Exhibit d(2)(Y)
FORM OF
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this __ day of ___, 2004, among ING Investors Trust (the
"Trust"), a Massachusetts business trust, Directed Services, Inc. (the
"Manager"), a New York corporation, and Xxxx Xxxxx Funds Management, Inc. (the
"Portfolio Manager"), a corporation organized under the laws of the State of
Maryland.
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company;
WHEREAS, the Trust is authorized to issue separate series, each of
which will offer a separate class of shares of beneficial interest, each series
having its own investment objective or objectives, policies, and limitations;
WHEREAS, the Trust currently offers shares in multiple series, may
offer shares of additional series in the future, and intends to offer shares of
additional series in the future;
WHEREAS, pursuant to a Management Agreement, effective as of May 24,
2002, as amended, a copy of which has been provided to the Portfolio Manager,
the Trust has retained the Manager to render advisory, management, and
administrative services with respect to the Trust's series; and
WHEREAS, the Trust and the Manager wish to retain the Portfolio Manager
to furnish investment advisory services to one or more of the series of the
Trust, and the Portfolio Manager is willing to furnish such services to the
Trust and the Manager.
NOW THEREFORE, in consideration of the premises and the promises and
mutual covenants herein contained, it is agreed between the Trust, the Manager
and the Portfolio Manager as follows:
1. APPOINTMENT. The Trust and the Manager hereby appoint the Portfolio
Manager to act as the portfolio manager to the series of the Trust designated on
SCHEDULE A of this Agreement (each a "Series") for the periods and on the terms
set forth in this Agreement. The Portfolio Manager accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
In the event the Trust designates one or more series other than the
Series with respect to which the Trust and the Manager wish to retain the
Portfolio Manager to render investment advisory services hereunder, they shall
promptly notify the Portfolio Manager in writing. If the Portfolio Manager is
willing to render such services, it shall so notify the Trust and Manager in
writing, whereupon such series shall become a Series hereunder, and be subject
to this Agreement.
2. PORTFOLIO MANAGEMENT DUTIES AND AUTHORITY.
Subject to the supervision of the Trust's Board of Trustees (the "Board")
and the Manager, the Portfolio Manager will provide a continuous investment
program for each Series' portfolio and
determine the composition of the assets of each Series' portfolio, including
determination of the purchase, retention, or sale of the securities, cash, and
other investments contained in the portfolio. The Portfolio Manager will provide
investment research and conduct a continuous program of evaluation, investment,
sales, and reinvestment of each Series' assets by determining the securities and
other investments that shall be purchased, entered into, sold, closed, or
exchanged for the Series, when these transactions should be executed, and what
portion of the assets of each Series should be held in the various securities
and other investments in which it may invest, and the Portfolio Manager is
hereby authorized to execute and perform such services on behalf of each Series.
To the extent permitted by the investment policies of the Series, the Portfolio
Manager shall make decisions for the Series as to foreign currency matters. The
Portfolio Manager will provide the services under this Agreement in accordance
with the Series' investment objective or objectives, policies, and restrictions
as stated in the Trust's Registration Statement filed with the U.S. Securities
and Exchange Commission (the "SEC"), as from time to time amended (the
"Registration Statement"), copies of which shall be sent to the Portfolio
Manager by the Manager upon filing with the SEC. The Portfolio Manager is
authorized to exercise tender offers and exchange offers on behalf of the
Series, each as the Portfolio Manager determines is in the best interest of the
Series. The Portfolio Manager and Manager further agree as follows:
(a) The Portfolio Manager will (1) manage each Series so that no action
or omission on the part of the Portfolio Manager will cause a Series to fail to
meet the requirements to qualify as a regulated investment company specified in
Section 851 of the Internal Revenue Code of 1986, as amended (the "Code") (other
than the requirements for the Trust to register under the 1940 Act and to file
with its tax return an election to be a regulated investment company and to file
with its tax return an election to be a regulated investment company and satisfy
the distribution requirements under Section 852 (a) of the Internal Revenue
Code, all of which shall not be the responsibility of the Portfolio Manager),
(2) manage each Series so that no action or omission on the part of the
Portfolio Manager shall cause a Series to fail to comply with the
diversification requirements of Section 817(h) of the Code, and the regulations
issued thereunder, and (3) use reasonable efforts to manage the Series so that
no action or omission on the part of the Portfolio Manager shall cause a Series
to fail to comply with any other rules and regulations pertaining to investment
vehicles underlying variable annuity or variable life insurance policies. The
Manager will notify the Portfolio Manager promptly if the Manager believes that
a Series is in violation of any requirement specified in the first sentence of
this paragraph. The Manager or the Trust will notify the Portfolio Manager of
any pertinent changes, modifications to, or interpretations of Section 817(h) of
the Code and regulations issued thereunder and of rules or regulations
pertaining to investment vehicles underlying variable annuity or variable life
insurance policies.
(b) On occasions when the Portfolio Manager deems the purchase or sale
of a security to be in the best interest of a Series as well as of other
investment advisory clients of the Portfolio Manager or any of its affiliates,
the Portfolio Manager may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to be so
sold or purchased with those of its other clients where such aggregation is not
inconsistent with the policies set forth in the Registration Statement. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Portfolio Manager in a
manner that is fair and equitable in the judgment of the Portfolio Manager in
the exercise of its fiduciary obligations to the Trust and to such other
clients, provided, however that the Manager and the Board shall have the right
to review and request changes to the Portfolio Manager's manner of
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allocation, provided further that any requested changes to such manner of
allocation shall be implemented on a prospective basis only.
(c) In connection with the purchase and sale of securities for each
Series, the Portfolio Manager will arrange for the transmission to the custodian
and portfolio accounting agent for the Series on a daily basis, such
confirmation, trade tickets, and other documents and information, including, but
not limited to, Cusip, Sedol, or other numbers that identify securities to be
purchased or sold on behalf of the Series, as may be reasonably necessary to
enable the custodian and portfolio accounting agent to perform their
administrative and recordkeeping responsibilities with respect to the Series.
With respect to portfolio securities to be purchased or sold through the
Depository Trust Company, the Portfolio Manager will arrange for the automatic
transmission of the confirmation of such trades to the Trust's custodian and
portfolio accounting agent.
(d) The Portfolio Manager will assist the portfolio accounting agent
for the Trust in determining or confirming, consistent with the procedures and
policies stated in the Registration Statement, the value of any portfolio
securities or other assets of the Series for which the portfolio accounting
agent seeks assistance from or identifies for review by the Portfolio Manager.
(e) The Portfolio Manager will make available to the Trust and the
Manager, promptly upon reasonable request, all of the Series' investment records
and ledgers maintained by the Portfolio Manager (which shall not include the
records and ledgers maintained by the custodian and portfolio accounting agent
for the Trust) as are necessary to assist the Trust and the Manager to comply
with requirements of the 1940 Act and the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), as well as other applicable laws. The Portfolio
Manager will furnish to regulatory authorities having the requisite authority
any information or reports in connection with such services which may be
requested in order to ascertain whether the operations of the Trust are being
conducted in a manner consistent with applicable laws and regulations.
(f) The Portfolio Manager will provide reports to the Trust's Board for
consideration at meetings of the Board on the investment program for the Series
and the issuers and securities represented in the Series' portfolio, and will
furnish the Trust's Board with respect to the Series such periodic and special
reports as the Trustees and the Manager may reasonably request.
(g) In rendering the services required under this Agreement, the
Portfolio Manager may, from time to time, employ or associate with itself such
affiliated or unaffiliated person or persons as it believes necessary to assist
it in carrying out its obligations under this Agreement. The Portfolio Manager
may not retain, employ or associate itself with any company that would be an
"investment adviser," as that term is defined in the 1940 Act, to the Series
unless the contract with such company is approved by a majority of the Trust's
Board and a majority of Trustees who are not parties to any agreement or
contract with such company and who are not "interested persons," as defined in
the 1940 Act, of the Trust, the Manager, or the Portfolio Manager, or any such
company, and is approved by the vote of a majority of the outstanding voting
securities of the applicable Series of the Trust to the extent required by the
1940 Act. The Portfolio Manager shall be responsible for making reasonable
inquiries and for reasonably ensuring that no associated person of the Portfolio
Manager, or of any company that the Portfolio Manager has retained, employed, or
with which it has associated with respect to the investment management of the
Series, to the best of the Portfolio Manager's knowledge, had in any material
connection with the handling of assets:
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(i) been convicted, in the last ten (10) years, of any felony or
misdemeanor arising out of conduct involving embezzlement,
fraudulent conversion, or misappropriation of funds or securities,
involving violations of Sections 1341, 1342, or 1343 of Xxxxx 00,
Xxxxxx Xxxxxx Code, or involving the purchase or sale of any
security; or
(ii) been found by any state regulatory authority, within the last
ten (10) years, to have violated or to have acknowledged violation
of any provision of any state insurance law involving fraud,
deceit, or knowing misrepresentation; or
(iii) been found by any federal or state regulatory authorities,
within the last ten (10) years, to have violated or to have
acknowledged violation of any provision of federal or state
securities laws involving fraud, deceit, or knowing
misrepresentation.
(h) In using spot and forward foreign exchange contracts for the Series
as an investment the parties represent the following:
(i) that the Manager is properly and lawfully established with full
power and authority to enter into spot and forward foreign exchange
contracts, to perform its obligations under such foreign exchange
contracts and to procure the Portfolio Manager to enter into such
foreign exchange contracts on its behalf.
(ii) that the Manager may not, except for purposes of redemptions,
expenses, and other costs of doing business, encumber funds which
the Portfolio Manager has under the Portfolio Manager's management
or which benefit from the Portfolio Manager's investment advice. If
the Manager requires funds for any redemptions, expenses, and other
costs of doing business, the Portfolio Manager will make funds
available in a reasonably timely manner for the Manager to meet
such obligations. The Manager reserves the right to segregate
assets upon notice to the Portfolio Manager and provide different
arrangements for investment management with respect to those
assets.
(iii) that the Portfolio Manager has been granted full power and
authority to enter into foreign exchange contracts as agent on the
Manager's behalf and to give instructions for settlement for the
same.
(iv) that the Portfolio Manager has full authority to instruct the
Manager's and the Trust's custodian in conformity with its mandate.
(v) that in the event of the termination of this Agreement, the
Portfolio Manager, if legally and operationally possible, may offer
the Series' counterparty the option to leave open any existing
foreign exchange contracts or to close them out at prevailing
market rates.
(i) The Portfolio Manager will have no duty to vote any proxy solicited
by or with respect to the issuers of securities in which assets of the Series
are invested unless the Manager gives the Portfolio Manager written instructions
to the contrary. The Portfolio Manager will immediately forward any proxy
solicited by or with respect to the issuers of securities in which assets of the
Series are invested to the Manager or to any agent of the Manager designated by
the Manager in writing.
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The Portfolio Manager will make appropriate personnel available for
consultation for the purpose of reviewing with representatives of the Manager
and/or the Board any proxy solicited by or with respect to the issuers of
securities in which assets of the Series are invested. Upon request, the
Portfolio Manager will submit a written voting recommendation to the Manager for
such proxies. In making such recommendations, the Portfolio Manager shall use
its good faith judgment to act in the best interests of the Series. The
Portfolio Manager shall disclose to the best of its knowledge any conflict of
interest with the issuers of securities that are the subject of such
recommendation including whether such issuers are clients or are being solicited
as clients of the Portfolio Manager or of its affiliates.
3. BROKER-DEALER SELECTION. The Portfolio Manager is hereby authorized
to place orders for the purchase and sale of securities and other investments
for each Series' portfolio, with or through such persons, brokers or dealers and
to negotiate commissions to be paid on such transactions and to supervise the
execution thereof. The Portfolio Manager's primary consideration in effecting
any such transaction will be to obtain the best execution for the Series, taking
into account the factors specified in the Registration Statement, which include
price (including the applicable brokerage commission or dollar spread), the size
of the order, the nature of the market for the security, the timing of the
transaction, the reputation, the experience and financial stability of the
broker-dealer involved, the quality of the service, the difficulty of execution,
and the execution capabilities and operational facilities of the firms involved,
and the firm's risk in positioning a block of securities. Accordingly, the price
to a Series in any transaction may be less favorable than that available from
another broker-dealer if the difference is reasonably justified, in the judgment
of the Portfolio Manager in the exercise of its fiduciary obligations to the
Trust, by other aspects of the portfolio execution services offered.
Subject to such policies as the Board may determine and consistent with
Section 28(e) of the Securities Exchange Act of 1934, as amended, the Portfolio
Manager may effect a transaction on behalf of the Series with a broker-dealer
who provides brokerage and research services to the Portfolio Manager
notwithstanding the fact that the commissions payable with respect to any such
transaction may be greater than the amount of any commission another
broker-dealer might have charged for effecting that transaction, if the
Portfolio Manager 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-dealer, viewed in terms of either that particular
transaction or the Portfolio Manager's or its affiliate's overall
responsibilities with respect to the Series and to their other clients as to
which they exercise investment discretion.
The Portfolio Manager will consult with the Manager to the end that
portfolio transactions on behalf of a Series are directed to broker-dealers on
the basis of criteria reasonably considered appropriate by the Manager. To the
extent consistent with this Agreement, the Portfolio Manager is further
authorized to allocate orders placed by it on behalf of the Series to the
Portfolio Manager as agent if it is registered as a broker-dealer with the SEC,
to any of its affiliated broker-dealers as agents, or to such brokers and
dealers who also provide research or statistical material, or other services to
the Series, the Portfolio Manager, or an affiliate of the Portfolio Manager.
Such allocation shall be in such amounts and proportions as the Portfolio
Manager shall determine consistent with the above standards, and the Portfolio
Manager will report on said allocation
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regularly to the Board indicating the broker-dealers to which such allocations
have been made and the basis therefore.
4. DISCLOSURE ABOUT PORTFOLIO MANAGER. The Portfolio Manager has
reviewed the post-effective amendment to the Registration Statement for the
Trust filed with the SEC that contains disclosure about the Portfolio Manager,
and represents and warrants that, with respect to the disclosure about or
information relating, directly or indirectly, to the Portfolio Manager, to the
Portfolio Manager's knowledge, such Registration Statement contains, as of the
date hereof, no untrue statement of any material fact and does not omit any
statement of a material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading. The Portfolio
Manager further represents and warrants that it is a duly registered investment
adviser under the Advisers Act, or alternatively that it is not required to be a
registered investment adviser under the Advisers Act to perform the duties
described in this Agreement, and that it is a duly registered investment adviser
in all states in which the Portfolio Manager is required to be registered and
will maintain such registration so long as this Agreement remains in effect. The
Portfolio Manager will provide the Manager with a copy of the Portfolio
Manager's Form ADV, Part II at the time the Form ADV and any amendment is filed
with the SEC, and a copy of its written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act, together with evidence of its
adoption.
5. EXPENSES. During the term of this Agreement, the Portfolio Manager
will pay all expenses incurred by it and its staff and for their activities in
connection with the portfolio management duties specified in this Agreement. The
Manager or the Trust shall be responsible for all the expenses of the Trust's
operations including, but not limited to:
(a) Expenses of all audits by the Trust's independent public
accountants;
(b) Expenses of the Series' transfer agent, registrar, dividend
disbursing agent, and shareholder recordkeeping services;
(c) Expenses of the Series' custodial services including recordkeeping
services provided by the custodian;
(d) Expenses of obtaining quotations for calculating the value of each
Series' net assets;
(e) Expenses of obtaining Portfolio Activity Reports and Analyses of
International Management Reports (as appropriate) for each Series;
(f) Expenses of maintaining the Trust's tax records;
(g) Salaries and other compensation of any of the Trust's executive
officers and employees, if any, who are not officers, directors, stockholders,
or employees of the Portfolio Manager or an affiliate of the Portfolio Manager;
(h) Taxes levied against the Trust;
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(i) Brokerage fees and commissions, transfer fees, registration fees,
taxes and similar liabilities and costs properly payable or incurred in
connection with the purchase and sale of portfolio securities for the Series;
(j) Costs, including the interest expense, of borrowing money;
(k) Costs and/or fees incident to meetings of the Trust's
shareholders, the preparation and mailings of prospectuses and reports of the
Trust to its shareholders, the filing of reports with regulatory bodies, the
maintenance of the Trust's existence, and the regulation of shares with federal
and state securities or insurance authorities;
(l) The Trust's legal fees, including the legal fees related to the
registration and continued qualification of the Trust's shares for sale;
(m) Trustees' fees and expenses to trustees who are not officers,
employees, or stockholders of the Portfolio Manager or any affiliate thereof;
(n) The Trust's pro rata portion of the fidelity bond required by
Section 17(g) of the 1940 Act, or other insurance premiums;
(o) Association membership dues;
(p) Extraordinary expenses of the Trust as may arise including
expenses incurred in connection with litigation, proceedings, and other claims
(unless the Portfolio Manager is responsible for such expenses under Section 13
of this Agreement), and the legal obligations of the Trust to indemnify its
Trustees, officers, employees, shareholders, distributors, and agents with
respect thereto; and
(q) Organizational and offering expenses.
6. COMPENSATION. For the services provided to each Series, the Manager
will pay the Portfolio Manager a fee, payable as described in SCHEDULE B.
The fee will be prorated to reflect any portion of a calendar month
that this Agreement is not in effect among the parties. In accordance with the
provisions of the Management Agreement, the Manager is solely responsible for
the payment of fees to the Portfolio Manager, and the Portfolio Manager agrees
to seek payment of its fees solely from the Manager.
7. MARKETING MATERIALS.
(a) During the term of this Agreement, the Sub-Adviser agrees to
furnish the Manager at its principal office for prior review and approval by the
Manager all written and/or printed materials, including but not limited to,
PowerPoint(R) or slide presentations, news releases, advertisements, brochures,
fact sheets and other promotional, informational or marketing materials (the
"Marketing Materials") for internal use or public dissemination, that are
produced or are for use or reference by the Sub-Adviser, its affiliates or other
designees, broker-dealers or the public in connection with the Series, and
Sub-Adviser shall not use any such materials if the Manager reasonably objects
in
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writing within five business days (or such other period as may be mutually
agreed) after receipt thereof. Marketing Materials may be furnished to the
Manager by first class or overnight mail, facsimile transmission equipment,
electronic delivery or hand delivery.
(b) During the term of this Agreement, the Manager agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, or Marketing Materials prepared for distribution to
shareholders of each Series, or the public that refer to the Sub-Adviser in any
way, prior to the use thereof, and the Manager shall not use any such materials
if the Sub-Adviser reasonably objects in writing within five business days (or
such other period as may be mutually agreed) after receipt thereof. The
Sub-Adviser's right to object to such materials is limited to the portions of
such materials that expressly relate to the Sub-Adviser, its services and its
clients. The Manager agrees to use its reasonable best efforts to ensure that
materials prepared by its employees or agents or its affiliates that refer to
the Sub-Adviser or its clients in any way are consistent with those materials
previously approved by the Sub-Adviser as referenced in the first sentence of
this paragraph. Marketing Materials may be furnished to the Sub-Adviser by first
class or overnight mail, facsimile transmission equipment, electronic delivery
or hand delivery.
8. SEED MONEY. The Manager agrees that the Portfolio Manager shall not
be responsible for providing money for the initial capitalization of the Series.
9. COMPLIANCE.
(a) The Trust and the Manager acknowledge that the Portfolio Manager
is not the compliance agent for any Series or for the Trust or the Manager, and
does not have access to all of the books and records for each Series necessary
to perform certain compliance testing. To the extent that the Portfolio Manager
has agreed to perform the services specified in Section 2 in accordance with the
Trust's Registration Statement, the Trust's Amended and Restated Agreement and
Declaration of Trust and By-Laws, the Trust's Prospectus and any policies
adopted by the Trust's Board applicable to the Series (collectively, the
"Charter Requirements"), and in accordance with applicable law (including
Subchapters M and L of the Code, the 1940 Act and the Advisers Act ("Applicable
Law")), the Portfolio Manager shall perform such services based upon its books
and records with respect to each Series, which comprise a portion of each
Series' books and records, and upon information and written instructions
received from the Trust, the Manager or the Trust's administrator, and shall not
be held responsible under this Agreement so long as it performs such services in
accordance with this Agreement, the Charter Requirements and Applicable Law
based upon such books and records and such information and instructions provided
by the Trust, the Manager, or the Trust's administrator. The Manager shall
promptly provide the Portfolio Manager with copies of the Trust's Registration
Statement, the Trust's Amended and Restated Agreement and Declaration of Trust
and By-Laws, the Trust's currently effective Prospectus and any written policies
and procedures adopted by the Trust's Board applicable to the Series and any
amendments or revisions thereto. The Portfolio Manager agrees that it shall
promptly notify the Manager and the Trust (1) in the event that the SEC or other
governmental authority has censured the Portfolio Manager; placed limitations
upon its activities, functions or operations; suspended or revoked its
registration, if any, as an investment adviser; or has commenced proceedings or
an investigation that may result in any of these actions, (2) upon having a
reasonable basis for believing that the Series has ceased to qualify or might
not qualify as a regulated investment company under Subchapter M of the Code, or
(3) upon having a reasonable basis for believing that the Series has ceased to
comply
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with the diversification provisions of Section 817(h) of the Code or the
regulations thereunder. The Portfolio Manager further agrees to notify the
Manager and the Trust promptly of any material fact known to the Portfolio
Manager respecting or relating to the Portfolio Manager that is not contained in
the Registration Statement as then in effect, and is required to be stated
therein or necessary to make the statements therein not misleading, or of any
statement contained therein that becomes untrue in any material respect.
(b) The Manager agrees that it shall immediately notify the Portfolio
Manager (1) in the event that the SEC has censured the Manager or the Trust;
placed limitations upon either of their activities, functions, or operations;
suspended or revoked the Manager's registration as an investment adviser; or has
commenced proceedings or an investigation that may result in any of these
actions, (2) upon having a reasonable basis for believing that the Series has
ceased to qualify or might not qualify as a regulated investment company under
Subchapter M of the Code, or (3) upon having a reasonable basis for believing
that the Series has ceased to comply with the diversification provisions of
Section 817(h) of the Code or the regulations thereunder.
10. BOOKS AND RECORDS. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Portfolio Manager hereby agrees that all records
which it maintains for the Series are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the Trust's
or the Manager's reasonable request, although the Portfolio Manager may, at its
own expense, make and retain a copy of such records. The Portfolio Manager
further agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-l under the 1940 Act
and to preserve the records required by Rule 204-2 under the Advisers Act for
the period specified in such rules.
11. COOPERATION; CONFIDENTIALITY. Each party to this Agreement agrees
to cooperate with each other party and with all appropriate governmental
authorities having the requisite jurisdiction (including, but not limited to,
the SEC and state insurance regulators) in connection with any investigation or
inquiry relating to this Agreement or the Trust.
Subject to the foregoing, the Portfolio Manager shall treat as
confidential all information pertaining to the Trust and actions of the Trust,
the Manager and the Portfolio Manager, and the Manager shall treat as
confidential and use only in connection with the Series all information
furnished to the Trust or the Manager by the Portfolio Manager, in connection
with its duties under the Agreement except that the aforesaid information need
not be treated as confidential if required to be disclosed under applicable law,
if generally available to the public through means other than by disclosure by
the Portfolio Manager or the Manager, or if available from a source other than
the Manager, Portfolio Manager of the Trust.
12. REPRESENTATIONS RESPECTING PORTFOLIO MANAGER.
(a) During the term of this Agreement, the Trust and the Manager agree
to furnish to the Portfolio Manager at its principal offices prior to use
thereof copies of all Registration Statements and amendments thereto,
prospectuses, proxy statements, reports to shareholders, sales literature or
other material prepared for distribution to shareholders of the Trust or any
Series or to the public that refer or relate in any way to the Portfolio Manager
or any of its affiliates (other than the Manager), or that use any derivative of
the names "Xxxx Xxxxx Funds Management, Inc.," or any
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derivative thereof or logos associated therewith. The Trust and the Manager
agree that they will not use any such material without the prior consent of the
Portfolio Manager, which consent shall not be unreasonably withheld. In the
event of the termination of this Agreement, the Trust and the Manager will
furnish to the Portfolio Manager copies of any of the above-mentioned materials
that refer or relate in any way to the Portfolio Manager;
(b) The Trust and the Manager will furnish to the Portfolio Manager
such information relating to either of them or the business affairs of the Trust
as the Portfolio Manager shall from time to time reasonably request in order to
discharge its obligations hereunder;
(c) The Manager and the Trust agree that neither the Trust, the
Manager, nor affiliated persons of the Trust or the Manager shall give any
information or make any representations or statements in connection with the
sale of shares of the Series concerning the Portfolio Manager or the Series
other than the information or representations contained in the Registration
Statement, prospectus, or statement of additional information for the Trust, as
they may be amended or supplemented from time to time, or in reports or proxy
statements for the Trust, or in sales literature or other promotional material
approved in advance by the Portfolio Manager, except with the prior permission
of the Portfolio Manager.
13. SERVICES NOT EXCLUSIVE.
(a) It is understood that the services of the Portfolio Manager are not
exclusive, and nothing in this Agreement shall prevent the Portfolio Manager (or
its affiliates) from providing similar services to other clients, including
investment companies (whether or not their investment objectives and policies
are similar to those of the Series) or from engaging in other activities.
(b) The Portfolio Manager shall be free to render investment advisory
or other services to others (including other investment companies) and to engage
in other activities, provided, however, that the Portfolio Manager may not
consult with any other portfolio manager of the Trust concerning transactions in
securities or other assets for any investment portfolio of the Trust, including
the Series, except that such consultations are permitted between the current and
successor portfolio managers of the Series in order to effect an orderly
transition of portfolio management duties so long as such consultations are not
concerning transactions prohibited by Section 17(a) of the 1940 Act.
14. LIABILITY. Except as may otherwise be required by the 1940 Act or
the rules thereunder or other applicable law, the Trust and the Manager agree
that the Portfolio Manager, any affiliated person of the Portfolio Manager, and
each person, if any, who, within the meaning of Section 15 of the Securities Act
of 1933, as amended ("1933 Act"), controls the Portfolio Manager (1) shall bear
no responsibility and shall not be subject to any liability for any act or
omission respecting any series of the Trust that is not a Series hereunder, and
(2) shall not be liable for any error of judgment, mistake of law, any
diminution in value of the investment portfolio of the Series, or subject to any
damages, expenses, or losses in connection with, any act or omission connected
with or arising out of any services rendered under this Agreement, except by
reason of willful misfeasance, bad faith, or gross negligence in the performance
by the Portfolio Manager of its duties, or by reason of reckless disregard by
the Portfolio Manager of its obligations and duties under this Agreement.
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15. INDEMNIFICATION.
(a) Notwithstanding Section 13 of this Agreement, the Manager agrees to
indemnify and hold harmless the Portfolio Manager, any affiliated person of the
Portfolio Manager (other than the Manager), and each person, if any, who, within
the meaning of Section 15 of the 1933 Act controls ("controlling person") the
Portfolio Manager (all of such persons being referred to as "Portfolio Manager
Indemnified Persons") against any and all losses, claims, damages, liabilities,
or litigation (including legal and other expenses) to which a Portfolio Manager
Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, the Code, under any other statute, at common law or otherwise,
arising out of the Manager's responsibilities to the Trust which (1) may be
based upon any violations of willful misconduct, malfeasance, bad faith or gross
negligence by the Manager, any of its employees or representatives, or any
affiliate of or any person acting on behalf of the Manager, or (2) may be based
upon any untrue statement or alleged untrue statement of a material fact
supplied by, or which is the responsibility of, the Manager and contained in the
Registration Statement or prospectus covering shares of the Trust or any Series,
or any amendment thereof or any supplement thereto, or the omission or alleged
omission to state therein a material fact known or which should have been known
to the Manager and was required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon information furnished to the Manager or the Trust or to any
affiliated person of the Manager by a Portfolio Manager Indemnified Person;
provided however, that in no case shall the indemnity in favor of the Portfolio
Manager Indemnified Person be deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of its
duties, or by reason of its reckless disregard of obligations and duties under
this Agreement.
(b) Notwithstanding Section 13 of this Agreement, the Portfolio Manager
agrees to indemnify and hold harmless the Manager, any affiliated person of the
Manager (other than the Portfolio Manager), and each person, if any, who, is a
controlling person of the Manager (all of such persons being referred to as
"Manager Indemnified Persons") against any and all losses, claims, damages,
liabilities, or litigation (including legal and other expenses) to which a
Manager Indemnified Person may become subject under the 1933 Act, 1940 Act, the
Advisers Act, the Code, under any other statute, at common law or otherwise,
arising out of the Portfolio Manager's responsibilities as Portfolio Manager of
the Series which (1) may be based upon any violations of willful misconduct,
malfeasance, bad faith or gross negligence by the Portfolio Manager, any of its
employees or representatives, or any affiliate of or any person acting on behalf
of the Portfolio Manager, including but not limited to its responsibilities
under Section 2, Paragraph (a) of this Agreement, or (2) any breach of any
representations or warranties contained in Section 4; provided, however, that in
no case shall the indemnity in favor of a Manager Indemnified Person be deemed
to protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
(c) The Manager shall not be liable under Paragraph (a) of this Section
14 with respect to any claim made against a Portfolio Manager Indemnified Person
unless such Portfolio Manager Indemnified Person shall have notified the Manager
in writing within a reasonable time after the summons, notice, or other first
legal process or notice giving information of the nature of the claim
11
shall have been served upon such Portfolio Manager Indemnified Person (or after
such Portfolio Manager Indemnified Person shall have received notice of such
service on any designated agent), but failure to notify the Manager of any such
claim shall not relieve the Manager from any liability which it may have to the
Portfolio Manager Indemnified Person against whom such action is brought except
to the extent the Manager is prejudiced by the failure or delay in giving such
notice. In case any such action is brought against the Portfolio Manager
Indemnified Person, the Manager will be entitled to participate, at its own
expense, in the defense thereof or, after notice to the Portfolio Manager
Indemnified Person, to assume the defense thereof, with counsel satisfactory to
the Portfolio Manager Indemnified Person. If the Manager assumes the defense of
any such action and the selection of counsel by the Manager to represent both
the Manager and the Portfolio Manager Indemnified Person would result in a
conflict of interests and therefore, would not, in the reasonable judgment of
the Portfolio Manager Indemnified Person, adequately represent the interests of
the Portfolio Manager Indemnified Person, the Manager will, at its own expense,
assume the defense with counsel to the Manager and, also at its own expense,
with separate counsel to the Portfolio Manager Indemnified Person, which counsel
shall be satisfactory to the Manager and to the Portfolio Manager Indemnified
Person. The Portfolio Manager Indemnified Person shall bear the fees and
expenses of any additional counsel retained by it, and the Manager shall not be
liable to the Portfolio Manager Indemnified Person under this Agreement for any
legal or other expenses subsequently incurred by the Portfolio Manager
Indemnified Person independently in connection with the defense thereof other
than reasonable costs of investigation. The Manager shall not have the right to
compromise on or settle the litigation without the prior written consent of the
Portfolio Manager Indemnified Person if the compromise or settlement results, or
may result in a finding of wrongdoing on the part of the Portfolio Manager
Indemnified Person.
(d) The Portfolio Manager shall not be liable under Paragraph (b) of
this Section 14 with respect to any claim made against a Manager Indemnified
Person unless such Manager Indemnified Person shall have notified the Portfolio
Manager in writing within a reasonable time after the summons, notice, or other
first legal process or notice giving information of the nature of the claim
shall have been served upon such Manager Indemnified Person (or after such
Manager Indemnified Person shall have received notice of such service on any
designated agent), but failure to notify the Portfolio Manager of any such claim
shall not relieve the Portfolio Manager from any liability which it may have to
the Manager Indemnified Person against whom such action is brought except to the
extent the Portfolio Manager is prejudiced by the failure or delay in giving
such notice. In case any such action is brought against the Manager Indemnified
Person, the Portfolio Manager will be entitled to participate, at its own
expense, in the defense thereof or, after notice to the Manager Indemnified
Person, to assume the defense thereof, with counsel satisfactory to the Manager
Indemnified Person. If the Portfolio Manager assumes the defense of any such
action and the selection of counsel by the Portfolio Manager to represent both
the Portfolio Manager and the Manager Indemnified Person would result in a
conflict of interests and therefore, would not, in the reasonable judgment of
the Manager Indemnified Person, adequately represent the interests of the
Manager Indemnified Person, the Portfolio Manager will, at its own expense,
assume the defense with counsel to the Portfolio Manager and, also at its own
expense, with separate counsel to the Manager Indemnified Person, which counsel
shall be satisfactory to the Portfolio Manager and to the Manager Indemnified
Person. The Manager Indemnified Person shall bear the fees and expenses of any
additional counsel retained by it, and the Portfolio Manager shall not be liable
to the Manager Indemnified Person under this Agreement for any legal or other
expenses subsequently incurred by the Manager Indemnified Person independently
in connection with the defense thereof
12
other than reasonable costs of investigation. The Portfolio Manager shall not
have the right to compromise on or settle the litigation without the prior
written consent of the Manager Indemnified Person if the compromise or
settlement results, or may result in a finding of wrongdoing on the part of the
Manager Indemnified Person.
(e) The Manager shall not be liable under this Section 14 to indemnify
and hold harmless the Portfolio Manager and the Portfolio Manager shall not be
liable under this Section 14 to indemnify and hold harmless the Manager with
respect to any losses, claims, damages, liabilities, or litigation that first
become known to the party seeking indemnification during any period that the
Portfolio Manager is, within the meaning of Section 15 of the 1933 Act, a
controlling person of the Manager.
16. DURATION AND TERMINATION. This Agreement shall become effective
with respect to each Series on the later of the date first indicated above or
the date of the commencement of operations of each Series. Unless terminated as
provided herein, the Agreement shall remain in full force and effect until
SEPTEMBER 1, 2005, and continue on an annual basis thereafter with respect to
each Series; provided that such annual continuance is specifically approved each
year by (a) the vote of a majority of the entire Board of the Trust, or by the
vote of a majority of the outstanding voting securities (as defined in the 0000
Xxx) of each Series, and (b) the vote of a majority of those Trustees who are
not parties to this Agreement or interested persons (as such term is defined in
the 0000 Xxx) of any such party to this Agreement cast in person at a meeting
called for the purpose of voting on such approval. The Portfolio Manager shall
not provide any services for such Series or receive any fees on account of such
Series with respect to which this Agreement is not approved as described in the
preceding sentence. However, any approval of this Agreement by the holders of a
majority of the outstanding shares (as defined in the 0000 Xxx) of a Series
shall be effective to continue this Agreement with respect to such Series
notwithstanding (1) that this Agreement has not been approved by the holders of
a majority of the outstanding shares of any other Series or (2) that this
agreement has not been approved by the vote of a majority of the outstanding
shares of the Trust, unless such approval shall be required by any other
applicable law or otherwise. Notwithstanding the foregoing, this Agreement may
be terminated for each or any Series hereunder (1) by the Manager at any time
without penalty, upon sixty (60) days' written notice to the Portfolio Manager
and the Trust, (2) at any time without payment of any penalty by the Trust, upon
the vote of a majority of the Trust's Board or a majority of the outstanding
voting securities of each Series, upon sixty (60) days' written notice to the
Manager and the Portfolio Manager, or (3) by the Portfolio Manager at any time
without penalty, upon three (3) months' written notice to the Manager and the
Trust, unless the Manager or the Trust requests additional time to find a
replacement for the Portfolio Manager, in which case the Portfolio Manager shall
allow the additional time requested by the Trust or the Manager not to exceed
three (3) months beyond the initial three-month notice period; provided however,
that the Portfolio Manager may terminate this Agreement at any time without
penalty effective upon written notice to the Manager and the Trust, in the event
either the Portfolio Manager (acting in good faith) or the Manager ceases to be
registered as an investment adviser under the Advisers Act or otherwise becomes
legally incapable of providing investment management services pursuant to its
respective contract with the Trust, or in the event the Manager becomes bankrupt
or otherwise incapable of carrying out its obligations under this Agreement, or
in the event that the Portfolio Manager does not receive compensation for its
services from the Manager or the Trust as required by the terms of this
Agreement. In addition, this Agreement shall terminate with respect to a Series
in the event that it is not approved by the vote of a majority of the
13
outstanding voting securities of that Series at a meeting of shareholders at
which approval of the Agreement shall be considered by shareholders of the
Series. In the event of termination for any reason, all records of each Series
for which the Agreement is terminated shall promptly be returned to the Manager
or the Trust, free from any claim or retention of rights in such records by the
Portfolio Manager, although the Portfolio Manager may, at its own expense, make
and retain a copy of such records. The Agreement shall automatically terminate
in the event of its assignment (as such term is described in the 1940 Act). In
the event this Agreement is terminated or is not approved in the manner
described above, the Sections or Paragraphs numbered 2(e), 10, 11, 12, 14, 15,
and 19 of this Agreement shall remain in effect, as well as any applicable
provision of this Paragraph numbered 16.
17. NOTICES. Any notice must be in writing and shall be deemed to have
been given when (1) delivered in person, (2) dispatched by telegram or electric
facsimile transfer (confirmed in writing by postage prepaid first class mail
simultaneously dispatched), (3) sent by internationally recognized overnight
courier service (with receipt confirmed by such overnight courier service), or
(4) sent by registered or certified mail, to the other party at the address of
such party set forth below or at such other address as such party may from time
to time specify in writing to the other party.
If to the Trust:
ING Investors Trust
0000 X. Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Counsel
If to the Manager:
Directed Services, Inc.
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chief Counsel
If to the Portfolio Manager:
Xxxx Xxxxx Funds Management, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx Xxx
18. AMENDMENTS. 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, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (1) the Trustees of the Trust,
including a majority of the Trustees of the Trust who are not interested persons
of any party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval, if such approval is required by applicable
law, and (2) the holders of a majority of the outstanding voting securities of
the Series.
14
Notwithstanding the foregoing, this Agreement may be amended without
the approval of a majority of the Series' outstanding voting securities if the
amendment relates solely to a change that is permitted or not prohibited under
federal law, rule, regulation, SEC Order or SEC staff interpretation thereof to
be made without shareholder approval.
19. USE OF NAMES.
(a) It is understood that the name "Directed Services, Inc." or any
derivative thereof or logo associated with that name is the valuable property of
the Manager and/or its affiliates, and that the Portfolio Manager has the right
to use such name (or derivative or logo) only with the approval of the Manager
and only so long as the Manager is Manager to the Trust and/or the Series. Upon
termination of the Management Agreement between the Trust and the Manager, the
Trust or the Manager shall notify the Portfolio Manager of the termination of
the Management Agreement and the Portfolio Manager shall as soon as is
reasonably possible cease to use such name (or derivative or logo).
(b) It is understood that the name "Xxxx Xxxxx Funds Management, Inc."
or any derivative thereof or logos associated with those names are the valuable
property of the Portfolio Manager and its affiliates and that the Trust and/or
the Series have the right to use such names (or derivatives or logos) in
offering materials of the Trust with the approval of the Portfolio Manager and
for so long as the Portfolio Manager is a portfolio manager to the Trust and/or
the Series. Upon termination of this Agreement between the Trust, the Manager
and the Portfolio Manager, the Trust shall as soon as is reasonably possible
cease to use such names (or derivatives or logos).
20. AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST. A copy of
the Amended and Restated Agreement and Declaration of Trust for the Trust is on
file with the Secretary of the Commonwealth of Massachusetts. The Amended and
Restated Agreement and Declaration of Trust has been executed on behalf of the
Trust by Trustees of the Trust in their capacity as Trustees of the Trust and
not individually. The obligations of this Agreement shall be binding upon the
assets and property of the Trust and shall not be binding upon any Trustee,
officer, or shareholder of the Trust individually.
21. MISCELLANEOUS.
(a) This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, without giving effect to the provisions, policies or principals
thereof relating to choice or conflict of laws, provided that nothing herein
shall be construed in a manner inconsistent with the 1940 Act, the Advisers Act
or rules or orders of the SEC thereunder. The term "affiliate" or "affiliated
person" as used in this Agreement shall mean "affiliated person" as defined in
Section 2(a)(3) of the 0000 Xxx.
(b) The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(c) To the extent permitted under Section 15 of this Agreement, this
Agreement may only be assigned by any party with the prior written consent of
the other parties.
15
(d) 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, and to this extent, the provisions of this
Agreement shall be deemed to be severable.
(e) Nothing herein shall be construed as constituting the Portfolio
Manager as an agent of the Manager, or constituting the Manager as an agent of
the Portfolio Manager.
(f) The Manager and the Portfolio Manager each affirm that it has
procedures in place reasonably designed to protect the privacy of non-public
personal consumer/customer financial information.
(g) The Trust, the Manager and the Portfolio Manager acknowledge that
each may have obligations under the laws and regulations of the United States to
verify the source of funds and identity of investors in accordance with the USA
Patriot Act of 2001, and any rules or regulations adopted thereunder
(collectively "the Patriot Act"). Each party agrees to assist the other parties
in monitoring transactions in accordance with the Patriot Act. If required by
applicable law or regulation, each party shall provide the other parties with
documentation evidencing the identity of a beneficial owner or owners of shares
of the Series upon request when a party is required by a law, court order, of by
administrative or regulatory entity to disclose the identity of the beneficial
owner(s).
16
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the day and year first above written.
ING INVESTORS TRUST
Attest: By:
--------------------------- ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
---------------------------- ------------------------------
DIRECTED SERVICES, INC.
Attest: By:
--------------------------- ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
---------------------------- ------------------------------
XXXX XXXXX FUNDS MANAGEMENT, INC.
Attest: By:
--------------------------- ----------------------------------
Name: Name:
--------------------------- --------------------------------
Title: Title:
--------------------------- -------------------------------
17
SCHEDULE A
The Series of ING Investors Trust, as described in Section 1 of the
attached Portfolio Management Agreement, to which Xxxx Xxxxx Funds Management,
Inc. shall act as Portfolio Manager is as follows:
ING Xxxx Xxxxx Value Portfolio
18
SCHEDULE B
COMPENSATION FOR SERVICES TO SERIES
For the services provided by Xxxx Xxxxx Funds Management, Inc.
("Portfolio Manager") to the following Series of ING Investors Trust, pursuant
to the attached Portfolio Management Agreement, the Manager will pay the
Portfolio Manager a fee, computed daily and payable monthly, based on the
average daily net assets of the Series at the following annual rates of the
average daily net assets of the Series:
SERIES RATE
------ ----
ING Xxxx Xxxxx Value Portfolio 0.70% on first $50 million of assets
0.45% on next $50 million of assets
0.40% on next $50 million of assets
0.35% on next $50 million of assets
0.30% on asset over $200 million
If this Agreement becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion that such period bears to the full
month in which such effectiveness or termination occurs.
19
