Exhibit (d)(1)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 23rd day of September, 2002 between ING Mutual Funds,
a Delaware business trust (the "Trust"), and ING Investments, LLC, an Arizona
Limited Liability Company (the "Manager").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust may offer shares of additional series in the future; and
WHEREAS, the Trust desires to avail itself of the services of the Manager
for the provision of advisory and management services for the Trust; and
WHEREAS, the Manager is willing to render such services to the Trust.
NOW, THEREFORE, in consideration of the premises, the promises and mutual
covenants herein contained, it is agreed between the parties as follows:
1. Appointment. The Trust hereby appoints the Manager, subject to the
direction of the Board of Trustees, for the period and on the terms set forth
in this Agreement, to provide advisory, management, and other services, as
described herein, with respect to each series of the Trust set forth in
Schedule A hereto (individually and collectively referred to herein as
"Series"), as such schedule may be amended from time to time. The Manager
accepts such appointment and agrees to render the services herein set forth
for the compensation herein provided.
In the event the Trust establishes and designates additional series with
respect to which it desires to retain the Manager to render advisory services
hereunder, it shall notify the Manager in writing. If the Manager is willing to
render such services, it shall notify the Trust in writing, whereupon such
additional series shall become a Series hereunder.
2. Services of the Manager. The Manager represents and warrants that it
is registered as an investment adviser under the Investment Advisers Act of
1940 and will maintain such registration for so long as required by applicable
law. Subject to the general supervision of the Board of Trustees of the Trust,
the Manager shall provide the following advisory, management, and other
services with respect to the Series:
(a) Provide general investment advice and guidance with respect to
the Series and provide advice and guidance to the Trust's Trustees, and oversee
the management of the investments of the Series and the composition of each
Series' portfolio of securities and investments, including cash, and the
purchase, retention and disposition thereof, in accordance with each Series'
investment objective or objectives and policies as stated in the Trust's current
registration statement, which management may be provided by others selected by
the Manager
and approved by the Board of Trustees as provided below or directly by the
Manager as provided in Section 3 of this Agreement;
(b) In the event that the Manager wishes to select others to render
investment management services, the Manager shall analyze, select and recommend
for consideration and approval by the Trust's Board of Trustees investment
advisory firms (however organized) to provide investment advice to one or more
of the Series, and, at the expense of the Manager, engage (which engagement may
also be by the Trust) such investment advisory firms to render investment
advice and manage the investments of such Series and the composition of each
such Series' portfolio of securities and investments, including cash, and the
purchase, retention and disposition thereof, in accordance with the Series'
investment objective or objectives and policies as stated in the Trust's
current registration statement (any such firms approved by the Board of
Trustees and engaged by the Trust and/or the Manager are referred to herein as
"Sub-Advisers");
(c) Periodically monitor and evaluate the performance of the
Sub-Advisers with respect to the investment objectives and policies of the
Series;
(d) Monitor the Sub-Advisers for compliance with the investment
objective or objectives, policies and restrictions of each Series, the 1940 Act,
Subchapter M of the Internal Revenue Code, and if applicable, regulations under
such provisions, and other applicable law;
(e) If appropriate, analyze and recommend for consideration by the
Trust's Board of Trustees termination of a contract with a Sub-Adviser under
which the Sub-Adviser provides investment advisory services to one or more of
the Series;
(f) Supervise Sub-Advisers with respect to the services that such
Sub-Advisers provide under respective sub-advisory agreements ("Sub-Advisory
Agreements");
(g) Render to the Board of Trustees of the Trust such periodic and
special reports as the Board may reasonably request; and
(h) Make available its officers and employees to the Board of
Trustees and officers of the Trust for consultation and discussions regarding
the administration and management of the Series and services provided to the
Trust under this Agreement.
3. Investment Management Authority. In the event the Manager wishes to
render investment management services directly to a Series, then with respect
to any such Series, the Manager, subject to the supervision of the Trust's
Board of Trustees, will provide a continuous investment program for the Series'
portfolio and determine the composition of the assets of the Series' portfolio,
including determination of the purchase, retention, or sale of the securities,
cash, and other investments contained in the portfolio. The Manager will
provide investment research and conduct a continuous program of evaluation,
investment, sales, and reinvestment of the Series' assets by determining the
securities and other investments that shall be purchased, entered into, sold,
closed, offered to the public, 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, and the Manager is hereby authorized to execute and perform such
services on behalf of the Series. To the extent permitted
2
by the investment policies of the Series, the Manager 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 such
Series. The Manager will provide the services under this Agreement in accordance
with the Series' investment objective or objectives, policies, and restrictions
as stated in the Trust's Registration Statement filed with the Securities and
Exchange Commission (the "SEC"), as amended. Furthermore:
(a) The Manager will manage the Series so that each will qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code.
In managing the Series in accordance with these requirements, the Manager shall
be entitled to receive and act upon advice of counsel to the Series or counsel
to the Manager.
(b) The Manager 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 Trust's Board of
Trustees, and the provisions of the Registration Statement of the Trust under
the Securities Act of 1933 and the 1940 Act, as supplemented or amended.
(c) On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of the Series as well as any other investment
advisory clients, the Manager may, to the extent permitted by applicable laws
and regulations and any applicable procedures adopted by the Trust's Board of
Trustees, but shall not be obligated to, aggregate the securities to be so sold
or purchased with those of its other clients where such aggregation is not
inconsistent with the policies set forth in the Registration Statement. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Manager in a manner
that is fair and equitable in the judgment of the Manager in the exercise of
its fiduciary obligations to the Trust on behalf of the Series and to such
other clients.
(d) In connection with the purchase and sale of securities of the Series,
the Manager will arrange for the transmission to the custodian for the Series
on a daily basis, of 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 to perform its administrative and
recordkeeping responsibilities with respect to the Series. With respect to
portfolio securities to be purchased or sold through the Depository Trust
Company, the Manager will arrange for the prompt transmission of the
confirmation of such trades to the Series' custodian.
(e) The Manager will assist the custodian or portfolio accounting agent
for the Series in determining, consist with the procedures and policies stated
in the Registration Statement for the Trust and any applicable procedures
adopted by the Trust's Board of Trustees, the value of any portfolio securities
or other assets of the Series for which the custodian or portfolio accounting
agent seeks assistance or review from the Manager.
(f) The Manager will make available to the Trust, promptly upon request,
any of the Series' or the Managers' investment records and ledgers as are
necessary to assist the Series to comply with requirements of the 1940 Act, as
well as other applicable laws. The Manager will furnish to regulatory
authorities having the requisite authority any information or
3
reports in connection with its services which may be requested in order to
ascertain whether the operations of the Series are being conducted in a manner
consistent with applicable laws and regulations.
(g) The Manager will regularly report to the Trust's Board of Trustees on
the investment program for the Series and the issuers and securities
represented in the Series' portfolio, and will furnish the Trust's Board of
Trustees with respect to the Series such periodic and special reports as the
Trustees may reasonably request.
(h) In connection with its responsibilities under this Section 3, the
Manager is responsible for decisions to buy and sell securities and other
investments for the Series' portfolio, broker-dealer selection, and negotiation
of brokerage commission rates. The Manager'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 Trust, which include price (including the
applicable brokerage commission or dollar spread), the size of the order, the
nature of the market for the security, the timing of the transaction, the
reputation, experience and financial stability of the broker-dealer involved,
the quality of the service, the difficulty of the execution, execution
capabilities and operational facilities of the firms involved, and the firm's
risk in positioning a block of securities. Accordingly, the price to the 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
Manager in the exercise of its fiduciary obligations to the Trust on behalf of
the Series, by other aspects of the portfolio execution services offered.
Subject to such policies as the Board of Trustees may determine and consistent
with Section 28(e) of the Securities Exchange Act of 1934, as amended, the
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 the 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 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-dealer, viewed in
terms of either that particular transaction or the Manager's overall
responsibilities with respect to the Series and to its other clients as to which
it exercises investment discretion. To the extent consistent with these
standards and in accordance with Section 11(a) of the Securities Exchange Act of
1934 and Rule 11a2-2(T) thereunder, the Manager is further authorized to
allocate the orders placed by it on behalf of the Series to the Manager 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 Manager or an affiliate of the Manager. Such
allocation shall be in such amounts and proportions as the Manager shall
determine consistent with the above standards, and the Manager will report on
said allocation regularly to the Board of Trustees of the Trust indicating the
broker-dealers to which such allocations have been made and the basis therefor.
4
4. Conformity with Applicable Law. The Manager, in the performance of its
duties and obligations under this Agreement, shall act in conformity with the
Registration Statement of the Trust and with the instructions and directions of
the Board of Trustees of the Trust and will conform to, and comply with, the
requirements of the 1940 Act and all other applicable federal and state laws and
regulations.
5. Exclusivity. The services of the Manager to the Series under this
Agreement are not to be deemed exclusive, and the Manager, or any affiliate
thereof, shall be free to render similar services to other investment companies
and other clients (whether or not their investment objectives and policies are
similar to those of any of the Series) and to engage in other activities, so
long as its services hereunder are not impaired thereby.
6. Documents. The Trust has delivered properly certified or authenticated
copies of each of the following documents to the Manager and will deliver to it
all future amendments and supplements thereto, if any:
(a) certified resolution of the Board of Trustees of the Trust
authorizing the appointment of the Manager and approving the form of this
Agreement;
(b) the Registration Statement as filed with the SEC and any
amendments thereto; and
(c) exhibits, powers of attorney, certificates and any and all other
documents relating to or filed in connection with the Registration Statement
described above.
7. Records. The Manager agrees to maintain and to preserve for the
periods prescribed under the 1940 Act any such records as are required to be
maintained by the Trust with respect to the Series by the 1940 Act. The Manager
further agrees that all records of the Series are the property of the Trust and,
to the extent held by the Manager, it will promptly surrender any of such
records upon request.
8. Expenses. During the term of this Agreement, the Manager will pay all
expenses incurred by it in connection with its activities under this Agreement,
except such expenses as are assumed by the Trust under this Agreement and such
expenses as are assumed by a Sub-Adviser under its Sub-Advisory Agreement. The
Manager further agrees to pay all fees payable to the Sub-Advisers, executive
salaries and expenses of the Trustees of the Trust who are employees of the
Manager or its affiliates, and office rent of the Trust. The Trust shall be
responsible for all of the other expenses of its operations, including, without
limitation, the management fee payable hereunder; brokerage commissions;
interest; legal fees and expenses of attorneys; fees of auditors, transfer
agents and dividend disbursing agents, custodians and shareholder servicing
agents; the expense of obtaining quotations for calculating each Series' net
asset value; taxes, if any, and the preparation of the Series' tax returns; cost
of stock certificates and any other expenses (including clerical expenses) of
issue, sale, repurchase or redemption of shares; expenses of registering and
qualifying shares of the Series under federal and state laws and regulations
(including the salary of employees of the Manager engaged in the registering and
qualifying of shares of the Series under federal and state laws and regulations
or a pro-rata portion of the salary of employees to the extent so engaged);
salaries of personnel involved in
5
placing orders for the execution of the Series' portfolio transactions; expenses
of disposition or offering any of the portfolio securities held by a Series;
expenses of printing and distributing reports, notices and proxy materials to
existing shareholders; expenses of printing and filing reports and other
documents filed with governmental agencies; expenses in connection with
shareholder and Trustee meetings; expenses of printing and distributing
prospectuses and statements of additional information to existing shareholders;
fees and expenses of Trustees of the Trust who are not employees of the Manager
or any Sub-Adviser, or their affiliates; trade association dues; insurance
premiums; and extraordinary expenses such as litigation expenses. To the extent
the Manager incurs any costs or performs any services which are an obligation of
the Trust, as set forth herein, the Trust shall promptly reimburse the Manager
for such costs and expenses. To the extent the services for which the Trust is
obligated to pay are performed by the Manager, the Manager shall be entitled to
recover from the Trust only to the extent of its costs for such services.
9. Compensation. For the services provided by the Manager to a Series
pursuant to this Agreement, the Trust will pay to the Manager an annual fee
equal to the amount specified for such Series in Schedule A hereto, payable
monthly in arrears. Payment of the fees shall be in addition to any amount paid
to the Manager for the salary of its employees for performing services which are
an obligation of the Trust as provided in Section 8. The fee will be
appropriately pro-rated to reflect any portion of a calendar month that this
Agreement is not in effect between us.
10. Liability of the Manager. The Manager may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be required by the 1940 Act or the rules thereunder, neither the Manager nor its
members, officers, Trustees, employees, or agents shall be subject to, and the
Trust will indemnify such persons from and against, any liability for, or any
damages, expenses, or losses incurred 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 Manager's duties, or by reason of reckless disregard of the
Manager's obligations and duties under this Agreement. Except as may otherwise
be required by the 1940 Act or the rules thereunder, neither the Manager nor its
members, officers, Trustees, employees, or agents shall be subject to, and the
Trust will indemnify such persons from and against, any liability for, or any
damages, expenses, or losses incurred in connection with, any act or omission by
a Sub-Adviser or any of the Sub-Adviser's stockholders or partners, officers,
Trustees, employees, or agents connected with or arising out of any services
rendered under a Sub-Adviser Agreement, except by reason of willful misfeasance,
bad faith, or gross negligence in the performance of the Manager's duties under
this Agreement, or by reason of reckless disregard of the Manager's obligations
and duties under this Agreement. No trustee, officer, employee or agent of the
Trust shall be subject to any personal liability whatsoever, in his or her
official capacity, to any person, including the Sub-Adviser, other than to the
Trust or its shareholders, in connection with Trust property or the affairs of
the Trust, save only that arising from his or her bad faith, willful
misfeasance, gross negligence or reckless disregard of his or her duty to such
person; and all such persons shall look solely to the Trust property for
satisfaction of claims of any nature against a trustee, officer, employee or
agent of the Trust arising in connection with the affairs of the Trust.
Moreover, the debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to
6
a Series shall be enforceable against the assets and property of that Series
only, and not against the assets or property of any other series of the Trust.
11. Continuation and Termination. This Agreement shall become effective
on the date first written above, subject to the condition that the Trust's Board
of Trustees, including a majority of those Trustees who are not interested
persons (as such term is defined in the ▇▇▇▇ ▇▇▇) of the Manager, and the
shareholders of each Series, shall have approved this Agreement. Unless
terminated as provided herein, the Agreement shall continue in full force and
effect with respect to each Series until the Reapproval Date set forth for such
Series in Schedule A to this Agreement, and shall continue from year to year
thereafter with respect to each Series so long as such continuance is
specifically approved at least annually (i) by the vote of a majority of the
Board of Trustees of the Trust, or (ii) by vote of a majority of the outstanding
voting shares of the Series (as defined in the 1940 Act), and provided
continuance is also approved by the vote of a majority of the Board of Trustees
of the Trust who are not parties to this Agreement or "interested persons" (as
defined in the ▇▇▇▇ ▇▇▇) of the Trust or the Manager, cast in person at a
meeting called for the purpose of voting on such approval. This Agreement may
not be amended in any material respect without a majority vote of the
outstanding voting shares (as defined in the 1940 Act).
However, any approval of this Agreement by the holders of a majority of the
outstanding shares (as defined in the ▇▇▇▇ ▇▇▇) 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 Trust,
unless such approval shall be required by any other applicable law or otherwise.
This Agreement may be terminated by the Trust at any time, in its entirety or
with respect to a Series, without the payment of any penalty, by vote of a
majority of the Board of Trustees of the Trust or by a vote of a majority of the
outstanding voting shares of the Trust, or with respect to a Series, by vote of
a majority of the outstanding voting shares of such Series, on sixty (60) days'
written notice to the Manager, or by the Manager at any time, without the
payment of any penalty, on sixty (60) days' written notice to the Trust. This
Agreement will automatically and immediately terminate in the event of its
"assignment" as described in the 1940 Act.
12. Use of Name. It is understood that the name "ING Investments, LLC" or
any derivative thereof (including the name "ING") or logo associated with that
name is the valuable property of the Manager and its affiliates, and that the
Trust and the Series have the right to use such name (or derivative or logo)
only so long as this Agreement shall continue with respect to such Trust and
Series. Upon termination of this Agreement, the Trust (or Series) shall
forthwith cease to use such name (or derivative or logo) and, in the case of the
Trust, shall promptly amend its Trust Instrument to change it name (if such name
is included therein).
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
14. Applicable Law.
(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 Investment Advisers Act of 1940, or any
rules or order of the SEC thereunder.
(b) 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.
(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.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
ING MUTUAL FUNDS
By: /s/ ▇▇▇▇▇▇ ▇. Naka
--------------------------
▇▇▇▇▇▇ ▇. Naka
Senior Vice President
ING INVESTMENTS, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
8
SCHEDULE A
WITH RESPECT TO THE
INVESTMENT MANAGEMENT AGREEMENT
BETWEEN
ING MUTUAL FUNDS
AND
ING INVESTMENTS, LLC
ANNUAL INVESTMENT LAST CONTINUED/
SERIES MANAGEMENT FEE APPROVED BY BOARD REAPPROVAL DATE
------ ----------------- ----------------- ----------------
(as a percentage of average
daily net assets)
ING Emerging 1.25% August 20, 2002 September 1, 2003
Countries Fund
ING Worldwide 1.00% of the first $500 million August 20, 2002 September 1, 2003
Growth Fund of assets
0.90% of the next $500 million
of assets
0.85% of assets in excess of
$1 billion
ING International 1.00% of the first $500 million August 20, 2002 September 1, 2003
SmallCap Growth of assets
Fund
0.90% of the next $500 million
of assets
0.85% of assets in excess of $1
billion
ING Global Real 1.00% August 20, 2002 September 1, 2003
Estate Fund
9