Exhibit (d)(11)
EXPENSE LIMITATION AGREEMENT
ING MUTUAL FUNDS
This EXPENSE LIMITATION AGREEMENT (this "Agreement"), effective this 29th
day of May, 2003, is made by and between ING Investments, LLC (the "Investment
Manager") and ING Mutual Funds (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," and 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 a Fund and its shareholders to
maintain the expenses of a 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,
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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 a 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 a Fund in accordance with
the terms of a 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 a Fund's advisory fee payable to
the Investment Manager.
2. Right to Recoupment. If the Investment Manager has waived or reduced any
management 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 a 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 a 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
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ninety (90) days 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 ninety (90)
days 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
directors/trustees of its responsibility for and control of the
conduct of the affairs of the Registrant or a Funds.
4.3 Definitions. Any question of interpretation of any term or provision
of this Agreement, including but not limited to the investment
advisory 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 MUTUAL FUNDS
By: \s\ Xxxxxx X. Naka
------------------------------
Name:
Title:
ING INVESTMENTS, LLC
By: \s\ Xxxxxxx X. Xxxxxx
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Name:
Title:
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SCHEDULE A
TO THE
EXPENSE LIMITATION AGREEMENT
BY AND BETWEEN
ING MUTUAL FUNDS
AND
ING INVESTMENTS, LLC
EXPIRATION OF INITIAL TERM: OCTOBER 31, 2004
OPERATING EXPENSE LIMITS
The Operating Expense Limit for each class of the below listed Fund shall
be the average annual net assets of each class of such Fund multiplied by the
percentage set forth below for such class:
NAME OF FUND OPERATING EXPENSE LIMIT PERCENTAGE
------------ ----------------------------------
Class A Class B Class C Class I Class Q
------- ------- ------- ------- -------
ING Global Equity Dividend Fund* 1.40% 2.15% 2.15% 1.15% 1.40%
* This Schedule A to the Expense Limitation Agreement will be effective with
respect to a Fund upon the effective date of the initial Registration Statement
with respect to a Fund.
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