Exhibit (h)(22)
RESTATED EXPENSE LIMITATION AGREEMENT
ING EQUITY TRUST
This RESTATED EXPENSE LIMITATION AGREEMENT (this "Agreement"), by and
between ING Investments, LLC (the "Investment Manager") and ING Equity Trust
(the "Registrant") effective this 1st day of August, 2003, restates the Amended
and Restated Expense Limitation Agreement dated September 23,2002 between
Investment Manager, Aeltus Investment Management, Inc. and the Registrant. If
the Registrant is a series fund investment company, then the Registrant is
entering into this Agreement on behalf of, and this Agreement shall apply to,
each series of the Registrant set forth on Schedule A hereto (each a "Fund,"
collectively the "Funds"), as such schedule may be amended from time to time to
add or delete series. If the Registrant is not a series fund investment company,
then this Agreement shall apply to the Registrant, and the use of the terms
"Fund" or "Funds" herein shall refer to the Registrant.
WHEREAS, the Registrant is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management company; and
WHEREAS, the Registrant and the Investment Manager desire that the
provisions of this Agreement do not adversely affect a Fund's status as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), do not interfere with a Fund's ability to
compute its taxable income under Code Section 852, do not adversely affect the
status of the distributions a Fund makes as deductible dividends under Code
Section 562, and do comply with the requirements of Revenue Procedure 99-40 (or
any successor pronouncement of the Internal Revenue Service); and
WHEREAS, the Registrant and the Investment Manager have entered into an
investment management agreement (the "Management Agreement"), pursuant to which
the Investment Manager provides investment advisory services to each Fund; and
WHEREAS, the Registrant and the Investment Manager have determined that it
is appropriate and in the best interests of the Funds and their shareholders to
maintain the expenses of each Fund at a level below the level to which each such
Fund might otherwise be subject.
NOW, THEREFORE, the parties hereto agree as follows:
1. Expense Limitation.
1.1 Applicable Expense Limit. To the extent that the ordinary operating
expenses, including but not limited to investment advisory fees payable to the
Investment Manager, but excluding interest, taxes, other investment-related
costs, leverage expenses (as defined below), extraordinary expenses such as
litigation, other expenses not incurred in the ordinary course of such Fund's
business, and expenses of any counsel or other persons or services retained by
such Fund's trustees who are not "interested persons," as that term is defined
in the 1940 Act, of the Investment Manager (the "Fund Operating Expenses"),
incurred by a class of a Fund listed on Schedule A in any fiscal year exceed the
Operating Expense Limit, as defined in Section 1.2
below, for such class for such fiscal year, such excess amount (the "Excess
Amount") shall be the liability of the Investment Manager. For the purposes of
this Agreement, leverage expenses shall mean fees, costs and expenses incurred
by a Fund's use of leverage (including, without limitation, expenses incurred by
a Fund in creating, establishing and maintaining leverage through borrowings or
the issuance of preferred shares).
1.2 Operating Expense Limit. The Operating Expense Limit in any fiscal
year with respect to each class of a Fund shall be the amount specified in
Schedule A.
1.3 Daily Computation. The Investment Manager shall determine on each
business day whether the aggregate fiscal year to date Fund Operating Expenses
for any class of a Fund exceed the Operating Expense Limit, as such Operating
Expense Limit has been pro-rated to the date of such determination (the
"Pro-Rated Expense Cap"). If, on any business day, the aggregate fiscal year to
date Fund Operating Expenses for any class of a Fund do not equal the Pro-Rated
Expense Cap for that class, the amount of such difference shall be netted
against the previous day's accrued amount for Excess Amounts or Recoupment
Amounts (as defined below), and the difference shall be accrued for that day as
an Excess Amount or Recoupment Amount as applicable.
1.4 Payment. At the end of each month, the accruals made pursuant to
Section 1.3 above shall be netted, and the result shall be remitted by the
Investment Manager to the Fund if such netting results in an Excess Amount, and
it shall be remitted to the Investment Manager if such netting results in a
Recoupment Amount and the Investment Manager is entitled to a Recoupment Amount
pursuant to Section 2.1 below. Any such amounts remitted to a Fund, or repaid by
a Fund, shall be allocated among the classes of the Fund in accordance with the
terms of the Fund's Multiple Class Plan Pursuant to Rule 18f-3 under the
1940 Act. The Registrant may offset amounts owed to a Fund pursuant to this
Agreement against the Fund's advisory fee payable to the Investment Manager.
2. Right to Recoupment. If the Investment Manager has waived or reduced any
investment advisory fees, or made any payments pursuant to Section 1.4 above,
relating to any of the 36 months immediately preceding any month end calculation
pursuant to Section 1.4 above, the Investment Manager shall be entitled to
recoup from a Fund any such investment advisory fees waived or reduced and any
such payments made (collectively, a "Recoupment Amount"), if (i) on the date of
any calculation under Section 1.3, the aggregate fiscal year to date Fund
Operating Expenses for any class of a Fund are less than that day's Pro-Rated
Expense Cap for that class, and (ii) such Recoupment Amounts have not already
been recouped. Any amounts recouped from a class of a Fund shall be recouped in
accordance with the principles of the Fund's Multiple Class Plan Pursuant to
Rule 18f-3 under the 1940 Act. Amounts recouped shall be allocated to the oldest
Recoupment Amounts during such 36-month period until fully recouped, and
thereafter to the next oldest Recoupment Amounts, and so forth.
3. Term and Termination. This Agreement shall have an initial term with respect
to each Fund ending on the date indicated on Schedule A, as such schedule may be
amended from time to time. Thereafter, this Agreement shall automatically renew
for one-year terms with respect to a Fund unless the Investment Manager provides
written notice of the termination of
this Agreement to a lead Independent Trustee of the Registrant within 90 days of
the end of the then current term for that Fund. In addition, this Agreement
shall terminate with respect to a Fund upon termination of the Management
Agreement with respect to such Fund, or it may be terminated by the Registrant,
without payment of any penalty, upon written notice to the Investment Manager at
its principal place of business within 90 days of the end of the then current
term for a Fund.
4. Miscellaneous.
4.1 Captions. The captions in this Agreement are included for convenience
of reference only and in no other way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
4.2 Interpretation. Nothing herein shall be deemed to require the
Registrant or a Fund to take any action contrary to the Registrant's articles of
incorporation, declaration of trust, or similar governing document, an
applicable prospectus or statement of additional information, or any applicable
statutory or regulatory requirement, or to relieve or deprive the Registrant's
Board of Trustees of its responsibility for and control of the conduct of the
affairs of the Registrant or the Funds.
4.3 Definitions. Any question of interpretation of any term or provision
of this Agreement, including but not limited to the investment management fee,
the computations of net asset values, and the allocation of expenses, having a
counterpart in or otherwise derived from the terms and provisions of the
Management Agreement or the 1940 Act, shall have the same meaning as and be
resolved by reference to such Management Agreement or the 1940 Act.
4.4 Amendments. This Agreement may be amended only by a written agreement
signed by each of the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized, as of the day and year
first above written.
ING EQUITY TRUST ING INVESTMENTS, LLC
By: /s/ Xxxxxx X. Naka By: /s/ Xxxxxxx X. Xxxxxx
---------------------------- --------------------------------
Name: Xxxxxx X. Naka Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President Title: Executive Vice President
SCHEDULE A
WITH RESPECT TO THE
RESTATED EXPENSE LIMITATION AGREEMENT
ING EQUITY TRUST
OPERATING EXPENSE LIMITS
GUARANTEE MAXIMUM OPERATING EXPENSE LIMIT
NAME OF FUND MATURITY DATE (AS A PERCENTAGE OF AVERAGE NET ASSETS)*
------------ ------------- ----------------------------------------
Class A Class B Class C Class Q
ING Principal Protection Fund October 11, 2006 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund II January 31, 2007 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund III June 5, 2007 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund IV October 8, 2007 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund V January 22, 2008 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund VI April 22, 2008 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund VII June 26, 2008 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund VIII** October 15, 2008 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund IX** January 15, 2009 1.75% 2.50% 2.50% 1.75%
/s/ HE
------
HE
Approved by the Board of Trustees on May 9, 2001 for ING Principal Protection
Fund; on November 2, 2001 for ING Principal Protection Fund II; on February 26,
2002 for ING Principal Protection Fund III, on May 24, 2002 for ING Principal
Protection Fund IV; on August 20, 2002 for ING Principal Protection Fund V; and
on November 22, 2002 for ING Principal Protection Fund VI, ING Principal
Protection Fund VII, ING Principal Protection Fund VIII, and ING Principal
Protection Fund IX.
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* Effective through to the Guarantee Maturity Date, thereafter this limit is
subject to change if the Agreement is extended as contemplated in
Section 3.
** This Schedule A will be effective with respect to this Fund upon the
effective date of the post-effective amendment to the Trust's Registration
Statement with respect to the Fund.
[MBIA LETTERHEAD]
June 24, 2003
ING Investments, LLC
0000 X. Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Aeltus Investment Management, Inc.
00 Xxxxx Xxxxx Xxxxxx, XX 00
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
ING Equity Trust
0000 X. Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Re: Consent to Revisions to the Expense Limitation Agreement
Ladies and Gentlemen:
Reference is hereby made to the Financial Guaranty Agreement, dated as of July
3, 2001, as amended by the First Amendment dated January 14, 2002, and further
amended by the Second Amendment dated March 28, 2002, the Third Amendment dated
August 20, 2002, the Fourth Amendment dated October 30, 2002, the Fifth
Amendment dated November 12, 2002, the sixth Amendment dated February 10, 2003,
and the Seventh Amendment dated March 24, 2003 among MBIA Insurance Corporation,
a New York monoline stock insurance company (the "Insurer"); ING Investments,
LLC, an Arizona limited liability company ("ING") (successor to ING Pilgrim
Investments, LLC, a Delaware limited liability company); Aeltus Investment
Management, Inc., a Connecticut corporation; and ING Equity Trust, a
Massachusetts business trust (formerly known as Pilgrim Equity Trust).
In accordance with Sections 6.l(c), 6.2(c), and 6.3(b) of the Agreement, the
Insurer hereby consents to the amendments to the Expense Limitation Agreement as
set forth in the form attached hereto as Exhibit 1. The Insurer understands that
such revisions are applicable to ING Principal Protection Fund, ING Principal
Protection Fund II, ING Principal Protection Fund III, ING Principal Protection
Fund IV, ING Principal Protection Fund V, ING Principal Protection Fund VI, ING
Principal Protection Fund VII, and any other fund to be added under the
Agreement in the future.
MBIA INSURANCE CORPORATION
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Vice President
Attachment: Exhibit 1-Revised Expense Limitation Agreement
AMENDED SCHEDULE A
WITH RESPECT TO THE
AMENDED AND RESTATED
EXPENSE LIMITATION AGREEMENT
BY AND BETWEEN
ING INVESTMENTS, LLC,
AELTUS INVESTMENT MANAGEMENT, INC.
AND
ING EQUITY TRUST
OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds:
GUARANTEE MAXIMUM OPERATING EXPENSE LIMIT
NAME OF FUND MATURITY DATE (AS A PERCENTAGE OF AVERAGE NET ASSETS)*
------------ ------------- ----------------------------------------
Class A Class B Class C Class Q
ING Principal Protection Fund October 11, 2006 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund II January 31, 2007 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund III June 5, 2007 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund IV October 15, 2008 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund V January 22, 2008 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund VI April 22, 2008 1.75% 2.50% 2.50% 1.75%
ING Principal Protection Fund VII** July 15, 2008 1.75% 2.50% 2.50% 1.75%
/s/ HE
------
HE
Approved by the Board of Trustees on May 9, 2001 for ING Principal Protection
Fund; on November 2, 2001 for ING Principal Protection Fund II; on February 26,
2002 for ING Principal Protection Fund III, on May 24, 2002 for ING Principal
Protection Fund IV; on August 20, 2002 for ING Principal Protection Fund V; and
on November 22, 2002 for ING Principal Protection Fund VI and ING Principal
Protection Fund VII.
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* Effective through to the Guarantee Maturity Date, thereafter this limit is
subject to change if the Agreement is extended as contemplated in
paragraph 4 and 5.4.
** This Amended Schedule A will be effective with respect to this Fund upon
the effective date of the post-effective amendment to the Trust's
Registration Statement with respect to the Fund.
IN WITNESS WHEREOF, the undersigned have caused this amendment to be executed as
of April 3, 2003.
ING INVESTMENTS, LLC
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
AELTUS INVESTMENT MANAGEMENT, INC.
/s/ Xxxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Senior Vice President
ING EQUITY TRUST
/s/ Xxxxxx X. Naka
-----------------------
Name:Xxxxxx X. Naka
Title: Senior Vice President
(ING LETTERHEAD)
June 24, 2003
Board of Trustees
ING Equity Trust
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
RE: VOLUNTARY EXPENSE LIMITATIONS
Ladies and Gentlemen:
For the Class A, B, C and Q shares of ING Principal Protection Fund VII (the
"Fund"), a series of ING Equity Trust, ING Investments, LLC shall waive or lower
its investment management fee in accordance with the Restated Expense Limitation
Agreement between ING Investments, LLC and ING Equity Trust, dated September
23, 2002, by 0.80%, as if the Maximum Operating Expense Limits specified in
Schedule A of the Restated Expense Limitation Agreement were as follows:
MAXIMUM OPERATING EXPENSE LIMIT
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Class A Class B Class C Class Q
0.95% 1.70% 1.70% 0.95%
The method of computation to determine the amount of the fee waiver and the
definitions as set forth in the Expense Limitation Agreement shall apply.
We will reduce our fees by the 0.80% for the duration of the Guarantee Period;
however, we retain the right, subject to approval by the Board of Trustees, to
revise or rescind this waiver. This Agreement shall terminate upon termination
of the Restated Expense Limitation Agreement.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Executive Vice President
(ING LETTERHEAD)
August 21, 2003
Board of Trustees
ING Equity Trust
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
RE: VOLUNTARY EXPENSE LIMITATIONS
Ladies and Gentlemen:
Pursuant to our letter agreement dated June 24, 2003, whereby we waived an
additional 0.80% (80 basis points) to affect a waiver of the investment
management fee for the Class A, B and C shares of ING Principal Protection Fund
VII (the "Fund"), a series of ING Equity Trust, we hereby modify the voluntary
expense limitations outlined in that agreement.
Rather than calculating the fees based on the actual percentage of assets in the
Equity Component as outlined in the Restated Expense Limitation Agreement, fees
collected will be based upon a target percentage of assets in the Equity
Component according to the schedule below.
TOTAL EQUITY MAXIMUM OPERATING EXPENSE LIMIT
RATIO (AS A PERCENTAGE OF AVERAGE NET ASSETS)
CLASS A CLASS B CLASS C
------- ------- -------
27% - 30% 1.75% 2.50% 2.50%
24% - 26% 1.55% 2.30% 2.30%
21% - 23% 1.35% 2.10% 2.10%
18% - 20% 1.15% 1.90% 1.90%
16% - 17% 0.95% 1.70% 1.70%
Under the fee schedule, the target equity ratio, calculated daily by the model
above, will determine when any increase in fee level would occur. Once a
particular fee level is reached, it will not be reduced even if the equity
percentage declines as a result of a decline in the equity market. The new fee
will be collected and will be used in subsequent model calculations to determine
the equity ratio.
This Agreement shall terminate upon termination of the Expense Limitation
Agreement.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
--------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
