Exhibit (d)(1)
FORM OF MANAGEMENT AGREEMENT
THIS is a RESTATEMENT of an AGREEMENT originally made the 30th day of October,
1998. This RESTATED AGREEMENT is made this 9th day of May, 2001 by and between
the PILGRIM FUNDS TRUST, formerly ING FUNDS TRUST, a Delaware business trust
(the "Trust"), on behalf of each of its series as listed in Schedule 1 (each, a
"Fund", and collectively, the "Funds"), and ING PILGRIM INVESTMENTS, LLC, a
Delaware limited liability company (the "Investment Manager").
WITNESSETH
WHEREAS, the Trust is registered as an open-end, investment company under
the Investment Company Act of 1940, as amended (the "Investment Company Act"),
and the rules and regulations promulgated thereunder; and
WHEREAS, the Investment Manager is registered and will remain registered
during the term of this Agreement as an investment adviser under the Investment
Advisers Act of 1940, as amended (the "Investment Advisers Act"), and engages in
the business of acting as an investment adviser; and
WHEREAS, the Trust's Board of Trustees authorized this agreement to be
restated at a meeting held May 9, 2001, and the other party to this agreement
ING Pilgrim Investments, LLC merged with and is the successor to the original
party to this agreement ING Mutual Funds Management LLC; and
WHEREAS, the Trust and the Investment Manager desire to enter into an
agreement to provide for the management of the assets of each Fund on the terms
and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. MANAGEMENT. The Investment Manager shall act as investment adviser for
the Funds of the Trust and shall, in such capacity, supervise the investment and
reinvestment of the cash, securities or other properties comprising each Fund's
assets, subject at all times to the policies and control of the Trust's Board of
Trustees. The Investment Manager shall give each Fund the benefit of its best
judgment, efforts and facilities in rendering its services as investment
adviser. The Investment Manager shall, for all purposes herein, be deemed an
independent contractor and shall have, unless otherwise expressly provided or
authorized, no authority to act for or represent the Trust, on behalf of the
Funds, in any way or otherwise be deemed an agent of the Trust.
2. DUTIES OF INVESTMENT MANAGER. In carrying out its obligation under
paragraph 1 hereof, the Investment Manager shall: (a) supervise and manage all
aspects of the Funds' operations; (b) provide the Funds or obtain for each, and
thereafter supervise, such executive, administrative, clerical and shareholder
servicing services as are deemed advisable by the Trust's Board of Trustees; (c)
arrange, but not pay for, the periodic updating of prospectuses and supplements
thereto, proxy material, tax returns, reports to the Funds' shareholders and
reports to and filings with the Securities and Exchange Commission and state
Blue Sky authorities; (d) provide the Funds with, or obtain for each, adequate
office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items for
the Funds' principal office; (e) provide the Board of Trustees of the Trust on a
regular basis with financial reports and analyses on the Funds' operations and
the operations of comparable investment companies; (f) obtain and evaluate
pertinent information about significant developments and economic, statistical
and financial data, domestic, foreign or otherwise, whether affecting the
economy generally or the Funds, and whether concerning the individual issuers
whose securities are included in the Funds or the activities in which they
engage, or with respect to securities which the Investment Manager considers
desirable for inclusion in the Funds; (g) determine what issuers and securities
shall be represented in the Funds' respective portfolios and regularly report
them to the Board of Trustees of the Trust; (h) formulate and implement
continuing programs for the purchases and sales of the securities of such
issuers and regularly report thereon to the Board of Trustees of the Trust; and
(i) take, on behalf of the Funds, all actions which appear necessary to carry
into effect such purchase and sale programs and supervisory functions as
aforesaid, including the placing of orders for the purchase and sale of
portfolio securities.
3. BROKER DEALER RELATIONSHIPS. The Investment Manager is responsible for
decisions to buy and sell securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates. The Investment Manager may select any
affiliated person of the Trust or the Investment Manager to the extent permitted
pursuant to the Trust's procedures for securities transactions with affiliated
brokers pursuant to Section 17(e)(2) and Rule 17e-1 under the Investment Company
Act.
The Investment Manager's primary consideration in effecting a security
transaction will be execution at a price that is reasonable and fair compared to
the commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions, including similar securities
being purchased or sold on a securities exchange during a comparable period of
time. In selecting a broker-dealer to execute each particular transaction, the
Investment Manager will take the following into consideration: the best net
price available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-dealer to the investment performance
of the Fund on a continuing basis. Accordingly, the price to a Fund in any
transaction may be less favorable than that available from another broker-dealer
if the difference is reasonably justified by other aspects of the portfolio
execution services offered.
Subject to such policies and procedures as the Board of Trustees may
determine, the Investment Manager shall not be deemed to have acted unlawfully
or to have breached any duty created by this Agreement or otherwise solely by
reason of its having caused a Fund to pay a broker or dealer that provides
brokerage and research services to the Investment Manager for the Fund's use an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker or dealer would have charged for
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effecting that transaction, if the Investment 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 or dealer, viewed in
terms of either that particular transaction or the Investment Manager's overall
responsibilities with respect to the Fund. The Investment Manager is further
authorized to allocate the orders placed by it on behalf of a Fund to such
brokers and dealers who also provide research or statistical material, or other
services to the Fund or the Investment Manager for the Fund's use. Such
allocation shall be in such amounts and proportions as the Investment Manager
shall determine and the Investment Manager will report on said allocations
regularly to the Board of Trustees of the Trust indicating the brokers to whom
such allocations have been made and the basis therefor.
4. CONTROL BY BOARD OF TRUSTEES. Any investment program undertaken by the
Investment Manager pursuant to this Agreement, as well as any other activities
undertaken by the Investment Manager on behalf of the Funds pursuant thereto,
shall at all times be subject to any directives of the Board of Trustees of the
Trust.
5. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its obligations
under this Agreement, the Investment Manager shall at all times conform to: (a)
all applicable provisions of the Investment Company Act and the Investment
Advisers Act and any rules and regulations adopted thereunder as amended; and
(b) the provisions of the Registration Statement of the Trust under the
Securities Act of 1933, as amended, and the Investment Company Act; and (c) the
provisions of the Trust Instrument of the Trust, as amended; and (d) the
provisions of the By-laws of the Trust, as amended; and (e) any other applicable
provisions of state and federal law.
6. EXPENSES. The expenses connected with the Funds shall be allocable
between the Funds and the Investment Manager as follows:
(a) The Investment Manager shall furnish, at its expense and without cost
to the Funds, the services of a President, Secretary and one or more
Vice Presidents of the Trust, to the extent that such additional
officers may be required by the Trust for the proper conduct of its
affairs;
(b) The Investment Manager shall further maintain, at its expense and
without cost to the Funds, a trading function in order to carry out
its obligations under subparagraph (h) of paragraph 2 hereof to place
orders for the purchase and sale of portfolio securities for the
Funds;
(c) Nothing in subparagraph (a) hereof shall be construed to require the
Investment Manager to bear: (i) any of the costs (including applicable
office space, facilities and equipment) of the services of a principal
financial officer of the Trust whose normal duties consist of
maintaining the financial accounts and books and records of the Funds;
including the review of calculations of net asset value and preparing
tax returns; or (ii) any of the costs (including applicable office
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space, facilities and equipment) of the services of any of the
personnel operating under the direction of such principal financial
officer. Notwithstanding the obligation of the Funds to bear the
expense of the functions referred to in clauses (i) and (ii) of this
subparagraph (c), the Investment Manager may pay the salaries,
including any applicable employment or payroll taxes and other salary
costs; of the principal financial officer and other personnel carrying
out such functions and the Funds shall reimburse the Investment
Manager therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in the operations of
the Funds and the offering of shares shall be borne by the Fund unless
specifically provided otherwise in this paragraph. These expenses
include, but are not limited to, brokerage commissions, legal,
auditing, taxes or governmental fees, networking servicing costs, fund
accounting servicing costs, fulfillment servicing costs, the cost of
preparing share certificates, custodian, depository, transfer and
shareholder service agent costs, expenses of issue, sale, redemption
and repurchase of shares, expenses of registering and qualifying
shares for sate, insurance premiums on properly or personnel
(including officers and trustees if available) of the Funds which
inure to each Funds benefit, expenses relating to trustee and
shareholder meetings, the cost of preparing and distributing reports
and notices to shareholders, the fees and other expenses incurred by
the Trust in connection with membership in investment company
organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to shareholders.
7. DELEGATION OF RESPONSIBILITIES. The Investment Manager may delegate the
performance of certain investment advisory services, as described hereunder, to
a sub-adviser.
8. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, each Fund will pay the Investment Manager and the
Investment Manager will accept as full compensation therefor a fee computed
daily and paid monthly in arrears at the annual rate set forth on Schedule 1,
based on each Fund's average daily net assets, computed in the manner set forth
in the Registration Statement of the Trust. If the fees payable to the
Investment Manager begin to accrue before the end of any month, or if this
Agreement terminates before the end of any month, then such fees for such month
shall be prorated according to the proportion which the partial period bears to
the full month in which such effectiveness or termination occurs. The Investment
Manager may from time to time and for such periods as it deems appropriate
voluntarily reduce its compensation hereunder (and/or voluntarily assume
expenses) for a Fund.
9. NON-EXCLUSIVITY. The services of the Investment Manager to the Funds are
not to be deemed to be exclusive, and the Investment Manager shall be free to
render investment advisory and corporate administrative or other services to
others (including other investment companies) and to engage in other activities.
It is understood and agreed that officers or members of the Investment Manager
may serve as officers or trustees of the Trust, and that officers or trustees of
the Trust may serve as officers or members of the Investment Manager to the
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extent permitted by law; and that the officers and members of the Investment
Manager are not prohibited from engaging in any other business activity or from
rendering services to any other person, or from serving as partners, officers'
or partners of any other firm or corporation, including other investment
companies.
10. TERM AND APPROVAL. This Agreement shall become effective as it pertains
to a Fund at the close of business on the date opposite the Fund's name on
Schedule 1 and shall remain in force and effect for two years for the Fund and
thereafter from year to year, provided that such continuance is specifically
approved at least annually: (a) (i) by the Trust's Board of Trustees or (ii) by
the vote of a majority of the Fund's outstanding voting securities (as defined
in Section 2(a)(42) of the Investment Company Act); and (b) by the affirmative
vote of a majority of the Trustees who are not parties to this Agreement or
interested persons of a party to this Agreement (other than as Trust trustees),
by votes cast in person at a meeting specifically called for such purpose.
11. TERMINATION. This Agreement may be terminated at any time as it
pertains to a Fund, without the payment of any penalty, by vote of the Trust's
Board of Trustees or by vote of a majority of the Fund's outstanding voting
securities, or by the Investment Manager, on sixty (60) days' written notice to
the other party. The notice provided for herein may be waived by either party.
This Agreement shall automatically terminate as it pertain to all Funds in the
event of its assignment, the term "assignment" for the purpose having the
meaning defined in Section 2(a)(4) of the Investment Company Act.
12. LIABILITY OF INVESTMENT MANAGER AND INDEMNIFICATION. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Investment Manager or any of
its officers, trustees or employees, the Investment Manager shall not be subject
to liability to the Trust or to the Funds or to any shareholder of the Funds for
any act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Investment Manager or any officer, director or employee of the Investment
Manager, the Trust hereby agrees to indemnify and hold the Investment Manager
harmless from and against all claims, actions, suits, and proceedings at law or
in equity whether brought or asserted by a private party or a governmental
agency, instrumentality or entity of any kind, relating to the sale, purchase,
pledge of, advertisement of, or solicitation of sales or purchases of any
security (whether of a Fund or otherwise) by the Trust, its officers, directors,
employees or agents in alleged violation of applicable federal, state or foreign
laws, rules or regulations.
13. LIMIT OF LIABILITY. The terms the "Pilgrim Funds Trust" and "Trustees"
(of the Trust) refer, respectively to the trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under the
Trust's organizational documentation, to which reference is hereby made. The
obligations of the "Pilgrim Funds Trust" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities and are not binding upon any of the
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Trustees, shareholders or representatives of the Trust personally, but bind only
the assets of the Funds, and all persons dealing with the Funds or other series
of the Trust must look solely to the assets of the Funds for the enforcement of
any claims against the Trust.
14. LICENSE AGREEMENT. The Trust shall have the non-exclusive right to use
the name "ING" to designate itself and any current or future series of shares
only so long as ING Pilgrim Investments, LLC serves as investment manager or
adviser to the Trust with respect to such series of shares. In the event that
the Investment Manager ceases to act as the investment manager to the Funds, the
Trust shall cease using the name "ING" upon the Investment Manager's written
request.
15. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. Further, any material amendment, as
determined by the parties hereto with the assistance of legal counsel, shall not
be effective until approved: (a) (i) by the Trust's Board of Trustees and (ii)
by the vote of a majority of the Fund's or Funds', as applicable, outstanding
voting securities (as defined in Section 2(a)(42) of the Investment Company
Act); and (b) by the affirmative vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of a party to this Agreement
(other than as Trust trustees), by votes cast in person at a meeting
specifically called for such purpose.
16. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust
and that of the Investment Manager shall be 00 Xxxxxx Xxxx., Xxxxx 000, Xxxxxxx
Xxxxxx, XX 00000.
17. QUESTIONS OF INTERPRETATION. Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the Investment Company Act shall be resolved by reference
to such term or provision of the Act and to interpretations thereof, if any, by
the United States Courts or in the absence of any controlling decision of any
such court, by rules, regulations or orders of the Securities and Exchange
Commission issued pursuant to said Act. In addition, where the effect of a
requirement of the Investment Company Act reflected in any provision of this
Agreement is released by rules, regulation or order of the Securities and
Exchange Commission, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
18. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall constitute an original and both of which, collectively, shall
constitute one agreement.
19. MISCELLANEOUS. The captions in this Agreement are- included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
PILGRIM FUNDS TRUST, ING PILGRIM INVESTMENTS, LLC
on behalf each of its series
listed on Schedule 1
By:________________________________ By:_____________________________________
Title:_____________________________ Title:__________________________________
Attest By:_________________________ Attest By:______________________________
Title:_____________________________ Title:__________________________________
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Schedule 1
NAME OF FUND FEE RATE* ORGANIZATIONAL APPROVAL DATE
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Pilgrim Tax Efficient Equity Fund 0.80% October 30, 1998
Pilgrim National Tax-Exempt Bond Fund 0.50% October 30, 1998
ING Pilgrim Money Market Fund 0.25% October 30, 1998
Pilgrim Intermediate Bond Fund 0.50% October 30, 1998
Pilgrim High Yield Bond Fund 0.65% October 30,1998
Pilgrim European Equity Fund 1.15% October 30, 1998
Pilgrim Global Information Technology Fund 1.25% October 30, 1998
Pilgrim Internet Fund 1.25% March 26, 1999
Pilgrim National Tax-Exempt Money Market Fund 0.400% March 26, 1999
Pilgrim Global Communications Fund 1.00% February 4, 2000
Pilgrim Internet Fund II 1.25% February 4, 2000
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* For the first year of operations, the fee rate will be one-quarter (1/4) of
the annual fee rate reflected herein. For the second year of operations,
the fee rate will be one-half (1/2) of the annual fee rate reflected
herein.
