Exhibit (d)(7)
FORM OF SUB-ADVISORY AGREEMENT
AGREEMENT made this ____ day of _____, 2002 between ING Pilgrim
Investments, LLC, a Delaware limited liability company (the "Manager"), and AW
Advisors, LLC, a Delaware limited liability company (the "Sub-Adviser").
WHEREAS, ING Equity Trust (the "Fund") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end, management
investment company;
WHEREAS, the Fund is authorized to issue separate series, each series
having its own investment objective or objectives, policies, and limitations;
WHEREAS, the Fund may offer shares of additional series in the future;
WHEREAS, pursuant to an Investment Management Agreement, dated September 1,
2000, as amended on November 2, 2001 and as further amended February 26, 2002
(the "Management Agreement"), a copy of which has been provided to the
Sub-Adviser, the Fund has retained the Manager to render advisory and management
services with respect to certain of the Fund's series; and
WHEREAS, pursuant to authority granted to the Manager in the Management
Agreement, the Manager wishes to retain the Sub-Adviser to furnish investment
advisory services to one or more of the series of the Fund, and the Sub-Adviser
is willing to furnish such services to the Fund and the Manager.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Manager and the Sub-Adviser as
follows:
1. APPOINTMENT. The Manager hereby appoints the Sub-Adviser to act as the
investment adviser and manager to the series of the Fund set forth on Schedule A
hereto (the "Series") for the periods and on the terms set forth in this
Agreement. The Sub-Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
In the event the Fund designates one or more series (other than the Series)
with respect to which the Manager wishes to retain the Sub-Adviser to render
investment advisory services hereunder, it shall notify the Sub-Adviser in
writing. If the Sub-Adviser is willing to render such services, it shall notify
the Manager in writing, whereupon such series shall become a Series hereunder,
and be subject to this Agreement.
2. SUB-ADVISER'S DUTIES. Subject to the supervision of the Fund's Board of
Trustees and the Manager, the Sub-Adviser will provide a continuous investment
program for each Series' portfolio and determine in its discretion 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 Sub-Adviser 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
the Series should be held in the various securities and other investments in
which it may invest. To the extent permitted by the investment policies of each
Series, the Sub-Adviser 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 the Series. The Sub-Adviser will
provide the services under this Agreement in accordance with each Series'
investment objective or objectives, policies, and restrictions as stated in the
Fund's Registration Statement filed with the U.S. Securities and Exchange
Commission ("SEC"), as amended, copies of which shall be sent to the Sub-Adviser
by the Manager prior to the commencement of this Agreement and promptly
following any such amendment. The Sub-Adviser further agrees as follows:
(a) The services of the Sub-Adviser to the Fund under this Agreement
are to be deemed exclusive inasmuch as the Sub-Adviser (including all officers,
directors, employees, owners, principals, successors, parents, subsidiaries, and
affiliates of the Sub-Adviser) agrees that it shall not directly or indirectly
perform advisory duties as herein specified in this Section 2 and its subparts
for any person or entity registered under the 1940 Act other than the Fund
during the term of this Agreement without the prior express written consent of
the Manager. Such written consent shall not be unreasonably withheld if the
Manager determines in its discretion that the Sub-Adviser seeks to provide
advisory services to another registered investment company that neither has nor
proposes to have investment objectives and policies similar to those of any of
the Series.
(b) The Sub-Adviser will comply 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 Fund's Board of
Trustees of which the Sub-Adviser has been sent a copy, and the provisions of
the Registration Statement of the Fund filed under the Securities Act of 1933,
as amended (the "1933 Act"), and the 1940 Act, as supplemented or amended, of
which the Sub-Adviser has received a copy, and with the Manager's portfolio
manager operating policies and procedures as in effect on the date hereof, as
such policies and procedures may be revised or amended by the Manager and agreed
to by the Sub-Adviser. In carrying out its duties under the Sub-Advisory
Agreement, the Sub-Adviser will comply with the following policies and
procedures:
(i) The Sub-Adviser will manage each Series so that it meets the
income and asset diversification requirements of Section 851 of the Internal
Revenue Code.
(ii) The Sub-Adviser will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Series are invested
consistent with any procedures or guidelines promulgated by the Board or the
Manager or, if none, in the discretion of the Sub-Adviser based upon the best
interests of the Series. The Sub-Adviser will maintain appropriate records
detailing its voting of proxies on behalf of the Fund and will provide to the
Fund at least quarterly a report setting forth the proposals voted on and how
the Series' shares were voted since the prior report, including the name of the
corresponding issuers.
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(iii) In connection with the purchase and sale of securities for each
Series, the Sub-Adviser will arrange for the transmission to the custodian and
portfolio accounting agent for the Series on a daily basis such confirmation,
trade tickets, and other documents and information, including, but not limited
to, Cusip, Cedel, 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 its administrative and
recordkeeping responsibilities with respect to the Series. With respect to
portfolio securities to be settled through the Depository Trust Company, the
Sub-Adviser will arrange for the prompt transmission of the confirmation of such
trades to the Fund's custodian and portfolio accounting agent.
(iv) The Sub-Adviser will assist the custodian and portfolio
accounting agent for the Fund in determining or confirming, consistent with the
procedures and policies stated in the Registration Statement for the Fund or
adopted by the Board of Trustees, the value of any portfolio securities or other
assets of the Series for which the custodian and portfolio accounting agent
seeks assistance from or identifies for review by the Sub-Adviser. The parties
acknowledge that the Sub-Adviser is not a custodian of the Series' assets and
will not take possession or custody of such assets.
(v) The Sub-Adviser will provide the Manager, no later than the 10th
day following the end of each of the first three fiscal quarters of each Series
and the 10th day following the end of each Series' fiscal year, a letter to
shareholders (to be subject to review and editing by the Manager) containing a
discussion of those factors referred to in Item 5(a) of Form N-1A, promulgated
pursuant to the 1933 and 1940 Acts, in respect of both the prior quarter and the
fiscal year to date.
(vi) The Sub-Adviser will complete and deliver to the Manager a
written compliance checklist in a form provided by the Manager for each month by
the 10th day of the following month.
(vii) The parties agree that in the event that the Manager or an
affiliated person of the Manager sends sales literature or other promotional
material to the Sub-Adviser for its approval and the Sub-Adviser has not
commented within 10 days, the Manager and its affiliated persons may use and
distribute such sales literature or other promotional material.
(c) The Sub-Adviser will make available to the Fund and the Manager,
promptly upon request, any of the Series' investment records and ledgers
maintained by the Sub-Adviser (which shall not include the records and ledgers
maintained by the custodian or portfolio accounting agent for the Fund) as are
necessary to assist the Fund 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 Sub-Adviser will furnish to
regulatory authorities having the requisite authority any information or reports
in connection with such services in respect to the Series which may be requested
in order to ascertain whether the operations of the Fund are being conducted in
a manner consistent with applicable laws and regulations.
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(d) The Sub-Adviser will provide reports to the Fund's Board of
Trustees for consideration at meetings of the Board on the investment program
for each Series and the issuers and securities represented in each Series'
portfolio, and will furnish the Fund's Board of Trustees with respect to each
Series such periodic and special reports as the Trustees and the Manager may
reasonably request.
3. BROKER-DEALER SELECTION. The Sub-Adviser is authorized to make decisions
to buy and sell securities and other investments for each Series' portfolio, to
select a broker-dealer to effect a transaction, and to negotiate brokerage
commission rates in effecting a security transaction. The Sub-Adviser'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 Series, and
determined in consultation with the Manager, 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 firm 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
Sub-Adviser in the exercise of its reasonable business judgement and fiduciary
obligations to the Fund, by other aspects of the portfolio execution services
offered. Subject to such policies as the Fund's Board of Trustees or Manager may
determine and consistent with Section 28(e) of the Securities Exchange Act of
1934, as amended (the "1934 Act"), 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 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 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-dealer, viewed in terms of either that
particular transaction or the Sub-Adviser's or the Manager's overall
responsibilities with respect to the Series and to their respective other
clients as to which they exercise investment discretion. The Sub-Adviser will
consult with the Manager so that portfolio transactions on behalf of a Series
are directed to broker-dealers on the basis of criteria reasonably considered
appropriate by the Manager. To the extent consistent with these standards, the
Sub-Adviser is further authorized to allocate the orders placed by it on behalf
of a Series to the Sub-Adviser 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
Sub-Adviser, or an affiliate of the Sub-Adviser. Such allocation shall be in
such amounts and proportions as the Sub-Adviser shall determine consistent with
the above standards, and the Sub-Adviser will report on said allocation
regularly to the Fund's Board of Trustees indicating the broker-dealers to which
such allocations have been made and the basis therefor.
4. DISCLOSURE ABOUT SUB-ADVISER. The Sub-Adviser has reviewed the most
recent Post-Effective Amendment to the Registration Statement for the Fund filed
with the SEC that contains disclosure about the Sub-Adviser, and represents and
warrants that, with respect to the disclosure about the Sub-Adviser or
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information relating, directly or indirectly, to the Sub-Adviser, 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, in light of the circumstances under which they were made, not
misleading. The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Advisers Act and will maintain such
registration so long as this Agreement remains in effect. The Sub-Adviser will
provide the Manager with a copy of the Sub-Adviser's Form ADV, Part II at any
time the Form ADV is updated.
5. EXPENSES. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it and its staff and for their activities in connection
with its portfolio management duties under this Agreement. The Manager or the
Fund shall be responsible for all the expenses of the Fund's operations.
6. COMPENSATION. For the services provided to each Series, the Manager will
pay the Sub-Adviser an annual fee equal to the amount specified for such Series
in Schedule A hereto, payable monthly in arrears. The fee will be appropriately
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
Sub-Adviser, and the Sub-Adviser agrees to seek payment of its fees solely from
the Manager; provided, however, that if the Fund fails to pay the Manager all or
a portion of the management fee under said Management Agreement when due, and
the amount that was paid is insufficient to cover the Sub-Adviser's fee under
this Agreement for the period in question, then the Sub-Adviser may enforce
against the Fund any rights it may have as a third-party beneficiary under the
Management Agreement and the Manager will take all steps appropriate under the
circumstances to collect the amount due from the Fund.
7. COMPLIANCE.
(a) The Sub-Adviser agrees to use reasonable compliance techniques as the
Manager or the Board of Trustees may adopt, including any written compliance
procedures.
(b) The Sub-Adviser agrees that it shall promptly notify the Manager and
the Fund (1) in the event that the SEC has censured the Sub-Adviser; placed
limitations upon its activities, functions or operations; suspended or revoked
its registration as an investment adviser; or has commenced proceedings or an
investigation that may result in any of these actions, or (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 Internal
Revenue Code. The Sub-Adviser further agrees to notify the Manager and the Fund
promptly of any material fact known to the Sub-Adviser respecting or relating to
the Sub-Adviser that is not contained in the Registration Statement or
prospectus for the Fund (which describes the Series), or any amendment or
supplement thereto, or if any statement contained therein becomes untrue in any
material respect.
(c) The Manager agrees that it shall promptly notify the Sub-Adviser (1) in
the event that the SEC has censured the Manager or the Fund; placed limitations
upon either of their activities, functions, or operations; suspended or revoked
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the Manager's registration as an investment adviser; or has commenced
proceedings or an investigation that may result in any of these actions, or (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 Internal Revenue Code.
8. BOOKS AND RECORDS. The Sub-Adviser hereby agrees that all records which
it maintains for the Series (including but not limited to documents, manuals,
computer disks and CD-ROMs) are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's or the
Manager's request in compliance with the requirements of Rule 31a-3 under the
1940 Act, although the Sub-Adviser may, at its own expense, make and retain a
copy of such records. The Sub-Adviser 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.
9. COOPERATION; CONFIDENTIALITY. Each party to this Agreement agrees to
cooperate with the other party and with all appropriate governmental authorities
having the requisite jurisdiction (including, but not limited to, the SEC) in
connection with any investigation or inquiry relating to this Agreement or the
Fund. Subject to the foregoing, the Sub-Adviser shall treat as confidential all
information pertaining to the Fund and actions of the Fund, the Manager and the
Sub-Adviser, and the Manager shall treat as confidential and use only in
connection with the Series all information furnished to the Fund or the Manager
by the Sub-Adviser, in connection with its duties under the Agreement except
that the aforesaid information need not be treated as confidential if required
to be disclosed under applicable law, if generally available to the public
through means other than by disclosure by the Sub-Adviser or the Manager, or if
available from a source other than the Manager, Sub-Adviser or the Fund.
10. REPRESENTATIONS RESPECTING SUB-ADVISER. The Manager agrees that neither
the Manager, nor affiliated persons of the Manager, shall give any information
or make any representations or statements in connection with the sale of shares
of the Series concerning the Sub-Adviser or the Series other than the
information or representations contained in the Registration Statement,
prospectus, or statement of additional information for the Fund's shares, as
they may be amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in sales literature or other promotional material
approved in advance by the Sub-Adviser, except with the prior permission of the
Sub-Adviser.
11. CONTROL. Notwithstanding any other provision of the Agreement, it is
understood and agreed that the Fund shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and has reserved the right to reasonably direct any action hereunder
taken on its behalf by the Sub-Adviser.
12. LIABILITY. Except as may otherwise be required by the 1940 Act or the
rules thereunder or other applicable law, the Manager agrees that the
Sub-Adviser, any affiliated person of the Sub-Adviser, and each person, if any,
who, within the meaning of Section 15 of the 1933 Act controls the Sub-Adviser
(1) shall bear no responsibility and shall not be subject to any liability for
any act or omission respecting any series of the Fund that is not a Series
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hereunder, and (2) shall not be liable for, 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 of the
Sub-Adviser's duties, or by reason of reckless disregard of the Sub-Adviser's
obligations and duties under this Agreement.
13. INDEMNIFICATION.
(a) The Manager agrees to indemnify and hold harmless the Sub-Adviser, any
affiliated person of the Sub-Adviser, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act controls ("controlling person") the
Sub-Adviser (all of such persons being referred to as "Sub-Adviser Indemnified
Persons") against any and all losses, claims, damages, liabilities, or
litigation (including legal and other expenses) to which a Sub-Adviser
Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, under any other statute, at common law or otherwise, arising out
of the Manager's responsibilities to the Fund which (1) may be based upon the
Manager's negligence, willful misfeasance, or bad faith in the performance of
its duties (which could include a negligent action or a negligent omission to
act), or by reason of the Manager's reckless disregard of its obligations and
duties under this Agreement, or (2) may be based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or prospectus covering shares of the Fund or any Series, or any
amendment thereof or any supplement thereto, or the omission or alleged omission
to state therein a material fact 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 Fund or to
any affiliated person of the Manager by a Sub-Adviser Indemnified Person;
provided, however, that in no case shall the indemnity in favor of the
Sub-Adviser 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 12 of this Agreement, the Sub-Adviser agrees to
indemnify and hold harmless the Manager, any affiliated person of the Manager,
and any controlling person of the Manager (all of such persons being referred to
as "Manager Indemnified Persons") against any and all losses, claims, damages,
liabilities, or litigation (including legal and other expenses) to which a
Manager Indemnified Person may become subject under the 1933 Act, 1940 Act, the
Advisers Act, under any other statute, at common law or otherwise, arising out
of the Sub-Adviser's responsibilities as Sub-Adviser of the Series which (1) may
be based upon the Sub-Adviser's negligence, willful misfeasance, or bad faith in
the performance of its duties (which could include a negligent action or a
negligent omission to act), or by reason of the Sub-Adviser's reckless disregard
of its obligations and duties under this Agreement, or (2) may be based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or prospectus covering the shares of the Fund or any
Series, or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact known or which should have been known
to the Sub-Adviser and was required to be stated therein or necessary to make
the statements therein not misleading, if such a statement or omission was made
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in reliance upon information furnished to the Manager, the Fund, or any
affiliated person of the Manager or Fund by the Sub-Adviser or any affiliated
person of the Sub-Adviser; provided, however, that in no case shall the
indemnity in favor of a Manager Indemnified Person be deemed to protect such
person against any liability to which any such person would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence in the performance
of its duties, or by reason of its reckless disregard of its obligations and
duties under this Agreement.
(c) The Manager shall not be liable under Paragraph (a) of this Section 13
with respect to any claim made against a Sub-Adviser Indemnified Person unless
such Sub-Adviser Indemnified Person shall have notified the Manager in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Sub-Adviser Indemnified Person (or after such Sub-Adviser 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 Sub-Adviser 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 Sub-Adviser Indemnified Person, the Manager will be entitled to
participate, at its own expense, in the defense thereof or, after notice to the
Sub-Adviser Indemnified Person, to assume the defense thereof, with counsel
satisfactory to the Sub-Adviser Indemnified Person. If the Manager assumes the
defense of any such action and the selection of counsel by the Manager to
represent the Manager and the Sub-Adviser Indemnified Person would result in a
conflict of interests and therefore, would not, in the reasonable judgment of
the Sub-Adviser Indemnified Person, adequately represent the interests of the
Sub-Adviser 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 Sub-Adviser Indemnified Person, which counsel shall be
satisfactory to the Manager and to the Sub-Adviser Indemnified Person. The
Sub-Adviser Indemnified Person shall bear the fees and expenses of any
additional counsel retained by it, and the Manager shall not be liable to the
Sub-Adviser Indemnified Person under this Agreement for any legal or other
expenses subsequently incurred by the Sub-Adviser 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 Sub-Adviser
Indemnified Person if the compromise or settlement results, or may result in a
finding of wrongdoing on the part of the Sub-Adviser Indemnified Person.
(d) The Sub-Adviser shall not be liable under Paragraph (b) of this Section
13 with respect to any claim made against a Manager Indemnified Person unless
such Manager Indemnified Person shall have notified the Sub-Adviser in writing
within a reasonable time after the summons or other first legal process 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
Sub-Adviser of any such claim shall not relieve the Sub-Adviser from any
liability which it may have to the Manager Indemnified Person against whom such
action is brought except to the extent the Sub-Adviser is prejudiced by the
failure or delay in giving such notice. In case any such action is brought
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against the Manager Indemnified Person, the Sub-Adviser 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 Sub-Adviser assumes the
defense of any such action and the selection of counsel by the Sub-Adviser to
represent both the Sub-Adviser 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 Sub-Adviser will, at its own expense, assume the
defense with counsel to the Sub-Adviser and, also at its own expense, with
separate counsel to the Manager Indemnified Person, which counsel shall be
satisfactory to the Sub-Adviser 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 Sub-Adviser 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 Sub-Adviser 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.
14. DURATION AND TERMINATION.
(a) This Agreement shall become effective on the date first indicated
above, subject to the condition that the Fund'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 or the Sub-Adviser, and the shareholders
of each Series, shall have approved this Agreement. Unless terminated as
provided herein, this Agreement shall remain in full force and effect with
respect to each Series until the Reapproval Date set forth for such Series on
Schedule B to the Agreement, and shall continue on an annual basis thereafter
with respect to each Series provided that such annual continuance is
specifically approved each year by (1) the Board of Trustees of the Fund, or by
the vote of a majority of the outstanding voting securities (as defined in the
0000 Xxx) of each Series, and (2) 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. However, any approval of this
Agreement by the holders of a majority of the outstanding shares (as defined in
the 0000 Xxx) of a Series shall be effective to continue this Agreement with
respect to such Series notwithstanding (1) that this Agreement has not been
approved by the holders of a majority of the outstanding shares of any other
Series or (2) that this Agreement has not been approved by the vote of a
majority of the outstanding shares of the Fund, unless such approval shall be
required by any other applicable law or otherwise. Notwithstanding the
foregoing, this Agreement may be terminated with respect to any Series covered
by this Agreement: (1) by the Manager at any time, upon sixty (60) days' written
notice to the Sub-Adviser and the Fund, (2) at any time without payment of any
penalty by the Fund, by the Fund's Board of Trustees or a majority of the
outstanding voting securities of each Series, upon sixty (60) days' written
notice to the Manager and the Sub-Adviser, or (3) by the Sub-Adviser upon three
months' written notice unless the Fund or the Manager requests additional time
to find a replacement for the Sub-Adviser, in which case the Sub-Adviser shall
allow the additional time requested by the Fund or Manager not to exceed three
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additional months beyond the initial three-month notice period; provided,
however, that the Sub-Adviser may terminate this Agreement at any time without
penalty, effective upon written notice to the Manager and the Fund, in the event
either the Sub-Adviser (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 Fund, 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 Sub-Adviser does not receive compensation for its services
from the Manager or the Fund as required by the terms of this Agreement.
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 Fund, free from any claim or retention of rights in such record by the
Sub-Adviser, although the Sub-Adviser may, at its own expense, make and retain a
copy of such records. This 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 8, 9, 10, 11, 12 and 13 of this Agreement shall
remain in effect, as well as any applicable provision of this Section numbered
14 and, to the extent that only amounts are owed to the Sub-Adviser as
compensation for services rendered while the Agreement was in effect, Section 6.
(b) NOTICES.
Any notice must be in writing and shall be sufficiently given when (1)
delivered in person, (2) dispatched by telegram or electronic facsimile transfer
(confirmed in writing by postage prepaid first class air mail simultaneously
dispatched), (3) sent by internationally recognized overnight courier service
(with receipt confirmed by such overnight courier service), or (4) sent by
registered or certified mail, to the other party at the address of such party
set forth below or at such other address as such party may from time to time
specify in writing to the other party.
If to the Fund:
ING Equity Trust
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx
If to the Manager:
ING Pilgrim Investments, LLC
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
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If to the Sub-Adviser:
AW Advisors, LLC
000 X. Xxxxxxxx Xxxxxxxx
Xxxxxx, XX 00000
Attention: _______________
15. AMENDMENTS. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (1) the holders of a majority of the
outstanding voting securities of the Series, and (2) the Trustees of the Fund,
including a majority of the Trustees of the Fund 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.
16. MISCELLANEOUS.
(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 1933 Act, 1934 Act, 1940 Act, the Advisers Act or rules or orders of the SEC
thereunder, and without regard for the conflicts of laws principle thereof. The
term "affiliate" or "affiliated person" as used in this Agreement shall mean
"affiliated person" as defined in Section 2(a)(3) of the 1940 Act.
(i) The Fund shall be entitled to commence a civil action seeking
enforcement and/or for breach of this Agreement in any state or federal court of
Delaware. The Sub-Adviser shall submit to the personal jurisdiction of any such
court and shall not contend that the court is not a proper venue for any such
civil action. The parties to this Agreement authorize and direct the court to:
(1) revise and amend the provisions of Section 2 to the extent that the court
finds those provisions too broad or otherwise unenforceable; and (2) enforce
this Agreement as revised or amended.
(ii) The party substantially prevailing in a civil action brought to
enforce and/or for breach of this Agreement shall be entitled to recover the
reasonable attorneys' fees and legal expenses incurred by that party in that
litigation.
(b) The Manager and the Sub-Adviser acknowledge that the Fund enjoys the
rights of a third-party beneficiary under this Agreement, and the Manager
acknowledges that the Sub-Adviser enjoys the rights of a third-party beneficiary
under the Management Agreement.
(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.
(d) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby, and to this extent, the provisions of this
Agreement shall be deemed to be severable.
-11-
(e) Nothing herein shall be construed as constituting the Sub-Adviser as an
agent or co-partner of the Manager, or constituting the Manager as an agent or
co-partner of the Sub-Adviser.
(f) This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
ING PILGRIM INVESTMENTS, LLC
By:
-----------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
AW ADVISORS, LLC
By:
-----------------------------------
-----------------------------------
Title:
SCHEDULE A
to the Sub-Advisory Agreement between
ING PILGRIM INVESTMENTS, LLC
and
AW ADVISORS, LLC
SERIES ANNUAL SUB-ADVISORY FEE
------ -----------------------
ING Biotechnology Fund (the "Fund") Fulcrum Fee
FULCRUM FEE:
The following schedule shows the sub-advisory fee to be paid by the Manager to
the Sub-Adviser. The sub-advisory fee is made up of two components: (i) a base
sub-advisory fee of 0.625% of the Fund's average daily net assets, and (ii) a
performance adjustment. The performance adjustment accrues daily but will not be
paid until after one full year of operations.
Annual % Point
Difference Between Annual Base Performance Annual Total
Class A Shares of the Sub-Advisory Fee Adjustment (as Sub-Advisory Fee
Fund and NASDAQ (as a % of average a % of average (as a % of average
Biotechnology Index* net assets) net assets) net assets)
-------------------- ----------- ----------- -----------
5.01 or better 0.625% 0.500% 1.125%
4.01 to 5.00 0.625% 0.375% 1.000%
3.01 to 4.00 0.625% 0.250% 0.875%
2.01 to 3.00 0.625% 0.125% 0.750%
2.00 to 2.00 0.625% 0.000% 0.625%
2.01 to 3.00 0.625% 0.125% 0.500%
3.01 to 4.00 0.625% 0.250% 0.375%
4.01 to 5.00 0.625% 0.375% 0.250%
5.00 or worse 0.625% 0.500% 0.125%
----------
* Measured over the performance period which, beginning twelve months after
the Fund has commenced operations, will be a rolling 12 month period ending
with the most recent calendar month. Since the performance adjustment is
based on the comparative performance of Class A shares against the Index,
the controlling factor is not whether the performance of Class A shares is
up or down, but whether that performance is up or down more than or less
than that of the Index. In addition, the relative performance of Class A
shares against the Index is measured only for the relevant performance
period, and does not take into account performance over longer or shorter
periods of time.
SCHEDULE B
to the
Sub-Advisory Agreement
between
ING PILGRIM INVESTMENTS, LLC
and
AW ADVISORS, LLC
SERIES APPROVED BY BOARD REAPPROVAL DATE
------ ----------------- ---------------
ING Biotechnology Fund February 26, 2002 September 1, 2003
