EXHIBIT (d)(6)
SUBADVISORY AGREEMENT
THIS is a RESTATEMENT of the AGREEMENT made the 30th day of October, 1998. THIS
RESTATED AGREEMENT is made this 9th day of May, 2001 by and between ING Pilgrim
Investments, LLC, a Delaware limited liability company (the "Investment
Adviser"), and Xxxxxx Xxxx Capital Management LLC (the "Sub-Adviser").
WITNESSETH
WHEREAS, the Investment Adviser is registered and will remain
registered during the term of this Agreement as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"), and
engages in the business of acting as an investment adviser; and
WHEREAS, the Sub-Adviser is registered and will remain registered
during the term of this Agreement as an investment adviser under the Investment
Advisers Act, and engages in the business of acting as an investment adviser;
and
WHEREAS, the Investment Adviser desires to retain the Sub-Adviser to
furnish investment advisory services to the Investment Adviser in connection
with the underlying investment funds specified on Schedule A hereto
(collectively, the "Funds," and each, a "Fund"), each of which is an investment
portfolio of the Pilgrim Funds Trust (formerly ING Funds Trust) (the "Trust");
and
WHEREAS, the Trust's Board of Trustees authorized this agreement to be
restated at a meeting held May 9,2000, and ING Pilgrim Investments, LLC, merged
with and is successor to the original party to this agreement - ING Mutual
Funds Management LLC; and
WHEREAS, Sub-Adviser is willing to make available to the Investment
Adviser and to the Funds certain sub-investment advisory services.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment. The Investment Adviser hereby appoints the Sub-Adviser to
provide certain sub-investment advisory services for the period and on the terms
set forth in this Agreement. The Sub-Adviser accepts such appointment and agrees
to furnish the services herein set forth for the compensation herein provided.
2. Sub-Investment Advisory Services. Subject always to the supervision of
the Investment Adviser and the Trust's Board of Trustees, the Sub-Adviser will
furnish an investment program in respect of, and make investment decisions for,
the portions of the Funds allocated to it by the
Investment Adviser, and place all orders for the purchase and sale of securities
for such portions of the Funds, In the performance of its duties, the
Sub-Adviser will comply with the provisions of the Trust's organizational
documentation, and the respective stated investment objective, policies and
restrictions of the Funds, as amended, will use its best efforts to safeguard
and promote the welfare of the Funds, and will comply with other policies which
the Trust's Board of Trustees or the Investment Adviser, as the case may be, may
from time to time determine and communicate to the Sub-Adviser.
The Sub-Adviser further agrees that it:
(a) will use the same skill and care in providing such services as
it uses in providing services to other accounts for which it
has investment management responsibilities;
(b) will place orders pursuant to its investment determinations
for the Funds either directly with the issuer or with any
broker or dealer;
(c) will report regularly to the Board of Trustees of the Trust
and to the Investment Adviser and will make appropriate
persons available for the purpose of reviewing with
representatives of the Investment Adviser on a regular basis
the management of the Funds, including, without limitation,
review of the general investment strategy of the Funds,
interest rate considerations and general conditions affecting
the marketplace;
(d) will maintain books and records with respect to the Funds'
securities transactions as are required by applicable laws and
regulations to be maintained and will furnish the Trust's
Board of Trustees such periodic and special reports as are
required by applicable laws and regulations to be furnished or
as the Board may reasonably request;
(e) will treat confidentially and as proprietary information of
the Trust all records and other information relative to the
Trust, and will not use records and information for any
purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval shall not be
unreasonably withheld and may not be withheld where the
Sub-Adviser may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so
requested by the Trust;
(f) in making investment recommendations for the Funds, the
Sub-Adviser's personnel will not inquire as to or take into
consideration whether the issuers of securities proposed for
purchase or sale for a Fund's accounts are clients of the
Sub-Adviser or of its affiliates. In dealing with such
clients, the Sub-Adviser and its affiliates will not inquire
as to or take into consideration whether securities of those
customers are held by the Trust; and
(g) will provide advice and recommendations with respect to other
aspects of the business and affairs of the Funds and perform
such other functions related to the provision of investment
management services as the Investment Adviser may reasonably
request
3. Broker Dealer Relationships. With regard to the portions of the Funds
allocated to it, the Sub-Adviser is responsible for decisions to buy and sell
securities, broker-dealer selection, and negotiation of brokerage commission
rates. The Sub-Adviser may select any affiliated person of the Trust, the
Investment Adviser, or the Sub-Adviser to the extent permitted pursuant to the
Trust's procedures for securities transactions with affiliated brokers pursuant
to Section 17(e)(2) and Rule 17e-1 under the Investment Company Act of 1940, as
amended (the "Investment Company Act").
The Sub-Adviser's primary consideration in effecting a security
transaction will be execution at a price that is reasonable and fair compared to
the commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions, including similar securities
being purchased or sold on a securities exchange during a comparable period of
time. In selecting a broker-dealer to execute each particular transaction, the
Sub-Adviser will take the following into consideration: the best net price
available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-dealer to the investment performance
of the Fund on a continuing basis. Accordingly, the price to a Fund in any
transaction may be less favorable than that available from another broker-dealer
if the difference is reasonably justified by other aspects of the portfolio
execution services offered.
Subject to such policies and procedures as the Board of Trustees may
determine, the Sub-Adviser shall not be deemed to have acted unlawfully or to
have breached any duty created by this Agreement or otherwise solely by reason
of its having caused a Fund to pay a broker or dealer that provides brokerage
and research services to the Sub-Adviser for the Fund's use an amount of
commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Sub-Adviser determines in good faith that such amount
of commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Sub-Adviser's overall responsibilities with
respect to the Fund. The Sub-Adviser is further authorized to allocate the
orders placed by it on behalf of a Fund to such brokers and dealers who also
provide research or statistical material, or other services to the Fund or the
Sub-Adviser for the Fund's use. Such allocation shall be in such amounts and
proportions as the Sub-Adviser shall determine and the Sub-Adviser will report
on said allocations regularly to the Board of Trustees of the Trust indicating
the brokers to whom such allocations have been made and the basis therefor.
4. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Sub-Adviser shall at all times conform to:
(a) all applicable provisions of the Investment Company Act and the Investment
Advisers Act and any rules and regulations
adopted thereunder as amended; (b) the provisions of the Registration Statement
of the Trust under the Securities Act of 1933, as amended, and the Investment
Company Act; (c) the provisions of the Trust Instrument of the Trust, as
amended; (d) the provisions of the By-laws of the Trust, as amended; and (e) any
other applicable provisions of state and federal law.
5. Books and Records. In compliance with Rule 31a-3 under the Investment
Company Act, the Sub-Adviser hereby agrees that all records which it maintains
for the Trust on behalf of the Investment Adviser are the property of the Trust
and further agrees to surrender promptly to the Trust or to the Investment
Adviser copies of any of such records upon request. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 adopted under the
Investment Company Act all records required to be maintained by Sub-Adviser on
behalf of the Investment Adviser under Rule 3la-l(b)(5), (6), (7), (9) and (10)
under the Investment Company Act.
6. Expenses. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Funds.
7. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Investment Adviser will pay the Sub-Adviser and
the Sub-Adviser will accept as full compensation therefor a fee computed daily
and paid monthly in arrears at the annual rate set forth on Schedule A, based on
each Fund's average daily net assets, computed in the manner set forth in the
Registration Statement of the Trust. In the event that investment advisory fees
charged to a Fund by the Investment Adviser are waived, deferred or reduced,
then sub-advisory fees payable in accordance with this Paragraph 7 shall be
proportionally waived, deferred or reduced. Such fee reduction, if applicable,
shall be applied on a monthly basis at the time each payment of sub-advisory
fees is due hereunder. Further, if the fees payable to the Sub-Adviser begin to
accrue before the end of any month, or if this Agreement terminates before the
end of any month, then such fees for such month shall be prorated according to
the proportion which the partial period bears to the full month in which such
effectiveness or termination occurs.
8. Liability of Sub-Adviser. In. the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Sub-Adviser or any of its officers, directors or employees,
the Sub-Adviser shall not be subject to liability to the Investment Adviser for
any act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security.
9. Limit of Liability. The terms the "Pilgrim Funds Trust" and "Trustees"
(of the Trust) refer, respectively to the trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under the
Trust's organizational documentation, to which reference is hereby made. The
obligations of the "Pilgrim Funds Trust" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities and are not binding upon any of the
Trustees, shareholders or representatives of the Trust personally, but bind only
the assets of the. Funds, and all persons
dealing with the Funds or other series of the Trust must look solely to the
assets of the Funds for the enforcement of any claims against the Trust.
10. Term. This Agreement shall become effective as it pertains to a Fund at
the close of business on the date opposite the Fund's name on Schedule A and
shall remain in force and effect for two years for the Fund from such date and
thereafter from year to year, provided that such continuance is specifically
approved at least annually: (a) (i) by the Trust's Board of Trustees or (ii) by
the vote of a majority of the Fund's outstanding voting securities (as defined
in Section 2(a)(42) of the Investment Company Act); and (b) by the affirmative
vote of a majority of the Trustees who are not parties to this Agreement or
interested persons of a party to this Agreement (other than as Trust trustees),
by votes cast in person at a meeting specifically called for such purpose.
11. Termination. This Agreement may be terminated at any time as it
pertains to a Fund, without the payment of any penalty, by vote of the Trust's
Board of Trustees or by vote of a majority of the Fund's outstanding voting
securities, by the Investment Adviser, or by the Sub-Adviser on sixty (60)
days' written notice to the other parties. The notice provided for herein may
be waived by any party. This Agreement shall automatically terminate as it
pertains to all Funds in the event of its assignment. The term "assignment" for
the purpose of this paragraph has the meaning defined in Section 2(a)(4) of the
Investment Company Act.
12. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
13. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust
and the Investment Adviser shall be 00 Xxxxxx Xxxx., Xxxxx 000, Xxxxxxx Xxxxxx,
XX 00000, and the address of the Sub-Adviser shall be 000 Xxxx Xxxxxx, Xxx Xxxx,
XX 00000, attn: Xxxxxxx X. Xxxxxx.
14. Questions of Interpretation. Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the investment Company Act shall be resolved by reference
to such term or provision of the Act. In addition, where the effect of a
requirement of the Investment Company Act reflected in any provision of this
Agreement is released by rules, regulation or order of the Securities and
Exchange Commission, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original and both of which, collectively, shall
constitute one agreement.
16. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement shall be held or made
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 shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their respective officers on the day and year first above
written.
XXXXXX XXXX CAPITAL ING PILGRIM INVESTMENTS, LLC
MANAGEMENT LLC
By: Xxxxxx X. Xxxx By: Xxxxx Xxxxxxxx
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Title: General Counsel Title: President & CEO
Attest By: Xxxxxxx Xxxxxx Attest By: Xxx Xxxxxxxx
--------------------- ---------------------
Title: VP Title: VP
AMENDED AND RESTATED
SCHEDULE A
WITH RESPECT TO THE
SUBADVISORY AGREEMENT
(OCTOBER 30,1998)
BETWEEN
ING INVESTMENTS, LLC
AN ARIZONA LIMITED LIABILITY COMPANY
(SUCCESSOR BY MERGER TO ING PILGRIM INVESTMENTS, LLC)
AND
XXXXXX XXXX CAPITAL MANAGEMENT LLC
ANNUAL
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SUB-ADVISORY FEE
----------------
(as a percentage of LAST CONTINUED/
---------------
FUND average daily net assets) APPROVED BY BOARD REAPPROVAL DATE
---- ----------------- ---------------
ING National Tax-Exempt Bond Fund 0.250% July 11, 2002 September 1, 2003
ING National Tax-Exempt Money 0.200% July 11, 2002 September 1, 2003
Market Fund
