[ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
(1) Title of each class of securities to which transaction applies: | |
(2) Aggregate number of securities to which transaction applies: | |
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it is determined): | |
(4) Proposed maximum aggregate value of transaction: | |
(5) Total fee paid: | |
[ ] | Fee paid previously with preliminary materials. |
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) Amount Previously Paid: | |
(2) Form, Schedule or Registration Statement No.: | |
(3) Filing Party: | |
(4) Date Filed: | |
Sincerely, | |
Henry J. Herrmann | |
President |
1. | To approve a new sub-advisory agreement between Waddell & Reed Investment Management Company and BlackRock Capital Management, Inc.; and |
2. | To transact any other business that properly comes before the Special Meeting. |
By Order of the Board of Directors, | |
Kristen A. Richards | |
Assistant Secretary | |
__________, 2006 | |
Overland Park, Kansas |
- the performance of the Fund compared with the average performance of a peer group of comparable funds and with relevant indices;
- the Fund's investment management fees and total expenses compared with the management fees and total expenses of a peer group of comparable funds;
- the benefits that accrue to BFM or its affiliates (or are anticipated to accrue to BCM or its affiliates) as a result of its relationship to the Fund; and
- the favorable history, reputation, qualification and background of BFM as well as the qualifications of its personnel, which BCM is expected to enjoy after the Transaction.
Name of Fund | Total Net Assets at June 30, 2006 (in millions) | Annual Management Fee as a % of Average Net Assets | Waivers, Reductions or Agreements to Waive or Reduce Management Fee |
Blackrock Small Cap Value Equity Portfolio | $102 | 0.55% of net assets up to $1 billion; 0.50% of net assets over $1 billion and up to $2 billion; 0.475% of net assets over $2 billion and up to $3 billion; and 0.45% of net assets over $3 billion | |
[Name of Fund] | $111 | 0.50% of net assets | |
[Name of Fund] | $174 | 0.50% of net assets |
Name and Address | Status or Title with BCM |
Lawrence D. Fink | Chairman and Chief Executive Officer |
Ralph L. Schlosstein | President and Director |
Robert S. Kapito | Vice Chairman and Director |
Robert P. Connolly | General Counsel, Secretary and Managing Director |
Susan L. Wagner | Vice Chairman and Chief Operating Officer |
Steven E. Buller | Chief Financial Officer and Managing Director |
Keith L. Anderson | Vice Chairman |
Charles S. Hallac | Vice Chairman |
Barbara G. Novick | Vice Chairman |
Paul L. Audet | Director |
Laurence J. Carolan | Director |
Kevin Klingert | Director |
John P. Moran | Director |
Mark Steinberg | Director |
NAME, ADDRESS AND AGE | POSITION HELD WITH THE FUND | PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS |
James M. Concannon 6300 Lamar Avenue Overland Park, KS 66202 Age: 58 | Director | Professor of Law, Washburn Law School (1998 to present); Director, Kansas Legal Services for Prisoners, Inc. |
John A. Dillingham 4040 Northwest Claymont Drive Kansas City, MO 64116 Age: 67 | Director | President and Director, JoDill Corp. (1980 to present) and Dillingham Enterprises, Inc. (1997 to present), both farming enterprises; President, Missouri Institute of Justice; Director, Salvation Army; Advisory Director, UMB Northland Board (Financial Services) |
David P. Gardner 6300 Lamar Avenue Overland Park, KS 66202 Age: 73 | Chairman and Director | Senior Advisor to the President, J. Paul Getty Trust (2004 to present); Professor, University of Utah (until 2005) |
Linda K. Graves 6300 Lamar Avenue Overland Park, KS 66202 Age: 53 | Director | First Lady of Kansas (until 2003); Chairman and Director, Greater Kansas City Community Foundation |
Joseph Harroz, Jr. 6300 Lamar Avenue Overland Park, KS 66202 Age: 39 | Director | Vice President and General Counsel of the Board of Regents, University of Oklahoma (1996 to present); Adjunct Professor, University of Oklahoma Law School (1997 to present); Managing Member, Harroz Investments, LLC, commercial enterprise investments (1998 to present); Consultant, MTV Associates (2004); Director and Shareholder, Valliance Bank; Director, Ivy Funds, Inc.; Trustee, Ivy Funds |
John F. Hayes 6300 Lamar Avenue Overland Park, KS 66202 Age: 86 | Director | Shareholder, Gilliland & Hayes, P.A., a law firm; formerly, Chairman, Gilliland & Hayes (until 2003); Director, Central Bank & Trust; Central Financial Corporation |
Glendon E. Johnson, Sr. 6300 Lamar Avenue Overland Park, KS 66202 Age: 82 | Director | Chairman and Chief Executive Officer (CEO), Castle Valley Ranches, LLC; Chairman and CEO, Wellness Council of America; Member, Advisory Council of the Boy Scouts of America |
Frank J. Ross, Jr. Polsinelli Shalton Welte Suelthaus, L.P. 700 West 47th Street Suite 1000 Kansas City, MO 64112 Age: 53 | Director | Shareholder/Director, Polsinelli Shalton Welte Suelthaus, a law firm (1980 to present); Director, Columbian Bank & Trust |
Eleanor B. Schwartz 6300 Lamar Avenue Overland Park, KS 66202 Age: 69 | Director | Professor Emeritus, University of Missouri at Kansas City (2003 to present); formerly, Professor of Business Administration, University of Missouri at Kansas City (until 2003; Director, Ivy Funds, Inc.; Trustee, Ivy Funds |
Frederick Vogel III 6300 Lamar Avenue Overland Park, KS 66202 Age: 71 | Director | Member, Board of Directors, The Terra Foundation for American Art (Chicago); Vice President, Treasurer and Trustee, The Layton Art Collection, Inc.; Member of the Directors Advisory Committee for American Art |
NAME, ADDRESS AND AGE | POSITION(S) HELD WITH THE FUND | PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS |
Henry J. Herrmann 6300 Lamar Avenue Overland Park, KS 66202 Age: 63 | President and Director | CEO of WDR (2005 to present); President, CEO and Chairman of WRIMCO (1993 to present); President, CEO and Chairman of Ivy Investment Management Company (IICO), an affiliate of WDR (2002 to present); formerly, President and Chief Investment Officer (CIO) of WDR, WRIMCO and IICO (until 2005); President and Director/Trustee of each of the funds in the Fund Complex; Director, Ivy Funds, Inc.; Trustee, Ivy Funds; Director, Austin, Calvert & Flavin, Inc., an affiliate of WRIMCO; Director, Ivy Services Inc. (ISI), an affiliate of IICO |
NAME, ADDRESS AND AGE | POSITION(S) HELD WITH THE FUND | PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS |
Joseph W. Kauten 6300 Lamar Avenue Overland Park KS 66202 Age: 37 | Treasurer, Vice President and Principal Accounting Officer | Treasurer and Principal Accounting Officer of each of the funds in the Waddell & Reed Fund Complex since 2006; Vice President of each of the funds in the Advisors Funds Complex since 2006; Assistant Treasurer of each of the funds in the Waddell & Reed Fund Complex from 2003 to 2006; Senior Manager, Deloitte & Touche LLP from 2001 to 2003 |
Mara Herrington 6300 Lamar Avenue Overland Park KS 66202 Age: 42 | Vice President and Secretary | Vice President and Secretary of each of the funds in the Waddell & Reed Fund Complex since 2006; formerly, Vice President and Associate General Counsel, Deutsche Investment Management Americas, Inc. |
Kristen A. Richards 6300 Lamar Avenue Overland Park KS 66202 Age: 38 | Vice President, Assistant Secretary and Associate General Counsel | Vice President, Associate General Counsel and Chief Compliance Officer of WRIMCO (2000 to present) and IICO (2002 to present); Vice President, Secretary and Associate General Counsel of each of the funds in the Fund Complex (2000 to present) |
Daniel C. Schulte 6300 Lamar Avenue Overland Park KS 66202 Age: 40 | Vice President, General Counsel and Assistant Secretary | Senior Vice President and General Counsel of WDR, Waddell & Reed, WRIMCO and WRSCO (2000 to present); Senior Vice President and General Counsel of IICO (2002 to present); Vice President, General Counsel and Assistant Secretary of each of the funds in the Fund Complex (2000 to present) |
Scott J. Schneider 6300 Lamar Avenue Overland Park KS 66202 Age: 38 | Vice President and Chief Compliance Officer | Chief Compliance Officer for each of the Funds in the Fund Complex (2004 to present); Vice President of each of the funds in the Advisors Funds Complex since 2006; formerly, Senior Attorney and Compliance Officer for each of the Funds in the Fund Complex (2000 to 2004) |
By order of the Board of Directors, | |
Kristen A. Richards | |
Assistant Secretary | |
__________, 2006 |
1. | Appointment of Sub-Adviser | ||
In accordance with and subject to the Investment Management Agreement between the Funds and the Adviser dated July 23, 2003, the Adviser hereby appoints the Sub-Adviser to perform portfolio selection services described herein for investment and reinvestment of the Portfolio, subject to the control and direction of the Funds' Board of Directors, for the period and on the terms hereinafter set forth. The Sub-Adviser accepts such appointment and agrees to furnish the services hereinafter set forth for the compensation herein provided. The Sub-Adviser shall for all purposes herein be deemed to be an independent contractor and shall, except as expressly provided or authorized, have no authority to act for or represent the Funds or the Adviser in any way or otherwise be deemed an agent of the Funds or the Adviser. | |||
2. | Obligations of and Services to be Provided by the Sub-Adviser | ||
(a) | The Sub-Adviser shall provide the following services and assume the following obligations with respect to the Portfolio of the Funds: | ||
(1) | The investment of the assets of the Portfolio shall at all times be subject to the applicable provisions of the Articles of Incorporation, the Bylaws, the Registration Statement, the current Prospectus and the Statement of Additional Information of the Funds and shall conform to the investment objectives, policies and restrictions of the Portfolio as set forth in such documents provided to Sub-adviser and as interpreted from time to time by the Board of Directors of the Funds and by the Adviser, including diversification of the holdings of the Portfolio as a segregated asset account in accordance with Section 817 of the Internal Revenue Code, as amended (the "Code"), and Regulation Section 1.817-5 thereunder, provided that the Adviser shall be responsible for ensuring that the Funds as a whole is "adequately diversified" if and to the extent required by Section 817(h) of the Code and Regulation 1.817-5 thereunder. Within the framework of the investment objectives, policies and restrictio ns of the Portfolio, and subject to the supervision of the Adviser, the Sub-Adviser shall have the sole and exclusive responsibility for the making and execution of all investment decisions for the Portfolio. The Adviser agrees to promptly inform the Sub-Adviser in writing if such objective, policies or restrictions change and to deliver to the Sub-Adviser updated documents, if prepared. | ||
(2) | In carrying out its obligations to manage the investments and reinvestments of the assets of the Portfolio, the Sub-Adviser shall: (1) obtain and evaluate pertinent economic, statistical, financial and other information affecting the economy generally and individual companies or industries the securities of which are included in the Portfolio or are under consideration for inclusion therein; (2) formulate and implement a continuous investment program for the Portfolio consistent with the investment objective and related investment policies for the Portfolio as set forth in the Funds' Registration Statement, as amended; and (3) take such steps as are necessary to implement the aforementioned investment program by purchase and sale of securities including the placing, or directing the placement through an affiliate of the Sub-Adviser, of orders for such purchases and sales. | ||
(3) | In connection with the purchase and sale of securities of the Portfolio, the Sub-Adviser shall arrange for the transmission to the Adviser (or its designee) and the Custodian for the Funds on a daily basis such confirmation, trade tickets and other documents as may be necessary to enable them to perform their administrative responsibilities with respect to the Portfolio. With respect to portfolio securities to be purchased or sold through the Depository Trust Company, the Sub-Adviser shall arrange for the automatic transmission of the I.D. confirmation of the trade to the Custodian of the Portfolio. The Sub-Adviser shall render such reports to the Adviser and/or to the Funds' Board of Directors concerning the investment activity and portfolio composition of the Portfolio in such form and at such intervals as the Adviser or the Board may from time to time reasonably require. | ||
(4) | The Sub-Adviser shall, in the name of the Funds, place or direct the placement of orders for the execution of portfolio transactions in accordance with the policies with respect thereto, as set forth in the Funds' Registration Statement, as amended from time to time, and under the Securities Act of 1933, as amended (the "1933 Act") and the 1940 Act. In connection with the placement of orders for the execution of the Portfolio's transactions, the Sub-Adviser shall create and maintain all necessary brokerage records of the Funds in accordance with all applicable law, rules and regulations, including but not limited to, records required by Section 31(a) of the 1940 Act. All records shall be the property of the Funds and shall be available for inspection and use by the Securities and Exchange Commission, the Funds or any person retained by the Funds. Where applicable, such records shall be maintained by the Sub-Adviser for the period and in the place required by Rule 31a-2 under the 1940 Act. | ||
(5) | In placing orders or directing the placement of orders for the execution of portfolio transactions, the Sub-Adviser shall select brokers and dealers for the execution of the Portfolio's transactions. In selecting brokers or dealers to execute such orders, the Sub-Adviser is expressly authorized to consider the fact that a broker or dealer has furnished statistical, research or other information or services which enhance the Sub-Adviser's investment research and portfolio management capability generally. It is further understood in accordance with Section 28(e) of the Securities Exchange Act of 1934, as amended, that the Sub-Adviser may negotiate with and assign to a broker a commission which may exceed the commission which another broker would have charged for effecting the transaction if the Sub-Adviser determines in good faith that the amount of commission charged was reasonable in relation to the value of brokerage and/or research services (as defined in Section 28(e)) provided by such broker, v iewed in terms either of the Portfolio's or the Sub-Adviser's overall responsibilities to the Sub-Adviser's discretionary accounts. | ||
The Sub-Adviser shall render such reports to the Adviser and/or to the Funds' Board of Directors regarding the total amount and usage of all commissions generated as a result of trades executed for the Portfolio's holdings, as well as information regarding third-party services, if any, received by the Sub-Adviser as a result of trading activity with select brokers and dealers. | |||
(b) | The Sub-Adviser shall use the same skill and care in providing services to the Portfolio as it uses in providing services to fiduciary accounts for which it has investment responsibility. The Sub-Adviser will comply with all applicable rules and regulations of the Securities and Exchange Commission. | ||
(c) | The Sub-Adviser shall (i) comply with all reasonable requests of the Funds (through the Adviser) for information, including information required in connection with the Trust's filings with the Securities and Exchange Commission (the "SEC") and state securities commissions, and (ii) provide such other services as the Sub-Adviser shall from time to time determine to be necessary or useful to the administration of the Funds. | ||
(d) | The Sub-Adviser shall furnish to the Adviser for distribution to the Funds' Board of Directors periodic reports on the investment performance of the Portfolio and on the performance of its obligations under this Agreement and shall supply such additional reports and information as the Funds' officers or Board of Directors shall reasonably request. | ||
(e) | On occasions when the Sub-Adviser deems the purchase or sale of a security to be in the best interest of the Portfolio as well as other customers, the Sub-Adviser, to the extent permitted by applicable law, may aggregate the securities to be so sold or purchased in order to obtain the best execution or lower brokerage commissions, if any. The Sub-Adviser also may purchase or sell a particular security for one or more customers in different amounts. On either occasion, and to the extent permitted by applicable law and regulations, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Sub-Adviser in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Portfolio and to such other customers. In no instance, however, will the Fund's assets be purchased from or sold to the Adviser, the Sub-Adviser, the Funds' underwriter, or any affiliated person of either the Funds, the Adviser, the Sub-Ad viser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the SEC and the 1940 Act. | ||
(f) | Consistent with U.S. securities laws, the Sub-Adviser agrees to adopt written trade allocation procedures that are "fair and equitable" to its clients which are consistent with the investment policies set out in the prospectuses and statements of additional information (including amendments) of the Portfolio or as the Funds' Board of Directors may direct from time to time. The Sub-Adviser also agrees to effect securities transactions in client accounts consistent with the allocation system described in such written procedures, to keep accurate records of such transactions and to fully disclose such trade allocation procedures and practices to clients. | ||
(g) | The Sub-Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the securities held in the Portfolio. The Adviser shall instruct the custodian and other appropriate parties providing services to the Portfolio to promptly forward misdirected proxies to the Sub-Adviser. | ||
The Sub-Adviser shall provide to the Advisor a copy of Sub-Adviser's written proxy voting policies and procedures, as adopted, including policies on addressing potential conflicts of interest and a copy of any summary of the procedures, if applicable. Sub-Adviser shall also be responsible for maintaining records with respect to the proxy votes cast for the Portfolio. The records shall conform to the applicable SEC proxy regulations. | |||
Records of all applicable proxy voting records will be provided to the Adviser within 3 business days of any request, written or oral (voting records should be available in hard and soft copy). | |||
(h) | The Sub-Adviser shall review all notices, including but not limited to corporate action notices, and provide and respond to all corresponding requests for information in relation to the securities held in the Portfolio. The Adviser shall instruct the custodian and other appropriate parties providing services to the Portfolio to promptly forward misdirected corporate action notices to the Sub-Adviser. | ||
(i) | The Sub-Adviser shall promptly notify the Adviser of any financial condition that is likely to impair the Sub-Adviser's ability to fulfill its commitment under this Agreement and/or any termination or resignation of senior (key) personnel. | ||
3. | Delivery of Documents to the Adviser. The Sub-Adviser has furnished the Adviser with copies of each of the following documents: | ||
(a) | The Sub-Adviser's current Form ADV and any amendments thereto, if applicable; | ||
(b) | The Sub-Adviser's most recent audited balance sheet; | ||
(c) | Separate lists of persons whom the Sub-Adviser wishes to have authorized to give written and/or oral instructions to the custodian and the fund accounting agent of Trust assets for the Portfolio; and | ||
(d) | The Code of Ethics of the Sub-Adviser as currently in effect. | ||
The Sub-Adviser will furnish the Adviser from time to time with copies, properly certified or otherwise authenticated, of all material amendments of or supplements to the foregoing, if any. Additionally, the Sub-Adviser will provide to the Adviser such other documents relating to its services under this Agreement as the Adviser may reasonably request on a periodic basis. Such amendments or supplements as to items (a) through (d) above will be provided within 30 days of the time such materials became available to the Sub-Adviser. | |||
4. | Expenses | ||
During the terms of this Agreement, the Sub-Adviser will pay all expenses incurred by it in connection with its activities under this Agreement. | |||
5. | Compensation | ||
In payment for the investment sub-advisory services to be rendered by the Sub-Adviser in respect of the Portfolio hereunder, the Adviser shall pay to the Sub-Adviser as full compensation for all services hereunder a fee computed at an annual rate which shall be a percentage of the average daily value of the net assets of the Portfolio. The fee shall be accrued daily and shall be based on the net asset values of all of the issued and outstanding shares of the Fund as determined as of the close of each business day pursuant to the Articles of Incorporation, Bylaws and currently effective Prospectus and Statement of Additional Information of the Funds. The fee shall be payable in arrears on the last day of each calendar month. | |||
The amount of such annual fee, as applied to the average daily value of the net assets of the Portfolio shall be as described in the schedule below: | |||
Assets Fee | |||
Net Portfolio Assets 0.50% | |||
6. | Renewal and Termination | ||
This Agreement shall continue in effect until September 30, 2007, and from year to year thereafter provided such continuance is specifically approved at least annually by a vote of the holders of the majority of the outstanding voting securities of a Portfolio, or by a vote of the majority of the Funds' Board of Directors. And further provided that such continuance is also approved annually by a vote of the majority of the Funds' Board of Directors who are not parties to this Agreement or interested persons of parties hereto, cast in person at a meeting called for the purpose of voting on such approval. This Agreement may be terminated at any time without payment of penalty: (i) by the Funds' Board of Directors or by a vote of a majority of the outstanding voting securities of the class of capital stock of the Portfolio on sixty days' prior written notice, or (ii) by either party hereto upon sixty days' prior written notice to the other. This Agreement will terminate automatically upon any termin ation of the Investment Management Agreement between the Funds and the Adviser or in the event of its assignment. The terms "interested person," "assignment" and "vote of a majority of the outstanding voting securities" shall have the meanings set forth in the 1940 Act. | |||
7. | General Provisions | ||
(a) | The Sub-Adviser may rely on information reasonably believed by it to be accurate and reliable. Except as may otherwise be provided by the 1940 Act, neither the Sub-Adviser nor its officers, directors, employees or agents shall be subject to any liability for any error of judgment or mistake of law or for any loss arising out of any investment or other act or omission in the performance by the Sub-Adviser of its duties under this Agreement or for any loss or damage resulting from the imposition by any government or exchange control restrictions which might affect the liquidity of the Portfolio's assets, or from acts or omissions of custodians or securities depositories, or from any war or political act of any foreign government to which such assets might be exposed, provided that nothing herein shall be deemed to protect, or purport to protect, the Sub-Adviser against any liability to the Portfolio or to its shareholders to which the Sub-Adviser would otherwise be subject by reason of willful misfeasance , bad faith or gross negligence in the performance of its duties hereunder, or by reason of the Sub-Adviser's reckless disregard of its obligations and duties hereunder. | ||
(b) | The Adviser and the Funds' Board of Directors understand that the value of investments made for the Account may go up as well as down, is not guaranteed and that investment decisions will not always be profitable. The Adviser has not made and is not making any guarantees, including any guarantee as to any specific level of performance of the Portfolio. The Adviser and the Funds' Board of Directors acknowledge that each Portfolio is designed for the described investment objective and is not intended as a complete investment program. They also understand that investment decisions made on behalf of the Portfolio by Sub-Adviser are subject to various market and business risks. | ||
(c) | This Agreement shall not become effective unless and until it is approved by the Board of Directors of the Funds, including a majority of the members who are not "interested persons" to parties to this Agreement, by a vote cast in person at a meeting called for the purpose of voting such approval, and by a majority of the outstanding voting securities of the class of capital stock of the Fund. | ||
(d) | The Adviser understands that the Sub-Adviser now acts, will continue to act, or may act in the future, as investment adviser to fiduciary and other managed accounts, including other investment companies, and the Adviser has no objection to the Sub-Adviser so acting, provided that the Sub-Adviser duly performs all obligations under this Agreement. The Adviser also understands that the Sub-Adviser may give advice and take action with respect to any of its other clients or for its own account which may differ from the timing or nature of action taken by the Sub-Adviser with respect to the Portfolio. Nothing in this Agreement shall impose upon the Sub-Adviser any obligation to purchase or sell or to recommend for purchase or sale, with respect to the Portfolio, any security which the Sub-Adviser or its shareholders, directors, officers, employees or affiliates may purchase or sell for its or their own account(s) or for the account of any other client. | ||
(e) | Except to the extent necessary to perform its obligations hereunder, nothing herein shall be deemed to limit or restrict the right of the Sub-Adviser, or the right of any of its officers, directors or employees who may also be an officer, director or employee of the Funds, or persons otherwise affiliated with the Funds (within the meaning of the 1940 Act) to engage in any other business or to devote time and attention to the management or other aspects of any other business, whether of a similar or dissimilar nature, or to render services of any kind to any other trust, corporation, firm, individual or association. | ||
8. | Confidential Treatment. It is understood that any information or recommendation supplied by the Sub-Adviser in connection with the performance of its obligations hereunder is to be regarded as confidential and for use only by the Adviser, the Fund or such persons as the Adviser may designate in connection with the Portfolio. It is also understood that any information supplied to the Sub-Adviser in connection with the performance of its obligations hereunder, particularly, but not limited to, any list of securities which, on a temporary basis, may not be bought or sold for the Portfolio, is to be regarded as confidential and for use only by the Sub-Adviser in connection with its obligation to provide investment advice and other services to the Portfolio. | ||
9. | Representations and Warranties. The Sub-Adviser hereby represents and warrants as follows: | ||
(a) | The Sub-Adviser is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and such registration is current, complete and in full compliance with all material applicable provisions of the Advisers Act and the rules and regulations thereunder; | ||
(b) | The Sub-Adviser has all requisite authority to enter into, execute, deliver and perform the Sub-Adviser's obligations under this Agreement; | ||
(c) | The Sub-Adviser's performance of its obligations under this Agreement does not conflict with any law, regulation or order to which the Sub-Adviser is subject; and | ||
(d) | The Sub-Adviser has reviewed the portion of (i) the registration statement filed with the SEC, as amended from time to time, for the Funds' ("Registration Statement"), and (ii) Funds' prospectuses and statements of additional information (including amendments) thereto, in each case in the form received from the Adviser with respect to the disclosure about the Sub-Adviser and the Funds of which the Sub-Adviser has knowledge and except as advised in writing to the Adviser such Registration Statement, prospectuses and statements of additional information (including amendments) contain, as of their respective dates, no untrue statement of any material fact of which the Sub-Adviser has knowledge and do not omit any statement of a material fact of which the Sub-Adviser has knowledge which was required to be stated therein or necessary to make the statements contained therein not misleading. | ||
10. | Use of Names. | ||
(a) | The Sub-Adviser acknowledges and agrees that the names W&R Target Funds, Inc. and Waddell & Reed Investment Management Company, and abbreviations or logos associated with those names, are the valuable property of the Adviser and its affiliates; that the Funds, the Adviser and their affiliates have the right to use such names, abbreviations and logos; and that the Sub-Adviser shall use the names W&R Target Funds, Inc. and Waddell & Reed Investment Management Company, and associated abbreviations and logos, only in connection with the Sub-Adviser's performance of its duties hereunder. Further, in any communication with the public and in any marketing communications of any sort, the Sub-Adviser agrees to obtain prior written approval from the Adviser before using or referring to W&R Target Funds, Inc. and Waddell & Reed Investment Management Company, or the Portfolio or any abbreviations or logos associated with those names; provided that nothing herein shall be deemed to prohibit th e Sub-Adviser from referring to the performance of the Portfolio in the Sub-Adviser's marketing material as long as such marketing material does not constitute "sales literature" or "advertising" for the Portfolio, as those terms are used in the rules, regulations and guidelines of the SEC and the National Association of Securities Dealers, Inc. | ||
(b) | The Sub-Adviser acknowledges that the Portfolio and its agents may use the "BlackRock Capital" and "BlackRock Capital Management, Inc." names and the name of the responsible portfolio manager(s) in connection with accurately describing the activities of the Portfolio, including use with marketing and other promotional and informational material relating to the Portfolio. The Sub-Adviser hereby agrees and consents to the use of the Sub-Adviser's name upon the foregoing terms and conditions. | ||
11. | Reports by the Sub-Adviser and Records of the Portfolio. The Sub-Adviser shall furnish the Adviser monthly, quarterly and annual reports concerning transactions and performance of the Portfolio, including information required to be disclosed in the Funds' Registration Statement, in such form as may be mutually agreed. The Sub-Adviser shall permit the financial statements, books and records with respect to the Portfolio to be inspected and audited by the Funds, the Adviser or their agents at all reasonable times during normal business hours. The Sub-Adviser shall immediately notify and forward to both the Adviser and legal counsel for the Funds any legal process served upon it on behalf of the Adviser or the Funds. The Sub-Adviser shall promptly notify the Adviser of any changes in any information concerning the Sub-Adviser of which the Sub-Adviser becomes aware that would be required to be disclosed in the Funds' Registration Statement. | ||
In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Adviser agrees that all records it maintains for the Portfolio are the property of the Portfolio and the Funds and further agrees to surrender promptly to the Funds or the Adviser any such records upon the Funds' or the Adviser's request. The Sub-Adviser further agrees to maintain for the Funds the records the Funds are required to maintain under Rule 31a-1(b) insofar as such records relate to the investment affairs of the Portfolio. The Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records it maintains for the Funds. | |||
12. | Indemnification. The Sub-Adviser agrees to indemnify and hold harmless the Adviser, any affiliated person within the meaning of Section 2(a)(3) of the 1940 Act ("affiliated person") of the Adviser and each person, if any, who, within the meaning of Section 15 of the Securities Act of 1933, as amended (the "1933 Act"), controls ("controlling person") the Adviser, against any and all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses), to which the Adviser, the Portfolio, the Funds or such affiliated person or controlling person may become subject under the 1933 Act, the 1940 Act, the Advisers Act, under any other statute, at common law or otherwise, arising out of the Sub-Adviser's responsibilities as sub-adviser of the Portfolio (1) to the extent of and as a result of the willful misconduct, bad faith, or gross negligence of the Sub-Adviser, any of the Sub-Adviser's employees or representatives or any affiliate of or any person acting on behalf of the Sub-Adviser, or (2) as a result of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, prospectuses or statements of additional information covering the Portfolio or the Funds or any amendment thereof or any supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading, if such a statement or omission was made in reliance upon written information furnished by the Sub-Adviser to the Adviser, the Funds or any affiliated person of the Adviser or the Funds expressly for use in the Funds' Registration Statement, or upon verbal information confirmed by the Sub-Adviser in writing expressly for use in the Funds' Registration Statement or (3) to the extent of, and as a result of, the failure of the Sub-Adviser to execute, or cause to be executed, portfolio transactions according to the standards and requir ements of the 1940 Act; provided, however, that in no case is the Sub-Adviser's indemnity in favor of the Adviser or any affiliated person or controlling person of the Adviser deemed to protect such person against any liability to which any such person would otherwise be subject by reason of willful misconduct, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement. | ||
The Adviser agrees to indemnify and hold harmless the Sub-Adviser against any and all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses), to which the Sub-Adviser or such affiliated person or controlling person may become subject under the 1933 Act, the 1940 Act, the Advisers Act, under any other statute, at common law or otherwise, arising out of the Adviser's responsibilities as investment manager of the Portfolio (1) to the extent of and as a result of the willful misconduct, bad faith, or gross negligence of the Adviser, any of the Adviser's employees or representatives or any affiliate of or any person acting on behalf of the Adviser, or (2) as a result of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, prospectuses or statements of additional information covering the Portfolio or the Funds or any amendment thereof or any supplement thereto or the omission or alleged omission to state the rein a material fact required to be stated therein or necessary to make the statement therein not misleading, if such a statement or omission was made by the Funds other than in reliance upon written information furnished by the Sub-Adviser, or any affiliated person of the Sub-Adviser, expressly for use in the Funds' Registration Statement or other than upon verbal information confirmed by the Sub-Adviser in writing expressly for use in the Funds' Registration Statement; provided, however, that in no case is the Adviser's indemnity in favor of the Sub-Adviser deemed to protect such person against any liability to which any such person would otherwise be subject by reason of willful misconduct, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement. | |||
13. | Assignment by the Sub-adviser. This Agreement shall not be assigned by the Sub-adviser to any other person or company without the Adviser's prior written consent. | ||
14. | Jurisdiction and Applicable Law. The Sub-adviser irrevocably submits to the jurisdiction of any state or U.S. federal court sitting in the State of Kansas over any suit, action or proceeding arising out of or relating to this proposal and the agreement contemplated herein. This Agreement shall be construed and enforced in accordance with the laws of Maryland, the 1940 Act and the applicable rules and guidance issued by the Securities and Exchange Commission and its staff thereunder. The Sub-adviser irrevocably waives, to the fullest extent permitted by law, any objection which it may have to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. The Sub-adviser agrees that final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding upon the Sub-adviser, and may be enforced to the extent permitted b y applicable law in any court of the jurisdiction of which the Sub-adviser is subject by a suit upon such judgment. | ||
Nothing in this Section 14 shall affect the right of the Adviser to serve process in any manner permitted by law or limit the right of the Adviser to bring proceedings against the Sub-adviser in the courts of any jurisdiction or jurisdictions. | |||
15. | Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered or sent by pre-paid first class letter post to the following addresses or to such other address as the relevant addressee shall hereafter notify for such purpose to the others by notice in writing and shall be deemed to have been given at the time of delivery. | ||
If to the Adviser: WADDELL & REED INVESTMENT MANAGEMENT COMPANY | |||
6300 Lamar Avenue | |||
Overland Park, KS 66202, U.S.A. | |||
Attention: Henry J. Herrmann, President | |||
If to the Fund or Portfolio: W&R TARGET FUNDS, INC. | |||
6300 Lamar Avenue | |||
Overland Park, KS 66202, U.S.A. | |||
Attention: Kristen A. Richards, Vice President and Assistant Secretary | |||
If to the Sub-Adviser: BLACKROCK CAPITAL MANAGEMENT, INC. | |||
19. | Severability. Should any part of this Agreement be held invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors. | ||
20. | Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all such counterparts shall constitute a single instrument. | ||
IN WITNESS WHEREOF, the parties have duly executed this Agreement. | |||
WADDELL & REED INVESTMENT MANAGEMENT COMPANY | |||
By: | |||
Henry J. Herrmann | |||
Its: President | |||
Date: | |||
BLACKROCK CAPITAL MANAGEMENT, INC. | |||
By: | |||
Its: | |||
Date: |
W&R TARGET FUNDS, INC. P.O. BOX 9132 HINGHAM, MA 02043-9132 | IMPORTANT: ELECTRONIC VOTING OPTIONS AVAILABLE Fast, convenient, easy and available 24 hours a day! Vote by Phone: Call toll-free 1-___-___-____. Follow the recorded instructions. Vote on the Internet: Log on to www.proxyweb.com. Follow the on-screen instructions. Vote by Mail: Check the appropriate boxes on the reverse side of this card, sign and date this card and return in the envelope provided. |
IF YOU VOTE BY TELEPHONE OR INTERNET, DO NOT MAIL YOUR CARD. | |
*** CONTROL NUMBER: 999 999 999 999 99 *** |
W&R TARGET SMALL CAP VALUE PORTFOLIO A Series of W&R TARGET FUNDS, INC. | SPECIAL MEETING OF THE SHAREHOLDERS November 16, 2006 |
The undersigned, having received Notice of the November 16, 2006 Special Meeting of Shareholders of the above referenced portfolio (the "Fund"), a series of W&R Target Funds, Inc. (the "Corporation"), and the related Proxy Statement, hereby appoints Kristen A. Richards and Daniel C. Schulte as proxies, each with full power of substitution and revocation, to represent the undersigned and to vote all shares of the Fund that the undersigned is entitled to vote at the Special Meeting of Shareholders of the Fund to be held at 6300 Lamar Avenue, Overland Park, Kansas on November 16, 2006 at 3:00 p.m. Central Time, and any adjournments or postponements thereof. The undersigned hereby revokes any and all proxies with respect to such shares previously given by me. This instruction may be revoked at any time prior to its exercise at the Special Meeting by execution of a subsequent proxy card, by written notice to the Secretary of the Corporation, or by voting in person at the Special Me eting.
Dated: ____________________, 2006
Signature(s) of Shareholder(s) | (Please sign in Box) | |
PLEASE INDICATE VOTES ON OPPOSITE SIDE OF CARD.
Please fill in boxes as shown using black or blue ink or number 2 pencil. [x]
PLEASE DO NOT USE FINE POINT PENS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION. | ||||||
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL. | ||||||
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR SPECIFICATIONS. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSAL. | ||||||
1. | To approve a sub-advisory agreement between Waddell & Reed Investment Management Company and BlackRock Capital Management, Inc. with respect to the Fund. | |||||
[ ] FOR | [ ] AGAINST | [ ] ABSTAIN | ||||
The proxies are authorized to vote in their discretion on any other business that may properly come before the meeting or any adjournments or postponements thereof. | ||||||
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING BY PHONE OR INTERNET, PLEASE SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. |
Form of Buckslip
W&R TARGET FUNDS, INC.
THREE EASY WAYS TO VOTE YOUR PROXY
The accompanying proxy statement discusses important matters affecting Small Cap Value Portfolio, a series of W&R Target Funds, Inc. Please take time to read the proxy statement, then cast your vote. There are three easy ways to vote -- choose the method that's most convenient for you. Please vote all proxy cards received.
1. | Vote by telephone. Just call our dedicated proxy voting number -- 1-__________. This is a toll-free number. It's available 24 hours a day, seven days a week. For each proxy, enter the 14-digit number printed on the upper portion of the card and follow the voice promptings to record your vote. |
2. | Vote by Internet. Visit the web site -- www.proxyweb.com and enter the 14-digit number. Then follow the voting instructions that will appear. Vote each card received separately. |
3. | Vote by mail. Simply fill out the proxy card(s) and return them to us in the enclosed postage paid envelope. Please do not return your cards if you vote by phone or Internet. |
Please vote today!