Exhibit (d.21)
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
ING LIFE INSURANCE AND ANNUITY COMPANY
AND
UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
INVESTMENT SUBADVISORY AGREEMENT, made as of the 1st day of May, 2004, between
ING Life Insurance and Annuity Company (the "Adviser"), an insurance
corporation organized and existing under the laws of the State of Connecticut,
and UBS Global Asset Management (Americas) Inc. ("Subadviser"), a corporation
organized and existing under the laws of the State of Delaware.
WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated as
of the 1st day of May, 2003 ("Advisory Agreement") with ING Partners, Inc.
("Company"), which is engaged in business as an open-end management investment
company registered under the Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, the Company is and will continue to be a series fund having two or
more investment Portfolios, each with its own assets, investment objectives,
policies and restrictions; and
WHEREAS, the Company shareholders are and will be (1) separate accounts
maintained by insurance companies for variable life insurance policies and
variable annuity contracts (the "Policies") under which income, gains, and
losses, whether or not realized, from assets allocated to such accounts are, in
accordance with the Policies, credited to or charged against such accounts
without regard to other income, gains, or losses of such insurance companies,
(2) qualified pension and retirement plans outside the separate account
context, and (3) the investment adviser of certain affiliated open-end
management investment companies registered under the 1940 Act or any of the
Adviser's affiliates; and
WHEREAS, the Subadviser is engaged principally in the business of rendering
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940 ("Advisers Act"); and
WHEREAS, the Board of Directors of the Company ("Board") and the Adviser desire
to retain the Subadviser as subadviser for the ING UBS U.S. Large Cap Equity
Portfolio (the "Portfolio"), to furnish certain investment advisory services to
the Adviser and the Company and the Subadviser is willing to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual promises herein set
forth, the parties hereto agree as follows:
1. APPOINTMENT. Adviser hereby appoints the Subadviser as its investment
subadviser with respect to the Portfolio for the period and on the terms set
forth in this Agreement. The Subadviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. DUTIES OF THE SUBADVISER
A. INVESTMENT SUBADVISORY SERVICES. Subject to the supervision of the Board
and the Adviser, the Subadviser shall act as the investment subadviser and
shall supervise and direct the investments of each Portfolio in accordance
with its investment objective, policies, and restrictions as provided in the
Company's Prospectus and Statement of Additional Information, as currently
in effect and as amended or supplemented from time to time (hereinafter
referred to as the "Prospectus"), and such other limitations as the Company
may impose by notice in writing to the Subadviser. The Subadviser shall
obtain and evaluate such information relating to the economy, industries,
businesses, securities markets, and individual securities as it may deem
necessary or useful in the discharge of its obligations hereunder and shall
formulate and implement a continuing program for the management of the
assets and resources of the Portfolio in a manner consistent with the
Portfolio's investment objective, policies, and restrictions, and in
compliance with the requirements applicable to registered investment
companies under applicable laws and those requirements applicable to both
regulated investment companies and segregated asset accounts under
Subchapters M and L of the Internal Revenue Code of 1986, as amended
("Code"). To implement its duties, the Subadviser is hereby authorized to:
(i) buy, sell, exchange, convert, lend, and otherwise trade in any stocks,
bonds, and other securities or assets on behalf of the Portfolio; and
(ii) place orders and negotiate the commissions (if any) for the execution
of transactions in securities or other assets with or through such
brokers, dealers, underwriters or issuers as the Subadviser may select.
B. SUBADVISER UNDERTAKINGS. In all matters relating to the performance of
this Agreement, the Subadviser shall act in conformity with the Company's
Articles of Incorporation, By-Laws, and current Prospectus and with the
written instructions and directions of the Board and the Adviser. The
Subadviser hereby agrees to:
(i) regularly (but no less frequently than quarterly) report to the Board
and the Adviser (in such form as the Adviser and Subadviser mutually
agree) with respect to the implementation of the investment program
and, in addition, provide such statistical information and special
reports concerning the Portfolio and/or important developments
materially affecting the investments held, or contemplated to be
purchased, by the Portfolio, as may reasonably be requested by the
Board or the Adviser and agreed to by the Subadviser, including
attendance at Board meetings, as reasonably requested, to present such
information and reports to the Board;
(ii) consult with the Company's pricing agent regarding the valuation of
securities that are not registered for public sale, not traded on any
securities markets, or otherwise may be deemed illiquid for purposes
of the 1940 Act and for which market quotations are not readily
available;
(iii) provide any and all information, records and supporting documentation
about accounts the Subadviser manages that have investment objectives,
policies, and strategies substantially similar to those employed by
the Subadviser in managing the Portfolio which may be reasonably
necessary, under applicable laws, to allow the Company or its agent to
present historical performance information concerning the Subadviser's
similarly managed accounts, for inclusion in the Company's Prospectus
and any other reports and materials prepared by the Company or its
agent, in accordance with regulatory requirements;
(iv) establish appropriate personnel contacts with the Adviser and the
Company's Administrator in order to provide the Adviser and
Administrator with information as reasonably requested by the Adviser
or Administrator; and
(v) execute account documentation, agreements, contracts and other
documents as the Adviser shall be requested by brokers, dealers,
counterparties and other persons to execute in connection with its
management of the assets of the Portfolio, provided that the
Subadviser receives the express agreement and consent of the Adviser
and/or the Board to execute such documentation, agreements, contracts
and other documents. In such respect, and only for this limited
purpose, the Subadviser shall act as the Adviser and/or the
Portfolio's agent and attorney-in-fact.
C. The Subadviser, at its expense, will furnish: (i) all necessary
investment and management facilities and investment personnel, including
salaries, expenses and fees of any personnel required for it to faithfully
perform its duties under this Agreement; and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment required for it to
faithfully and fully perform its duties and obligations under this
Agreement.
D. The Subadviser will select brokers and dealers to effect all Portfolio
transactions subject to the conditions set forth herein. The Subadviser will
place all necessary orders with brokers, dealers, or issuers, and will
negotiate brokerage commissions if applicable. The Subadviser is directed at
all times to seek to execute brokerage transactions for the Portfolio in
accordance with such policies or practices as may be established by the
Board and the Adviser and described in the current Prospectus as amended
from time to time. In placing orders for the purchase or sale of investments
for the Portfolio, in the name of the Portfolio or their nominees, the
Subadviser shall use its best efforts to obtain for the Portfolio the most
favorable price and best execution available, considering all of the
circumstances, and shall maintain records adequate to demonstrate compliance
with this requirement.
Subject to the appropriate policies and procedures approved by the Adviser
and the Board, the Subadviser may, to the extent authorized by Section 28(e)
of the Securities Exchange Act of 1934, cause the Portfolio to pay a broker
or dealer that provides brokerage or research services to the Subadviser, an
amount of commission for effecting a portfolio transaction in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if the Subadviser determines, in good faith, that
such amount of commission is reasonable in relationship to the value of such
brokerage or research services provided viewed in terms of that particular
transaction or the Subadviser's overall responsibilities to the Portfolio or
its other advisory clients. To the extent authorized above the Subadviser
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of such action. In
addition, subject to seeking the best execution available, the Subadviser
may also consider sales of shares of the Portfolio as a factor in the
selection of brokers and dealers.
E. On occasions when the Subadviser deems the purchase or sale of a security
to be in the best interest of a Portfolio as well as other clients of the
Subadviser, the Subadviser to the extent permitted by applicable laws and
regulations, and subject to the Adviser's approval of the Subadviser's trade
aggregation and allocation procedures, may, but shall be under no obligation
to, aggregate the orders for securities to be purchased or sold to attempt
to obtain a more favorable price or lower brokerage commissions and
efficient execution. 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 Subadviser in the manner the Subadviser considers to be the
most equitable and consistent with its fiduciary obligations to the
Portfolio and to its other clients.
F. With respect to the provision of services by the Subadviser hereunder,
the Subadviser will maintain all accounts, books and records with respect to
each Portfolio as are required of an investment adviser of a registered
investment company pursuant to the 1940 Act and the Advisers Act and the
rules under both statutes.
G. The Subadviser and the Adviser acknowledge that the Subadviser is not the
compliance agent for the Portfolio, and does not have access to all of the
Company's books and records necessary to perform certain compliance testing.
However, to the extent that the Subadviser has agreed to perform the
services specified in this Agreement, the Subadviser shall perform
compliance testing with respect to the Portfolio based upon information in
its possession and upon information and written instructions received from
the Adviser or the Administrator and shall not be held in breach of this
Agreement so long as it performs in accordance with such information and
instructions. The Adviser or Administrator shall promptly provide the
Subadviser with copies of the Company's current Prospectus and any written
policies or procedures adopted by the Board applicable to the Portfolio and
any amendments or revisions thereto.
H. The Subadviser will have no duty to vote any proxy solicited by or with
respect to the issuers of securities in which assets of the Portfolio are
invested unless the Adviser gives the Subadviser thirty days' prior written
instruction to the contrary. Upon receipt of a proxy solicited by or with
respect to the issuers of securities in which assets of the Portfolios are
invested, the Subadviser will immediately forward such proxy to the Adviser
or to any agent designated by the Adviser.
The Subadviser will make appropriate personnel available for consultation
for the purpose of reviewing with representatives of the Adviser and/or the
Board any proxy solicited by or with respect to the issuers of securities in
which assets of the Portfolios are invested. Upon request, the Subadviser
will provide a voting recommendation to the Adviser for such proxies in
accordance with Subadviser's Proxy Voting Polices and Procedures. In making
such recommendations, the Subadviser shall use its good faith judgment to
act in the best interests of the Portfolios. The Adviser will accord these
written voting recommendations confidential treatment and will restrict the
dissemination of the information to a limited number of employees on a need
to know basis.
The voting recommendation provided by the Subadviser will be made in
accordance with Subadviser's Proxy Policies and Procedures which address
material conflicts of interest and are reasonably designed to ensure that
such decisions are made based solely on the best interest of its clients.
I. Subadviser hereby authorizes Adviser to use Subadviser's name and any
applicable trademarks in the Company's Prospectus, as well as in any
advertisement or sales literature used by the Adviser or its agents to
promote the Company and/or to provide information to shareholders of the
Portfolio.
During the term of this Agreement, the Adviser shall furnish to the
Subadviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature, or other material prepared for
distribution to shareholders of the Company or the public, which refer to
the Subadviser or its clients in any way, prior to the use thereof, and the
Adviser shall not use any such materials if the Subadviser reasonably
objects within three business days (or such other time as may be mutually
agreed) after receipt thereof. The Adviser shall ensure that materials
prepared by employees or agents of the Adviser or its affiliates that refer
to the Subadviser or its clients in any way are consistent with those
materials previously approved by the Subadviser.
3. COMPENSATION OF SUBADVISER. The Adviser will pay the Subadviser, with
respect to the Portfolio, the compensation specified in Appendix A to this
Agreement. Payments shall be made to the Subadviser on the second day of each
month. The advisory fee will be calculated based on the daily average value of
the Portfolio's net assets subject to the Subadviser's management and accrued
on a daily basis. Compensation for any partial period shall be pro-rated based
on the length of the period.
4. LIABILITY OF SUBADVISER. Neither the Subadviser nor any of its directors,
officers, employees or agents shall be liable to the Adviser or the Company for
any loss or expense suffered by the Adviser or the Company resulting from its
acts or omissions as Subadviser to the Portfolio, except for losses or expenses
to the Adviser or the Company resulting from willful misconduct, bad faith, or
gross negligence in the performance of, or from reckless disregard of, the
Subadviser's duties under this Agreement. Neither the Subadviser nor any of its
agents shall be liable to the Adviser or the Company for any loss or expense
suffered as a consequence of any action or inaction of other service providers
to the Company in failing to observe the instructions of the Adviser, provided
such action or inaction of such other service providers to the Company is not a
result of the willful misconduct, bad faith or gross negligence in the
performance of, or from reckless disregard of, the duties of the Subadviser
under this Agreement.
5. LIABILITY OF ADVISER. The Adviser agrees to indemnify the Subadviser and its
directors, officers, employees and agents against any loss or expense suffered
by the Subadviser resulting from Adviser's acts or omissions as Adviser to the
Portfolio, that may be based upon willful misconduct, bad faith, or gross
negligence in the performance of, or from reckless disregard of, the Adviser's
duties under the Agreement; provided however, that in no case is the indemnity
of the Adviser in favor of the Subadviser deemed to protect the Subadviser
against any liability to which it would otherwise be subject to by reason of
the Subadviser's willful misconduct, bad faith or gross negligence in the
performance of, or from reckless disregard of, the duties of the Subadviser
under this Agreement.
6. NON-EXCLUSIVITY. The services of the Subadviser to the Portfolio and the
Company are not to be deemed to be exclusive, and the Subadviser 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 Subadviser may not consult with any other subadviser of the Company
concerning transactions in securities or other assets for any investment
portfolio of the Company, including the Portfolio, except that such
consultations are permitted between the current and successor subadvisers of a
portfolio in order to effect an orderly transition of sub-advisory duties so
long as such consultations are not concerning transactions prohibited by
Section 17(a) of the Investment Company Act of 1940, as amended. It is
understood and agreed that the directors, officers, and employees of the
Subadviser are not precluded by this Agreement from engaging in any other
business activity or from rendering services to any other person, or from
serving as partners, officers, directors, trustees, or employees of any other
firm or corporation, including other investment companies.
7. ADVISER OVERSIGHT AND COOPERATION WITH REGULATORS. The Adviser and
Subadviser shall cooperate with each other in providing records, reports and
other materials to regulatory and administrative bodies having proper
jurisdiction over the Company, the Adviser and the Subadviser, in connection
with the services provided pursuant to this Agreement; provided, however, that
this agreement to cooperate does not apply to the provision of information,
reports and other materials which either the Subadviser or Adviser reasonably
believes the regulatory or administrative body does not have the authority to
request or which is privileged or confidential information of the Subadviser or
Adviser.
8. RECORDS. The records relating to the services provided under this Agreement
required to be established and maintained by an investment adviser under
applicable law or those required by the Adviser or the Board of Directors for
the Subadviser to prepare and provide shall be the property of the Company and
shall be under its control; however, the Company shall permit the Subadviser to
retain such records (either in original or in duplicate form) as it shall
reasonably require. In the event of the termination of this Agreement and upon
request by the Company or the Adviser, such records shall promptly be returned
to the Company by the Subadviser free from any claim or retention of rights
therein; provided however, that the Subadviser may retain copies thereof. The
Subadviser shall keep confidential any nonpublic information concerning the
Adviser or any Subadviser's duties hereunder and shall disclose such
information only if the Company has authorized such disclosure or if such
disclosure is expressly required or requested by applicable federal or state
regulatory authorities.
9. DURATION OF AGREEMENT. This Agreement shall become effective with respect to
the Portfolio on the later of the date of its execution or the date of the
commencement of operations of the Portfolio. This Agreement will continue in
effect for a period of more than two years from the date of its execution only
so long as such continuance is specifically approved at least annually by the
Board, provided that in such event such continuance shall also be approved by
the vote of a majority of the Directors who are not "interested persons" (as
defined in the 1940 Act) ("Independent Directors") of any party to this
Agreement cast in person at a meeting called for the purpose of voting on such
approval.
10. REPRESENTATIONS OF SUBADVISER. The Subadviser represents, warrants, and
agrees as follows:
A. The Subadviser: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement;
(iii) has met, and will continue to meet for so long as this Agreement
remains in effect, any other applicable federal or state requirements, or
the applicable requirements of any regulatory or industry self-regulatory
organization, necessary to be met in order to perform the services
contemplated by this Agreement; (iv) has the authority to enter into and
perform the services contemplated by this Agreement; and (v) will
immediately notify the Adviser of the occurrence of any event that would
disqualify the Subadviser from serving as an investment adviser of an
investment company pursuant to Section 9(a) of the 1940 Act or otherwise.
B. The Subadviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and, if it has not already
done so, will provide the Adviser and the Company with a copy of such code
of ethics, together with evidence of its adoption.
C. The Subadviser has provided the Adviser and the Company with a copy of
its Form ADV as most recently filed with the SEC and hereafter will furnish
a copy of its annual amendment to the Adviser.
11. PROVISION OF CERTAIN INFORMATION BY SUBADVISER. The Subadviser will
promptly notify the Adviser in writing of the occurrence of any of the
following events:
A. the Subadviser fails to be registered as an investment adviser under the
Advisers Act;
B. the Subadviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry, or investigation, at law or in equity, before or
by any court, public board, or body, involving the affairs of the Company;
C. a controlling stockholder of the Subadviser or the portfolio manager of
a Portfolio changes or there is otherwise an actual change in control or
management of the Subadviser.
12. PROVISION OF CERTAIN INFORMATION BY THE ADVISER. The Adviser will promptly
notify the Subadviser in writing of the occurrence of any of the following
events:
A. the Adviser fails to be registered as an investment adviser under the
Advisers Act or under the laws of any jurisdiction in which the Adviser is
required to be registered as an investment adviser in order to perform its
obligations under this Agreement;
B. the Adviser is served or otherwise receives notice of any action, suit,
proceeding, inquiry, or investigation, at law or in equity, before or by
any court, public board, or body, involving the affairs of the Company;
C. a controlling stockholder of the Adviser changes or there is otherwise
an actual change in control or management of the Adviser.
13. TERMINATION OF AGREEMENT. This Agreement may be terminated at any time with
respect to a Portfolio, without the payment of any penalty, by vote of the
Board or by a vote of a majority of the outstanding voting securities of such
Portfolio on 60 days prior written notice to the Subadviser. This Agreement may
also be terminated by the Adviser: (i) on at least 120 days prior written
notice to the Subadviser, without the payment of any penalty; (ii) upon
material breach by the Subadviser of any of its representations and warranties
made hereunder, if such breach shall not have been cured within a 20-day period
after notice of such breach; or (iii) if the Subadviser becomes unable to
discharge its duties and obligations under this Agreement. The Subadviser may
terminate this Agreement at any time, without the payment of any penalty, on at
least 90 days prior notice to the Adviser. This Agreement shall terminate
automatically in the event of its assignment or upon termination of the
Advisory Agreement between the Company and the Adviser.
14. AMENDMENT OF 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, and no material amendment of this Agreement shall be
effective until approved by vote of a majority of the Independent Directors
cast in person at a meeting called for the purpose of such approval.
15. MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Maryland without giving effect to the conflicts of
laws principles thereof, and the 1940 Act. To the extent that the
applicable laws of the State of Maryland conflict with the applicable
provisions of the 1940 Act, the latter shall control.
B. CAPTIONS. The Captions contained 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.
C. ENTIRE AGREEMENT. This Agreement represents the entire agreement and
understanding of the parties hereto and shall supersede any prior
agreements between the parties concerning management of the Portfolio and
all such prior agreements shall be deemed terminated upon the effectiveness
of this Agreement.
D. INTERPRETATION. Nothing herein contained shall be deemed to require the
Company to take any action contrary to its Articles of Incorporation,
By-Laws, or any applicable statutory or regulatory requirement to which it
is subject or by which it is bound, or to relieve or deprive the Board of
its responsibility for and control of the conduct of the affairs of the
Company.
E. DEFINITIONS. 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 1940 Act shall be resolved by reference to such term or
provision of the 1940 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, releases or orders of the SEC validly issued pursuant
to the Act. As used in this Agreement, the terms "majority of the
outstanding voting securities," "affiliated person," "interested person,"
"assignment," "broker," "investment adviser," "net assets," "sale," "sell,"
and "security" shall have the same meaning as such terms have in the 1940
Act, subject to such exemptions as may be granted by the SEC by any rule,
release or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Agreement is made less
restrictive by a rule, release, or order of the SEC, whether of special or
general application, such provision shall be deemed to incorporate the
effect of such rule, release, or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
ING LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
By: /s/ Xxx X. Doberman
----------------------------------
Name: Xxx X. Doberman
Title:
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
APPENDIX A
FEE SCHEDULE
.30% on the first $100 million in assets
.27% on the next $100 million in assets
.25% on all assets in excess of $200 million
