EXHIBIT (D)(5)
FORM OF AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 29th day of April, 2005 between ING VP Emerging Markets
Fund, Inc. (formerly Lexington Emerging Markets Fund, Inc.) (the "Fund"), a
Maryland corporation, and ING Investments, LLC, an Arizona limited liability
company (the "Manager") (the "Agreement").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Fund is authorized to issue shares of common stock in separate
series with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, the Fund may offer shares of additional series in the future;
WHEREAS, the Fund desires to avail itself of the services of the Manager
for the provision of advisory and management services for the Fund; and
WHEREAS, the Manager is willing to render such services to the Fund;
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 Fund hereby appoints the Manager, subject to the
direction of the Board of Directors, 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 the ING VP Emerging Markets Fund series of the
Fund (referred to herein as "Series"). The Manager accepts such appointment and
agrees to render the services herein set forth for the compensation herein
provided.
In the event the Fund 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 Fund in writing, whereupon such
additional series shall become a Series hereunder.
With respect to those Series that have obtained shareholder approval,
subject to the approval of the Board of Directors of the Fund, the Manager is
authorized to enter into sub-advisory agreements with other registered
investment advisers to serve as investment sub-advisors, whether or not
affiliated with the Manager (each a "Sub-Adviser"). The Manager will continue to
have responsibility for all services furnished pursuant to any sub-advisory
agreement (each a "Sub-Advisory Agreement"). The Fund and Manager understand and
agree that the Manager may manage each Series in a "manager-of-managers" style
with either a single or multiple sub-advisers, which contemplates that the
Manager will, among other things and
pursuant to an Order issued by the Securities and Exchange Commission (the
"SEC"): (i) continually evaluate the performance of the Sub-Advisers to the
Fund; and (ii) periodically make recommendations to the Fund's Board of
Directors regarding the results of its evaluation and monitoring functions. The
Fund recognizes that, subject to the approval of the Board of Directors of the
Fund, a sub-adviser's services may be terminated or modified and that the
Manager may appoint a new Sub-Adviser for a Series, subject to an applicable SEC
Order.
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 Directors of the Fund, 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 Fund's Directors, 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 Fund's current
registration statement, which management may be provided by others selected by
the Manager and approved by the Board of Directors 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 Fund's Board of Directors 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 Fund) 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 Fund's current
registration statement;
(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
Fund's Board of Directors 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;
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(g) Render to the Board of Directors of the Fund such periodic and
special reports as the Board may reasonably request; and
(h) Make available its officers and employees to the Board of
Directors and officers of the Fund for consultation and discussions regarding
the administration and management of the Series and services provided to the
Fund 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 Fund's Board of
Directors, 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 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 the 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 Fund's Registration
Statement filed with 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 Fund 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 Fund's Board of
Directors, and the provisions of the Registration Statement of the Fund 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
Fund's Board of Directors, 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 Fund and to such other clients.
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(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
Fund 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 Fund's custodian.
(e) The Manager will assist the custodian or portfolio accounting
agent for the Fund in determining, consistent with the procedures and policies
stated in the Registration Statement for the Fund and any applicable procedures
adopted by the Fund's Board of Directors, 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 Fund, promptly upon
request, any of the Series' or the Manager's investment records and ledgers as
are necessary to assist the Fund 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 reports in
connection with its services 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.
(g) The Manager will regularly report to the Fund's Board of Directors
on the investment program for the Series and the issuers and securities
represented in the Series' portfolio, and will furnish the Fund's Board of
Directors with respect to the Series such periodic and special reports as the
Directors 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 Fund, 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 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 Fund, by other aspects of the
portfolio execution services offered. Subject to such policies as the Board of
Directors 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
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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 Directors of the Fund indicating the broker-dealers to
which such allocations have been made and the basis therefor.
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 Fund and with the instructions and directions of
the Board of Directors of the Fund 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 Fund 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 Fund 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 Directors of the Fund
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 Fund 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 Fund with respect to the Series by the 1940 Act. The Manager further
agrees that all records of the Series are the property of the Fund 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
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assumed by the Fund under this Agreement and such expenses as are assumed by a
Sub-Adviser under its Sub-Adviser Agreement. The Manager further agrees to pay
all fees payable to the Sub-Advisers, executive salaries and expenses of the
Directors of the Fund who are employees of the Manager or its affiliates, and
office rent of the Fund. The Fund 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 Fund's net asset value; taxes, if any, and the preparation
of the Fund's 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 Fund 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 Fund 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 placing orders for
the execution of the Fund's 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 director
meetings; expenses of printing and distributing prospectuses and statements of
additional information to existing shareholders; fees and expenses of Directors
of the Fund who are not employees of the Manager or any Sub-Adviser, or their
affiliates; Board approved trade association dues; insurance premiums;
extraordinary expenses such as litigation expenses. To the extent the Manager
incurs any costs or performs any services which are an obligation of the Fund,
as set forth herein, the Fund shall promptly reimburse the Manager for such
costs and expenses. To the extent the services for which the Fund is obligated
to pay are performed by the Manager, the Manager shall be entitled to recover
from the Fund only to the extent of its costs for such services.
9. Compensation. For the services provided by the Manager to each Series
pursuant to this Agreement, the Fund will pay to the Manager an annual fee equal
to 0.85% of the Series' average daily net assets, payable monthly in arrears.
Payment of the above 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 Fund 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
stockholders, officers, directors, employees, or agents shall be subject to, and
the Fund 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
stockholders, officers, directors, employees, or agents shall be subject to, and
the
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Fund 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,
directors, 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 director, officer, employee or agent of the
Fund 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
Fund or its shareholders, in connection with Fund property or the affairs of the
Fund, 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 Fund property for satisfaction of
claims of any nature against a director, officer, employee or agent of the Fund
arising in connection with the affairs of the Fund. Moreover, the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to 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 Fund.
11. Continuation and Termination. This Agreement shall become effective on
the date first written above, subject to the condition that the Fund's Board of
Directors, including a majority of those Directors who are not interested
persons (as such term is defined in the 0000 Xxx) 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 until NOVEMBER 30, 2006, 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 Directors of the
Fund, 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 Directors of the Fund who are not
parties to this Agreement or "interested persons" (as defined in the 0000 Xxx)
of the Fund 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 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. This
Agreement may be terminated by the Fund 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 Directors of the Fund or by a vote of a majority of the
outstanding voting shares of the Fund, 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 Fund. This
Agreement will automatically and immediately terminate in the event of its
"assignment" as described in the 1940 Act.
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12. Use of Name. It is understood that the name "Pilgrim Investments, Inc."
or any derivative thereof (including the name "Pilgrim") or logo associated with
that name is the valuable property of the Manager and its affiliates, and that
the Fund and/or 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 Fund
and/or Series. Upon termination of this Agreement, the Fund (or Series) shall
forthwith cease to use such name (or derivative or logo) and, in the case of the
Fund, shall promptly amend its Articles of Incorporation to change its 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
Arizona, 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 VP EMERGING MARKETS FUND, INC.
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By: Xxxxxx X. Naka
Senior Vice President
ING INVESTMENTS, LLC
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By: Xxxxxxx X. Xxxxxx
Executive Vice President
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AMENDED SCHEDULE OF APPROVALS
WITH RESPECT TO THE
INVESTMENT MANAGEMENT AGREEMENT
BETWEEN
ING VP EMERGING MARKETS FUND, INC.
AND
ING INVESTMENTS, LLC
SERIES ANNUAL INVESTMENT MANAGEMENT FEE
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(as a percentage of average daily net assets)
ING VP Emerging Markets Fund 0.85%
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