Exhibit (h)(22)
FORM OF AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT
ING EQUITY TRUST - ING PRINCIPAL PROTECTION FUNDS
THIS EXPENSE LIMITATION AGREEMENT, effective as of this 23rd day of
September, 2002, by and between ING Investments, LLC (the "Investment Manager"),
Aeltus Investment Management, Inc. (the "Sub-Adviser") and ING Equity Trust (the
"Trust"), on behalf of each series of the Trust which is an ING Principal
Protection Fund set forth on Schedule A hereto (each a "Fund," and collectively,
the "Funds"), as such schedule may be amended from time to time to add
additional series.
WHEREAS, the Trust is a Massachusetts business trust, and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management company of the series type, and each Fund is a series of the
Trust; and
WHEREAS, the Trust 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 Trust and the Investment Manager have entered into an
Investment Management Agreement dated May 9, 2001, as amended (the "Management
Agreement"), pursuant to which the Investment Manager provides investment
management services to each Fund for compensation based on the value of the
average daily net assets of each such Fund; and
WHEREAS, the Investment Manager and the Sub-Adviser have entered into a
Sub-Adviser Agreement dated May 9, 2001, as amended (the "Sub-Adviser
Agreement"), pursuant to which the Sub-Adviser provides investment advisory
services to each Fund identified on Schedule A (each a "Sub-Advised Fund") for
compensation based on the value of the average daily net assets of each such
Sub-Advised Fund; and
WHEREAS, the Trust, the Investment Manager and the Sub-Adviser have
determined that it is appropriate and in the best interests of each Fund and its
shareholders to maintain the expenses of each Fund at a level below the level to
which each such Fund may normally 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 incurred by a class of a Fund in any fiscal year, including but not
limited to investment management fees payable to the Investment Manager, but
excluding interest, taxes, brokerage commissions, other investment-related
costs, 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 ("Fund Operating Expenses"), exceed the Operating
Expense Limit, as defined in Section 1.2 below, such excess amount (the "Excess
Amount") shall be the liability of the Investment Manager, subject to the
allocation provisions set forth in Section 3 below.
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 based on a percentage of the average daily net assets of such class
of such Fund.
1.3. Method of Computation. To determine the Investment Manager's
obligation with respect to the Excess Amount, each day the Fund Operating
Expenses for each class of a Fund shall be annualized. If the annualized Fund
Operating Expenses for any day of a class of a Fund exceed the Operating Expense
Limit for that class of such Fund, the Investment Manager shall remit to the
appropriate class of such Fund an amount that, together with the waived or
reduced investment management fee, is sufficient to pay that day's Excess
Amount. Any such amounts remitted to 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 Trust may offset amounts owed to
such Fund pursuant to this Agreement against the advisory fee payable to the
Investment Manager.
1.4. Year-End Adjustment. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the amount of the investment management fees
waived or reduced and other payments remitted by the Investment Manager to each
class of a Fund with respect to the previous fiscal year shall equal the Excess
Amount.
2. Recoupment of Fee Waivers and Expense Reimbursements.
2.1. Recoupment. If on any day during which the Management Agreement is
in effect, the estimated annualized Fund Operating Expenses of a class of a Fund
for that day are less than the Operating Expense Limit, the Investment Manager
shall be entitled to recoup from such Fund the investment management fees waived
or reduced and other payments remitted by the Investment Manager to such class
of such Fund pursuant to Section 1 hereof (the "Recoupment Amount") during any
of the previous thirty-six (36) months, to the extent that such class'
annualized Operating Expenses plus the amount so recouped equals, for such day,
the Operating Expense Limit provided in Schedule A, provided that such amount
paid to the Investment Manager will in no event exceed the total Recoupment
Amount and will not include any amounts previously recouped. Any such 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.
2.2. Year-End Adjustment. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the actual Fund Operating Expenses of each class
of a Fund for the prior fiscal year (including any
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recoupment payments hereunder with respect to such fiscal year) do not exceed
the Operating Expense Limit.
3. Allocation between Investment Manager and Sub-Adviser with Respect to
Sub-Advised Funds.
3.1. Allocation of Excess Amount. The Investment Manager shall be solely
responsible for payment of the Excess Amount in an amount up to 0.05% of a
sub-advised Fund's average daily net assets in excess of the Operating Expense
Limit. With respect to any remaining Excess Amount, for so long as the fee
payable to the Sub-Adviser under the Sub-Adviser Agreement is equal to 50% of
the advisory fee payable to the Investment Manager by the Sub-Advised Fund, the
Sub-Adviser shall waive or reduce its portfolio management fee and/or promptly
remit to the Investment Manager an amount that is sufficient to pay 50% of any
remaining Excess Amount paid to the Sub-Advised Fund by the Investment Manager
pursuant to Section 1 of this Agreement. The Investment Manager may offset
amounts owed to the Investment Manager pursuant to this Section 3.1 against the
sub-advisory fee paid to the Sub-Adviser.
3.2. Allocation of Recoupments. The Investment Manager shall promptly
remit to the Sub-Adviser 50% of any amount recouped by the Investment Manager
from any Sub-Advised Fund pursuant to Section 2 of this Agreement, provided that
the Investment Manager shall not remit amounts recouped to the Sub-Adviser until
the Investment Manager has recouped the 0.05% of such Sub-Advised Fund's average
daily net assets paid under Section 3.1 above.
3.3. Accounting. The Trust and the Investment Manager will provide to the
Sub-Adviser reasonable access to the books and records of each for purposes of
confirming the amounts contributed and recouped under this Agreement.
4. Term and Termination of Agreement.
This Agreement shall have an initial term with respect to each Fund ending
on the date indicated on Schedule A hereto (the "Guarantee Maturity Date"), 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 within ninety (90) days of the end of the
then-current term for that Fund; provided, however, that the Sub-Adviser may
terminate this Agreement with respect to any Sub-Advised Fund by providing
written notice to the Trust and the Investment Manager of the termination of
this Agreement with respect to such Sub-Advised Fund at least forty (40) days
prior to the end of the then-current term. In addition, this Agreement shall
terminate with respect to a Fund upon termination of the Management Agreement
with respect to the Fund, or it may be terminated by the Trust, without payment
of any penalty, upon written notice to the Investment Manager at its principal
place of business within ninety (90) days of the end of the then-current term
for a Fund. The obligations of the Investment Manager and the Sub-Adviser
pursuant to Section 3 of this Agreement shall terminate upon termination of the
Sub-Adviser Agreement. The Operating Expense Limit specified in Schedule A is
effective through to the Guarantee Maturity Date applicable to a Fund,
thereafter the maximum Operating Expense Limit may be changed upon the extension
of this Agreement as contemplated by this paragraph and paragraph 5.4.
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5. Miscellaneous.
5.1. 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.
5.2. Interpretation. Nothing herein contained shall be deemed to require
a Fund or the Trust to take any action contrary to the Trust's Declaration of
Trust, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Trust's Board of
Trustees of its responsibility for and control of the conduct of the affairs of
the Trust or the Funds
5.3. 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.
5.4. 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
By: _____________________________
Name: Xxxxxx X. Naka
Title: Senior Vice President
ING INVESTMENTS, LLC
By: _____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
AELTUS INVESTMENT MANAGEMENT, INC.
By: _____________________________
Name: _____________________________
Title: _____________________________
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SCHEDULE A
WITH RESPECT TO THE
AMENDED AND RESTATED
EXPENSE LIMITATION AGREEMENT
BY AND BETWEEN
ING INVESTMENTS, LLC,
AELTUS INVESTMENT MANAGEMENT
AND
ING EQUITY TRUST
EFFECTIVE: SEPTEMBER 23, 2002
OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds:
GUARANTY 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 7, 2008 1.75% 2.50% 2.50% 1.75%
----
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; and on August 20, 2002 for ING Principal Protection Fund V.
----------
* 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 and Restated Expense Limitation Agreement is effective with
respect to this Fund upon the effective date of the initial Registration
Statement with respect to the Fund.
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