EXHIBIT (H)(9)
EXPENSE LIMITATION AGREEMENT
ING VARIABLE INSURANCE TRUST
EXPENSE LIMITATION AGREEMENT, effective this ____ day of
___________________, 2003, by and between ING Investments, LLC (the "Investment
Manager"), Aeltus Investment Management, Inc. (the "Sub-Adviser") and ING
Variable Insurance Trust (the "Trust"), on behalf of each series of the Trust
set forth on Schedule A hereto (each a "Fund," and collectively, the "Funds"),
as such schedule may be amended from time to time to add additional series.
WHEREAS, the Trust is a Delaware business trust, and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management company of the series type, and each Fund is a series of the
Trust; and
WHEREAS, the Trust and the Investment Manager desire that the
provisions of this Agreement do not adversely affect a Fund's status as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), do not interfere with a Fund's ability to
compute its taxable income under Code Section 852, do not adversely affect the
status of the distributions a Fund makes as deductible dividends under Code
Section 562, and do comply with the requirements of Revenue Procedure 99-40 (or
any successor pronouncement of the Internal Revenue Service); and
WHEREAS, the Trust and the Investment Manager have entered into an
Investment Management Agreement (the "Management Agreement"), pursuant to which
the Investment Manager provides investment management services to each Fund for
compensation based on the value of the average daily net assets of each such
Fund; and
WHEREAS, the Investment Manager and the Sub-Adviser have entered into a
Sub-Advisory Agreement dated ______________________, 2003, pursuant to which the
Sub-Adviser provides investment advisory services to each Fund identified in
Schedule A (each a "Sub-Advised Fund) for compensation based on the value of the
average daily net assets of each such Sub-Advised Fund; and
WHEREAS, the Trust, the Investment Manager, and the Sub-Adviser have
determined that it is appropriate and in the best interests of each Fund and its
shareholders to maintain the expenses of each Fund at a level below the level to
which each such Fund may normally be subject.
NOW THEREFORE, the parties hereto agree as follows:
1. Expense Limitation.
1.1. Applicable Expense Limit. To the extent that the ordinary
operating expenses incurred by a Fund in any fiscal year, including but not
limited to investment management fees payable to the Investment Manager, but
excluding interest, taxes, brokerage commissions, other investment-related
costs, extraordinary expenses such as litigation, other expenses not incurred in
the ordinary course of such Fund's business, and expenses of any counsel or
other persons or services retained by such Fund's trustees who are not
"interested persons," as that term is defined in the 1940 Act, of the Investment
Manager ("Fund Operating Expenses"), exceed the Operating Expense Limit, as
defined in Section 1.2 below, such excess amount (the "Excess Amount") shall be
the liability of the Investment Manager.
1.2. Operating Expense Limit. The Operating Expense Limit in any
fiscal year with respect to a Fund shall be the amount specified in Schedule A
based on a percentage of the average daily net assets of such Fund.
1.3. Method of Computation. To determine the Investment Manager's
obligation with respect to the Excess Amount, each day the Fund Operating
Expenses for a Fund shall be annualized. If the annualized Fund Operating
Expenses for any day of a Fund exceed the Operating Expense Limit for that Fund,
the Investment Manager shall remit to the appropriate Fund an amount that,
together with the waived or reduced investment management fee, is sufficient to
pay that day's Excess Amount. The Trust may offset amounts owed to a Fund
pursuant to this Agreement against the advisory fee payable to the Investment
Manager.
1.4. Year-End Adjustment. If necessary, on or before the last day
of the first month of each fiscal year, an adjustment payment shall be made by
the appropriate party in order that the amount of the investment management fees
waived or reduced and other payments remitted by the Investment Manager to each
class of each Fund with respect to the previous fiscal year shall equal the
Excess Amount.
2. Recoupment of Fee Waivers and Expense Reimbursements.
2.1. Recoupment. If on any day during which the Management
Agreement is in effect, the estimated annualized Fund Operating Expenses of a
Fund for that day are less than the Operating Expense Limit, the Investment
Manager shall be entitled to recoup from such Fund the investment management
fees waived or reduced and other payments remitted by the Investment Manager to
such Fund pursuant to Section 1 hereof (the "Recoupment Amount") during any of
the previous thirty-six (36) months, to the extent that such Fund's annualized
Operating Expenses plus the amount so recouped equals, for such day, the
Operating Expense Limit provided in Schedule A, provided that such amount paid
to the Investment Manager will in no event exceed the total Recoupment Amount
and will not include any amounts previously recouped.
2.2. Year-End Adjustment. If necessary, on or before the last day
of the first month of each fiscal year, an adjustment payment shall be made by
the appropriate party in order that the actual Fund Operating Expenses of a Fund
for the prior fiscal year (including any recoupment payments hereunder with
respect to such fiscal year) do not exceed the Operating Expense Limit.
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3. Allocation between Investment Manager and Sub-Adviser with Respect to
Sub-Advised Funds.
3.1. Allocation of Excess Amount. For so long as the fee payable to
the Sub-Adviser under the Sub-Advisory Agreement is equal to 45% of the advisory
fee for each Fund, payable to the Investment Manager by a Sub-Advised Fund, the
Sub-Adviser shall waive or reduce its sub-advisory fee and/or promptly remit to
the Investment Manager an amount that is sufficient to pay 45% of any Excess
Amount paid to that Sub-Advised Fund by the Investment Manager pursuant to
Section 1 of this Agreement. The Investment Manager may offset amounts owed to
the Investment Manager pursuant to this Section 3.1 against the sub-advisory fee
paid to the Sub-Adviser.
3.2. Allocation of Recoupments. The Investment Manager shall
promptly remit to the Sub-Adviser 45% of any amount recouped by the Investment
Manager from any Sub-Advised Fund pursuant to Section 2 of this Agreement.
3.3. Accounting. The Trust and the Investment Manager will provide
to the Sub-Adviser reasonable access to the books and records of each for
purposes of confirming the amounts contributed and recouped under this
Agreement.
4. Term and Termination of Agreement.
This Agreement shall have an initial term with respect to each Fund
ending on the date indicated on Schedule A hereto, as such schedule may be
amended from time to time. Thereafter, this Agreement shall automatically renew
for one-year terms with respect to a Fund unless the Investment Manager provides
written notice of the termination of this Agreement to a lead Independent
Trustee within ninety (90) days of the end of the then-current term for that
Fund; provided, however, that the Sub-Adviser may terminate this Agreement with
respect to any Sub-Advised Fund by providing written notice to the Trust and the
Investment Manager of the termination of this Agreement with respect to such
Sub-Advised Fund at least thirty (30) days prior to the end of the then-current
term. In addition, this Agreement shall terminate with respect to a Fund upon
termination of the Management Agreement with respect to such Fund, or it may be
terminated by the Trust, without payment of any penalty, upon written notice to
the Investment Manager at its principal place of business within ninety (90)
days of the end of the then-current term for a Fund. The obligations of the
Investment Manager and the Sub-Adviser pursuant to Section 3 of this Agreement
shall terminate upon termination of the Sub-Advisory Agreement with respect to a
Fund.
5. Miscellaneous.
5.1. Captions. The captions in this Agreement are included for
convenience of reference only and in no other way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
5.2. Interpretation. Nothing herein contained shall be deemed to
require a Fund or the Trust to take any action contrary to the Trust's
Declaration of Trust, or any applicable statutory or regulatory requirement to
which it is subject or by which it is bound, or to relieve or deprive the
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Trust's Board of Trustees of its responsibility for and control of the conduct
of the affairs of the Trust or the Funds.
5.3. Definitions. Any question of interpretation of any term or
provision of this Agreement, including but not limited to the investment
management fee, the computations of net asset values, and the allocation of
expenses, having a counterpart in or otherwise derived from the terms and
provisions of the Management Agreement or the 1940 Act, shall have the same
meaning as and be resolved by reference to such Management Agreement or the 1940
Act.
5.4. Amendments. This Agreement may be amended only by a written
agreement signed by each of the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
ING VARIABLE INSURANCE TRUST
By:____________________________________
Name: Xxxxxx X. Naka
Title: Senior Vice President
ING INVESTMENTS, LLC
By:____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
AELTUS INVESTMENT MANAGEMENT, INC.
By: ________________________________
Name: ________________________________
Title: ________________________________
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SCHEDULE A
TO THE
EXPENSE LIMITATION AGREEMENT
BY AND BETWEEN
ING VARIABLE INSURANCE TRUST,
ING INVESTMENTS, LLC AND
AELTUS INVESTMENT MANAGEMENT, INC.
OPERATING EXPENSE LIMITS
EFFECTIVE: __________________
This Agreement relates to the following Funds of the Trust:
MAXIMUM OPERATING EXPENSE LIMIT
-------------------------------
NAME OF FUND* (as a percentage of average net assets) EXPIRATION OF INITIAL TERM
------------ --------------------------
ING GET U.S. Core Portfolio - Series 1 0.65% during the offering period December 31, 2004
1.00% during the guarantee period
ING GET U.S. Core Portfolio - Series 2 0.65% during the offering period December 31, 2004
1.00% during the guarantee period
ING GET U.S. Opportunity Portfolio - Series 1 0.65% during the offering period December 31, 2004
1.00% during the guarantee period
ING GET U.S. Opportunity Portfolio - Series 2 0.65% during the offering period December 31, 2004
1.00% during the guarantee period
______ HE
*This Schedule A to the Expense Limitation Agreement will be effective with
respect to the Funds upon the effective date of the initial Registration
Statement with respect to each Fund
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