Exhibit 77(q)(1)(e)(3)
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 8th day of November, 2004, among ING Investors Trust
(the "Trust"), a Massachusetts business trust, Directed Services, Inc. (the
"Manager"), a New York corporation, and OppenheimerFunds, Inc. (the "Portfolio
Manager"), a corporation organized under the laws of the State of Colorado (the
"Agreement").
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;
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 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.
(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
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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 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, as may be
mutually agreed upon 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.
(d) The Portfolio Manager will provide reasonable assistance to the
portfolio accounting agent for the Trust or the Manager 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, provided, however, that the
parties acknowledge that the Portfolio Manager is not the fund accounting agent
for the Trust and is not responsible for pricing determinations or calculations
and any information provided pursuant to this position by Portfolio Manager will
be provided for information purposes only.
(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, provided
however, that both parties note the Portfolio Manager does not maintain the
official books and records of the Series, and any information provided pursuant
to this position by the Portfolio Manager will be based on information in its
possession and/or model portfolios.
(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
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"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 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:
(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.
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(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
Manager's and 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. If provided with such notice, the Portfolio Manager will vote
proxies for the Series according to the Portfolio Manager's voting policies. 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.
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.
(j) The Series have adopted policies to identify and prevent investors in
the Series from market timing the purchase and sale of the Series' shares or
engaging in arbitrage activity to the material detriment of long-term investors
in the Series.
(k) All necessary country registrations that are material to the operation
of the Series will be in place by the Portfolio Manager's management start date
so that the Portfolio Manager can invest the Series's assets consistent with the
comparable Xxxxxxxxxxx fund's investments. If such registrations are not in
place, the Manager acknowledges the Portfolio Manager will allocate those
portions of the Portfolio to cash.
(l) The Portfolio Manager makes no representation or warranty, express or
implied, that any level of performance or investment results will be achieved by
the Portfolio, whether on a relative or absolute basis.
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
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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.
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 regularly to the Board indicating the
broker-dealers to which such allocations have been made and the basis therefor.
The Portfolio Manager will not accept directed brokerage instructions from
the Manager. Notwithstanding this provision and consistent with best execution,
the Portfolio Manager shall make reasonable efforts to use brokers that
participate in any commission recapture or reduction program that benefits the
Series.
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
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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;
(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;
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(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 A.
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. Seed Money. The Manager agrees that the Portfolio Manager shall not be
responsible for providing money for the initial capitalization of the Series.
8. 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 each Series' books and records 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
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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 Portfolio 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 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.
9. 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.
10. 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
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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.
11. 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 name
"OppenheimerFunds, Inc.," or any 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.
12. 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 services of the Portfolio Manager to the Series and the Trust are
not to be deemed to be exclusive, and 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
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management duties so long as such consultations are not concerning transactions
prohibited by Section 17(a) of the 1940 Act.
13. 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.
14. 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
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,
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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,
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 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
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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
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.
15. Duration and Termination. This Agreement shall become effective with
respect to each Series on the date first indicated above. 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
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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. Notwithstanding the
foregoing, this Agreement may be terminated for each or any Series hereunder:
(a) by the Manager at any time without penalty, upon sixty (60) days' written
notice to the Portfolio Manager and the Trust, (b) 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 (c) 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 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), 9, 10, 11, 13, 14, and 18 of this Agreement shall remain in effect, as
well as any applicable provision of this Paragraph numbered 15.
16. 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.
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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:
OppenheimerFunds, Inc. With a copy to:
Two World Financial Center OFI Legal
000 Xxxxxxx Xxxxxx, 00xx Xxxxx Attn: Xxxxx Xxxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxx
17. 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 (i) 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 (ii) the holders of a majority of the outstanding voting securities of
the Series.
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.
18. 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
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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 names "OppenheimerFunds, Inc." and "Main
Street" 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).
19. 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.
20. Miscellaneous.
(a) This Agreement shall be governed by the laws of the state of Delaware,
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) 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.
(d) 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.
(e) 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.
(f) 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, and any rules or regulations adopted thereunder (collectively the
"Patriot Act"). Each party agrees to assist the other parties
-16-
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).
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
By:
----------------------------------
Xxxxxx X. Naka
Senior Vice President
DIRECTED SERVICES, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
OPPENHEIMERFUNDS, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
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SCHEDULE A
COMPENSATION FOR SERVICES TO SERIES
For the services provided by OppenheimerFunds, 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(1) RATE
--------- ----
ING Xxxxxxxxxxx Xxxx Xxxxxx 0.30% if total assets as defined below at any
Portfolio(R) month-end are less than or equal to $1 billion
0.23% if total assets as defined below at any
month-end are in excess of $1 billion
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.
----------
(1) For purposes of calculating fees under this Agreement, the assets of the
Series shall be aggregated with the assets of the ING Xxxxxxxxxxx Global
Portfolio and ING Xxxxxxxxxxx Strategic Income Portfolio, two series of
ING Partners, Inc., which is not a party to this Agreement. The aggregated
assets will be applied to the above schedule and the resulting fee shall
be prorated back to each Series and its respective Adviser/Manager based
on relative net assets.
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