1
Exhibit 5(a)
MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 30th day of October, 1998 by and between the
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 MUTUAL FUNDS MANAGEMENT CO. LLC, a Delaware limited liability
company (the "Investment Manager").
W I T N E S S E T H
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 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:
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.
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'
2
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.
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
3
commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the 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.
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.
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.
Expenses. The expenses connected with the Funds shall be allocable between
the Funds and the Investment Manager as follows:
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;
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;
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
4
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 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.
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 6. 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 sale, insurance premiums on property 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.
Delegation of Responsibilities. The Investment Manager may delegate the
performance of certain investment advisory services, as described hereunder, to
a sub-adviser.
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 A, 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.
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
5
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 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.
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.
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.
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,
6
employees or agents in alleged violation of applicable federal, state or foreign
laws, rules or regulations.
Limit of Liability. The terms the "ING 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 "ING 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 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 Mutual Fund Management Co. 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.
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.
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
7
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.
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.
ING FUNDS TRUST, ING MUTUAL FUNDS MANAGEMENT, CO. LLC
on behalf each of its series listed on Schedule 1
By:____________________________ By:____________________________
Title:_________________________ Title:_________________________
Attest By:_____________________ Attest By:_______________________
Title:_________________________ Title:_________________________
8
Schedule 1
Organizational
Name of Fund Fee Rate* Approval Date
------------ --------- -------------
ING Large Cap Growth Fund 0.75% October 30, 1998
ING Small Cap Growth Fund 1.00% October 30, 1998
ING Emerging Markets Equity Fund 1.25% October 30, 1998
ING International Equity Fund 1.25% October 30, 1998
ING International Bond Fund 1.00% October 30, 1998
ING Tax Efficient Equity Fund 0.80% October 30, 1998
ING National Tax-Exempt Bond Fund 0.50% October 30, 1998
ING Mid Cap Growth Fund 1.00% October 30, 1998
ING Balanced Fund 0.80% October 30, 1998
ING Focus Fund 1.00% October 30, 1998
ING Growth and Income Fund 0.75% October 30, 1998
ING U.S. Treasury Money
Market Fund 0.25% October 30, 1998
ING Money Market Fund 0.25% October 30, 1998
ING Intermediate Bond Fund 0.50% October 30, 1998
ING High Yield Bond Fund 0.65% October 30, 1998
ING Mortgage Income Fund 0.50% October 30, 1998
ING Global Brand Names Fund 1.00% October 30, 1998
----------
* For the first year of operations, the fee rate will be one-quarter (1/4) of
the annual fee rate reflected herein. For the second year of operations, the fee
rate will be one-half (1/2) of the annual fee rate reflected herein.
9
Organizational
Name of Fund Fee Rate* Approval Date
------------ --------- -------------
ING European Equity Fund 1.15% October 30, 1998
ING Global Information
Technology Fund 1.25% October 30, 1998
ING Global Real Estate Fund 1.00% October 30, 1998
----------
* For the first year of operations, the fee rate will be one-quarter (1/4) of
the annual fee rate reflected herein. For the second year of operations, the fee
rate will be one-half (1/2) of the annual fee rate reflected herein.
