Exhibit (d)(14)
FORM OF SUBADVISORY AGREEMENT
THIS is a RESTATEMENT of the AGREEMENT made the 30th 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, on behalf of Delta Asset
Management (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, 200, 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 hereinset 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.
2
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
3
provisions of the Registration Statement of the Trust under the Securities Act
of 1933, as amended, and the Investment Company Act; (c) the 3 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 31a-1(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
4
Trustees, shareholders or representatives of the Trust personally, but bind only
the assets of the Funds, and all 4 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 Xxxxxx Xxxx Capital Management LLC, on behalf of
the Sub- Adviser, shall be 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, atm: 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.
5
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 MANAGEMENT LLC,
on behalf of Delta Asset Management ING PILGRIM INVESTMENTS, LLC
By:________________________________ By:_____________________________________
Title:_____________________________ Title:__________________________________
Attest By:_________________________ Attest By:______________________________
Title:_____________________________ Title:__________________________________
6
Schedule A
NAME OF FUND FEE RATE* ORGANIZATIONAL APPROVAL DATE
------------ --------- ----------------------------
Pilgrim Tax Efficient Equity Fund 0.400% October 30, 1998
----------
* For the first year of operations, the fee rate will be one-quarter (1/4) of
the annual fee rate reflected herein. For the second year of operations,
the fee rate will be one-half (1 /2) of the annual fee rate reflected
herein.
7
FIRST AMENDMENT TO SUBADVISORY AGREEMENT
THIS is a RESTATEMENT of the FIRST AMENDMENT to the SUBADVISORY AGREEMENT
made and entered into as of February 4, 2000. THIS RESTATED AMENDMENT TO THE
SUBADVISORY AGREEMENT (the "Amendment") is made and entered into as of May 9,
2000 by and among ING PILGRIM INVESTMENTS, LLC (the "Investment Adviser"), a
Delaware limited liability company, and XXXXXX XXXX CAPITAL MANAGEMENT LLC
("Xxxxxx Xxxx"), on behalf of Delta Asset Management (the "Sub-Adviser").
WHEREAS, Investment Adviser and Sub-Adviser are parties to a Subadvisory
Agreement dated as of October 30, 1998 (the "Agreement") wherein Investment
Adviser retained Sub-Adviser to furnish investment advisory services to the
Investment Adviser in connection with the underlying investment funds specified
on Schedule A of the Agreement (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, ING Pilgrim Investments, LLC merged with and is the successor to
the original party to this agreement -- ING Mutual Funds Management LLC; and
WHEREAS, the Investment Adviser and Sub-Adviser desire to amend and
supplement the Agreement upon the following terms and conditions.
NOW THEREFORE, for and in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree that the Agreement is
amended and supplemented as follows:
1. The following paragraph shall be inserted as paragraph IA to the
Agreement:
IA. Asset Allocation. A committee (the "Allocation Committee', consisting
of member determined by the Sub-Adviser and Xxxxxx Xxxx, shall allocate the
assets of each of the Funds for which the Sub-Adviser and Xxxxxx Xxxx act
as co-sub-advisers (collectively, the "Co-Sub-Advisers") among the
Co-Sub-Advisers.
2. The following paragraph shall replace the first paragraph of paragraph 2
in its entirety:
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 or, with regard to the Funds to
be advised by the Co-Sub-Advisers as indicated on Schedule A, the portions
of the Funds allocated to it by the Allocation Committee. The Sub-Adviser
will 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.
3. The following sentence shall be inserted after the first full sentence
of paragraph 7:
With regard to certain of the Funds indicated on Schedule A for which the
CoSub-Advisers provide co-sub-advisory services, the Co-Sub-Advisers shall
split such fee amongst each other in a proportion that they shall jointly
determine.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
by their duly authorized officers to be effective as of the date first above
written.
XXXXXX XXXX CAPITAL MANAGEMENT LLC,
on behalf of Delta Asset Management ING PILGRIM INVESTMENTS, LLC
By:________________________________ By:_____________________________________
Title:_____________________________ Title:__________________________________
Attest By:_________________________ Attest By:______________________________
Title:_____________________________ Title:__________________________________
