Document:

Exhibit 10.42

 

IVY FUNDS

 

 

DISTRIBUTION AND SERVICE PLAN

FOR CLASS A, CLASS B, CLASS C, CLASS E, and CLASS Y
SHARES

 

 

This Distribution and
Service Plan (the “Plan”) originally adopted by Ivy Funds (the “Trust”) on
behalf of its Ivy Managed European/Pacific Fund and Ivy Managed International
Opportunities Fund series of the Trust (each, a “Fund” and collectively, the “Funds”),
on November 29, 2006, and subsequently adopted on behalf of the Funds
listed in Appendix A, on the date listed therein, pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended (the “Act”) to provide for
the payment of marketing and other fees to support the sale and distribution of
each Class of shares of the Funds and the services provided to the Funds’
shareholders by financial advisors. 
Under the Plan, the Funds will: (A) compensate Ivy Funds
Distributor, Inc. (“IFDI”) for, either directly or through third parties,
distributing the Fund’s Class A shares, providing personal service to Class A
shareholders and/or maintaining Class A shareholder accounts (hereinafter
referred to as “Class A Fee”); (B) compensate IFDI for, either
directly or through third parties, providing personal service to Class B
and Class C shareholders and/or maintaining Class B and Class C
shareholder accounts and for distributing the Funds’ Class B and Class C
shares (hereinafter referred to as either a “Class B Fee” or “Class C
Fee” as the case may be); (C) compensate IFDI for, either directly or
through third parties, distributing the Funds’ Class E shares, providing
services to Class E shareholders and/or maintaining Class E
shareholder accounts (hereinafter referred to as a “Class E Fee”); and (D) compensate
IFDI for, either directly or through third parties, distributing the Funds’ Class Y
shares, providing services to Class Y shareholders and/or maintaining Class Y
shareholder accounts (hereinafter referred to as a “Class Y Fee”).

 

I.          CLASS A SHARES

 

Class A
Fee

 

The Trust will pay to
IFDI a distribution fee, which represents compensation for the expenses
incurred by IFDI for payments made to brokers, which are affiliated or
unaffiliated with IFDI, for account maintenance and personal service to
shareholders of the Funds.  The services
for which Class A Fee may be made include, among others, advising clients
or customers regarding the purchase, sale or retention of Class A shares
of a Fund, answering routine inquiries concerning a Fund, assisting
shareholders in changing options or enrolling in specific plans and providing
shareholders with information regarding a Fund, and related developments.  The Trust will pay to IFDI for such payments,
subject to any applicable restriction imposed by Rules of the National
Association of Securities Dealers, Inc. (NASD), on a monthly basis up to
an amount equal on an annual basis to 0.25% of the average daily net asset
value of outstanding Class A shares of a Fund that are registered in the
name of a broker as nominee or held in a shareholder account that designates a
broker as broker of record.  Class A
Fees for which IFDI will be compensated may also be used by IFDI or its
affiliates to compensate certain entities in addition to brokers, such as
banks, investment advisers, financial institutions and pension plan
administrators, for rendering certain shareholder liaison services similar to
those rendered for Class A Fees, pursuant to a related agreement between
IFDI or its affiliate and such entity.

 

 

 

II.         CLASS B SHARES

 

Distribution
Fee

 

The Trust shall pay IFDI
a distribution fee, which represents compensation for the expenses incurred by
IFDI for distribution of the Class B shares of each Fund, and which shall
be paid at the annual rate of 0.75% of that Fund’s average daily net assets
attributable to that Fund’s Class B shares.  Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Board of Trustees
shall determine, subject to any applicable restriction imposed by rules of
the NASD.

 

The services for which Class B
Fees may be paid include IFDI’s services as distributor of the Class B
shares of a Fund, including but not limited to, compensation to broker-dealers
that have entered into a Dealer Agreement with IFDI, bonuses and other
incentives paid to broker-dealers, compensation to and expenses of employees of
IFDI who engage in or support distribution of a Fund’s Class B shares;
telephone expenses; printing of prospectuses and reports for other than
existing shareholders; preparation, printing and distribution of sales
literature and advertising materials; and profit on the foregoing.

 

Service
Fee

 

The Trust will pay IFDI a
service fee, which represents compensation for the expenses incurred by IFDI
for payments made to brokers that are affiliated or unaffiliated with IFDI, in
connection with account maintenance and personal services to shareholders of
the Funds.  The Trust will pay IFDI for
such payments, subject to any applicable restriction imposed by the Rules of
the NASD, up to an amount equal on an annual basis to 0.25% of the average
daily net asset value of outstanding Class B shares of a Fund that are
registered in the name of a broker as nominee or held in a shareholder account
that designates a broker as broker of record.

 

The service for which
such Class B Fees may be paid include, among others, advising clients or
customers regarding the purchase, sale or retention of Class B shares of a
Fund, answering routine inquiries concerning a Fund, assisting shareholders in
changing options or enrolling in specific plans and providing shareholders with
information regarding the Fund and related developments.  Class B Fees for which IFDI will be
compensated may also be used to compensate certain entities in addition to
brokers, such as banks and investment advisers, for rendering certain
shareholder liaison services similar to those services rendered for Class B
Fees, pursuant to a related agreement between IFDI and such entity.

 

III.       CLASS C SHARES

 

Distribution
Fee

 

The Trust shall pay IFDI
a distribution fee, which represents compensation for the expenses incurred by
IFDI for distribution of the Class C shares of each Fund, and which shall
be paid at the annual rate of 0.75% of that Fund’s average daily net assets
attributable to that Fund’s Class C shares.  Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Board of Trustees
shall determine, subject to any applicable restriction imposed by rules of
the NASD.

 

 

2

 

The services for which Class C
Fees may be paid include IFDI’s services as distributor of the Class C
shares of a Fund, including but not limited to, compensation to broker-dealers
that have entered into a Dealer Agreement with IFDI, bonuses and other
incentives paid to broker-dealers, compensation to and expenses of employees of
IFDI who engage in or support distribution of a Fund’s Class C shares;
telephone expenses; printing of prospectuses and reports for other than
existing shareholders; preparation, printing and distribution of sales
literature and advertising materials; and profit on the foregoing.

 

Service
Fee

 

The Trust will pay IFDI a
service fee, which represents compensation for the expenses incurred by IFDI
for payments made to brokers that are affiliated or unaffiliated with IFDI, in
connection with account maintenance and personal services to shareholders of
the Funds.  IFDI will be compensatedfor
such payments, subject to any applicable restriction imposed by the Rules of
the NASD, up to an amount equal on an annual basis to 0.25% of the average daily
net asset value of outstanding Class C shares of a Fund that are
registered in the name of a broker as nominee or held in a shareholder account
that designates a broker as broker of record.

 

The services for which
such Class C Fees may be paid include, among others, advising clients or
customers regarding the purchase, sale or retention of Class C shares of a
Fund, answering routine inquiries concerning a Fund, assisting shareholders in
changing options or enrolling in specific plans and providing shareholders with
information regarding the Fund and related developments.  Class C Fees for which IFDI will be
compensated may also be used to compensate certain entities in addition to
brokers, such as banks and investment advisers, for rendering certain shareholder
liaison services similar to those services rendered for Class C Fees,
pursuant to a related agreement between IFDI and such entity.

 

IV.       CLASS E SHARES

 

Class E
Fee

 

The Trust will pay IFDI a
distribution fee, which represents compensation for the expenses incurred by
IFDI for payments made to brokers, which are affiliated or unaffiliated with
IFDI, for account maintenance and personal service to shareholders of all
Funds.  The services for which Class E
Fee may be paid include, among others, advising clients or customers regarding
the purchase, sale or retention of Class E shares of a Fund, answering
routine inquiries concerning a Fund, assisting shareholders in changing options
or enrolling in specific plans and providing shareholders with information
regarding a Fund, and related developments. 
IFDI will be compensated for
such payments, subject to any applicable restriction imposed by Rules of
the NASD, on a monthly basis up to an amount equal on an annual basis to 0.25%
of the average daily net asset value of outstanding Class E shares of a
Fund that are registered in the name of a broker as nominee or held in a
shareholder account that designates a broker as broker of record.  Class E Fees for which IFDI will be
compensated may also be used by IFDI or its affiliates to compensate certain
entities in addition to brokers, such as banks, investment advisers, financial
institutions and pension plan administrators, for rendering certain shareholder
liaison services similar to those rendered for Class E Fees, pursuant to a
related agreement between IFDI or its affiliate and such entity.

 

 

3

 

V.        CLASS Y SHARES

 

Distribution
Fee

 

With respect to each
Fund, subject to the limitation on total Class Y Fees set forth below, the
Trust shall pay to IFDI a fee for expenses incurred in the distribution of the Class Y
Shares of each Fund, in an amount not to exceed on an annual basis 0.25 of 1%
of each Fund’s average net assets of its Class Y shares.  Class Y Fees shall be payable to IFDI
daily or at such other intervals as the Board of Trustees may determine.  If this Plan is terminated, the Trust will
owe no payments to the IFDI other than any portion of the distribution fee accrued
through the effective date of termination, but unpaid as of such date.

 

Service
Fee

 

With respect to each
Fund, subject to the limitation on total Class Y Fees set forth below, the
Trust shall pay IFDI a service fee in an amount not to exceed on an annual
basis 0.25 of 1% of each Fund’s average net assets of its Class Y shares
as compensation for expenses incurred by UFDU or its affiliated companies for
shareholder servicing and the maintenance of shareholder accounts of each Fund’s
Class Y shares.  The amounts shall
be payable to IFDI daily or at such other intervals as the Board of Trustees
may determine.

 

Limitation
of Total Class Y Fees

 

With respect to each
Fund, the Trust is authorized to pay both a distribution fee and a service fee
to IFDI provided that the total amount of fees paid to IFDI pursuant to this
Plan shall not exceed on an annual basis 0.25 of 1% of the average net assets
of that Fund’s Class Y shares.

 

VI.       QUARTERLY REPORTS

 

Any person authorized to
direct the disposition of monies paid to a Fund pursuant to the Plan or any
related agreement shall provide to the Board of Trustees of the Trust, and the
Board of Trustees shall review at least quarterly, a written report of the
amounts so expended of the distribution fee and the service fee paid to IFDI
under this Plan with respect to each class of shares of each Fund and the
purposes for which such expenditures were made with respect to such class of
shares of each Fund.

 

VII.      APPROVAL OF PLAN

 

This Plan shall not
become effective as to a Class or Fund until it has been approved by a
vote of at least a majority (as defined in the Act) of the outstanding voting
securities of the affected Class or the Fund.  With respect to the submission of the Plan
for such a vote, it shall have been effectively approved with respect to a class
of shares of a Fund if a majority of the outstanding voting securities of the
class of shares of the Fund votes for approval of the Plan, notwithstanding
that the matter has not been approved by a majority of the outstanding voting
securities of the Trust or any other Fund or Class of shares.

 

The Plan shall not become
effective as to a Class or Fund until it has been approved by a vote of
the Board of Trustees of the Trust and by the Trustees who are not interested
persons of the Trust and have no direct or indirect financial interest in the
operation of the Plan or any agreement

 

 

4

 

related to this Plan
(other than as Trustees or shareholders of the Trust) (“Independent Trustees”)
cast in person at a meeting called for the purpose of voting on such Plan and
any related agreements.

 

VIII.     CONTINUANCE

 

This Plan shall continue
in effect as to each Fund and each class of shares for a period of one (1) year
and thereafter from year to year only so long as such continuance is approved
by the Trustees, including the Independent Trustees, as specified hereinabove
for the adoption of the Plan by the Trustees and Independent Trustees with
respect to that Class of shares of that Fund.

 

IX.       TERMINATION

 

This Plan may be
terminated at any time by a vote of a majority of the Independent Trustees as
to any Fund or Class of shares by a vote of the majority of the
outstanding shares of that Class or Fund without penalty.  On termination, the payment of all
distribution and service fees shall cease, and the Trust shall have no
obligation to IFDI to compensate it for any expenditure it has made or may make
to distribute a Fund’s Class of shares or service shareholder accounts of
a particular class of shares.

 

X.        AMENDMENTS

 

This Plan may not be
amended to increase materially the amount to be spent for distribution or
services without approval by the shareholders of the affected Class of
shares of the affected Fund, and all material amendments of this Plan must be
approved in the manner prescribed for the adoption of the Plan by the Board of
Trustees and Independent Trustees as provided hereinabove.  The distribution and service fees may,
however, be reduced by action of the Board of Trustees without shareholder
approval.

 

XI.       RELATED AGREEMENTS

 

Any agreement related to
the Plan shall be in writing and shall provide: (a) that such agreement
may be terminated at any time as to a Fund or Class of shares, without
payment of any penalty, by vote of a majority of the Independent Trustees or by
vote of a majority of the outstanding voting securities of a Fund or Class of
shares, on not more than sixty (60) days’ written notice to any other party to
the agreement; and (b) that such agreement shall terminate automatically
in the event of its assignment.

 

XII.      TRUSTEES

 

While this Plan is in
effect, the selection and nomination of Independent Trustees shall be committed
to the discretion of the Independent Trustees.

 

XIII.     RECORDS

 

The Trust shall preserve
copies of the Plan, any related agreement and any report made pursuant to
paragraph V hereof, for a period of not less than six (6) years from the
date of the Plan, such agreement or report, as the case may be, the first two (2) years
of which shall be in an easily accessible place.

 

 

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XIV.    SEVERABILITY

 

The provisions of this
Plan are severable with respect to each class of shares and each Fund.

 

XV.      LIMITATION OF LIABILITY

 

It is understood and
expressly stipulated that neither the holders of shares of a Fund nor any
Trustee, officer, agent or employee of the Trust shall be personally liable
hereunder, nor shall any resort be had to other private property for the
satisfaction of any claim or obligation hereunder, but the Trust only shall be
liable.

 

IN
WITNESS WHEREOF, the Trust has adopted this Distribution and
Service Plan on behalf of its Ivy Managed European/Pacific Fund and Ivy Managed
International Opportunities Fund series as of this 29th day of November, 2006.

 

	
   

  	
  IVY FUNDS

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/Henry J.
  Herrmann

  
	
   

  	
   

  	
  Henry J.
  Herrmann, President

  

 

 

6

 

APPENDIX A

 

to

Distribution and Service Plan

 

This Plan has been
adopted by Ivy Funds on behalf of its following series, and on the date
indicated:

 

	
  Series of
  Ivy Funds

  	
   

  	
  Date adopted on behalf of Series

  
	
  Ivy Managed
  European/Pacific Fund

  	
   

  	
  November 29, 2006

  
	
  Ivy Managed
  International Opportunities Fund

  	
   

  	
  November 29, 2006

  
	
   

  	
   

  	
   

  
	
  Ivy Global
  Strategic Income Fund

  	
   

  	
  February 13, 2008

  
	
   

  	
   

  	
   

  
	
  Ivy Micro Cap
  Growth Fund

  	
   

  	
  November 12, 2008

  

 

 

7Exhibit 10.43

 

IVY FUNDS

DISTRIBUTION AND SERVICE PLAN

FOR CLASS A, CLASS B, CLASS C, CLASS E, CLASS R
and CLASS Y SHARES

 

(Amended Plan Adopted on November 14, 2007)

 

 

This Amended Distribution
and Service Plan (the “Plan”) is adopted by Ivy Funds (the “Trust”) on behalf
of Ivy Balanced Fund, Ivy Bond Fund, Ivy Cundill Global Value Fund, Ivy
Dividend Income Fund, Ivy European Opportunities Fund, Ivy Global Natural
Resources Fund, Ivy International Balanced Fund, Ivy International Core Equity
Fund, Ivy International Growth Fund, Ivy Mortgage Securities Fund, Ivy Pacific
Opportunities Fund, Ivy Real Estate Securities Fund, Ivy Small Cap Value Fund
and Ivy Value Fund, each a series of the Trust (each, a “Fund” and
collectively, the “Funds”), pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended (the “Act”) to provide for the payment of
marketing and other fees to support the sale and distribution of each Class of
shares of the Funds and the services provided to the Funds’ shareholders by financial
advisors.  Under the Plan, the Funds
will: (A) reimburse and/or compensate Ivy Funds Distributor, Inc. (“IFDI”)
for, either directly or through third parties, distributing the Fund’s Class A
shares, providing personal service to Class A shareholders and/or
maintaining Class A shareholder accounts (hereinafter referred to as “Class A
Fee”); (B) reimburse and/or compensate IFDI for, either directly or
through third parties, providing personal service to Class B and Class C
shareholders and/or maintaining Class B and Class C shareholder
accounts and for distributing the Funds’ Class B and Class C shares
(hereinafter referred to as either a “Class B Fee” or “Class C Fee”
as the case may be); (C) compensate IFDI for, either directly or through
third parties, distributing the Funds’ Class E shares, providing services
to Class E shareholders and/or maintaining Class E shareholder
accounts (hereinafter referred to as a “Class E Fee”); (D) compensate
IFDI for, either directly or through third parties, distributing the Ivy Global
Natural Resources Fund and Ivy Real Estate Securities Fund Class R shares,
providing services to Class R shareholders and/or maintaining Class R
shareholder accounts (hereinafter referred to as a “Class R Fee”) and (E) compensate
IFDI for, either directly or through third parties, distributing the Funds’ Class Y
shares, providing services to Class Y shareholders and/or maintaining Class Y
shareholder accounts (hereinafter referred to as a “Class Y Fee”).

 

I.          CLASS A SHARES

 

Class A
Fee

 

The Trust will reimburse
IFDI for payments made to brokers, which are affiliated or unaffiliated with
IFDI, for account maintenance and personal service to shareholders of all
Funds.  The services for which Class A
Fee may be made include, among others, advising clients or customers regarding
the purchase, sale or retention of Class A shares of a Fund, answering
routine inquiries concerning a Fund, assisting shareholders in changing options
or enrolling in specific plans and providing shareholders with information
regarding a Fund, and related developments. 
IFDI will be reimbursed for such payments, subject to any applicable
restriction imposed by Rules of the National Association of Securities
Dealers, Inc. (NASD), on a monthly basis up to an amount

 

 

 

equal on an annual basis
to 0.25% of the average daily net asset value of outstanding Class A
shares of a Fund that are registered in the name of a broker as nominee or held
in a shareholder account that designates a broker as broker of record.  Class A Fees for which IFDI will be
reimbursed may also be used by IFDI or its affiliates to compensate certain
entities in addition to brokers, such as banks, investment advisers, financial
institutions and pension plan administrators, for rendering certain shareholder
liaison services similar to those rendered for Class A Fees, pursuant to a
related agreement between IFDI or its affiliate and such entity.  In the case of Ivy International Growth Fund
the Class A Fee will apply only to Class A shares of each Fund which
were issued after December 31, 1991. 
Payments made out of or charged against the assets attributable to the Class A
shares of a Fund must be in reimbursement for distribution services rendered
for or on behalf of that Fund.  The costs
and expenses not reimbursed in any one given month may be reimbursed in a
subsequent month.  The Plan does not
provide for payment of interest or carrying charges as distribution expenses.

 

II.         CLASS B SHARES

 

Distribution
Fee

 

The Trust shall pay IFDI Class B
Fees for distribution of the Class B shares of each Fund at the annual
rate of 0.75% of that Fund’s average daily net assets attributable to that Fund’s
Class B shares.  Such fee shall be
paid daily or at such other intervals as the Board of Trustees shall determine,
subject to any applicable restriction imposed by rules of the NASD.

 

The services for which Class B
Fees may be made include IFDI’s services as distributor of the Class B
shares of a Fund, including but not limited to, compensation to broker-dealers
that have entered into a Dealer Agreement with IFDI, bonuses and other
incentives paid to broker-dealers, compensation to and expenses of employees of
IFDI who engage in or support distribution of a Fund’s Class B shares;
telephone expenses; printing of prospectuses and reports for other than
existing shareholders; preparation, printing and distribution of sales
literature and advertising materials; and profit on the foregoing.

 

Service
Fee

 

The Trust will reimburse
IFDI for payments made to brokers that are affiliated or unaffiliated with
IFDI, in connection with account maintenance and personal services to
shareholders of the Funds.  IFDI will be
reimbursed for such payments, subject to any applicable restriction imposed by
the Rules of the NASD, up to an amount equal on an annual basis to 0.25%
of the average daily net asset value of outstanding Class B shares of a
Fund that are registered in the name of a broker as nominee or held in a
shareholder account that designates a broker as broker of record.

 

The services for which
such Class B Fees may be made include, among others, advising clients or
customers regarding the purchase, sale or retention of Class B shares of a
Fund, answering routine inquiries concerning a Fund, assisting shareholders in
changing options or enrolling in specific plans and providing shareholders with
information regarding the Fund and related developments.  Class B Fees for which IFDI will be

 

 

2

 

reimbursed may also be
used to compensate certain entities in addition to brokers, such as banks and
investment advisers, for rendering certain shareholder liaison services similar
to those services rendered for Class B Fees, pursuant to a related
agreement between IFDI and such entity. 
The costs and expenses not reimbursed in any one given month may be
reimbursed in a subsequent month.  The
Plan does not provide for payment of interest or carrying charges as
distribution expenses.

 

III.       CLASS C SHARES

 

Distribution
Fee

 

The Trust shall pay IFDI Class C
Fees for distribution of the Class C shares of each Fund at the annual
rate of 0.75% of that Fund’s average daily net assets attributable to that Fund’s
Class C shares.  Such fee shall be
paid daily or at such other intervals as the Board of Trustees shall determine,
subject to any applicable restriction imposed by rules of the NASD.

 

The services for which Class C
Fees may be made include IFDI’s services as distributor of the Class C
shares of a Fund, including but not limited to, compensation to broker-dealers
that have entered into a Dealer Agreement with IFDI, bonuses and other
incentives paid to broker-dealers, compensation to and expenses of employees of
IFDI who engage in or support distribution of a Fund’s Class C shares;
telephone expenses; printing of prospectuses and reports for other than
existing shareholders; preparation, printing and distribution of sales
literature and advertising materials; and profit on the foregoing.

 

Service
Fee

 

The Trust will reimburse
IFDI for payments made to brokers that are affiliated or unaffiliated with
IFDI, in connection with account maintenance and personal services to
shareholders of the Funds.  IFDI will be
reimbursed for such payments, subject to any applicable restriction imposed by
the Rules of the NASD, up to an amount equal on an annual basis to 0.25%
of the average daily net asset value of outstanding Class C shares of a
Fund that are registered in the name of a broker as nominee or held in a
shareholder account that designates a broker as broker of record.

 

The services for which
such Class C Fees may be made include, among others, advising clients or
customers regarding the purchase, sale or retention of Class C shares of a
Fund, answering routine inquiries concerning a Fund, assisting shareholders in
changing options or enrolling in specific plans and providing shareholders with
information regarding the Fund and related developments.  Class C Fees for which IFDI will be
reimbursed may also be used to compensate certain entities in addition to brokers,
such as banks and investment advisers, for rendering certain shareholder
liaison services similar to those services rendered for Class C Fees,
pursuant to a related agreement between IFDI and such entity.  The costs and expenses not reimbursed in any
one given month may be reimbursed in a subsequent month.  The Plan does not provide for payment of
interest or carrying charges as distribution expenses.

 

 

3

 

IV.       CLASS E SHARES

 

Class E
Fee

 

The Trust will pay IFDI
for payments made to brokers, which are affiliated or unaffiliated with IFDI,
for account maintenance and personal service to shareholders of all Funds.  The services for which Class E Fee may
be made include, among others, advising clients or customers regarding the
purchase, sale or retention of Class E shares of a Fund, answering routine
inquiries concerning a Fund, assisting shareholders in changing options or
enrolling in specific plans and providing shareholders with information
regarding a Fund, and related developments. 
IFDI will be compensated for such payments, subject to any applicable
restriction imposed by Rules of the NASD, on a daily basis up to an amount
equal on an annual basis to 0.25% of the average daily net asset value of outstanding
Class E shares of a Fund that are registered in the name of a broker as
nominee or held in a shareholder account that designates a broker as broker of
record.  Class E Fees for which IFDI
will be compensated may also be used by IFDI or its affiliates to compensate
certain entities in addition to brokers, such as banks, investment advisers,
financial institutions and pension plan administrators, for rendering certain
shareholder liaison services similar to those rendered for Class E Fees,
pursuant to a related agreement between IFDI or its affiliate and such entity.

 

IV.       CLASS R SHARES

 

Distribution
and Service Fee

 

The Trust shall pay IFDI Class R
Fees for distribution and servicing of the Class R shares of Ivy Global
Natural Resources Fund and Ivy Real Estate Securities Fund at the annual rate
of 0.50% of each Fund’s average daily net assets attributable to that Fund’s Class R
shares.  Such fee shall be paid daily or
at such other intervals as the Board of Trustees shall determine, subject to
any applicable restriction imposed by rules of the NASD.

 

The services for which Class R
Fees may be made include financing of shareholder services and IFDI’s services
as distributor of the Class R shares of a Fund, including but not limited
to, compensation to broker-dealers that have entered into a Dealer Agreement
with IFDI, bonuses and other incentives paid to broker-dealers, compensation to
and expenses of employees of IFDI who engage in or support distribution of a
Fund’s Class R shares; telephone expenses; printing of prospectuses and
reports for other than existing shareholders; preparation, printing and
distribution of sales literature and advertising materials; and profit on the
foregoing.

 

IV.       CLASS Y SHARES

 

Distribution
Fee

 

With respect to each
Fund, subject to the limitation on total Class Y Fees set forth below, the
Trust shall pay IFDI for distribution of the Class Y Shares of each Fund, Class Y
Fees in an amount not to exceed on an annual basis 0.25 of 1% of each Fund’s
average net assets of its Class Y shares. 
Class Y Fees shall be payable to IFDI daily or at such other
intervals as the Board of Trustees may determine.  If this Plan is terminated, the Trust

 

 

4

 

will owe no payments to
the IFDI other than any portion of the distribution fee accrued through the
effective date of termination, but unpaid as of such date.

 

Service
Fee

 

With respect to each
Fund, subject to the limitation on total Class Y Fees set forth below, the
Trust shall pay Class Y Fees to IFDI in an amount not to exceed on an
annual basis 0.25 of 1% of each Fund’s average net assets of its Class Y
shares as a “service fee” to finance shareholder servicing by IFDI or its
affiliated companies and to encourage and foster the maintenance of shareholder
accounts of the particular Fund’s Class Y shares.  The amounts shall be payable to IFDI daily or
at such other intervals as the Board of Trustees may determine.

 

Limitation
of Total Class Y Fees

 

With respect to each
Fund, the Trust is authorized to pay both a distribution fee and a service fee
to IFDI provided that the total amount of fees paid to IFDI pursuant to this
Plan shall not exceed on an annual basis 0.25 of 1% of the average net assets
of that Fund’s Class Y shares.

 

V.        QUARTERLY REPORTS

 

Any person authorized to
direct the disposition of monies paid or payable by a Fund pursuant to the Plan
or any related agreement shall provide to the Board of Trustees of the Trust,
and the Board of Trustees shall review at least quarterly, a written report of
the amounts so expended of the distribution fee and the service fee paid to
IFDI under this Plan with respect to each class of shares of each Fund and the
purposes for which such expenditures were made with respect to such class of
shares of each Fund.

 

VI.       APPROVAL OF PLAN

 

This Plan shall not
become effective as to a Class or Fund until it has been approved by a
vote of at least a majority (as defined in the Act) of the outstanding voting
securities of the affected Class or the Fund.  With respect to the submission of the Plan
for such a vote, it shall have been effectively approved with respect to a
class of shares of a Fund if a majority of the outstanding voting securities of
the class of shares of the Fund votes for approval of the Plan, notwithstanding
that the matter has not been approved by a majority of the outstanding voting
securities of the Trust or any other Fund or Class of shares.

 

The Plan shall not become
effective as to a Class or Fund until it has been approved by a vote of the
Board of Trustees of the Trust and by the Trustees who are not interested
persons of the Trust and have no direct or indirect financial interest in the
operation of the Plan or any agreement related to this Plan (other than as
Trustees or shareholders of the Trust) (“Independent Trustees”) cast in person
at a meeting called for the purpose of voting on such Plan and any related
agreements.

 

 

5

 

VII.      CONTINUANCE

 

This Plan shall continue
in effect as to each Fund and each class of shares for a period of one (1) year
and thereafter from year to year only so long as such continuance is approved
by the Trustees, including the Independent Trustees, as specified hereinabove
for the adoption of the Plan by the Trustees and Independent Trustees with
respect to that Class of shares of that Fund.

 

VIII.     TERMINATION

 

This Plan may be
terminated at any time by a vote of a majority of the Independent Trustees as
to any Fund or Class of shares by a vote of the majority of the
outstanding shares of that Class or Fund without penalty.  On termination, the payment of all
distribution and service fees shall cease, and the Trust shall have no
obligation to IFDI to reimburse it for any expenditure it has made or may make
to distribute a Fund’s Class of shares or service shareholder accounts of
a particular class of shares.

 

IX.       AMENDMENTS

 

This Plan may not be
amended to increase materially the amount to be spent for distribution or
services without approval by the shareholders of the affected class of shares
of the affected Fund, and all material amendments of this Plan must be approved
in the manner prescribed for the adoption of the Plan by the Board of Trustees
and Independent Trustees as provided hereinabove.  The distribution and service fees may,
however, be reduced by action of the Board of Trustees without shareholder
approval.

 

X.        RELATED AGREEMENTS

 

Any agreement related to
the Plan shall be in writing and shall provide: (a) that such agreement
may be terminated at any time as to a Fund or Class of shares, without
payment of any penalty, by vote of a majority of the Independent Trustees or by
vote of a majority of the outstanding voting securities of a Fund or Class of
shares, on not more than sixty (60) days’ written notice to any other party to
the agreement; and (b) that such agreement shall terminate automatically
in the event of its assignment.

 

XI.       TRUSTEES

 

While this Plan is in
effect, the selection and nomination of Independent Trustees shall be committed
to the discretion of the Independent Trustees.

 

XII.      RECORDS

 

The Trust shall preserve
copies of the Plan, any related agreement and any report made pursuant to
paragraph V hereof, for a period of not less than six (6) years from the
date of the Plan, such agreement or report, as the case may be, the first two (2) years
of which shall be in an easily accessible place.

 

 

6

 

XIII.     SEVERABILITY

 

The provisions of this
Plan are severable with respect to each class of shares and each Fund.

 

XIV.    LIMITATION OF LIABILITY

 

It is understood and
expressly stipulated that neither the holders of shares of a Fund nor any
Trustee, officer, agent or employee of the Trust shall be personally liable
hereunder, nor shall any resort be had to other private property for the
satisfaction of any claim or obligation hereunder, but the Trust only shall be
liable.

 

IN
WITNESS WHEREOF, the Trust has adopted this Amended
Distribution and Service Plan as of this 14th day of November,
2007.

 

	
   

  	
  IVY FUNDS

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
    /s/
  Henry J. Herrmann

  	
   

  
	
   

  	
  Henry J.
  Herrmann, President

  

 

 

7

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