EXHIBIT (d)(26)
FORM OF RESTATED EXPENSE LIMITATION AGREEMENT
ING EQUITY TRUST
This RESTATED EXPENSE LIMITATION AGREEMENT (this "Agreement"),
effective this ___ day of ______ 2003, restates the Expense Limitation Agreement
dated September 23, 2002 by and between ING Investments, LLC (the "Investment
Manager"), ING Equity Trust (the "Registrant") and Clarion CRA Securities, L.P.
(the "Sub-Adviser"). If the Registrant is a series fund investment company, then
the Registrant is entering into this Agreement on behalf of, and this Agreement
shall apply to, each series of the Registrant set forth on Schedule A hereto
(each a "Fund," collectively the "Funds"), as such schedule may be amended from
time to time to add or delete series. If the Registrant is not a series fund
investment company, then this Agreement shall apply to the Registrant, and the
use of the terms "Fund" or "Funds" herein shall refer to the Registrant.
WHEREAS, the Registrant is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management company; and
WHEREAS, the Registrant, the Investment Manager and the Sub-Adviser
desire that the provisions of this Agreement do not adversely affect a Fund's
status as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), do not interfere with a Fund's
ability to compute its taxable income under Code Section 852, do not adversely
affect the status of the distributions a Fund makes as deductible dividends
under Code Section 562, and do comply with the requirements of Revenue Procedure
99-40 (or any successor pronouncement of the Internal Revenue Service); and
WHEREAS, the Registrant and the Investment Manager have entered into an
investment management agreement (the "Management Agreement"), pursuant to which
the Investment Manager provides investment advisory services to each Fund; and
WHEREAS, the Investment Manager and the Sub-Adviser have entered into
an investment management sub-advisory agreement (the "Sub-Advisory Agreement"),
pursuant to which the Sub-Adviser provides investment advisory services to one
or more of the Funds; and
WHEREAS, the Registrant, the Investment Manager and the Sub-Adviser
have determined that it is appropriate and in the best interests of the Funds
and their shareholders to maintain the expenses of each Fund at a level below
the level to which each such Fund might otherwise be subject.
NOW, THEREFORE, the parties hereto agree as follows:
1. Expense Limitation.
1.1 Applicable Expense Limit. To the extent that the ordinary
operating expenses, including but not limited to investment advisory fees
payable to the Investment Manager, but excluding interest, taxes, other
investment-related costs, leverage expenses (as defined below), extraordinary
expenses such as litigation, other expenses not incurred in the ordinary course
of such Fund's business, and expenses of any counsel or other persons or
services retained by such Fund's Trustees who are not "interested persons," as
that term is defined in the 1940 Act, of the Investment Manager (the "Fund
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Operating Expenses"), incurred by a class of a Fund listed on Schedule A in any
fiscal year exceed the Operating Expense Limit, as defined in Section 1.2 below,
for such class for such fiscal year, such excess amount (the "Excess Amount")
shall be the liability of the Investment Manager. For the purposes of this
Agreement, leverage expenses shall mean fees, costs and expenses incurred by a
Fund's use of leverage (including, without limitation, expenses incurred by a
Fund in creating, establishing and maintaining leverage through borrowings or
the issuance of preferred shares).
1.2 Operating Expense Limit. The Operating Expense Limit in any
fiscal year with respect to each class of a Fund shall be the amount specified
in Schedule A.
1.3 Daily Computation. The Investment Manager shall determine on
each business day whether the aggregate fiscal year to date Fund Operating
Expenses for any class of a Fund exceed the Operating Expense Limit, as such
Operating Expense Limit has been pro-rated to the date of such determination
(the "Pro-Rated Expense Cap"). If, on any business day, the aggregate fiscal
year to date Fund Operating Expenses for any class of a Fund do not equal the
Pro-Rated Expense Cap for that class, the amount of such difference shall be
netted against the previous day's accrued amount for Excess Amounts or
Recoupment Amounts (as defined below), and the difference shall be accrued for
that day as an Excess Amount or Recoupment Amount as applicable.
1.4 Payment. At the end of each month, the accruals made pursuant
to Section 1.3 above shall be netted, and the result shall be remitted by the
Investment Manager to the Fund if such netting results in an Excess Amount, and
it shall be remitted to the Investment Manager if such netting results in a
Recoupment Amount and the Investment Manager is entitled to a Recoupment Amount
pursuant to Section 2.1 below. Any such amounts remitted to a Fund, or repaid by
a Fund, shall be allocated among the classes of the Fund in accordance with the
terms of the Fund's Multiple Class Plan Pursuant to Rule 18f-3 under the 1940
Act. The Registrant may offset amounts owed to a Fund pursuant to this Agreement
against the Fund's advisory fee payable to the Investment Manager.
2. Right to Recoupment. If the Investment Manager has waived or reduced
any investment advisory fees, or made any payments pursuant to Section 1.4
above, relating to any of the 36 months immediately preceding any month end
calculation pursuant to Section 1.4 above, the Investment Manager shall be
entitled to recoup from a Fund any such investment advisory fees waived or
reduced and any such payments made (collectively, a "Recoupment Amount"), if (i)
on the date of any calculation under Section 1.3, the aggregate fiscal year to
date Fund Operating Expenses for any class of a Fund are less than that day's
Pro-Rated Expense Cap for that class, and (ii) such Recoupment Amounts have not
already been recouped. Any amounts recouped from a class of a Fund shall be
recouped in accordance with the principles of the Fund's Multiple Class Plan
Pursuant to Rule 18f-3 under the 1940 Act. Amounts recouped shall be allocated
to the oldest Recoupment Amounts during such 36 month period until fully
recouped, and thereafter to the next oldest Recoupment Amounts, and so forth.
3. Contribution by Sub-Advisers.
3.1 Waiver and/or reduction of fees. Each Sub-Adviser agrees to
waive and/or reduce its investment advisory fees under its Sub-Advisory
Agreement, in the same percentage, and for the same time period, for any Fund
subject to such Sub-Advisory Agreement for which the Investment Manager waives
and/or reduces its investment advisory fees under the Management Agreement.
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3.2 Payment of Excess Amounts. Each Sub-Adviser shall pay to the
Investment Manager a portion of any Excess Amounts paid by the Investment
Manager hereunder with regard to any Fund subject to such Sub-Adviser's
Sub-Advisory Agreement. A Sub-Adviser's portion of such Excess Amounts shall be
the same percentage of such Excess Amounts as the percentage of the investment
advisory fees for such Fund that Sub-Adviser receives from the Investment
Manager. The Investment Manager may offset amounts owed to the Investment
Manager pursuant to this Section 3.2 against the sub-advisory fees paid to the
applicable Sub-Adviser. Otherwise, the Investment Manager shall provide an
invoice to such Sub-Adviser and the Sub-Adviser shall pay such invoice promptly
upon receipt.
3.3 Allocation of Recoupments. The Investment Manager shall
promptly remit to a Sub-Adviser a portion of any amounts recouped by the
Investment Manager pursuant to Section 2 of this Agreement that relate to the
waiver and/or reduction of fees or the payment of Excess Amounts by such
Sub-Adviser. The portion to be paid to such Sub-Adviser shall be the same
percentage of the Recoupment Amount as the percentage of the waiver and/or
reduction of fees or the payment of Excess Amounts by such Sub-Adviser bears to
the total waiver and/or reduction of fees or the payment of Excess Amounts to
which such recoupment relates.
3.4 Accounting. The Investment Manager will provide to each
Sub-Adviser reasonable access to the books and records of the applicable Fund
and the Investment Manager for the purpose of confirming the amounts waived,
reduced, paid or recouped by the Investment Manager under this Agreement.
3.5 Term and Termination of Sub-Advisers' Obligations and Rights.
A Sub-Adviser's obligations under Sections 3.1 and 3.2, and its rights under
Section 3.3, shall begin as of the date such Sub-Adviser becomes a signatory
hereto and shall end upon the earlier of the termination of this Agreement, the
Management Agreement or such Sub-Adviser's Sub-Advisory Agreement.
4. Term and Termination. This Agreement shall have an initial term with
respect to each Fund ending on the date indicated on Schedule A, as such
schedule may be amended from time to time. Thereafter, this Agreement shall
automatically renew for one-year terms with respect to a Fund unless the
Investment Manager provides written notice of the termination of this Agreement
to a lead Independent Trustee of the Registrant within 90 days of the end of the
then current term for that Fund. In addition, this Agreement shall terminate
with respect to a Fund upon termination of the Management Agreement with respect
to such Fund, or it may be terminated by the Registrant, without payment of any
penalty, upon written notice to the Investment Manager at its principal place of
business within 90 days of the end of the then current term for a Fund.
5. Miscellaneous.
5.1 Captions. The captions in this Agreement are included for
convenience of reference only and in no other way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
5.2 Interpretation. Nothing herein shall be deemed to require the
Registrant or a Fund to take any action contrary to the Registrant's articles of
incorporation, declaration of trust, or similar
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governing document, an applicable prospectus or statement of additional
information, or any applicable statutory or regulatory requirement, or to
relieve or deprive the Registrant's Board of Trustees of its responsibility for
and control of the conduct of the affairs of the Registrant or the Funds.
5.3 Definitions. Any question of interpretation of any term or
provision of this Agreement, including but not limited to the investment
management fee, the computations of net asset values, and the allocation of
expenses, having a counterpart in or otherwise derived from the terms and
provisions of the Management Agreement or the 1940 Act, shall have the same
meaning as and be resolved by reference to such Management Agreement or the 1940
Act.
5.4 Amendments. This Agreement may be amended only by a written
agreement signed by each of the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers thereunto duly authorized, as of the day and year
first above written.
ING EQUITY TRUST ING INVESTMENTS, LLC
By: ______________________________ By:_______________________________
Name: Xxxxxx X. Naka Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President Title: Executive Vice President
CLARION CRA SECURITIES, L.P.
By:_______________________________
Name: X. Xxxxxx Xxxxxxxx
Title: Managing Director
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SCHEDULE A
TO THE
RESTATED EXPENSE LIMITATION AGREEMENT
ING EQUITY TRUST
OPERATING EXPENSE LIMITS
MAXIMUM OPERATING EXPENSE LIMIT
NAME OF FUND (AS A PERCENTAGE OF AVERAGE NET ASSETS)
------------ ---------------------------------------
Class A Class B Class C Class I Class Q
------- ------- ------- ------- -------
ING Real Estate Fund 1.45% 2.20% 2.20% 1.00% 1.45%
Initial Term Expires May 31, 2004
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HE
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