EXHIBIT (d)(7)
SUB-ADVISER AGREEMENT
AGREEMENT made this 9th day of May, 2001 between ING Pilgrim
Investments, LLC, a Delaware limited liability company (the "Manager"), and
Aeltus Investment Management, Inc., a Connecticut corporation (the
"Sub-Adviser").
WHEREAS, Pilgrim Equity Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end,
management investment company;
WHEREAS, the Fund is authorized to issue separate series, each series
having its own investment objective or objectives, policies, and limitations;
WHEREAS, the Fund may offer shares of additional series in the future;
WHEREAS, pursuant to an Investment Management Agreement, dated the date
hereof (the "Management Agreement"), a copy of which has been provided to the
Sub-Adviser, the Fund has retained the Manager to render advisory and management
services with respect to certain of the Fund's series; and
WHEREAS, pursuant to authority granted to the Manager in the Management
Agreement, the Manager wishes to retain the Sub-Adviser to furnish investment
advisory services to one or more of the series of the Fund, and the Sub-Adviser
is willing to furnish such services to the Fund and the Manager;
NOW, THEREFORE, in consideration of the premises and the promises and
mutual covenants herein contained, it is agreed between the Manager and the
Sub-Adviser as follows:
1. Appointment. The Manager hereby appoints the Sub-Adviser to act as
the investment adviser and manager to the series of the Fund set forth on
Schedule A hereto (the "Series") for the periods and on the terms set forth in
this Agreement. The Sub-Adviser accepts such appointment and agrees to furnish
the services herein set forth for the compensation herein provided.
In the event the Fund designates one or more series (other than the
Series) with respect to which the Manager wishes to retain the Sub-Adviser to
render investment advisory services hereunder, it shall notify the Sub-Adviser
in writing. If the Sub-Adviser is willing to render such services, it shall
notify the Manager in writing, whereupon such series shall become a Series
hereunder, and be subject to this Agreement.
2. Sub-Adviser Duties. Subject to the supervision of the Fund's Board
of Trustees and the Manager, the Sub-Adviser will provide a continuous
investment program for each Series' portfolio and determine in its discretion
the composition of the assets of each Series' portfolio, including determination
of the purchase, retention, or sale of the securities, cash, and other
investments contained in the portfolio. The Sub-Adviser will provide investment
research and conduct a continuous program of evaluation, investment, sales, and
reinvestment of each Series' assets by determining the securities and
other investments that shall be purchased, entered into, sold, closed, or
exchanged for the Series, when these transactions should be executed, and what
portion of the assets of the Series should be held in the various securities and
other investments in which it may invest. To the extent permitted by the
investment policies of each Series, the Sub-Adviser shall make decisions for the
Series as to foreign currency matters and make determinations as to and execute
and perform foreign currency exchange contracts on behalf of the Series. The
Sub-Adviser will provide the services under this Agreement in accordance with
each Series' investment objective or objectives, policies, and restrictions as
stated in the Fund's Registration Statement filed with the Securities and
Exchange Commission ("SEC"), as amended, copies of which shall be sent to the
Sub-Adviser by the Manager prior to the commencement of this Agreement and
promptly following any such amendment. The Sub-Adviser further agrees as
follows:
(a) The Sub-Adviser will conform with the 1940 Act and all rules
and regulations thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the Fund's Board of
Trustees of which the Sub-Adviser has been sent a copy, and the provisions of
the Registration Statement of the Fund filed under the Securities Act of 1933
(the "1933 Act") and the 1940 Act, as supplemented or amended, of which the
Sub-Adviser has received a copy, and with the Manager's portfolio manager
operating policies and procedures as in effect on the date hereof, as such
policies and procedures may be revised or amended by the Manager and agreed to
by the Sub-Adviser. In carrying out its duties under the Sub-Adviser Agreement,
the Sub-Adviser will comply with the following policies and procedures:
(i) The Sub-Adviser will manage each Series so that it meets the
income and asset diversification requirements of Section 851 of the Internal
Revenue Code.
(ii) The Sub-Adviser will vote all proxies solicited by or with
respect to the issuers of securities which assets of the Series are invested
consistent with any procedures or guidelines promulgated by the Board or the
Manager, or if none, in the discretion of the Sub-Adviser based upon the best
interests of the Series. The Sub-Adviser will maintain appropriate records
detailing its voting of proxies on behalf of the Fund and will provide to the
Fund at least quarterly a report setting forth the proposals voted on and how
the Series' shares were voted since the prior report, including the name of the
corresponding issuers.
(iii) In connection with the purchase and sale of securities for
each Series, the Sub-Adviser will arrange for the transmission to the custodian
and portfolio accounting agent for the Series on a daily basis, such
confirmation, trade tickets, and other documents and information, including, but
not limited to, Cusip, Cedel, or other numbers that identify securities to be
purchased or sold on behalf of the Series, as may be reasonably necessary to
enable the custodian and portfolio accounting agent to perform its
administrative and recordkeeping responsibilities with respect to the Series.
With respect to portfolio securities to be settled through the Depository Trust
Company, the Sub-Adviser will arrange for the prompt transmission of the
confirmation of such trades to the Fund's custodian and portfolio accounting
agent.
(iv) The Sub-Adviser will assist the custodian and portfolio
accounting agent for the
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Fund in determining or confirming, consistent with the procedures and policies
stated in the Registration Statement for the Fund or adopted by the Board of
Trustees, the value of any portfolio securities or other assets of the Series
for which the custodian and portfolio accounting agent seeks assistance from or
identifies for review by the Sub-Adviser. The parties acknowledge that the
Sub-Adviser is not a custodian of the Series' assets and will not take
possession or custody of such assets.
(v) The Sub-Adviser will provide the Manager, no later than the
20th day following the end of each of the first three fiscal quarters of each
Series and the 45th day following the end of each Series' fiscal year, a letter
to shareholders (to be subject to review and editing by the Manager) containing
a discussion of those factors referred to in Item 5(a) of 1940 Act Form N-1 A in
respect of both the prior quarter and the fiscal year to date.
(vi) The Sub-Adviser will complete and deliver to the Manager a
written compliance checklist in a form provided by the Manager for each month by
the 10th day of the following month.
(vii) The parties agree that in the event that the Manager or an
affiliated person of the Manager sends sales literature or other promotional
material to the Sub-Adviser for its approval and the Sub-Adviser has not
commented within 10 days, the Manager and its affiliated persons may use and
distribute such sales literature or other promotional material.
(b) The Sub-Adviser will make available to the Fund and the
Manager, promptly upon request, any of the Series' investment records and
ledgers maintained by the Sub-Adviser (which shall not include the records and
ledgers maintained by the custodian or portfolio accounting agent for the Fund)
as are necessary to assist the Fund and the Manager to comply with requirements
of the 1940 Act and the Investment Advisers Act of 1940 (the "Advisers Act"), as
well as other applicable laws. The Sub-Adviser will furnish to regulatory
authorities having the requisite authority any information or reports in
connection with such services in respect to the Series which may be requested in
order to ascertain whether the operations of the Fund are being conducted in a
manner consistent with applicable laws and regulations.
(c) The Sub-Adviser will provide reports to the Fund's Board of
Trustees for consideration at meetings of the Board on the investment program
for each Series and the issuers and securities represented in each Series'
portfolio, and will furnish the Fund's Board of Trustees with respect to each
Series such periodic and special reports as the Trustees and the Manager may
reasonably request.
3. Broker-Dealer Selection. The Sub-Adviser is authorized to make
decisions to buy and sell securities and other investments for each Series'
portfolio, broker-dealer selection, and negotiation of brokerage commission
rates in effecting a security transaction. The Sub-Adviser's primary
consideration in effecting a security transaction will be to obtain the best
execution for the Series, taking into account the factors specified in the
prospectus and/or statement of additional information for the Fund, and
determined in consultation with the Manager, which include price (including the
applicable brokerage commission or dollar spread), the size of the order, the
nature of the
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market for the security, the timing of the transaction, the reputation, the
experience and financial stability of the broker-dealer involved, the quality of
the service, the difficulty of execution, and the execution capabilities and
operational facilities of the firm involved, and the firm's risk in positioning
a block of securities. Accordingly, the price to a Series in any transaction may
be less favorable than that available from another broker-dealer if the
difference is reasonably justified, in the judgment of the Sub-Adviser in the
exercise of its fiduciary obligations to the Fund, by other aspects of the
portfolio execution services offered. Subject to such policies as the Fund's
Board of Trustees or Manager may determine and consistent with Section 28(e) of
the Securities Exchange Act of 1934, the Sub-Adviser 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 Series to pay a broker-dealer
for effecting a portfolio investment transaction in excess of the amount of
commission another broker-dealer would have charged for effecting that
transaction, if the Sub-Adviser 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-dealer, viewed in terms of either that
particular transaction or the Sub-Adviser's or the Manager's overall
responsibilities with respect to the Series and to their respective other
clients as to which they exercise investment discretion. The Sub-Adviser will
consult with the Manager to the end that portfolio transactions on behalf of a
Series are directed to broker-dealers on the basis of criteria reasonably
considered appropriate by the Manager. To the extent consistent with these
standards, the Sub-Adviser is further authorized to allocate the orders placed
by it on behalf of a Series to the Sub-Adviser if it is registered as a
broker-dealer with the SEC, to an affiliated broker-dealer, or to such brokers
and dealers who also provide research or statistical material, or other services
to the Series, the Sub-Adviser, or an affiliate of the Sub-Adviser. Such
allocation shall be in such amounts and proportions as the Sub-Adviser shall
determine consistent with the above standards, and the Sub-Adviser will report
on said allocation regularly to the Fund's Board of Trustees indicating the
broker-dealers to which such allocations have been made and the basis therefor.
4. Disclosure about Sub-Adviser. The Sub-Adviser has reviewed the most
recent Post-Effective Amendment to the Registration Statement for the Fund filed
with the SEC that contains disclosure about the Sub-Adviser, and represents and
warrants that, with respect to the disclosure about the Sub-Adviser or
information relating, directly or indirectly, to the Sub-Adviser, such
Registration Statement contains, as of the date hereof, no untrue statement of
any material fact and does not omit any statement of a material fact which was
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading. The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Advisers Act and will maintain such
registration so long as this Agreement remains in effect. The Sub-Adviser will
provide the Manager with a copy of the Sub-Adviser's Form ADV, Part II at the
time the Form ADV is filed with the SEC.
5. Expenses. During the term of this Agreement, the Sub-Adviser will
pay all expenses incurred by it and its staff and for their activities in
connection with its portfolio management duties under this Agreement. The
Manager or the Fund shall be responsible for all the expenses of the Fund's
operations.
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6. Compensation. For the services provided to each Series, the Manager
will pay the Sub-Adviser an annual fee equal to the amount specified for such
Series in Schedule A hereto, payable monthly in arrears. The fee will be
appropriately prorated to reflect any portion of a calendar month that this
Agreement is not in effect among the parties. In accordance with the provisions
of the Management Agreement, the Manager is solely responsible for the payment
of fees to the Sub-Adviser, and the Sub-Adviser agrees to seek payment of its
fees solely from the Manager; provided, however, that if the Fund fails to pay
the Manager all or a portion of the management fee under said Management
Agreement when due, and the amount that was paid is insufficient to cover the
Sub-Adviser's fee under this Agreement for the period in question, then the
Sub-Adviser may enforce against the Fund any rights it may have as a third-party
beneficiary under the Management Agreement and the Manager will take all steps
appropriate under the circumstances to collect the amount due from the Fund.
7. Compliance.
(a) The Sub-Adviser agrees to use reasonable compliance techniques as
the Manager or the Board of Trustees may adopt, including any written compliance
procedures.
(b) The Sub-Adviser agrees that it shall promptly notify the Manager
and the Fund (1) in the event that the SEC has censured the Sub-Adviser, placed
limitations upon its activities, functions or operations; suspended or revoked
its registration as an investment adviser; or has commenced proceedings or an
investigation that may result in any of these actions, or (2) upon having a
reasonable basis for believing that the Series has ceased to qualify or might
not qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code. The Sub-Adviser further agrees to notify the Manager and the Fund
promptly of any material fact known to the Sub-Adviser respecting or relating to
the Sub-Adviser that is not contained in the Registration Statement or
prospectus for the Fund (which describes the Series), or any amendment or
supplement thereto, or if any statement contained therein that becomes untrue in
any material respect.
(c) The Manager agrees that it shall promptly notify the Sub-Adviser
(1) in the event that the SEC has censured the Manager or the Fund; placed
limitations upon either of their activities, functions, or operations; suspended
or revoked the Manager's registration as an investment adviser; or has commenced
proceedings or an investigation that may result in any of these actions, or (2)
upon having a reasonable basis for believing that the Series has ceased to
qualify or might not qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code.
8. Books and Records. The Sub-Adviser hereby agrees that all records
which it maintains for the Series are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's or
the Manager's request in compliance with the requirements of Rule 31a-3 under
the 1940 Act, although the Sub-Adviser may, at its own expense, make and retain
a copy of such records. The Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-l under the 1940 Act.
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9. Cooperation; Confidentiality. Each party to this Agreement agrees to
cooperate with the other party and with all appropriate governmental authorities
having the requisite jurisdiction (including, but not limited to, the SEC) in
connection with any investigation or inquiry relating to this Agreement or the
Fund. Subject to the foregoing, the Sub-Adviser shall treat as confidential all
information pertaining to the Fund and actions of the Fund, the Manager and the
Sub-Adviser, and the Manager shall treat as confidential and use only in
connection with the Series all information furnished to the Fund or the Manager
by the Sub-Adviser, in connection with its duties under the agreement except
that the aforesaid information need not be treated as confidential if required
to be disclosed under applicable law, if generally available to the public
through means other than by disclosure by the Sub- Adviser or the Manager, or if
available from a source other than the Manager, Sub-Adviser or this Fund.
10. Representations Respecting Sub-Adviser. The Manager agrees that
neither the Manager, nor affiliated persons of the Manager, shall give any
information or make any representations or statements in connection with the
sale of shares of the Series concerning the Sub-Adviser or the Series other than
the information or representations contained in the Registration Statement,
prospectus, or statement of additional information for the Fund's shares, as
they may be amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in sales literature or other promotional material
approved in advance by the Sub-Adviser, except with the prior permission of the
Sub-Adviser.
11. Control. Notwithstanding any other provision of the Agreement, it
is understood and agreed that the Fund shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and has reserved the right to reasonably direct any action hereunder
taken on its behalf by the Sub-Adviser.
12. Liability. Except as may otherwise be required by the 1940 Act or
the rules thereunder or other applicable law, the Manager agrees that the
Sub-Adviser, any affiliated person of the Sub-Adviser, and each person, if any,
who, within the meaning of Section 15 of the 1933 Act controls the Sub-Adviser
(1) shall bear no responsibility and shall not be subject to any liability for
any act or omission respecting any series of the Fund that is not a Series
hereunder, and (2) shall not be liable for, or subject to any damages, expenses,
or losses in connection with, any act or omission connected with or arising out
of any services rendered under this Agreement, except by reason of willful
misfeasance, bad faith, or gross negligence in the performance of the
Sub-Adviser's duties, or by reason of reckless disregard of the Sub-Adviser's
obligations and duties under this Agreement.
13. Indemnification.
(a) The Manager agrees to indemnify and hold harmless the
Sub-Adviser, any affiliated person of the Sub-Adviser, and each person, if any,
who, within the meaning of Section 15 of the 1933 Act controls ("controlling
person") the Sub-Adviser (all of such persons being referred to as "Sub-Adviser
Indemnified Persons") against any and all losses, claims, damages, liabilities,
or litigation (including legal and other expenses) to which a Sub-Adviser
Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, under any other statute, at common law or
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otherwise, arising out of the Manager's responsibilities to the Fund which (1)
may be based upon the Manager's negligence, willful misfeasance, or bad faith in
the performance of its duties (which could include a negligent action or a
negligent omission to act), or by reason of the Manager's reckless disregard of
its obligations and duties under this Agreement, or (2) may be based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or prospectus covering shares of the Fund or any Series,
or any amendment thereof or any supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such statement
or omission was made in reliance upon information furnished to the Manager or
the Fund or to any affiliated person of the Manager by a Sub-Adviser Indemnified
Person; provided however, that in no case shall the indemnity in favor of the
Sub-Adviser Indemnified Person be deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of its
duties, or by reason of its reckless disregard of obligations and duties under
this Agreement.
(b) Notwithstanding Section 12 of this Agreement, the Sub-Adviser
agrees to indemnify and hold harmless the Manager, any affiliated person of the
Manager, and any controlling person of the Manager (all of such persons being
referred to as "Manager Indemnified Persons") against any and all losses,
claims, damages, liabilities, or litigation (including legal and other expenses)
to which a Manager Indemnified Person may become subject under the 1933 Act,
1940 Act, the Advisers Act, under any other statute, at common law or otherwise,
arising out of the Sub-Adviser's responsibilities as Sub-Adviser of the Series
which (1) may be based upon the Sub-Adviser's negligence, willful misfeasance,
or bad faith in the performance of its duties (which could include a negligent
action or a negligent omission to act), or by reason of the Sub-Adviser's
reckless disregard of its obligations and duties under this Agreement, or (2)
may be based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or prospectus covering the shares
of the Fund or any Series, or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact known or which
should have been known to the Sub-Adviser and was required to be stated therein
or necessary to make the statements therein not misleading, if such a statement
or omission was made in reliance upon information furnished to the Manager, the
Fund, or any affiliated person of the Manager or Fund by the Sub-Adviser or any
affiliated person of the Sub-Adviser; provided, however, that in no case shall
the indemnity in favor of a Manager Indemnified Person be deemed to protect such
person against any liability to which any such person would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence in the performance
of its duties, or by reason of its reckless disregard of its obligations and
duties under this Agreement.
(c) The Manager shall not be liable under Paragraph (a) of this
Section 13 with respect to any claim made against a Sub-Adviser Indemnified
Person unless such Sub-Adviser Indemnified Person shall have notified the
Manager in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Sub-Adviser Indemnified Person (or after such Sub-Adviser
Indemnified Person shall have received notice of such service on any designated
agent), but failure to notify the Manager of any such claim shall not relieve
the Manager from any liability which it may have to the Sub-Adviser Indemnified
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Person against whom such action is brought except to the extent the Manager is
prejudiced by the failure or delay in giving such notice. In case any such
action is brought against the Sub-Adviser Indemnified Person, the Manager will
be entitled to participate, at its own expense, in the defense thereof or, after
notice to the Sub-Adviser Indemnified Person, to assume the defense thereof,
with counsel satisfactory to the Sub-Adviser Indemnified Person. If the Manager
assumes the defense of any such action and the selection of counsel by the
Manager to represent the Manager and the Sub-Adviser Indemnified Person would
result in a conflict of interests and therefore, would not, in the reasonable
judgment of the Sub-Adviser Indemnified Person, adequately represent the
interests of the Sub-Adviser Indemnified Person, the Manager will, at its own
expense, assume the defense with counsel to the Manager and, also at its own
expense, with separate counsel to the Sub-Adviser Indemnified Person, which
counsel shall be satisfactory to the Manager and to the Sub-Adviser Indemnified
Person. The Sub-Adviser Indemnified Person shall bear the fees and expenses of
any additional counsel retained by it, and the Manager shall not be liable to
the Sub-Adviser Indemnified Person under this Agreement for any legal or other
expenses subsequently incurred by the Sub-Adviser Indemnified Person
independently in connection with the defense thereof other than reasonable costs
of investigation. The Manager shall not have the right to compromise on or
settle the litigation without the prior written consent of the Sub-Adviser
Indemnified Person if the compromise or settlement results, or may result in a
finding of wrongdoing on the part of the Sub-Adviser Indemnified Person.
(d) The Sub-Adviser shall not be liable under Paragraph (b) of
this Section 13 with respect to any claim made against a Manager Indemnified
Person unless such Manager Indemnified Person shall have notified the
Sub-Adviser in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Manager Indemnified Person (or after such Manager Indemnified
Person shall have received notice of such service on any designated agent), but
failure to notify the Sub-Adviser of any such claim shall not relieve the
Sub-Adviser from any liability which it may have to the Manager Indemnified
Person against whom such action is brought except to the extent the Sub-Adviser
is prejudiced by the failure or delay in giving such notice. In case any such
action is brought against the Manager Indemnified Person, the Sub-Adviser will
be entitled to participate, at its own expense, in the defense thereof or, after
notice to the Manager Indemnified Person, to assume the defense thereof, with
counsel satisfactory to the Manager Indemnified Person. If the Sub-Adviser
assumes the defense of any such action and the selection of counsel by the
Sub-Adviser to represent both the Sub-Adviser and the Manager Indemnified Person
would result in a conflict of interests and therefore, would not, in the
reasonable judgment of the Manager Indemnified Person, adequately represent the
interests of the Manager Indemnified Person, the Sub-Adviser will, at its own
expense, assume the defense with counsel to the Sub-Adviser and, also at its own
expense, with separate counsel to the Manager Indemnified Person, which counsel
shall be satisfactory to the Sub-Adviser and to the Manager Indemnified Person.
The Manager Indemnified Person shall bear the fees and expenses of any
additional counsel retained by it, and the Sub-Adviser shall not be liable to
the Manager Indemnified Person under this Agreement for any legal or other
expenses subsequently incurred by the Manager Indemnified Person independently
in connection with the defense thereof other than reasonable costs of
investigation. The Sub-Adviser shall not have the right to compromise on or
settle the litigation without the prior written consent of the
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Manager Indemnified Person if the compromise or settlement results, or may
result in a finding of wrongdoing on the part of the Manager Indemnified Person.
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14. Duration and Termination.
(a) This Agreement shall become effective on the date first
indicated above, subject to the condition that the Fund's Board of Trustees,
including a majority of those Trustees who are not interested persons (as such
term is defined in the 0000 Xxx) of the Manager or the Sub-Adviser, and the
shareholders of each Series, shall have approved this Agreement. Unless
terminated as provided herein, this Agreement shall remain in full force and
effect for two years from such date and continue on an annual basis thereafter
with respect to each Series covered by this Agreement; provided that such annual
continuance is specifically approved each year by (a) the Board of Trustees of
the Fund, or by the vote of a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of each Series, and (b) the vote of a majority of those
Trustees who are not parties to this Agreement or interested persons (as such
term is defined in the 0000 Xxx) of any such party to this Agreement cast in
person at a meeting called for the purpose of voting on such approval. However,
any approval of this Agreement by the holders of a majority of the outstanding
shares (as defined in the 0000 Xxx) of a Series shall be effective to continue
this Agreement with respect to such Series notwithstanding (i) that this
Agreement has not been approved by the holders of a majority of the outstanding
shares of any other Series or (ii) that this agreement has not been approved by
the vote of a majority of the outstanding shares of the Fund, unless such
approval shall be required by any other applicable law or otherwise.
Notwithstanding the foregoing, this Agreement may be terminated with respect to
any Series covered by this Agreement: (a) by the Manager at any time, upon sixty
(60) days' written notice to the Sub-Adviser and the Fund, (b) at any time
without payment of any penalty by the Fund, by the Fund's Board of Trustees or a
majority of the outstanding voting securities of each Series, upon sixty (60)
days' written notice to the Manager and the Sub-Adviser, or (c) by the
Sub-Adviser upon three (3) months' written notice unless the Fund or the Manager
requests additional time to find a replacement for the Sub-Adviser, in which
case the Sub-Adviser shall allow the additional time requested by the Fund or
Manager not to exceed three (3) additional months beyond the initial three-month
notice period; provided, however, that the Sub-Adviser may terminate this
Agreement at any time without penalty, effective upon written notice to the
Manager and the Fund, in the event either the Sub-Adviser (acting in good faith)
or the Manager ceases to be registered as an investment adviser under the
Advisers Act or otherwise becomes legally incapable of providing investment
management services pursuant to its respective contract with the Fund, or in the
event the Manager becomes bankrupt or otherwise incapable of carrying out its
obligations under this Agreement, or in the event that the Sub-Adviser does not
receive compensation for its services from the Manager or the Fund as required
by the terms of this agreement.
In the event of termination for any reason, all records of each Series
for which the Agreement is terminated shall promptly be returned to the Manager
or the Fund, free from any claim or retention of rights in such record by the
Sub-Adviser, although the Sub-Adviser may, at its own expense, make and retain a
copy of such records. This Agreement shall automatically terminate in the event
of its assignment (as such term is described in the 1940 Act). In the event this
Agreement is terminated or is not approved in the manner described above, the
Sections or Paragraphs numbered 8, 9, 10, 11, 12 and 13 of this Agreement shall
remain in effect, as well as any applicable provision of this Section numbered
14 and, to the extent that only amounts are owed to the Sub-Adviser as
compensation for services rendered while the agreement was in effect, Section 6.
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(b) Notices.
Any notice must be in writing and shall be sufficiently given (1) when
delivered in person, (2) when dispatched by telegram or electronic facsimile
transfer (confirmed in writing by postage prepaid first class air mail
simultaneously dispatched), (3) when sent by internationally recognized
overnight courier service (with receipt confirmed by such overnight courier
service), or (4) when sent by registered or certified mail, to the other party
at the address of such party set forth below or at such other address as such
party may from time to time specify in writing to the other party.
If to the Fund:
Pilgrim Equity Trust
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx
If to the Sub-Adviser:
Aeltus Investment Management, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxx
15. Amendments. 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 amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) the holders of a majority of the
outstanding voting securities of the Series, and (ii) the Trustees of the Fund,
including a majority of the Trustees of the Fund who are not interested persons
of any party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval, if such approval is required by applicable
law.
- 11 -
16. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State of
Delaware, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or rules or orders of the SEC
thereunder, and without regard for the conflicts of laws principle thereof. The
term "affiliate" or "affiliated person" as used in this Agreement shall mean
"affiliated person" as defined in Section 2(a)(3) of the 0000 Xxx.
(b) The Manager and the Sub-Adviser acknowledge that the Fund enjoys
the rights of a third-party beneficiary under this Agreement, and the Manager
acknowledges that the Sub-Adviser enjoys the rights of a third parry beneficiary
under the Management Agreement.
(c) The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(d) To the extent permitted under Section 14 of this Agreement, this
Agreement may only be assigned by any party with the prior written consent of
the other parties.
(e) 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, and to this extent, the provisions of this
Agreement shall be deemed to be severable.
(f) Nothing herein shall be construed as constituting the Sub-Adviser
as an agent or co partner of the Manager, or constituting the Manager as an
agent or co-partner of the Sub-Adviser.
(g) This agreement may be executed in counterparts.
- 12 -
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the day and year first above written.
ING PILGRIM INVESTMENTS, LLC
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxx
Title SVP CFO
AELTUS INVESTMENT MANAGEMENT, INC.
By: /s/ J. Xxxxx Xxx
--------------------------------------
J. Xxxxx Xxx
Title President
- 13 -
Schedule A
SERIES ANNUAL SUB-ADVISER FEE
------ -----------------------
Offering Phase 0.125%
Pilgrim Principal Protection Fund Guarantee Period 0.40%
Index Plus LargeCap Period 0.30%
- 14 -
[ING FUNDS LOGO]
Xxxx Xxx Xxxxxxxxx
Senior Vice President
Aeltus Investment Management, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
August 20, 2002
Pursuant to Section 1 of the Sub-Adviser Agreement dated May 9, 2001,
as amended between ING Investments, LLC (successor by merger to ING Pilgrim
Investments, LLC) and Aeltus Investment Management, Inc. (the "Agreement") we
hereby notify you of our intention to retain you as Sub-Adviser to render
investment advisory services to ING Principal Protection Fund V, a newly
established series of ING Equity Trust (formerly Pilgrim Equity Trust), upon all
of the terms and conditions set forth in the Agreement. Upon your acceptance,
the Agreement has been modified to give effect to the foregoing by adding the
"ING Principal Protection Fund V" to Schedule A of the Agreement. The Amended
and Restated Schedule A, with the annual investment management fees indicated
for the series, is attached hereto.
Please signify your acceptance to act as Sub-Adviser under the
Agreement with respect to ING Principal Protection Fund V by signing below.
Very sincerely,
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Executive Vice President
ING Investments, LLC
ACCEPTED AND AGREED TO:
Aeltus Investment Management, Inc.
By /s/ Xxxx Xxx Xxxxxxxxx
-----------------------------------------
Xxxx Xxx Xxxxxxxxx
Senior Vice President
0000 X. Xxxxxxxxxx Xxxxx Xx. Tel: 000-000-0000 ING Investments, LLC
Xxxxxxxxxx, XX 00000-0000 Fax: 000-000-0000
xxx.xxxxxxxx.xxx
AMENDED AND RESTATED
SCHEDULE A
WITH RESPECT TO THE
SUB-ADVISER AGREEMENT
BETWEEN
ING INVESTMENTS, LLC
AN ARIZONA LIMITED LIABILITY COMPANY
(SUCCESSOR BY MERGER TO ING PILGRIM INVESTMENTS, LLC)
AND
AELTUS INVESTMENT MANAGEMENT, INC.
ANNUAL INVESTMENT LAST CONTINUED/
SERIES MANAGEMENT FEE APPROVED BY BOARD REAPPROVAL DATE
------------------ --------------------------- ----------------- ----------------
ING Principal Offering Phase 0.125% May 9, 2001 May 9, 2003
Protection Fund Guarantee Period 0.40%
Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% November 2, 2001 September 1, 2003
Protection Fund II Guarantee Period 0.40%
Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% February 26, 2002 September 1,2003
Protection Guarantee Period 0.40%
Fund III Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% May 24, 2002 September 1, 2003
Protection Guarantee Period 0.40%
Fund IV Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% August 20, 2002 September 1, 2003
Protection Guarantee Period 0.40%
Fund V Index Plus
LargeCap Period 0.30%
ANNUAL INVESTMENT LAST CONTINUED/
SERIES MANAGEMENT FEE APPROVED BY BOARD REAPPROVAL DATE
------------------ --------------------------- ----------------- ----------------
ING Principal Offering Phase 0.125% November 22, 2002 September 1, 2004
Protection Guarantee Period 0.40%
Fund VI* Index Plus
LargeCap Period 0.30%
--------------------
* This Amended and Restated Schedule A will be effective with respect to
the Fund upon the effective date of the post-effective amendment to the
Trust's Registration Statement with respect to the Fund.
AMENDED AND RESTATED
SCHEDULE A
WITH RESPECT TO THE
SUB-ADVISER AGREEMENT
BETWEEN
ING INVESTMENTS, LLC
AN ARIZONA LIMITED LIABILITY COMPANY
(SUCCESSOR BY MERGER TO ING PILGRIM INVESTMENTS, LLC)
AND
AELTUS INVESTMENT MANAGEMENT, INC.
ANNUAL INVESTMENT LAST CONTINUED/
SERIES MANAGEMENT FEE APPROVED BY BOARD REAPPROVAL DATE
------------------ --------------------------- ----------------- ----------------
ING Principal Offering Phase 0.125% February 25, 2003 September 1,2003
Protection Fund Guarantee Period 0.40%
Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% November 2, 2001 September 1, 2003
Protection Fund II Guarantee Period 0.40%
Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% February 26, 2002 September 1, 2003
Protection Guarantee Period 0.40%
Fund III Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% May 24, 2002 September 1,2003
Protection Guarantee Period 0.40%
Fund IV Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% August 20, 2002 September 1, 2003
Protection Guarantee Period 0.40%
Fund V Index Plus
LargeCap Period 0.30%
ANNUAL INVESTMENT LAST CONTINUED/
SERIES MANAGEMENT FEE APPROVED BY BOARD REAPPROVAL DATE
------------------ --------------------------- ----------------- ----------------
ING Principal Offering Phase 0.125% November 22, 2002 September 1,2004
Protection Guarantee Period 0.40%
Fund VI Index Plus
LargeCap Period 0.30%
[ING FUNDS LOGO]
Xxxx Xxx Xxxxxxxxx
Senior Vice President
Aeltus Investment Management, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
April 3, 2003
Pursuant to Section 1 of the Sub-Adviser Agreement dated May 9, 2001,
as amended, between ING Investments, LLC (successor by merger to ING Pilgrim
Investments, LLC) and Aeltus Investment Management, Inc. (the "Agreement") we
hereby notify you of our intention to retain you as Sub-Adviser to render
investment advisory services to ING Principal Protection Fund VII, a newly
established series of ING Equity Trust (formerly Pilgrim Equity Trust), upon all
of the terms and conditions set forth in the Agreement. Upon your acceptance,
the Agreement has been modified to give effect to the foregoing by adding the
"ING Principal Protection Fund VII" to Schedule A of the Agreement. The Amended
and Restated Schedule A, with the annual investment management fees indicated
for the series, is attached hereto.
Please signify your acceptance to act as Sub-Adviser under the
Agreement with respect to ING Principal Protection Fund VII by signing below.
Very sincerely,
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Executive Vice President
ING Investments, LLC
ACCEPTED AND AGREED TO:
Aeltus Investment Management, Inc.
By /s/ Xxxx Xxx Xxxxxxxxx
-----------------------------
Xxxx Xxx Xxxxxxxxx
Senior Vice President
0000 X. Xxxxxxxxxx Xxxxx Xx. Tel: 000-000-0000 ING Investments, LLC
Xxxxxxxxxx, XX 00000-0000 Fax: 000-000-0000
xxx.xxxxxxxx.xxx
AMENDED AND RESTATED
SCHEDULE A
WITH RESPECT TO THE
SUB-ADVISER AGREEMENT
BETWEEN
ING INVESTMENTS, LLC
AN ARIZONA LIMITED LIABILITY COMPANY
(SUCCESSOR BY MERGER TO ING PILGRIM INVESTMENTS, LLC)
AND
AELTUS INVESTMENT MANAGEMENT, INC.
ANNUAL INVESTMENT LAST CONTINUED/
SERIES MANAGEMENT FEE APPROVED BY BOARD REAPPROVAL DATE
------------------ --------------------------- ----------------- ----------------
ING Principal Offering Phase 0.125% May 9, 2001 May 9, 2003
Protection Fund Guarantee Period 0.40%
Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% November 2, 2001 September 1, 2003
Protection Fund II Guarantee Period 0.40%
Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% February 26, 2002 September 1, 2003
Protection Guarantee Period 0.40%
Fund III Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% May 24, 2002 September 1, 2003
Protection Guarantee Period 0.40%
Fund IV Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.125% August 20, 2002 September 1, 2003
Protection Guarantee Period 0.40%
Fund V Index Plus
LargeCap Period 0.30%
ANNUAL INVESTMENT LAST CONTINUED/
SERIES MANAGEMENT FEE APPROVED BY BOARD REAPPROVAL DATE
------------------ ---------------------------- ----------------- ----------------
ING Principal Offering Phase 0.125% November 22, 2002 September 1, 2004
Protection Guarantee Period 0.40%
Fund VI Index Plus
LargeCap Period 0.30%
ING Principal Offering Phase 0.1125% November 22, 2002 September 1,2004
Protection Guarantee Period 0.36%
Fund VII* Index Plus
LargeCap Period 0.27%
---------------------
* This Amended and Restated Schedule A will be effective with respect to
the Fund upon the effective date of the post-effective amendment to the
Trust's Registration Statement with respect to the Fund.
