EXHIBIT (d)(3)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 23rd day of September, 2002 between ING Mutual
Funds, a Delaware business trust (the "Trust"), and ING Investments, LLC, an
Arizona limited liability company (the "Manager").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
in separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust may offer shares of additional series in the future;
and
WHEREAS, the Trust desires to avail itself of the services of the
Manager for the provision of advisory and management services for the Trust; and
WHEREAS, the Manager is willing to render such services to the Trust.
NOW, THEREFORE, in consideration of the premises, the promises and
mutual covenants herein contained, it is agreed between the parties as follows:
1. Appointment. The Trust hereby appoints the Manager, subject to
the direction of the Board of Trustees, for the period and on the terms set
forth in this Agreement, to provide advisory, management, and other services, as
described herein, with respect to each series of the Trust as set forth in
Schedule A hereto (individually and collectively referred to herein as
"Series"), as such schedule may be amended from time to time. The Manager
accepts such appointment and agrees to render the services herein set forth for
the compensation herein provided.
In the event the Trust establishes and designates additional series
with respect to which it desires to retain the Manager to render advisory
services hereunder, it shall notify the Manager in writing. If the Manager is
willing to render such services, it shall notify the Trust in writing, whereupon
such additional series shall become a Series hereunder.
2. Services of the Manager. The Manager represents and warrants
that it is registered as an investment adviser under the Investment Advisers Act
of 1940 and will maintain such registration for so long as required by
applicable law. Subject to the general supervision of the Board of Trustees of
the Trust, the Manager shall provide the following advisory, management, and
other services with respect to the Series:
(a) Provide general, investment advice and guidance with
respect to the Series and provide advice and guidance to the Trust's Trustees,
and oversee the management of the investments of the Series and the composition
of each Series' portfolio of securities and investments, including cash, and the
purchase, retention and disposition thereof, in accordance with each Series'
investment objective or objectives and policies as stated in the Trust's current
registration statement, which management may be provided by others selected by
the Manager and approved by the Board of Trustees as provided below or directly
by the Manager as provided in Section 3 of this Agreement;
(b) In the event that the Manager wishes to select others
to render investment management services, the Manager shall analyze, select and
recommend for consideration and approval by the Trust's Board of Trustees
investment advisory firms (however organized) to provide investment advice to
one or more of the Series, and, at the expense of the Manager, engage (which
engagement may also be by the Trust) such investment advisory firms to render
investment advice and manage the investments of such Series and the composition
of each such Series' portfolio of securities and investments, including cash,
and the purchase, retention and disposition thereof, in accordance with the
Series' investment objective or objectives and policies as stated in the Trust's
current registration statement (any such firms approved by the Board of Trustees
and engaged by the Trust or the Manager are referred to herein as
"Sub-Advisers");
(c) Periodically monitor and evaluate the performance of
the Sub-Advisers with respect to the investment objectives and policies of the
Series;
(d) Monitor the Sub-Advisers for compliance with the
investment objective or objectives, policies and restrictions of each Series,
the 1940 Act, Subchapter M of the Internal Revenue Code, and if applicable,
regulations under such provisions, and other applicable law;
(e) If appropriate, analyze and recommend for
consideration by the Trust's Board of Trustees termination of a contract with a
Sub-Adviser under which the Sub-Adviser provides investment advisory services to
one or more of the Series;
(f) Supervise Sub-Advisers with respect to the services
that such Sub-Advisers provide under respective sub-advisory agreements
("Sub-Advisory Agreements");
(g) Render to the Board of Trustees of the Trust such
periodic and special reports as the Board may reasonably request; and
(h) Make available its officers and employees to the
Board of Trustees and officers of the Trust for consultation and discussions
regarding the administration and management of the Series and services provided
to the Trust under this Agreement.
3. Investment Management Authority. In the event the Manager
wishes to render investment management services directly to a Series, then with
respect to any such Series, the Manager, subject to the supervision of the
Trust's Board of Trustees, will provide a continuous investment program for the
Series' portfolio and determine the composition of the assets of the Series'
portfolio, including determination of the purchase, retention, or sale of the
securities, cash, and other investments contained in the portfolio. The Manager
will provide investment research and conduct a continuous program of evaluation,
investment, sales, and reinvestment of the Series' assets by determining the
securities and other investments that shall be purchased, entered into, sold,
closed, offered to the public, or exchanged for the Series, when these
transactions should be executed, and what portion of the assets of the Series
should be held in the various securities and other investments in which it may
invest, and the Manager is hereby
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authorized to execute and perform such services on behalf of the Series. To the
extent permitted by the investment policies of the Series, the Manager shall
make decisions for the Series as to foreign currency matters and make
determinations as to, and execute and perform, foreign currency exchange
contracts on behalf of such Series. The 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 Securities and Exchange Commission (the "SEC"), as
amended. Furthermore:
(a) The Manager will manage the Series so that each will
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code. In managing the Series in accordance with these requirements, the
Manager shall be entitled to receive and act upon advice of counsel to the
Series or counsel to the Manager.
(b) The Manager will conform with the 1940 Act and all
rules and regulations thereunder, all other applicable federal and state laws
and regulations, with any applicable procedures adopted by the Trust's Board of
Trustees, and the provisions of the Registration Statement of the Trust under
the Securities Act of 1933 and the 1940 Act, as supplemented or amended.
(c) On occasions when the Manager deems the purchase or
sale of a security to be in the best interest of the Series as well as any other
investment advisory clients, the Manager may, to the extent permitted by
applicable laws and regulations and any applicable procedures adopted by the
Trust's Board of Trustees, 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 Manager in
a manner that is fair and equitable in the judgment of the Manager in the
exercise of its fiduciary obligations to the Trust on behalf of the Series and
to such other clients.
(d) In connection with the purchase and sale of
securities of a Series, the Manager will arrange for the transmission to the
custodian for the Series on a daily basis, of such confirmation, trade tickets,
and other documents and information, including, but not limited to, Cusip,
Cedel, or other numbers that identify securities to be purchased or sold on
behalf of a Series, as may be reasonably necessary to enable the custodian to
perform its administrative and recordkeeping responsibilities with respect to a
Series. With respect to portfolio securities to be purchased or sold through the
Depository Trust Company, the Manager will arrange for the prompt transmission
of the confirmation of such trades to the Series' custodian.
(e) The Manager will assist the custodian or portfolio
accounting agent for the Series in determining, consistent with the procedures
and policies stated in the Registration Statement for the Trust and any
applicable procedures adopted by the Trust's Board of Trustees, the value of any
portfolio securities or other assets of the Series for which the custodian or
portfolio accounting agent seeks assistance or review from the Manager.
(f) The Manager will make available to the Trust,
promptly upon request, any of the Series' or the Manager's investment records
and ledgers as are necessary to assist the
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Series to comply with requirements of the 1940 Act, as well as other applicable
laws. The Manager will furnish to regulatory authorities having the requisite
authority any information or reports in connection with its services which may
be requested in order to ascertain whether the operations of the Series are
being conducted in a manner consistent with applicable laws and regulations.
(g) The Manager will regularly report to the Trust's
Board of Trustees on the investment program for the Series and the issuers and
securities represented in such Series' portfolio, and will furnish the Trust's
Board of Trustees with respect to the Series such periodic and special reports
as the Trustees may reasonably request.
(h) In connection with its responsibilities under this
Section 3, the Manager is responsible for decisions to buy and sell securities
and other investments the Series' portfolio, broker-dealer selection, and
negotiation of brokerage commission rates. The Manager's primary consideration
in effecting a security transaction will be to obtain the best execution for the
Series, taking into account the factors specified in the Prospectus and/or
Statement of Additional Information for the Trust, 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, experience and financial stability of the
brokers-dealer involved, the quality of the service, the difficulty of
execution, execution capabilities and operational facilities of the firms
involved, and the firm's risk in positioning a block of securities. Accordingly,
the price to the 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 Manager in the exercise of its fiduciary obligations to
the Trust on behalf of the Series, by other aspects of the portfolio execution
services offered. Subject to such policies as the Board of Trustees may
determine and consistent with Section 28(e) of the Securities Exchange Act of
1934, as amended, the Manager 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 the Series to pay a broker-dealer for effecting a portfolio
investment transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, if the 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
Manager's overall responsibilities with respect to the Series and to its other
clients as to which it exercises investment discretion. To the extent consistent
with these standards and in accordance with Section 11 (a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, the Manager is further
authorized to allocate the orders placed by it on behalf of the Series to the
Manager if it is registered as a broker-dealer with the SEC, to an affiliated
broker-dealer, or to such brokers and dealers who also provide research or
statistical material or other services to the Series, the Manager or an
affiliate of the Manager. Such allocation shall be in such amounts and
proportions as the Manager shall determine consistent with the above standards,
and the Manager will report on said allocation regularly to the Board of
Trustees of the Trust indicating the broker-dealers to which such allocations
have been made and the basis therefor.
4. Conformity with Applicable Law. The Manager, in the
performance of its duties and obligations under this Agreement, shall act in
conformity with the Registration Statement of
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the Trust and with the instructions and directions of the Board of Trustees of
the Trust and will conform to, and comply with, the requirements of the 1940 Act
and all other applicable federal and state laws and regulations.
5. Exclusivity. The services of the Manager to the Series under
this Agreement are not to be deemed exclusive, and the Manager, or any affiliate
thereof, shall be free to render similar services to other investment companies
and other clients (whether or not their investment objectives and policies are
similar to those of any of the Series) and to engage in other activities, so
long as its services hereunder are not impaired thereby.
6. Documents. The Trust has delivered properly certified or
authenticated copies of each of the following documents to the Manager and will
deliver to it all future amendments and supplements thereto, if any:
(a) certified resolution of the Board of Trustees of the
Trust authorizing the appointment of the Manager and approving the form of this
Agreement;
(b) the Registration Statement as filed with the SEC and
any amendments thereto; and
(c) exhibits, powers of attorney, certificates and any
and all other documents relating to or filed in connection with the Registration
Statement described above.
7. Records. The Manager agrees to maintain and to preserve for
the periods prescribed under the 1940 Act any such records as are required to be
maintained by the Trust with respect to the Series by the 1940 Act. The Manager
further agrees that all records of the Series are the property of the Trust and,
to the extent held by the Manager, it will promptly surrender any of such
records upon request.
8. Expenses. During the term of this Agreement, the Manager will
pay all expenses incurred by it in connection with its activities under this
Agreement, except such expenses as are assumed by the Trust under this Agreement
and such expenses as are assumed by a Sub-Adviser under its Sub-Advisory
Agreement. The Manager further agrees to pay all fees payable to the
Sub-Advisers, executive salaries and expenses of the Trustees of the Trust who
are employees of the Manager or its affiliates, and office rent of the Trust.
The Trust shall be responsible for all of the other expenses of its operations,
including, without limitation, the management fee payable hereunder; brokerage
commissions; interest; legal fees and expenses of attorneys; fees of auditors,
transfer agents and dividend disbursing agents, custodians and shareholder
servicing agents; the expense of obtaining quotations for calculating each
Series' net asset value; taxes, if any, and the preparation of the Series' tax
returns; cost of stock certificates and any other expenses (including clerical
expenses) of issue, sale, repurchase or redemption of shares; expenses of
registering and qualifying shares of the Series under federal and state laws and
regulations (including the salary of employees of the Manager engaged in the
registering and qualifying of shares of the Series under federal and state laws
and regulations or a pro-rata portion of the salary of employees to the extent
so engaged); salaries of personnel involved in placing orders for the execution
of the Series' portfolio transactions; expenses of disposition or
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offering any of the portfolio securities held by a Series; expenses of printing
and distributing reports, notices and proxy materials to existing shareholders;
expenses of printing and filing reports and other documents filed with
governmental agencies; expenses in connection with shareholder and trustee
meetings; and expenses of printing and distributing prospectuses and statements
of additional information to existing shareholders; fees and expenses of
Trustees of the Trust who are not employees of the Manager or any Sub-Adviser,
or their affiliates; trade association dues; insurance premiums; extraordinary
expenses such as litigation expenses. To the extent the Manager incurs any costs
or performs any services which are an obligation of the Trust, as set forth
herein, the Trust shall promptly reimburse the Manager for such costs and
expenses. To the extent the services for which the Trust is obligated to pay are
performed by the Manager, the Manager shall be entitled to recover from the
Trust only to the extent of its costs for such services.
9. Compensation. For the services provided by the Manager to a
Series pursuant to this Agreement, the Trust will pay to the Manager an annual
fee equal to the amount specified for such Series in Schedule A hereto, payable
monthly in arrears. Payment of the fees shall be in addition to any amount paid
to the Manager for the salary of its employees for performing services which are
an obligation of the Trust as provided in Section 8. The fee will be
appropriately pro-rated to reflect any portion of a calendar month that this
Agreement is not in effect between us.
10. Liability of the Manager. The Manager may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be required by the 1940 Act or the rules thereunder, neither the Manager nor its
stockholders, officers, trustees, employees, or agents shall be subject to, and
the Trust will indemnify such persons from and against, any liability for, or
any damages, expenses, or losses incurred 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 of the Manager's duties, or by reason of reckless
disregard of the Manager's obligations and duties under this Agreement. Except
as may otherwise be required by the 1940 Act or the rules thereunder, neither
the Manager nor its stockholders, officers, trustees, employees, or agents shall
be subject to, and the Trust will indemnify such persons from and against, any
liability for, or any damages, expenses, or losses incurred in connection with,
any act or omission by a Sub-Adviser or any of the Sub-Adviser's stockholders
or partners, officers, trustees, employees, or agents connected with or arising
out of any services rendered under a Sub-Advisory Agreement, except by reason of
willful misfeasance, bad faith, or gross negligence in the performance of the
Manager's duties under this Agreement, or by reason of reckless disregard of the
Manager's obligations and duties under this Agreement. No trustee, officer,
employee or agent of the Trust shall be subject to any personal liability
whatsoever, in his or her official capacity, to any person, including the Sub-
Adviser, other than to the Trust or its shareholders, in connection with Trust
property or the affairs of the Trust, save only that arising from his or her bad
faith, willful misfeasance, gross negligence or reckless disregard of his or her
duty to such person; and all such persons shall look solely to the Trust
property for satisfaction of claims of any nature against a trustee, officer,
employee or agent of the Trust arising in connection with the affairs of the
Trust. Moreover, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with
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respect to a Series shall be enforceable against the assets and property of that
Series only, and not against the assets or property of any other series of the
Trust.
11. Continuation and Termination. This Agreement shall become
effective on the date first written above, subject to the condition that the
Trust's Board of Trustees, including a majority of those Trustees who are not
interested persons (as such term is defined in the 0000 Xxx) of the Manager, and
the shareholders of each Series, shall have approved this Agreement. Unless
terminated as provided herein, the Agreement shall continue in full force and
effect with respect to each Series until the Reapproval Date set forth for such
Series in Schedule A to this Agreement, and shall continue from year to year
thereafter with respect to each Series so long as such continuance is
specifically approved at least annually (i) by the vote of a majority of the
Board of Trustees of the Trust, or (ii) by vote of a majority of the outstanding
voting shares of the Series (as defined in the 1940 Act), and provided
continuance is also approved by the vote of a majority of the Board of Trustees
of the Trust who are not parties to this Agreement or "interested persons" (as
defined in the 0000 Xxx) of the Trust or the Manager, cast in person at a
meeting called for the purpose of voting on such approval. This Agreement may
not be amended in any material respect without a majority vote of the
outstanding voting shares (as defined in the 1940 Act).
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
(i) that this Agreement has not been approved by the holders of a majority of
the outstanding shares of any other Series or (ii) 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.
This Agreement may be terminated by the Trust at any time, in its entirety or
with respect to a Series, without the payment of any penalty, by vote of a
majority of the Board of Trustees of the Trust or by a vote of a majority of the
outstanding voting shares of the Trust, or with respect to a Series, by vote of
a majority of the outstanding voting shares of such Series, on sixty (60) days'
written notice to the Manager, or by the Manager at any time, without the
payment of any penalty, on sixty (60) days' written notice to the Trust. This
Agreement will automatically and immediately terminate in the event of its
"assignment" as described in the 1940 Act.
12. Use of Name. It is understood that the name "ING Investments,
LLC" or any derivative thereof (including the name "ING") or logo associated
with that name is the valuable property of the Manager and its affiliates, and
that the Trust or the Series have the right to use such name (or derivative or
logo) only so long as this Agreement shall continue with respect to such Trust
or Series. Upon termination of this Agreement, the Trust (or Series) shall
forthwith cease to use such name (or derivative or logo) and, in the case of the
Trust, shall promptly amend its Declaration of Trust to change its name (if such
name is included therein).
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
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14. Applicable Law.
(a) This Agreement shall be governed by the laws of the
State of Delaware, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940, or any
rules or order of the SEC thereunder.
(b) 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.
(c) 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.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
ING MUTUAL FUNDS
By: /s/ Xxxxxx X. Naka
-------------------------
Xxxxxx X. Naka
Senior Vice President
ING INVESTMENTS, LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
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SCHEDULE A
WITH RESPECT TO THE
INVESTMENT MANAGEMENT AGREEMENT
BETWEEN
ING MUTUAL FUNDS
AND
ING INVESTMENTS, LLC
DATED: SEPTEMBER 23,2002
ANNUAL INVESTMENT
MANAGEMENT FEE
--------------
(as a percentage of average LAST CONTINUED/
SERIES daily net assets) APPROVED BY BOARD REAPPROVAL DATE
------ ----------------- ---------------
ING International Fund 1.00% August 20, 2002 September 1, 2003
ING Precious Metals Fund 1.00% of assets up to $50 million August 20, 2002 September 1, 2003
0.75% of assets in excess of $50
million
ING Russia Fund 1.25% August 20, 2002 September 1, 2003
