Committee, or any committee
or officer of the Trust acting pursuant to authority given by the Board of
Trustees.


 


 


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III.        Allocation of Expenses


 


The expenses of the Trust
and the expenses of WRIMCO in performing its functions under this Agreement
shall be divided into two classes, to wit: (i) those expenses which will
be paid in full by WRIMCO as set forth in subparagraph “A” hereof, and (ii) those
expenses which will be paid in full by each Fund, as set forth in subparagraph “B”
hereof.


 


A.    With respect to the duties of WRIMCO under Section II
above, it shall pay in full, except as to the brokerage and research services
acquired through the allocation of commissions as provided in Section IV
hereinafter, for (a) the salaries and employment benefits of all employees
of WRIMCO who are engaged in providing these advisory services; (b) adequate
office space and suitable office equipment for such employees; and (c) all
telephone and communications costs relating to such functions. In addition,
WRIMCO shall pay the fees and expenses of all trustees of the Trust who are
employees of WRIMCO or an affiliated corporation and the salaries and
employment benefits of all officers of the Trust who are affiliated persons of
WRIMCO.


 


B.    The Funds shall pay in full for all of their
respective expenses which are not listed above (other than those assumed by
WRIMCO or its affiliates in their respective capacities as principal
underwriter of the shares of each of the Funds, as Shareholder Servicing Agent
or as Accounting Services Agent for the Funds), including (a) the costs of
preparing and printing prospectuses and reports to shareholders of the Funds,
including mailing costs; (b) the costs of printing all proxy statements
and all other costs and expenses of meetings of shareholders of the Funds
(unless the Trust and WRIMCO shall otherwise agree); (c) interest, taxes,
brokerage commission and premiums on fidelity and other insurance; (d) audit
fees and expenses of independent accountants and legal fees and expenses of
attorneys, but not of attorneys who are employees of WRIMCO or an affiliated
company; (e) fees and expenses of its trustees not affiliated with WRIMCO
or its affiliates; (f) custodian fees and expenses; (g) fees payable
by the Trust and/or the Funds under the Securities Act of 1933, the 1940 Act and
the securities or “Blue-Sky” laws of any jurisdiction; (h) fees and
assessments of the Investment Company Institute or any successor organization; (i) such
nonrecurring or extraordinary expenses as may arise, including litigation
affecting the Trust and/or the Funds, and any indemnification by the Trust of
its officers, directors, employees and agents with respect thereto; (j) the
costs and expenses provided for in any Shareholder Servicing Agreement or
Accounting Services Agreement, including amendments thereto, contemplated by
subsection C of this Section III. In the event that any of the foregoing
shall, in the first instance, be paid by WRIMCO, a Fund shall pay the same to
WRIMCO on presentation of a statement with respect thereto.


 


C.    WRIMCO, or an affiliate of WRIMCO, may also
act as (i) transfer agent or shareholder servicing agent of each Fund of
the Trust and/or as (ii) accounting services agent of each Fund of the
Trust if at the time in question there is a separate agreement, “Shareholder
Servicing Agreement” and/or “Accounting Services Agreement,” covering such
functions between the Trust and WRIMCO or such affiliate. The corporation,
whether WRIMCO or its affiliate, which is the party to such Agreement with the
Trust is referred to as the “Agent.” Each such Agreement shall provide in
substance that it shall not go into effect, or be amended, or a new agreement
covering the same topics between the Trust and the Agent be entered into as to
a Fund, unless the terms of such Agreement, such amendment or such new
agreement have been


 


 


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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 1940 Act, of either party to the
Agreement, such amendment or such new agreement (considering WRIMCO to be such
a party even if at the time in question the Agent is an affiliate of WRIMCO),
cast in person at a meeting called for the purpose of voting on such approval.
Such a vote is referred to as a “disinterested trustee” vote. Each such
Agreement shall also provide in substance for its continuance, unless
terminated, for a specified period which shall not exceed two years from the
date of its execution and from year to year thereafter only if such continuance
is specifically approved at least annually by a disinterested trustee vote, and
that 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) the
Agent 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 light of the usual and
customary charges made by others for services of the same nature and quality.
Any such Agreement may also provide in substance that any disinterested trustee
vote may be conditioned on the favorable vote of the holders of a majority (as
defined in or under the 1940 Act) of the outstanding shares of each class or
series of the Trust. Any such Agreement shall also provide in substance that it
may be terminated as to a Fund by the Agent at any time without penalty upon
giving the Trust one hundred twenty (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 the Agent sixty (60) days’ written notice
(which notice may be waived by the Agent), 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 the holders of
a majority (as defined in or under the 1940 Act) of the outstanding shares of
each class or series of the Trust.


 


IV.        Brokerage


 


A.    WRIMCO may select brokers to effect the
portfolio transactions of each Fund on the basis of its estimate of their
ability to obtain, for reasonable and competitive commissions, the best
execution of particular and related portfolio transactions. For this purpose, “best
execution” means prompt and reliable execution at the most favorable price
obtainable. Such brokers may be selected on the basis of all relevant factors
including the execution capabilities required by the transaction or
transactions, the importance of speed, efficiency, or confidentiality, and the
willingness of the broker to provide useful or desirable investment research
and/or special execution services. WRIMCO shall have no duty to seek advance
competitive commission bids and may select brokers based solely on its current
knowledge of prevailing commission rates.


 


B.    Subject to the foregoing, WRIMCO shall have
discretion, in the interest of the Funds, to direct the execution of its
portfolio transactions to brokers who provide brokerage and/or research
services (as such services are defined in Section 28(e) of the
Securities Exchange Act of 1934) for the Funds and/or other accounts for which
WRIMCO exercises “investment discretion” (as that term is defined in Section 3(a)(35)
of the Securities Exchange Act of 1934); and in connection with such
transactions, to pay commission in excess of the amount another adequately
qualified broker would have charged if WRIMCO determines, in good faith, that
such


 


 


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commission is reasonable
in relation to the value of the brokerage and/or research services provided by
such broker, viewed in terms of either that particular transaction or the
overall responsibilities of WRIMCO with respect to the accounts for which it
exercises investment discretion. In reaching such determination, WRIMCO will
not be required to attempt to place a specified dollar amount on the brokerage
and/or research services provided by such broker; provided that WRIMCO shall be
prepared to demonstrate that such determinations were made in good faith, and
that all commissions paid by the Funds over a representative period selected by
the Trust’s Board of Trustees were reasonable in relation to the benefits to
the Funds.


 


V.         Compensation of WRIMCO


 


As compensation in full
for services rendered and for the facilities and personnel furnished under
sections I, II, and IV of this Agreement, each Fund will pay to WRIMCO for
each day the fees specified in Appendix B hereto.


 


The amounts payable to
WRIMCO shall be determined as of the close of business each day; shall, except
as set forth below, be based upon the value of net assets computed in
accordance with the Trust Instrument; and shall be paid in arrears whenever
requested by WRIMCO. In computing the value of the net assets of each Fund,
there shall be excluded the amount owed to the Fund with respect to shares
which have been sold but not yet paid to the Fund by Waddell & Reed, Inc.


 


Notwithstanding the
foregoing, if the laws, regulations or policies of any state in which shares of
the Funds are qualified for sale limit the operation and management expenses of
the Funds, WRIMCO will refund to the Funds the amount by which such expenses
exceed the lowest of such state limitations.


 


VI.        Undertakings of WRIMCO; Liabilities


 


WRIMCO shall give to the
Trust the benefit of its best judgment, efforts and facilities in rendering
advisory services hereunder.


 


WRIMCO shall at all times
be guided by and be subject to each Fund’s investment policies, the provisions
of the Trust Instrument and Bylaws of the Trust as each shall from time to time
be amended, and to the decision and determination of the Trust’s Board of
Trustees.


 


This Agreement shall be
performed in accordance with the requirements of the 1940 Act, the Investment
Advisers Act of 1940, the Securities Act of 1933, and the Securities Exchange
Act of 1934, to the extent that the subject matter of this Agreement is within
the purview of such Acts. Insofar as applicable to WRIMCO as an investment
adviser and affiliated person of the Trust, WRIMCO shall comply with the
provisions of the 1940 Act, the Investment Advisers Act of 1940 and the
respective rules and regulations of the Securities and Exchange Commission
thereunder.


 


In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations
or duties hereunder on the part of WRIMCO it shall not be subject to liability
to the Trust or to any shareholder of the Funds (direct or beneficial) for any
act or omission in the


 


 


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course of or connected
with rendering services thereunder or for any losses that may be sustained in
the purchase, holding or sale of any security.


 


VII.       Duration of this Agreement


 


This Agreement shall
become effective on April 30, 2009 and shall continue in effect as to a
Fund, unless terminated as hereinafter provided, for a period of one year and
from year-to-year thereafter only if such continuance is specifically approved
at least annually by the Board of Trustees, including the vote of a majority of
the trustees who are not parties to this Agreement or “interested persons” (as
defined in the 1940 Act) of any such party, cast in person at a meeting called
for the purpose of voting on such approval, or by the vote of the holders of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the Fund.


 


VIII.     Termination


 


 


This Agreement may be
terminated as to a Fund by WRIMCO at any time without penalty upon giving the
Trust one hundred twenty (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 WRIMCO sixty (60) days’ written notice (which
notice may be waived by WRIMCO), 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 (as
defined in the 1940 Act) of the outstanding voting securities of the affected
Fund. This Agreement shall automatically terminate in the event of its
assignment, the term “assignment” for this purpose having the meaning defined
in Section 2(a)(4) of the 1940 Act and the rules and regulations
thereunder.


 


 


(The remainder of this
page intentionally left blank)


 


 


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IN WITNESS WHEREOF, the
parties hereto have caused the foregoing instrument to be executed by their
duly authorized officers and their corporate seal to be hereunto affixed, all
as of the day and year first above written.


 


 


	
  (Seal)

  	
  IVY FUNDS VARIABLE
  INSURANCE

  
	
   

  	
  PORTFOLIOS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Mara
  Herrington

  	
   

  
	
   

  	
   

  	
  Mara Herrington

  
	
   

  	
   

  	
  Vice President

  



 


ATTEST:


 


	
  By:

  	
  /s/
  Megan E. Bray

  	
   

  
	
   

  	
  Megan E. Bray

  	
   

  
	
   

  	
  Assistant Secretary

  	
   

  



 


 


	
  (Seal)

  	
  WADDELL & REED
  INVESTMENT

  
	
   

  	
  MANAGEMENT COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Henry J. Herrmann

  	
   

  
	
   

  	
   

  	
  Henry J. Herrmann

  
	
   

  	
   

  	
  President

  



 


ATTEST:


 


	
  By:

  	
  /s/
  Wendy J. Hills

  	
   

  
	
   

  	
  Wendy J. Hills

  	
   

  
	
   

  	
  Secretary

  	
   

  



 


 


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APPENDIX
A


TO
INVESTMENT MANAGEMENT AGREEMENT


 


 


Ivy Funds VIP Global
Natural Resources


Ivy Funds VIP
International Value


Ivy Funds VIP Micro Cap
Growth


Ivy Funds VIP Mortgage
Securities


Ivy Funds VIP Real Estate
Securities


Ivy Funds VIP Small Cap
Value


 


 


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APPENDIX B


TO INVESTMENT
MANAGEMENT AGREEMENT


 


IVY FUNDS VARIABLE INSURANCE
PORTFOLIOS FEE SCHEDULE


 


FEE SCHEDULE


 


 


A cash
fee computed each day on net asset value for each Fund at the annual rates
listed below:


 


 


	
  Global Natural Resources

  	
   

  
	
  Net Fund Assets

  	
  Fee

  
	
   

  	
   

  
	
  Up to $500 million

  	
  1.00%

  
	
  Over $500 million and
  up to $1 billion

  	
  0.85%

  
	
  Over $1 billion and up
  to $2 billion

  	
  0.83%

  
	
  Over $2 billion and up
  to $3 billion

  	
  0.80%

  
	
  Over $3 billion

  	
  0.76%

  
	
   

  	
   

  
	
  International Value

  	
   

  
	
  Net Fund Assets

  	
  Fee

  
	
   

  	
   

  
	
  Up to $1 billion

  	
  0.85%

  
	
  Over $1 billion and up
  to $2 billion

  	
  0.83%

  
	
  Over $2 billion and up
  to $3 billion

  	
  0.80%

  
	
  Over $3 billion

  	
  0.76%

  
	
   

  	
   

  
	
  Micro Cap Growth

  	
   

  
	
  Net Fund Assets

  	
  Fee

  
	
   

  	
   

  
	
  Up to $1 billion

  	
  0.95%

  
	
  Over $1 billion and up
  to $2 billion

  	
  0.93%

  
	
  Over $2 billion and up
  to $3 billion

  	
  0.90%

  
	
  Over $3 billion

  	
  0.86%

  
	
   

  	
   

  
	
  Mortgage Securities

  	
   

  
	
  Net Fund Assets

  	
  Fee

  
	
   

  	
   

  
	
  Up to $500 million

  	
  0.50%

  
	
  Over $500 million and
  up to $1 billion

  	
  0.45%

  
	
  Over $1 billion and up
  to $1.5 billion

  	
  0.40%

  
	
  Over $1.5 billion

  	
  0.35%

  



 


 


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  Real Estate Securities

  	
   

  
	
  Net Fund Assets

  	
  Fee

  
	
   

  	
   

  
	
  Up to $1 billion

  	
  0.90%

  
	
  Over $1 billion and up
  to $2 billion

  	
  0.87%

  
	
  Over $2 billion and up
  to $3 billion

  	
  0.84%

  
	
  Over $3 billion

  	
  0.80%

  
	
   

  	
   

  
	
  Small Cap Value

  	
   

  
	
  Net Fund Assets

  	
  Fee

  
	
   

  	
   

  
	
  Up to $1 billion

  	
  0.85%

  
	
  Over $1 billion and up
  to $2 billion

  	
  0.83%

  
	
  Over $2 billion and up
  to $3 billion

  	
  0.80%

  
	
  Over $3 billion

  	
  0.76%

  



 


 


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