As filed with the Securities and Exchange Commission on December 23, 2003
Securities Act File No. 333-_____________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
ING EQUITY TRUST
(Exact Name of Registrant as Specified in Charter)
7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258-2034
(Address of Principal Executive Offices) (Zip Code)
1-800-992-0180
(Registrant's Area Code and Telephone Number)
Huey P. Falgout, Jr.
ING Investments, LLC
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258-2034
(Name and Address of Agent for Service)
With copies to:
Jeffrey S. Puretz, Esq.
Dechert LLP
1775 I Street, N.W.
Washington, DC 20006-2401
---------------
Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration Statement becomes effective.
- --------------------------------------------------------------------------------
It is proposed that this filing will become effective on January 22, 2004
pursuant to Rule 488 under the Securities Act of 1933, as amended
- --------------------------------------------------------------------------------
No filing fee is required because an indefinite number of shares have previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended.
ING GROWTH OPPORTUNITIES FUND
ING GROWTH + VALUE FUND
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258-2034
1-800-992-0180
February 9, 2004
Dear Shareholder:
Your Board of Trustees has called a Special Meeting of shareholders
("Special Meeting") of ING Growth Opportunities Fund ("Growth Opportunities
Fund") and ING Growth + Value Fund ("Growth + Value"), which is scheduled for
10:00 a.m., Local time, on March 25, 2004 at 7337 East Doubletree Ranch Road,
Scottsdale, Arizona 85258-2034.
The Board of Trustees of Growth Opportunities Fund, a series of ING
Equity Trust, and Growth + Value Fund, a series of ING Mayflower Trust, has
reviewed and recommends the proposed reorganizations (each a "Reorganization")
of the Growth Opportunities Fund and the Growth + Value Fund into ING MidCap
Opportunities Fund ("MidCap Opportunities Fund"), a series of ING Equity Trust
(each a "Fund", and collectively, the "Funds"). All Funds are members of the
mutual fund group called the "ING Funds."
If approved by shareholders of your Fund, you will become a shareholder
of MidCap Opportunities Fund on the date that the Reorganization occurs. The
Reorganization would provide shareholders of the Growth Opportunities and Growth
+ Value Funds with an opportunity to participate in a larger fund with similar
investment objectives and strategies.
You are being asked to vote to approve an Agreement and Plan of
Reorganization. The accompanying document describes the proposed transactions
and compares the strategies and expenses of each of the Funds for your
evaluation.
After careful consideration, the Board of Trustees of ING Equity Trust,
on behalf of the Growth Opportunities Fund, and ING Mayflower Trust, on behalf
of Growth + Value Fund, unanimously approved each proposal and recommends
shareholders vote "FOR" the proposals.
A Proxy Statement/Prospectus that describes the Reorganization is
enclosed. We hope that you can attend the Special Meeting in person; however, we
urge you in any event to vote your shares by completing and returning the
enclosed proxy card in the envelope provided at your earliest convenience.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. TO
AVOID THE ADDED COST OF FOLLOW-UP SOLICITATIONS AND POSSIBLE ADJOURNMENTS,
PLEASE TAKE A FEW MINUTES TO READ THE PROXY STATEMENT/PROSPECTUS AND CAST YOUR
VOTE. IT IS IMPORTANT THAT YOUR VOTE BE RECEIVED NO LATER THAN MARCH 24, 2004.
The Growth Opportunities Fund and Growth + Value Fund are each using
Georgeson Shareholder Communications, Inc., a professional proxy solicitation
firm, to assist shareholders in the voting process. As the date of the Special
Meeting approaches, if we have not already heard from you, you may receive a
telephone call from Georgeson Shareholder Communications, Inc., reminding you to
exercise your right to vote.
We appreciate your participation and prompt response in this matter and
thank you for your continued support.
Sincerely,
/s/ James M. Hennessy
James M. Hennessy,
President and Chief Executive Officer
ING GROWTH OPPORTUNITIES FUND
ING GROWTH + VALUE FUND
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258-2034
1-800-992-0180
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF ING GROWTH OPPORTUNITIES FUND AND ING GROWTH + VALUE FUND
SCHEDULED FOR MARCH 25, 2004
To the Shareholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of shareholders ("Special
Meeting") of both of the ING Growth Opportunities Fund ("Growth Opportunities
Fund") and ING Growth + Value Fund ("Growth + Value Fund") is scheduled for
March 25, 2004 at 10:00 a.m., Local time, at 7337 East Doubletree Ranch Road,
Scottsdale, Arizona 85258-2034.
At the Special Meeting, you will be asked to consider and approve the
following:
(1) Growth Opportunities Fund only:
To approve an Agreement and Plan of Reorganization
(the "Reorganization Agreement") by and among Growth
Opportunities Fund and MidCap Opportunities Fund,
providing for the merger of Growth Opportunities Fund
with and into MidCap Opportunities Fund;
(2) Growth + Value Fund only:
To approve an Agreement and Plan of Reorganization
(the "Reorganization Agreement") by and among Growth
+ Value Fund and MidCap Opportunities Fund, providing
for the merger of Growth + Value Fund with and into
MidCap Opportunities Fund; and
(3) To transact such other business, not currently
contemplated, that may properly come before the
Special Meeting or any adjournment(s) thereof in the
discretion of the proxies or their substitutes.
Shareholders of record as of the close of business on January 6, 2004,
are entitled to notice of, and to vote at, the Special Meeting or any
adjournment thereof. Your attention is called to the accompanying Proxy
Statement/Prospectus. Regardless of whether you plan to attend the Special
Meeting, PLEASE COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD so
that a quorum will be present and a maximum number of shares may be voted.
Proxies may be revoked at any time before they are exercised by executing and
submitting a revised proxy, by giving written notice of revocation to the Growth
Opportunities Fund or Growth + Value Fund or by voting in person at the Special
Meeting.
By Order of the Board of Trustees
/s/ Huey P. Falgout, Jr.
Huey P. Falgout, Jr.
Secretary
February 9, 2004
PROXY STATEMENT/PROSPECTUS
FEBRUARY 9, 2004
TABLE OF CONTENTS
INTRODUCTION............................................................................. 1
SUMMARY.................................................................................. 2
The Proposed Reorganization........................................................... 2
Comparison of Investment Objectives and Strategies.................................... 4
Comparison of Fund Characteristics.................................................... 6
Relative Performance.................................................................. 8
Performance of ING MidCap Opportunities Fund.......................................... 9
Comparison of Investment Techniques and Principal Risks of Investing in the Funds..... 11
COMPARISON OF FEES AND EXPENSES.......................................................... 13
Management Fees....................................................................... 13
Administration Fees................................................................... 13
Distribution and Service Fees......................................................... 13
Expense Limitation Arrangements....................................................... 13
Expense Tables........................................................................ 14
General Information................................................................... 17
INFORMATION ABOUT THE REORGANIZATION..................................................... 17
The Reorganization Agreement.......................................................... 17
Reasons for the Reorganization........................................................ 18
Board Considerations.................................................................. 18
Tax Considerations.................................................................... 19
Expenses of the Reorganization........................................................ 20
ADDITIONAL INFORMATION ABOUT THE FUNDS................................................... 20
Form of Organization.................................................................. 20
Distributor........................................................................... 20
Dividends and Other Distributions..................................................... 20
Capitalization........................................................................ 20
GENERAL INFORMATION ABOUT THE PROXY STATEMENT............................................ 21
Solicitation of Proxies............................................................... 21
Voting Rights......................................................................... 22
Other Matters to Come Before the Special Meeting...................................... 23
Shareholder Proposals................................................................. 23
Reports to Shareholders............................................................... 23
APPENDICES
Portfolio Manager's Report for ING MidCap Opportunities Fund......................... A
Form of Agreement and Plan of Reorganization (Growth Opportunities).................. B-1
Form of Agreement and Plan of Reorganization (Growth + Value)........................ B-2
Additional Information Regarding ING MidCap Opportunities Fund....................... C
Additional Funds Offered............................................................. D
Security Ownership of Certain Beneficial and Record Owners........................... E
PROXY STATEMENT/PROSPECTUS
FEBRUARY 9, 2004
ING MIDCAP OPPORTUNITIES FUND
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258-2034
1-800-992-0180
INTRODUCTION
This Proxy Statement/Prospectus is being furnished to you in connection
with a Special Meeting of shareholders of the ING Growth Opportunities Fund
("Growth Opportunities Fund") and the ING Growth + Value Fund ("Growth + Value
Fund") to be held on March 25, 2004 ("Special Meeting"). As more fully described
in this Proxy Statement/Prospectus, the purpose of the Special Meeting is to
vote on proposed reorganizations (each, a "Reorganization") of the Growth
Opportunities Fund and the Growth + Value Fund into ING MidCap Opportunities
Fund ("MidCap Opportunities Fund") (each a "Fund" and collectively the "Funds").
Under an Agreement and Plan of Reorganization (the "Reorganization
Agreement"), the Growth Opportunities Fund and the Growth + Value Fund (each, an
"Acquired Fund" and collectively, the "Acquired Funds") would each transfer all
of its respective assets to MidCap Opportunities Fund in exchange for shares of
beneficial interest of MidCap Opportunities Fund and the assumption by MidCap
Opportunities Fund of the liabilities of each of the Acquired Funds.
Because you, as a shareholder of either the Growth Opportunities Fund
or the Growth + Value Fund, are being asked to approve the Reorganization
Agreement that will result in a transaction in which you will ultimately hold
shares of MidCap Opportunities Fund, this Proxy Statement also serves as a
Prospectus for MidCap Opportunities Fund. MidCap Opportunities Fund is a
diversified mutual fund. MidCap Opportunities Fund's investment objective is to
seek long-term capital appreciation. The Fund, under normal market conditions,
seeks to achieve its investment objective by investing at least 80% of its
assets in common stocks of mid-sized U.S. companies that the Sub-Adviser (Aeltus
Investment Management, Inc. ("ING Aeltus")) believes have above average
prospects for growth.
This Proxy Statement/Prospectus, which should be read and retained for
future reference, sets forth concisely the information that a shareholder should
know before voting on the Reorganization Agreement. A Statement of Additional
Information ("SAI") relating to this Proxy Statement dated February 9, 2004
containing additional information about the Reorganization and the parties
thereto, has been filed with the U.S. Securities and Exchange Commission (the
"SEC") and is incorporated herein by reference. For a more detailed discussion
of the investment objectives, strategies and restrictions of the Funds, see the
Class A, B, C, and M Equity Funds Prospectus, the Class I Equity Funds
Prospectus, the Class Q Equity Funds Prospectus and the SAI for the Funds, each
dated September 30, 2003, which are incorporated herein by reference. Each Fund
also provides periodic reports to its shareholders which highlight certain
important information about the Funds, including investment results and
financial information. The annual report dated May 31, 2003 and the semi-annual
report dated November 30, 2003 for each of the Funds are incorporated herein by
reference. You may receive a copy of the most recent Prospectus, SAI, SAI
relating to the Proxy Statement, annual report and semi-annual report for either
of the Funds without charge by contacting the Funds at ING Funds, 7337 East
Doubletree Ranch Road, Scottsdale, Arizona 85258-2034, Attention: Literature
Fulfillment, or by calling 1-800-992-0180.
You can copy and review information about each Fund (including the SAI)
at the SEC's Public Reference Room in Washington, D.C. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-202-942-8090. Reports and other information about the Funds are available on
the EDGAR Database on the SEC's internet site at http://www.sec.gov. You may
obtain copies of this information, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing the
SEC's Public Reference Section, Washington, D.C. 20549-0102.
THE U.S. SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED THESE SECURITIES, OR DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
1
SUMMARY
You should read this entire Proxy Statement/Prospectus carefully,
including the Appendices, which are also a part of the Proxy
Statement/Prospectus. You should also consult the Class A, B, C, and M Equity
Funds Prospectus, the Class I Equity Funds Prospectus and the Class Q Equity
Funds Prospectus for more information about the Funds and the Reorganization
Agreements, which are attached hereto as APPENDIX B-1 and APPENDIX B-2.
THE PROPOSED REORGANIZATION
On November 11, 2003, the Board of Trustees of ING Equity Trust, on
behalf of ING Growth Opportunities Fund, and ING Mayflower Trust, on behalf of
ING Growth + Value Fund approved the Reorganization Agreement with respect to
each Acquired Fund (each, a "Reorganization Agreement") and ING MidCap
Opportunities Fund. Subject to shareholder approval, each Reorganization
Agreement provides for:
- the transfer of all of the assets of each Acquired Fund to
MidCap Opportunities Fund in exchange for shares of beneficial
interest of MidCap Opportunities Fund;
- the assumption by MidCap Opportunities Fund of all of the
liabilities of each Acquired Fund;
- the distribution of MidCap Opportunities Fund shares to the
shareholders of each Acquired Fund; and
- the complete liquidation of each Acquired Fund.
MidCap Opportunities Fund shares would then be distributed to
shareholders of each Acquired Fund so that each shareholder would receive a
number of full and fractional shares of MidCap Opportunities Fund equal to the
aggregate value of shares of the Acquired Fund held by such shareholder.
As a result of the Reorganization, each owner of Class A, Class B,
Class C, Class I and Class Q shares of each Acquired Fund would become a
shareholder of the corresponding class of shares of MidCap Opportunities Fund.
The Reorganization is expected to be effective on April [__], 2004, or such
other date as the parties may agree (the "Closing Date").
Each shareholder will hold, immediately after the Closing Date, shares
of the corresponding class of MidCap Opportunities Fund having an aggregate
value equal to the aggregate value of the shares of the corresponding class of
Acquired Fund held by that shareholder as of the Closing Date.
In considering whether to approve the Reorganization, you should note
that:
- The Funds have similar investment objectives;
- The Funds currently have the same portfolio management team;
- The portfolio management team manages each Fund in a similar
fashion; and
- After application of expense reimbursements, the proposed
Reorganization is expected to result in a reduction in net
operating expenses (excluding short-term, nonrecurring,
reorganization expenses) per share for all shareholders of
each Acquired Fund.
2
GROSS EXPENSES BEFORE THE MERGER
CLASS A CLASS B CLASS C CLASS I CLASS Q
------- ------- ------- ------- -------
- - Expenses of Growth + Value Fund: 1.90% 2.60% 2.60% N/A 1.82%
- - Expenses of Growth Opportunities Fund: 1.82% 2.52% 2.52% 1.37% 1.68%
- - Expenses of MidCap Opportunities Fund: 1.78% 2.48% 2.48% 1.37% 1.59%
NET EXPENSES BEFORE THE MERGER (AFTER FEE WAIVER)
CLASS A CLASS B CLASS C CLASS I CLASS Q
------- ------- ------- ------- -------
- - Expenses of Growth + Value Fund 1.90% 2.60% 2.60% N/A 1.82%
- - Expenses of Growth Opportunities Fund: 1.82% 2.52% 2.52% 1.37% 1.68%
- - Expenses of MidCap Opportunities Fund(1): 1.75% 2.45% 2.45% 1.37% 1.59%
AFTER THE MERGER : Pro Forma
CLASS A CLASS B CLASS C CLASS I CLASS Q
------- ------- ------- ------- -------
- - Gross Expenses of MidCap Opportunities Fund: 1.77% 2.47% 2.47% 1.36% 1.58%
- - NetExpenses of MidCap Opportunities Fund (1)(2): 1.75% 2.45% 2.45% 1.36% 1.58%
- -------------------
(1) Reflects expense limitations that are effective January 1, 2004. The
expense limitations will remain in effect until May 31, 2005. There is
no assurance that the expense limitation agreement will be continued
after that date. Effective January 1, 2004 the expense limits for the
MidCap Opportunities Fund will be 1.75% 2.45%, 2.45%, 1.45%, 1.60% for
Class A, B, C, I and Q shares, respectively. For more information, see
"Comparison of Fees and Expenses - Expense Limitation Arrangements."
(2) Net Expenses after the Reorganization do not reflect short-term
nonrecurring reorganization expenses. For more information, see
"Comparison of Fees and Expenses - Annual Fund Operating Expenses."
Approval of the Reorganization Agreement on behalf of the Growth Opportunities
Fund or Growth + Value Fund requires the affirmative vote of the holders of a
majority of the shares of that Fund. The holders of a majority of outstanding
shares present in person or by proxy shall constitute a quorum at any meeting of
the shareholders.
AFTER CAREFUL CONSIDERATION, THE BOARD OF TRUSTEES OF ING EQUITY TRUST,
ON BEHALF OF GROWTH OPPORTUNITIES FUND, AND ING MAYFLOWER TRUST, ON BEHALF OF
GROWTH + VALUE FUND, UNANIMOUSLY APPROVED THE PROPOSED REORGANIZATIONS. THE
BOARD RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSED REORGANIZATIONS.
3
COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES
The following summarizes the investment objective, strategies and
management differences, if any, among Growth Opportunities Fund, Growth + Value
Fund and MidCap Opportunities Fund:
GROWTH OPPORTUNITIES FUND GROWTH + VALUE FUND MIDCAP OPPORTUNITIES FUND
- --------------------------------------------------------------------------------------------------------------------
INVESTMENT OBJECTIVE Seeks long-term growth of Seeks capital appreciation. Seeks long-term capital
capital. appreciation.
INVESTMENT STRATEGIES - Normally invests at - Normally invests at - Normally invests at
least 65% of its total least 65% of its total least 80% of its assets in
assets in securities assets in securities the common stocks of
purchased on the basis purchased on the basis mid-sized U.S. companies.
of the potential for of the potential for
capital appreciation. capital appreciation.
These securities may be These securities may
from large-cap, mid-cap, be from large-cap,
or small-cap companies. mid-cap, or small-cap
companies.
- The Sub-Adviser - The portfolio - The Sub-Adviser, uses
uses a disciplined managers use a a disciplined combination
combination of disciplined of quantitative screens
quantitative screens and combination of and bottom-up fundamental
bottom-up fundamental quantitative screens security analysis to build
security analysis to and bottom-up a diversified portfolio of
build a diversified fundamental security companies the Sub-Adviser
portfolio of companies analysis to build a believes will have
the Sub-Adviser believes broadly diversified improving bottom lines,
will have improving portfolio of companies with reasonable valuation,
bottom lines, with that have improving whose stocks demonstrate
reasonable valuation, bottom lines, with relative strength. The
whose stocks demonstrate reasonable valuation, Sub-Adviser's company
relative strength. The whose stocks analysis focuses upon the
Sub-Adviser's company demonstrate relative prospects for continuing
analysis focuses upon strength. The bottom-line growth,
the prospects for portfolio managers' balance sheet strength,
continuing bottom-line company analysis and cash flow
growth, balance sheet focuses upon the characteristics. The
strength, and cash flow prospects for Sub-Adviser uses a
characteristics. The continuing bottom-line proprietary measure to
Sub-Adviser uses a growth, balance sheet determine relative stock
proprietary measure to strength, and cash price strength. A
determine relative stock flow characteristics. determination of
price strength. A The portfolio managers reasonable valuation for
determination of use a proprietary individual securities is
reasonable valuation for measure to determine based on the judgment of
individual securities is relative stock price. the Sub-Adviser.
based on the judgment of A determination of
the Sub-Adviser. for individual
reasonable valuation
securities is based on
the judgment of the
portfolio managers.
- The Sub-Adviser may - The portfolio - The Sub-Adviser may
sell securities for a manager may sell sell securities for a
variety of reasons, such securities for a variety of reasons, such
as to secure gains, variety of reasons, as to secure gains, limit
limit losses, or such as to secure losses, or redeploy assets
redeploy assets into gains, limit losses, into opportunities
opportunities believed or redeploy assets believed to be more
to be more promising. into opportunities promising. The most
The most frequent reason believed to be more frequent reason to sell a
to sell a security is promising. The most security is likely to be
likely to be that the frequent reason to that the Sub-Adviser
Sub-Adviser believes a sell a security is believes a company's
company's bottom line likely to be that the bottom line results or
results or prospects portfolio managers prospects have
have believe a
4
GROWTH OPPORTUNITIES FUND GROWTH + VALUE FUND MIDCAP OPPORTUNITIES FUND
- --------------------------------------------------------------------------------------------------------------------
been changed. company's bottom line been changed.
results or prospects
have been changed.
- The Fund also may - The Fund also may - The Fund also may
lend portfolio lend portfolio lend portfolio securities
securities on a securities on a on a short-term or
short-term or long-term short-term or long-term basis, up to 33
basis, up to 33 1/3% of long-term basis, up to 1/3% of its total assets.
its total assets. 33 1/3% of its total
assets.
- The Fund may engage - The Fund may engage - The Fund may engage
in frequent and active in frequent and in frequent and active
trading of portfolio active trading of trading of portfolio
securities to achieve portfolio securities securities to achieve its
its investment objective. to achieve its investment objective.
investment
objective.
- ---------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENTS - The Fund invests - The Fund invests - The Fund invests
primarily in common primarily in a primarily in common stock
stock of U.S. companies diversified portfolio of U.S. companies that the
that the Sub-Adviser of equity securities, Sub-Adviser feels have
feels have above average including common and above average prospects
prospects for growth. preferred stock. The for growth.
Fund invests in
common stock of
companies the
portfolio managers
believe are poised
to rise in price.
- ---------------------------------------------------------------------------------------------------------------------
INVESTMENT ADVISER ING Investments, LLC ING Investments, LLC ING Investments, LLC
- ---------------------------------------------------------------------------------------------------------------------
Aeltus Investment N/A Aeltus Investment Management,
SUB-ADVISER Management, Inc. Inc.
- ---------------------------------------------------------------------------------------------------------------------
Matthew S. Price, CFA and Matthew S. Price, CFA and Matthew S. Price, CFA and
PORTFOLIO MANAGERS (1) David C. Campbell David C. Campbell David C. Campbell
- ---------------------------------------------------------------------------------------------------------------------
(1) Mr. Price and Mr. Campbell became the portfolio managers of Growth
Opportunities Fund and the MidCap Opportunities Fund as of April 21,
2003. Prior to April 21, 2003, those Funds were both managed by another
portfolio management team. Messrs. Price and Campbell became the
portfolio managers of the Growth + Value Fund as of June 16, 2003.
Prior to that date, the Growth + Value Fund was sub-advised by an
investment advisory firm that was not affiliated with the Adviser.
As you can see from the chart above, the investment objectives and
strategies of the Funds are similar.
5
COMPARISON OF FUND CHARACTERISTICS
The following table compares certain characteristics of Growth
Opportunities Fund, Growth + Value Fund and MidCap Opportunities Fund as of
November 30, 2003:
GROWTH OPPORTUNITIES MIDCAP OPPORTUNITIES
GROWTH + VALUE FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------
Net Assets $ 217,309,346 $ 180,922,991 $ 177,068,228
- -------------------------------------------------------------------------------------------------------------------------
Number of Holdings 97 95 93
- -------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate(1) 84% 44% 37%
- -------------------------------------------------------------------------------------------------------------------------
Average market capitalization of
companies in Fund $2.4 billion $3.7 billion $3.3 billion
- -------------------------------------------------------------------------------------------------------------------------
Market capitalization range of
companies in Fund (as a % of
net assets):
Holdings in companies with
market capitalizations over
$10 billion: 14.2% 33.4% 19.0%
Holdings in companies with
market capitalizations
between $5 billion and $10
billion: 21.4% 25.2% 29.1%
Holdings in companies with
market capitalizations under
$5 billion: 63.7% 41.0% 51.5%
- -------------------------------------------------------------------------------------------------------------------------
U.S Equity Securities (as a % of net
assets) 100.4% 98.9% 99.6%
- -------------------------------------------------------------------------------------------------------------------------
Top 5 Industries (as % of net
assets) Retail 12.7% Retail 12.5% Retail 15.1%
Electronics 7.2% Pharmaceuticals 8.1% Pharmaceuticals 7.3%
Software 7.1% Semiconductors 7.6% Healthcare-Products 7.1%
Pharmaceuticals 6.3% Healthcare-Products 7.5% Software 7.0%
Healthcare-Products 5.9% Computers 6.5% Semiconductors 5.9%
- -------------------------------------------------------------------------------------------------------------------------
Top 10 Holdings Avid Technology,
(as a % of net assets) Inc. 2.2% Xilinx, Inc. 2.7% Gentex Corp. 2.7%
Midcap SPDR Varian Medical
Gentex Corp. 2.1% Trust Series I 2.5% Systems, Inc. 2.3%
Omnicare, Inc. 2.1% EMC Corp. 2.3% Omnicare, Inc. 2.1%
Veritas Software
Co. 1.9% Omnicare, Inc. 2.2% Staples Inc. 1.9%
Network Veritas Software
Appliance, Inc. 1.8% Co. 2.2% Fair Isaac Corp. 1.9%
Patina Oil & Gas Veritas Software
Corp. 1.8% Altera Corp. 2.2% Co. 1.8%
Network
Chico's FAS, Inc. 1.8% Gentex Corp. 2.1% Appliance, Inc. 1.8%
Performance Food Network
Group Co. 1.7% Appliance, Inc. 2.0% HOT Topic, Inc. 1.7%
Education
6
GROWTH OPPORTUNITIES MIDCAP OPPORTUNITIES
GROWTH + VALUE FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------
HOT Topic, Inc. 1.7% Utstarcom, Inc. 1.8% Management Corp. 1.7%
Benchmark
Electronics, Inc. 1.6% Apache Corp. 1.8% Utstarcom, Inc. 1.7%
- --------------------------------------------------------------------------------------------------------------------------
(1) For the six months ended November 30, 2003
- --------------------------------------------------------------------------------------------------------------------------
Following the Reorganization, certain holdings of Growth + Value Fund
and the Growth Opportunities Fund that are transferred to MidCap Opportunities
Fund in connection with the Reorganization may be sold. Such sales may result in
increased transaction costs for MidCap Opportunities Fund, and the realization
of taxable gains or losses for MidCap Opportunities Fund. For more information,
see the notes to the Pro Forma financial statements in the SAI relating to this
Proxy Statement/Prospectus.
7
RELATIVE PERFORMANCE
The following table shows, for the periods shown, the unaudited average
annual total return for: (i) Class A shares of Growth + Value Fund; (ii) Class A
shares of Growth Opportunities Fund; (iii) Class A shares of MidCap
Opportunities Fund; (iv) Russell MidCap Growth Index; and (v) Russell MidCap
Index. Performance of the Funds in the table below does not reflect the
deduction of sales loads, and would be lower if it did. An index has an inherent
performance advantage over the Funds since it has no cash in its portfolios,
imposes no sales charges, and incurs no operating expenses. An investor cannot
invest directly in an index. Total return is calculated assuming reinvestment of
all dividends and capital gain distributions at net asset value and excluding
the deduction of sales charges. Each Fund's past performance is not an
indication of its future performance.
CALENDAR
YEAR/PERIOD GROWTH + GROWTH MIDCAP RUSSELL MIDCAP RUSSELL MIDCAP
ENDED VALUE(3) OPPORTUNITIES(4) OPPORTUNITIES(4) GROWTH INDEX(1) INDEX(2)
- ---------------- --------- ---------------- ---------------- --------------- --------------
12/31/99 88.10% 93.26% 103.24% 51.29% 18.23%
12/31/00 -13.02% -19.11% -0.35% -11.75% 8.25%
12/31/01 -34.19% -41.92% -37.24% -20.15% -5.62%
12/31/02 -38.81% -33.22% -28.00% -27.41% -16.18%
1/01/03-11/30/03 38.14% 32.22% 37.62% 41.17% 35.98%
- ------------------
(1) The Russell MidCap Growth Index is an unmanaged index that measures the
performance of those companies included in the Russell MidCap Index
with relatively higher price-to-book rations and higher forecasted
growth values.
(2) The Russell MidCap Index is an unmanaged index that measures the
performance of the 800 smallest companies in the Russell 1000 Index,
which represent approximately 26% of the total market capitalization of
the Russell 1000 Index.
(3) Growth + Value Fund is directly advised by ING Investments under the
portfolio management team of Mr. Matthew Price and Mr. David Campbell
as of June 16, 2003. Prior to that date, the Growth + Value Fund was
sub-advised by an investment advisory firm that was not affiliated with
the Adviser.
(4) Growth Opportunities Fund and MidCap Opportunities Fund are both
managed by Mr. Price and Mr. Campbell as of April 21, 2003. Prior to
April 21, 2003, those Funds were both managed by another portfolio
management team.
8
PERFORMANCE OF MIDCAP OPPORTUNITIES FUND
The following bar chart and tables provide an indication of the risks
of investing in MidCap Opportunities Fund by showing (on a calendar year basis)
changes in MidCap Opportunities Fund's annual total return from year to year and
by showing (on a calendar year basis) how MidCap Opportunities Fund's average
annual returns for one year and five years compare to those of the Russell
MidCap Growth Index and the Russell MidCap Index. The information in the bar
chart is based on the performance of the Class A shares of the Fund although the
bar chart does not reflect the deduction of the sales load on Class A shares. If
the bar chart included the sales load, returns would be less than those shown.
MidCap Opportunities Fund's past performance (before and after income taxes) is
not necessarily an indication of how the Fund will perform in the future. Total
returns include reinvestment of dividends and capital gains distributions, if
any. The Russell MidCap Growth Index and the Russell MidCap Index are unmanaged.
CALENDAR YEAR-BY-YEAR RETURNS(1)(2)(3)
<Table>
<Caption>
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
103.24 -0.35 -37.24 -28.00
</Table>
- ------------------
(1) These figures are for the year ended December 31 of each year. They do
not reflect sales charges and would be lower if they did.
(2) During the period shown in the chart, the Fund's best quarterly
performance was 44.90% for the quarter ended December 31, 1999, and the
Fund's worst quarterly performance was -30.57% for the quarter ended
September 30, 2001.
The Fund's year-to-date total return as of September 30, 2003: 23.38%
(3) MidCap Opportunities Fund is managed by Mr. Matthew Price and Mr. David
Campbell as of April 21, 2003. Prior to April 21, 2003, the Fund had a
different portfolio management team.
The following table shows what the average annual total returns of
MidCap Opportunities Fund would equal if you averaged out actual performance
over various lengths of time assuming that a shareholder paid the maximum
front-end or contingent deferred sales charge compared to the Russell MidCap
Growth Index and the Russell MidCap Index, both unmanaged indices. The Russell
MidCap Growth Index and Russell MidCap Index have an inherent performance
advantage over MidCap Opportunities Fund since they have no cash in their
portfolio, impose no sales charges and incur no operating expenses. An investor
cannot invest directly in an index. MidCap Opportunities Fund's performance
reflected in the table below assumes the deduction of the maximum sales charge
in all cases. The tables also show returns on a before-tax and after-tax basis.
After-tax returns are calculated using the historical highest individual federal
marginal income tax rates and do not reflect the impact of state and local
taxes.
Actual after-tax returns depend on an investor's tax situation and may
differ from those shown, and after-tax returns shown are not relevant to
investors who hold their Fund shares through tax-deferred arrangements, such as
401(k) plans or individual retirement accounts.
In some cases, the return after-taxes may exceed the return before
taxes due to an assumed tax benefit from any losses on a sale of Fund shares at
the end of the measurement period.
9
After tax-returns are shown for Class A shares only. After-tax returns for other
Classes will vary.
MIDCAP OPPORTUNITIES FUND -- AVERAGE ANNUAL TOTAL RETURNS for the periods ended
December 31, 2002
5 YEARS OR 10 YEARS OR
1 YEAR SINCE INCEPTION(1) SINCE INCEPTION
------ ------------------ ---------------
Class A return before taxes(2) % -32.13 2.58 N/A
Class A return after taxes on distributions(2) % -32.13 0.05 N/A
Class A return after taxes on distributions and sale % -19.73 1.70 N/A
of Fund shares(2)
Class B return before taxes(3) % -32.05 3.01 N/A
Class C return before taxes(4) % -29.23 3.27 N/A
Class I returns before taxes % -27.61 4.43 N/A
Class Q return before taxes % -28.00 -26.69 N/A
Russell MidCap Growth Index (reflects no deduction % -27.41 1.20(7) N/A
for fees, expenses or taxes) (5)
Russell MidCap Index (reflects no deduction for fees, % -16.18 5.80(7) N/A
expenses or taxes) (6)
- ------------------
(1) Class A, Class B, Class C and Class I shares commenced operations on
August 20, 1998. Class Q shares commenced operations on April 4, 2000.
(2) Reflects deduction of sales charge of 5.75%.
(3) Reflects deduction of deferred sales charge of 5% and 2% for the 1 year
and Life of Class year returns, respectively.
(4) Reflects deduction of deferred sales charge of 1% for the 1 year
return.
(5) Russell MidCap Growth Index measures the performance of those companies
included in the Russell MidCap Index with relatively higher
price-to-book ratios and higher forecasted growth values.
(6) Russell MidCap Index measures the performance of the 800 smallest
companies in the Russell 1000 Index, which represent approximately 26%
of the total market capitalization of the Russell 1000 Index.
(7) Index return for Class A, Class B, Class C and Class I is for the
period beginning September 1, 1998. Index return for Class Q is -26.91%
for the Russell MidCap Growth Index and Index return for Class Q is
-8.73% for the Russell MidCap Index for the periods beginning April 1,
2000.
10
The following table shows the performance of MidCap Opportunities Fund
if sales charges are not reflected.
MIDCAP OPPORTUNITIES FUND -- AVERAGE ANNUAL TOTAL RETURNS for the periods ended
December 31, 2002
5 YEARS OR 10 YEARS OR
1 YEAR SINCE INCEPTION(1) SINCE INCEPTION
------- ------------------ ---------------
Class A return before taxes -28.00% 3.98% N/A
Class B return before taxes -28.47% 3.36% N/A
Class C return before taxes -28.51% 3.27% N/A
Class I return before taxes -27.61% 4.43% N/A
Class Q return before taxes -28.00% -26.69% N/A
Russell MidCap Growth Index (reflects no deduction -27.41 1.20(4) N/A
for fees, expenses or taxes) (2)
Russell MidCap Index (reflects no deduction for fees, -16.18 5.80(4) N/A
expenses or taxes) (3)
- ------------------
(1) Class A, Class B, Class C and Class I shares commenced operations on
August 20, 1998. Class Q shares commenced operations on April 4, 2000.
(2) Russell MidCap Growth Index measures the performance of those companies
included in the Russell MidCap Index with relatively higher
price-to-book rations and higher forecasted growth values.
(3) Russell MidCap Index measures the performance of the 800 smallest
companies in the Russell 1000 Index, which represent approximately 26%
of the total market capitalization of the Russell 1000 Index.
(4) Index return for Class A, Class B, Class C and Class I is for the
period beginning September 1, 1998. Index return for Class Q is -26.91%
for the Russell MidCap Growth Index and Index return for Class Q is
-8.73% for the Russell MidCap Index for the periods beginning April 1,
2000.
For a discussion by the Adviser regarding the performance of MidCap
Opportunities Fund for the fiscal year ended May 31, 2003, see APPENDIX A to
this Proxy Statement/Prospectus. Additional information about MidCap
Opportunities Fund is included in APPENDIX C to this Proxy Statement/Prospectus.
COMPARISON OF INVESTMENT TECHNIQUES AND PRINCIPAL RISKS OF INVESTING IN THE
FUNDS
Because the Funds have investment objectives and strategies that are
similar, many of the risks of investing in MidCap Opportunities Fund are
substantially the same as the risks of investing in the Growth Opportunities
Fund and the Growth + Value Fund. You may lose money on your investment in any
of the Funds. The value of each Fund's shares may go up or down, sometimes
rapidly and unpredictably. Market conditions, financial conditions of issuers
represented in the portfolio, investment strategies, portfolio management, and
other factors affect the volatility of each Fund's shares. The following
summarizes the principal investment techniques and risks of investing in the
Funds.
Price Volatility. Each of the Funds faces the risk of price volatility.
The value of a Fund changes as the prices of its investments go up or down.
Equity securities face market, issuer and other risks, and their values may go
up or down, sometimes rapidly and unpredictably. Market risk is the risk that
securities may decline in value due to factors affecting securities markets
generally or particular industries. Issuer risk is the risk that the value of a
security may decline for reasons relating to the issuer, such as changes in the
financial condition of the issuer. While equities may offer the potential for
greater long-term growth than most debt securities, they generally have higher
volatility. The Growth Opportunities Fund and MidCap Opportunities Fund each
invests in companies that the Sub-Adviser feels have the potential for rapid
growth which may give the Fund a higher risk of price volatility than a fund
that emphasizes other styles, such as a value-oriented style. The MidCap
Opportunities Fund invests in mid-sized companies and the Growth Opportunities
Fund and the Growth + Value Fund may invest in small and mid-sized companies.
Small and mid-sized companies may be more susceptible to price swings than
larger
11
companies because they have fewer financial resources, more limited product and
market diversification and many are dependent on a few key managers.
Market Trends. From time to time, the stock market may not favor the
growth securities in which the Funds invest, or the mid-cap growth securities in
which the MidCap Opportunities Fund emphasizes and in which the Growth
Opportunities Fund and Growth + Value Fund may invest. Rather, the market could
favor more speculative growth stocks or more value-oriented stocks or large or
small company stocks, or may not favor equities at all.
Inability to Sell Securities. Securities of small-and mid-sized
companies usually trade in lower volume and may be less liquid than securities
of larger, more established companies. These less liquid securities could
include securities of small and mid-size U.S. companies, high-yield securities,
convertible securities, unrated debt and convertible securities, securities that
originate from small offerings, and foreign securities, particularly those from
companies in emerging markets. A Fund could lose money if it cannot sell a
security at the time and price that would be most beneficial to the Fund.
Securities Lending. There is a risk when lending portfolio securities,
the securities may not be available to the Fund on a timely basis and the Fund
may, therefore lose the opportunity to sell the securities at a desirable price.
Portfolio Turnover. The Funds are generally expected to engage in
frequent and active trading of portfolio securities to achieve their investment
objectives. A high portfolio turnover rate involves greater expenses to a Fund,
including brokerage commissions and other transaction costs, and is likely to
generate more taxable short-term gains for shareholders, which may have an
adverse impact on performance.
12
COMPARISON OF FEES AND EXPENSES
The following discussion describes and compares the fees and expenses
of the Funds. For further information on the fees and expenses of MidCap
Opportunities Fund, see "APPENDIX C: ADDITIONAL INFORMATION REGARDING MIDCAP
OPPORTUNITIES FUND."
MANAGEMENT FEES
Growth + Value Fund pays ING Investments, LLC ("ING Investments" or
"Adviser") a management fee of 1.00% of the Fund's average daily net assets.
Growth Opportunities Fund pays the Adviser a management fee of 0.95% of the
Fund's average daily net assets. MidCap Opportunities Fund pays the Adviser a
management of 1.00% of the Fund's average daily net assets.
The Adviser pays ING Aeltus a sub-advisory fee of 0.4275% of the Growth
Opportunities Fund's average daily net assets. The Adviser pays ING Aeltus a
sub-advisory fee of 0.45% of the MidCap Opportunities Fund's average daily net
assets.
ADMINISTRATION FEES
Each of the Funds pays an annual administration fee of 0.10% of that
Fund's average daily net assets.
DISTRIBUTION AND SERVICE FEES
The annual distribution (12b-1) and service fees for Class A shares for
each of the Funds is 0.30% of each Fund's average daily net assets. The Funds
have the same distribution (12b-1) and service fees for Class B and Class C
shares (1.00%). In addition, the Funds have the same service fees for Class Q
shares (0.25%).
EXPENSE LIMITATION ARRANGEMENTS
An expense limitation agreement is in place for the MidCap
Opportunities Fund. Under the terms of the expense limitation agreement for
MidCap Opportunities Fund, ING Investments has agreed to limit the expenses of
the MidCap Opportunities Fund, excluding interest, taxes, brokerage and
extraordinary expenses, subject to possible recoupment by ING Investments within
three years. The expense limitation agreement is contractual and shall renew
automatically for one-year terms unless the Adviser provides written notice of
termination of the expense limitation agreement within 90 days of the end of the
then current term or upon termination of the investment management agreement.
The current expense limitation agreement for the MidCap Opportunities Fund
provides that it will remain in effect through May 31, 2005. There can be no
assurance that the expense limitation agreement will be continued after this
date. The expense limitations for Class A, Class B, Class C, Class I and Class Q
shares through December 31, 2003 are 1.50%, 2.20%, 2.20%, 1.20% and 1.35%,
respectively. Effective January 1, 2004 the expense limits will be 1.75% 2.45%,
2.45%, 1.45%, 1.60% for Class A, B, C, I and Q shares, respectively. The Growth
+ Value Fund and the Growth Opportunities Fund currently do not have an expense
limitation agreement. This information and similar information is shown in the
table below entitled "Annual Fund Operating Expenses."
13
EXPENSE TABLES
There are two types of fees and expenses when you invest in mutual
funds: fees, including sales charges, you pay directly when you buy or sell
shares, and operating expenses paid each year by the Funds. The following table
shows the fees and expenses for Class A, Class B, Class C, Class I and Class Q
shares of each of the Funds.
TRANSACTION FEES ON NEW INVESTMENTS
(fees paid directly from your investment)
CLASS A CLASS B CLASS C CLASS I CLASS Q
-------- -------- ------- ------- -------
Maximum sales charge (load) imposed on purchases (as a
percentage of offering price) 5.75%(1) None None None None
Maximum deferred sales charge (load) (as a percentage of
the lower of original purchase price or redemption
proceeds) None(2) 5.00%(3) 1.00(4) None None
- ------------------
(1) Reduced for purchases of $50,000 and over. See "Class A Shares: Initial
Sales Charge Alternative" in APPENDIX C.
(2) A contingent deferred sales charge of no more than 1.00% may be
assessed on redemptions of Class A shares that were purchased without
an initial sales charge as part of an investment of $1 million or more.
See "Class A Shares: Initial Sales Charge Alternative" in APPENDIX C.
(3) Imposed upon redemptions within 6 years of purchase. The fee has
scheduled reductions after the first year. See "Class B Shares:
Deferred Sales Charge Alternative" in APPENDIX C.
(4) Imposed upon redemptions within 1 year from purchase.
The Growth + Value Fund, the Growth Opportunities Fund and the MidCap
Opportunities Fund do not have any redemption fees, exchange fees or sales
charges on reinvested dividends. Each Fund also has substantially similar
purchase options, exchange rights and redemption procedures. For more
information regarding on the purchase options, exchange rights and redemption
procedures of the MidCap Opportunities Fund, see "APPENDIX C: ADDITIONAL
INFORMATION REGARDING MIDCAP OPPORTUNITIES FUND."
14
The current expenses of each of the Funds and estimated pro forma
expenses giving effect to the proposed Reorganizations are shown in the
following table. Expenses of the Funds are based upon the operating expenses
incurred by Class A, Class B, Class C, Class I and Class Q shares of the Funds
for the period ended November 30, 2003. Pro forma fees show estimated fees of
MidCap Opportunities Fund after giving effect to the proposed Reorganization.
Pro forma numbers are estimated in good faith and are hypothetical.
ANNUAL FUND OPERATING EXPENSES AS OF NOVEMBER 30, 2003
(expenses that are deducted from Fund assets, shown as a ratio of expenses
to average daily net assets) (1)
TOTAL FEE
DISTRIBUTION (12b-1) FUND WAIVER
MANAGEMENT AND SHAREHOLDER OTHER OPERATING BY NET
FEES SERVICING FEES(2) EXPENSES(3)(4) EXPENSES ADVISER(5) EXPENSES
---------- -------------------- -------------- --------- ---------- --------
CLASS A
Growth + Value Fund 1.00% 0.30% 0.60% 1.90% 0.00% 1.90%
Growth Opportunities Fund 0.95% 0.30% 0.57% 1.82% 0.00% 1.82%
MidCap Opportunities Fund 1.00% 0.30% 0.48% 1.78% 0.03% 1.75%
MidCap Opportunities Fund
After the Reorganization
(Estimated Pro Forma) 1.00% 0.30% 0.47% 1.77% 0.02% 1.75%
CLASS B
Growth + Value Fund 1.00% 1.00% 0.60% 2.60% 0.00% 2.60%
Growth Opportunities Fund 0.95% 1.00% 0.57% 2.52% 0.00% 2.52%
MidCap Opportunities Fund 1.00% 1.00% 0.48% 2.48% 0.03% 2.45%
MidCap Opportunities Fund
After the Reorganization
(Estimated Pro Forma) 1.00% 1.00% 0.47% 2.47% 0.02% 2.45%
CLASS C
Growth + Value Fund 1.00% 1.00% 0.60% 2.60% 0.00% 2.60%
Growth Opportunities Fund 0.95% 1.00% 0.57% 2.52% 0.00% 2.52%
MidCap Opportunities Fund 1.00% 1.00% 0.48% 2.48% 0.03% 2.45%
MidCap Opportunities Fund
After the Reorganization
(Estimated Pro Forma) 1.00% 1.00% 0.47% 2.47% 0.02% 2.45%
CLASS I
Growth + Value Fund N/A N/A N/A N/A N/A N/A
Growth Opportunities Fund 0.95% N/A 0.42% 1.37% 0.00% 1.37%
MidCap Opportunities Fund 1.00% N/A 0.37% 1.37% 0.00% 1.37%
MidCap Opportunities Fund
After the Reorganization
(Estimated Pro Forma) 1.00% N/A 0.36% 1.36% 0.00% 1.36%
CLASS Q
Growth + Value Fund 1.00% 0.25% 0.57% 1.82% 0.00% 1.82%
Growth Opportunities Fund 0.95% 0.25% 0.48% 1.68% 0.00% 1.68%
MidCap Opportunities Fund 1.00% 0.25% 0.34% 1.59% 0.00% 1.59%
MidCap Opportunities Fund
After the Reorganization
(Estimated Pro Forma) 1.00% 0.25% 0.33% 1.58% 0.00% 1.58%
- ------------------
(1) The fiscal year end for Growth + Value Fund, Growth Opportunities Fund
and MidCap Opportunities Fund is May 31.
(2) As a result of distribution (Rule 12b-1) fees, a long-term investor may
pay more than the economic equivalent of the maximum sales charge
allowed by the Rules of the National Association of Securities Dealers,
Inc.
(3) ING Funds Services, LLC receives an annual administration fee equal to
0.10% of average daily net assets.
(4) "Other Expenses" excludes short-term, nonrecurring expenses related to
the Reorganization of the Growth Opportunities Fund and Growth + Value
Fund with and into the MidCap Opportunities Fund.
15
(5) ING Investments has entered into an expense limitation agreement with
MidCap Opportunities Fund under which it will limit the expenses of the
Fund (excluding interest, taxes, brokerage and extraordinary expenses,
subject to possible recoupment by ING Investments within three years)
to 1.50%, 2.20%, 2.20%, 1.20% and 1.35% for Class A, Class B, Class C,
Class I and Class Q shares of the Fund, respectively. The expense
limitation agreement is contractual and will continue through December
31, 2003. Effective January 1, 2004, ING has entered into a new expense
limitation with MidCap Opportunities Fund under which it will limit the
expenses of the Fund (excluding interest, taxes, brokerage and
extraordinary expenses, subject to possible recoupment by ING
Investments within three years) to 1.75%, 2.45%, 2.45%, 1.45%, and
1.60% for Class A, Class B, Class C, Class I and Class Q shares of the
Fund, respectively. Thereafter, the expense limitation agreement renews
automatically for one-year terms unless ING Investments provides
written notice of the termination of the expense limitation agreement
at least 90 days prior to the end of the then-current term or upon
termination of the investment management agreement.
Examples. The following examples are intended to help you compare the
cost of investing in each Fund and the combined Fund. The examples assume that
you invest $10,000 in each Fund and in the combined Fund after the
Reorganizations for the time periods indicated. The examples also assume that
your investment has a 5% return each year and that each Fund's operating
expenses remain the same. The 5% return is an assumption and is not intended to
portray past or future investment results. Based on the above assumptions, you
would pay the following expenses if you redeem your shares at the end of each
period shown. Your actual costs may be higher or lower.
GROWTH + VALUE FUND GROWTH OPPORTUNITIES FUND
------------------- -------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
CLASS A 757 1,138 1,542 2,669 749 1,115 1,504 2,589
CLASS B* 763 1,108 1,580 2,764 755 1,085 1,540 2,684
CLASS C 363 808 1,380 2,934 355 785 1,340 2,856
CLASS I N/A N/A N/A N/A 139 434 750 1,646
CLASS Q 185 573 985 2,137 171 530 913 1,987
MIDCAP OPPORTUNITIES FUND(1)
---------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CLASS A 743 1,100 1,481 2,547
CLASS B* 748 1,070 1,518 2,642
CLASS C 348 770 1,318 2,814
CLASS I 139 434 750 1,646
CLASS Q 162 502 866 1,889
ESTIMATED PRO FORMA: THE FUNDS
COMBINED (1)**
--------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CLASS A 743 1,098 1,477 2,537
CLASS B* 748 1,068 1,514 2,632
CLASS C 348 768 1,314 2,805
CLASS I 138 431 745 1,635
CLASS Q 161 499 860 1,878
You would pay the following expenses if you did not redeem your shares:
GROWTH + VALUE FUND GROWTH OPPORTUNITIES FUND
------------------- -------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
CLASS A 757 1,138 1,542 2,669 749 1,115 1,504 2,589
CLASS B* 263 808 1,380 2,764 255 785 1,340 2,684
CLASS C 263 808 1,380 2,934 255 785 1,340 2,856
CLASS I N/A N/A N/A N/A 139 434 750 1,646
CLASS Q 185 573 985 2,137 171 530 913 1,987
16
MIDCAP OPPORTUNITIES FUND(1)
---------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CLASS A 743 1,100 1,481 2,547
CLASS B* 248 770 1,318 2,642
CLASS C 248 770 1,318 2,814
CLASS I 139 434 750 1,646
CLASS Q 162 502 866 1,889
ESTIMATED PRO FORMA: THE FUNDS
COMBINED(1)**
-------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CLASS A 743 1,098 1,477 2,537
CLASS B* 248 768 1,314 2,632
CLASS C 248 768 1,314 2,805
CLASS I 138 431 745 1,635
CLASS Q 161 499 860 1,878
- ------------------
(1) The example reflects the contractual expense limitation for the
one-year period, and the first year of the three-, five-, and ten-year
periods.
* The ten year calculations for Class B shares assume conversion of the
Class B shares to Class A shares at the end of the end of the eighth
year following the date of purchase.
** Estimated.
GENERAL INFORMATION
Class A shares of MidCap Opportunities Fund issued to a shareholder in
connection with the Reorganization will not be subject to an initial sales
charge, but Class B and Class C shares will be subject to the same contingent
deferred sales charge, if any, applicable to the corresponding shares of Growth
+ Value Fund or the Growth Opportunities Fund held by that shareholder
immediately prior to the Reorganization.
In addition, the period that the shareholder held shares of Growth +
Value Fund or the Growth Opportunities Fund will be included in the holding
period of MidCap Opportunities Fund shares for purposes of calculating any
contingent deferred sales charge. Similarly, Class B shares of MidCap
Opportunities Fund issued to a shareholder in connection with the Reorganization
will convert to Class A shares eight years after the date that the Class B
shares of Growth + Value Fund or Growth Opportunities Fund were purchased by the
shareholder. Growth + Value Fund, Growth Opportunities Fund and MidCap
Opportunities Fund are subject to the sales load structure described in the
table above in the section "Expense Tables."
INFORMATION ABOUT THE REORGANIZATION
THE REORGANIZATION AGREEMENTS
The terms and conditions under which the proposed transaction may be
consummated are set forth in each Reorganization Agreement. Significant
provisions of the Reorganization Agreements are summarized below; however, this
summary is qualified in its entirety by reference to the Reorganization
Agreements, copies of which are attached as APPENDIX B-1 and APPENDIX B-2.
The Reorganization Agreements provide for (i) the transfer, as of the
Closing Date, of all of the assets of Growth + Value Fund and Growth
Opportunities Fund in exchange for shares of beneficial interest of MidCap
Opportunities Fund and the assumption by MidCap Opportunities Fund of all of
each Acquired Fund's liabilities; and (ii) the distribution of shares of MidCap
Opportunities Fund to shareholders of each Acquired Fund, as provided for in the
Reorganization Agreements. Growth + Value Fund and Growth Opportunities Fund
will then be liquidated.
17
After the Reorganizations, each shareholder of each Acquired Fund will
own shares of MidCap Opportunities Fund having an aggregate value equal to the
aggregate value of the shares in the Acquired Fund held by that shareholder as
of the Closing Date. Shareholders of Class A, Class B, Class C, and Class Q
shares of Growth + Value Fund will receive the same Class of shares of MidCap
Opportunities Fund. Shareholders of Class A, Class B, Class C, Class I and Class
Q shares of Growth Opportunities Fund will receive the same Class of shares of
MidCap Opportunities Fund. In the interest of economy and convenience, shares of
MidCap Opportunities Fund generally will not be represented by physical
certificates, unless you request the certificates in writing.
Until the Closing Date, shareholders of each Acquired Fund will
continue to be able to redeem their shares. Redemption requests received after
the Closing Date will be treated as requests received by MidCap Opportunities
Fund for the redemption of its shares.
The obligations of the Funds under the Reorganization Agreements are
subject to various conditions, including approval of the shareholders of each of
the Acquired Funds. The Reorganization Agreements also requires that each of the
Funds take, or cause to be taken, all actions, and do or cause to be done, all
things reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by the Reorganization Agreements. The
Reorganization Agreements may be terminated by mutual agreement of the parties
or on certain other grounds. Please refer to APPENDIX B-1 and APPENDIX B-2 to
review the terms and conditions of the Reorganization Agreements.
REASONS FOR THE REORGANIZATIONS
Each Reorganization is one of several reorganizations that have taken
place among various ING Funds. The ING Fund complex has grown in recent years
through the addition of many funds. Management of the ING Funds has proposed the
consolidation of several of the ING Funds that they believe have similar or
compatible investment strategies. The Reorganizations are designed to reduce the
overlap in funds offered in the ING Funds complex, thereby eliminating
inefficiencies and confusion about overlapping funds. ING Investments also
believes that the Reorganizations may benefit Fund shareholders by resulting in
a surviving fund with a greater asset base. This is expected to provide greater
investment opportunities for the MidCap Opportunities Fund and the potential to
take larger portfolio positions.
The proposed Reorganizations were presented to the Board of Trustees of
Growth + Value Fund, Growth Opportunities Fund, and MidCap Opportunities Fund
for consideration at a meeting held on November 11, 2003. For the reasons
discussed below, the Trustees of the Funds, including all of the Trustees who
are not "interested persons" (as defined in the Investment Company Act of 1940,
as amended) of the Funds, determined that the interests of the shareholders of
the Funds will not be diluted as a result of the proposed Reorganizations, and
that the proposed Reorganizations are in the best interests of the Funds and
their shareholders.
The Reorganization will allow the Growth + Value Fund's and the Growth
Opportunities Fund's shareholders to continue to participate in a
professionally-managed portfolio that seeks to achieve capital appreciation
through investment in equity securities. As shown in the fee table, after
application of expense reimbursements, the proposed Reorganizations are expected
to result in a reduction in net operating expenses (excluding short-term,
nonrecurring, reorganization expenses) per share for shareholders of each
Acquired Fund. As shareholders of MidCap Opportunities Fund, shareholders will
be able to continue to exchange into the ING Funds that offer the same Class of
shares in which such shareholder is currently invested. A list of the ING Funds
and the Classes available after the Reorganization is contained in APPENDIX D.
BOARD CONSIDERATIONS
The Board of Trustees of the Growth + Value Fund and the Growth
Opportunities Fund, in recommending the proposed transactions, considered a
number of factors, including the following:
- the plans of management to reduce overlap in funds in the ING
Fund complex;
- the potential benefits of the transaction to shareholders;
18
- the relative investment performance of MidCap Opportunities
Fund as compared to Growth + Value Fund and Growth
Opportunities Fund;
- gross and net expense ratios and information regarding fees
and expenses of Growth + Value Fund, Growth Opportunities Fund
and MidCap Opportunities Fund;
- the relative size of the Funds;
- whether the Reorganization would dilute the interests of the
Funds' current shareholders;
- the similarity of investment objectives and strategies of
MidCap Opportunities Fund with those of Growth + Value Fund
and Growth Opportunities Fund;
- each of the Funds has the same portfolio management team;
- the fees or expenses that will be borne directly or indirectly
by the Funds in connection with the merger;
- any benefits that may be realized by the Adviser; and
- the tax consequences of each Reorganization to Growth + Value
Fund and Growth Opportunities Fund and its shareholders,
including the tax-free nature of the transaction.
The Board of Trustees also considered the future potential benefits to
ING Investments in that its costs to administer the Funds may be reduced if the
Reorganizations are approved, and its costs may be reduced under its obligation
to limit expenses of MidCap Opportunities Fund.
THE TRUSTEES OF ING MAYFLOWER TRUST, ON BEHALF OF GROWTH + VALUE FUND,
AND OF ING EQUITY TRUST, ON BEHALF OF GROWTH OPPORTUNITIES FUND, RECOMMEND THAT
SHAREHOLDERS APPROVE EACH REORGANIZATION WITH AND INTO MIDCAP OPPORTUNITIES
FUND.
TAX CONSIDERATIONS
The Reorganization is intended to qualify for Federal income tax
purposes as a tax-free reorganization under Section 368 of the Internal Revenue
Code of 1986, as amended. Accordingly, pursuant to this treatment, neither
Growth + Value Fund, Growth Opportunities Fund nor their shareholders, nor
MidCap Opportunities Fund nor its shareholders, are expected to recognize any
gain or loss for federal income tax purposes from the transactions contemplated
by the Reorganization Agreements. As a condition to the Closing of the
Reorganizations, the Funds will receive an opinion from the law firm of Dechert
to the effect that each Reorganization will qualify as a tax-free reorganization
for Federal income tax purposes. That opinion will be based in part upon certain
assumptions and upon certain representations made by the Funds.
Immediately prior to the Reorganization, Growth + Value Fund and Growth
Opportunities Fund will each pay a dividend or dividends which, together with
all previous dividends, will have the effect of distributing to their
shareholders all of Growth + Value Fund's and Growth Opportunities Fund's
investment company taxable income for taxable years ending on or prior to the
Reorganization (computed without regard to any deduction for dividends paid) and
all of its net capital gain, if any, realized in taxable years ending on or
prior to the Reorganization (after reduction for any available capital loss
carryforward). Such dividends will be included in the taxable income of Growth +
Value Fund's and Growth Opportunities Fund's shareholders. Growth + Value Fund
and Growth Opportunities Fund shareholders' holding period in the MidCap
Opportunities Fund shares received in the Reorganization will include the
shareholders' holding period in the Growth + Value Fund or Growth Opportunities
Fund shares surrendered in the Reorganization provided that they held those
shares as capital assets. Growth + Value Fund and Growth Opportunities Fund
shareholders' aggregate basis in MidCap Opportunities Fund shares received in
the Reorganization will be the same as the shareholders' aggregate basis in the
Growth + Value Fund and Growth Opportunities Fund.
19
As of May 31, 2003, Growth + Value Fund, Growth Opportunities Fund and
MidCap Opportunities Fund had accumulated capital loss carryforwards of
approximately $521,848,512, $463,537,631 and $183,253,255, respectively. After
the Reorganizations, the losses of Growth + Value Fund and Growth Opportunities
Fund generally will be available to MidCap Opportunities Fund to offset its
capital gains, although a portion of the amount of these losses that may offset
MidCap Opportunities Fund's capital gains in any given year will be limited due
to the Reorganizations. The ability of MidCap Opportunities Fund to use losses
in the future depends upon a variety of factors that cannot be known in advance,
including the existence of capital gains against which these losses may be
offset. In addition, the benefits of any of these various capital loss
carryforwards currently are available only to pre-reorganization shareholders of
each Fund. After the Reorganizations, however, these benefits will inure to the
benefit of all post-reorganization shareholders of MidCap Opportunities Fund.
EXPENSES OF THE REORGANIZATIONS
ING Investments will bear half the cost of the Reorganizations. The
Funds will bear the other half of the expenses related to the proposed
Reorganizations, including, but not limited to, the costs of solicitation of
voting instructions and any necessary filings with the SEC. Of the
Reorganization expenses allocated to the Funds, each Fund will bear a pro rata
portion based on its relative net asset values immediately before the Closing
Date.
ADDITIONAL INFORMATION ABOUT THE FUNDS
FORM OF ORGANIZATION
Growth + Value Fund is a diversified series of ING Mayflower Trust, an
open-end management investment company organized as a Massachusetts business
trust. Growth Opportunities Fund and MidCap Opportunities Fund are each a
diversified series of ING Equity Trust, an open-end management investment
company organized as a Massachusetts business trust. ING Mayflower Trust and ING
Equity Trust are governed by the same Board of Trustees consisting of eleven
members. For more information on the history of the Funds, see the SAI.
DISTRIBUTOR
ING Funds Distributor, LLC (the "Distributor"), whose address is 7337
East Doubletree Ranch Road, Scottsdale, Arizona 85258-2034, is the principal
distributor for the Funds.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Funds pay dividends from net investment income, if any, on an
annual basis. Each Fund distributes capital gains, if any, on an annual basis.
Dividends and distributions of each of the Funds are automatically reinvested in
additional shares of the respective Class of the particular Fund, unless the
shareholder elects to receive distributions in cash.
If each Reorganization Agreement is approved by the relevant Acquired
Fund's shareholders, then as soon as practicable before the Closing Date, each
Acquired Fund will pay its shareholders a cash distribution of substantially all
undistributed net investment income and undistributed realized net capital
gains.
CAPITALIZATION
The following table shows on, an unaudited basis, the capitalization of
each of the Funds as of November 30, 2003, and on a pro forma basis as of
November 30, 2003 giving effect to the Reorganization:
NET ASSET
VALUE PER SHARES
NET ASSETS SHARE OUTSTANDING
------------ -------------- ------------
GROWTH + VALUE FUND
Class A $ 48,362,085 $ 9.78 4,942,681
Class B 116,822,644 9.26 12,621,510
Class C 51,878,275 9.25 5,607,185
Class Q 246,342 9.70 25,392
20
NET ASSET
VALUE PER SHARES
NET ASSETS SHARE OUTSTANDING
------------ -------------- ------------
Total Growth + Value Fund $217,309,346 23,196,768
GROWTH OPPORTUNITIES FUND
Class A $ 49,166,222 $ 13.05 3,766,378
Class B 54,174,520 12.10 4,475,844
Class C 25,186,576 12.13 2,077,164
Class I 52,392,562 13.52 3,874,430
Class Q 3,111 12.96 240
Total Growth Opportunities Fund $180,922,991 14,194,056
MIDCAP OPPORTUNITIES FUND
Class A $ 49,810,293 $ 11.89 4,187,879
Class B 47,224,661 11.47 4,118,043
Class C 73,547,411 11.41 6,444,787
Class I 1,600,415 12.13 131,892
Class Q 4,885,448 11.98 407,820
Total MidCap Opportunities Fund $177,068,228 15,290,421
PRO FORMA - MIDCAP OPPORTUNITIES
FUND INCLUDING GROWTH + VALUE FUND
AND GROWTH OPPORTUNITIES FUND(1)
Class A $147,338,600 $ 11.89 12,390,428
Class B 218,221,825 11.47 19,026,253
Class C 150,612,262 11.41 13,198,937
Class I 53,992,977 12.13 4,451,147
Class Q 5,134,901 11.98 428,642
Total Pro Forma MidCap Opportunities Fund $575,300,565 49,495,407
- ------------------
(1) Capitalization table does not include one time Reorganization related
expenses estimated at $175,000.
GENERAL INFORMATION ABOUT THE PROXY STATEMENT
SOLICITATION OF PROXIES
Solicitation of proxies is being made primarily by the mailing of the
Notice and this Proxy Statement with its enclosures on or about February 9,
2004. Shareholders of Growth + Value Fund and Growth Opportunities Fund whose
shares are held by nominees, such as brokers, can vote their proxies by
contacting their respective nominee. In addition to the solicitation of proxies
by mail, employees of ING Investments and its affiliates, without additional
compensation, may solicit proxies in person or by telephone, telegraph,
facsimile, or oral communications. Growth + Value Fund and Growth Opportunities
Fund have retained Georgeson Shareholder Communications, Inc. (the "Solicitor"),
a professional proxy solicitation firm, to assist with any necessary
solicitation of proxies. The estimated cost of the proxy solicitation is
$190,000. ING Investments will bear half the cost of the proxy solicitation. Of
the proxy solicitation expenses allocated to the Funds, each Fund will bear a
pro rata portion based on its relative net assets immediately prior to the
closing of the Reorganization. Shareholders of Growth + Value Fund and Growth
Opportunities Fund may receive a telephone call from the professional proxy
solicitation firm asking the shareholder to vote.
In all cases where a proxy is solicited by telephone, the Solicitor is
required to ask the person to provide identifying registration data, including
full name and address, and, if known, the number of shares owned. If the
shareholder is a corporation or other entity, the Solicitor will ask for the
title of the person and for confirmation that the person is authorized to direct
the voting of the shares. The Solicitor will advise the shareholder that the
shareholder can vote his or her shares over the telephone and will ask if the
shareholder would like to cast a vote. Although the Solicitor's representative
is permitted to answer questions about the process, he or she is not permitted
to recommend to the shareholder how to vote, other than to read any
recommendation set forth in the Proxy
21
Statement/Prospectus. The Solicitor will then record the shareholder's
instructions on the Proxy Card. Within 72 hours, the shareholder will be sent a
confirmation of his or her vote asking the shareholder to call the Solicitor
immediately if his or her instructions are not correctly reflected in the
confirmation.
If a shareholder wishes to participate in the Special Meeting, but does
not wish to give a proxy by telephone, the shareholder may still submit the
proxy originally sent with the Proxy Statement/Prospectus, attend in person or
vote online. Should shareholders require additional information regarding the
proxy or require replacement of the proxy, they may contact the Solicitor
toll-free at 1-866-889-0072.
A shareholder may revoke the accompanying proxy at any time prior to
its use by filing with Growth + Value Fund or Growth Opportunities Fund, a
written revocation or duly executed proxy bearing a later date. In addition, any
shareholder who attends the Special Meeting in person may vote by ballot at the
Special Meeting, thereby canceling any proxy previously given. The persons named
in the accompanying proxy will vote as directed by the proxy, but in the absence
of voting directions in any proxy that is signed and returned, they intend to
vote "FOR" the Reorganization proposals and may vote in their discretion with
respect to other matters not now known to the Board of Trustees of ING Equity
Trust or ING Mayflower Trust that may be presented at the Special Meeting.
VOTING RIGHTS
Shareholders of Growth + Value Fund and Growth Opportunities Fund are
entitled to one vote for each share held as to any matter on which you are
entitled to vote and for each fractional share that you own, you shall be
entitled to a proportionate fractional vote. Shares have no preemptive or
subscription rights.
Only shareholders of Growth + Value Fund and Growth Opportunities Fund
at the close of business on January 6, 2004 (the "Record Date") will be entitled
to be present and give voting instructions for Growth + Value Fund and Growth
Opportunities Fund at the Special Meeting with respect to their shares owned as
of that Record Date. As of the Record Date, [______] shares of Growth + Value
Fund and [______] shares of Growth Opportunities Fund were outstanding and
entitled to vote.
Approval of each Reorganization Agreement requires the affirmative vote
of the holders of a majority of the shares of the Acquired Fund. Holders of a
majority of outstanding shares present in person or by proxy shall constitute a
quorum. In the absence of a quorum, a majority of outstanding shares entitled to
vote present in person or by proxy may adjourn the meeting from time to time
until a quorum is present.
If a shareholder abstains from voting as to any matter, or if a broker
returns a "non-vote" proxy, indicating a lack of authority to vote on a matter,
the shares represented by the abstention or non-vote will be deemed present at
the Special Meeting for purposes of determining a quorum. However, abstentions
and broker non-votes will not be deemed represented at the Special Meeting for
purposes of calculating the vote on any matter. For this reason, with respect to
matters requiring the affirmative majority of the total shares outstanding, an
abstention or broker non-vote will have the effect of a vote against the
Reorganization.
The Acquired Funds expect that, before the Special Meeting,
broker-dealer firms holding shares of the Fund in "street name" for their
customers will request voting instructions from their customers and beneficial
owners. If these instructions are not received by the date specified in the
broker-dealer firms' proxy solicitation materials, the Funds understand that the
broker-dealers that are members of the New York Stock Exchange may consider
whether the rules of the New York Stock Exchange permit the broker-dealers to
vote on the items to be considered at the Special Meeting on behalf of their
customers and beneficial owners. If permitted, such broker-dealers may so vote.
To the knowledge of ING Investments, as of [____], 2004, no current
Trustee owns 1% or more of the outstanding shares of the Funds, and the officers
and Trustees own, as a group, less than 1% of the shares of the Funds.
APPENDIX E hereto lists the persons that, as of [____], 2004, owned
beneficially or of record 5% or more of the outstanding shares of any Class of
the Funds.
22
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
Growth + Value Fund and Growth Opportunities Fund do not know of any
matters to be presented at the Special Meeting other than those described in
this Proxy Statement/Prospectus. If other business should properly come before
the Special Meeting, the proxyholders will vote thereon in accordance with their
best judgment.
SHAREHOLDER PROPOSALS
Neither Growth + Value Fund nor Growth Opportunities Fund is required
to hold regular annual meetings and, in order to minimize its costs, does not
intend to hold meetings of shareholders unless so required by applicable law,
regulation, regulatory policy or if otherwise deemed advisable by Growth + Value
Fund's nor Growth Opportunities Fund's management. Therefore, it is not
practicable to specify a date by which shareholder proposals must be received in
order to be incorporated in an upcoming proxy statement for an annual meeting.
REPORTS TO SHAREHOLDERS
ING Investments will furnish, without charge, a copy of the most recent
Annual Report regarding the Funds and any more recent Semi-Annual Report
succeeding the Annual Report, if any, on request. Requests for such reports
should be directed in writing to a Fund at ING Funds, 7337 East Doubletree Ranch
Road, Scottsdale, Arizona 85258-2034 or by calling Shareholder Services at
1-800-992-0180.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE SPECIAL MEETING MAY BE
ASSURED, PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
/s/ Huey P. Falgout
---------------------
Huey P. Falgout, Jr.
Secretary
February 9, 2004
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258-2034
23
APPENDIX A
REPORT FOR ING MIDCAP OPPORTUNITIES FUND
Set forth below is an excerpt from ING MidCap Opportunities Fund's
Annual Report, dated May 31, 2003, regarding the Fund's performance.
PORTFOLIO MANAGEMENT: A team of investment professionals led by Matthew
Price, CFA and David Campbell, ING Investments, LLC.*
GOAL: The ING MidCap Opportunities Fund (the "Fund") seeks long-term
capital appreciation by investing primarily in the common stock of mid-sized
U.S. companies.
MARKET OVERVIEW: The U.S. equity markets declined during the year
ending May 31, 2003. For the period, the Russell MidCap Growth index declined
5.84%. Mid-sized stocks were not alone in their decline. The Russell 2000 Growth
index fell 9.59%, the S&P 500 was down 8.06% and the Dow Jones Industrials
dropped 8.90%. The NASDAQ Composite, down 1.23%, held up a little better
following its steep drop in the two preceding years.
The results for the six months ending May 31, 2003 were more encouraging. The
Russell MidCap Growth index advanced 10.00% during the six-month period. Indeed,
the returns for the latest three months ended May 31, 2003 were even better. In
the three-month period, the Russell MidCap Growth index moved up 19.27%. We
think that a major part of this advance can be attributed to a resurgence in
those stocks that were most beaten-up over the last several years. We expect,
though, that as this speculation broadens out, the advance may become more
sustainable, albeit somewhat less explosive.
PERFORMANCE: For the year ended May 31, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of -8.91% compared to
the Russell Mid Cap Growth Index for which the total return was -5.84% and the
S&P MidCap 400 Index for which the total return was -9.14%.
PORTFOLIO SPECIFICS: In the semi annual report we stated that the Fund
outperformed the index in the first half year and this was primarily due to
stock selection in the transportation, telecommunications and financial sectors.
In the six months since the date of the semi-annual report, the Fund returned
4.01% and the index 10.00%. During this period, the source of the
underperformance was mainly stock selection in the Healthcare and Industrials
sectors. We estimate that these accounted for approximately half of the
underperformance. Sector selection also detracted from performance. We held on
average an over weight in Technology, which was a laggard for most of the period
and were underweight in the Healthcare sector, which was relatively strong. Over
the last six months, sector weights underwent significant change with the
substantial over weight in Technology taken to an underweight and the under
weight in Healthcare stocks reduced considerably.
MARKET OUTLOOK: After several years of declines, the stock market
appeared to be in a recovery mode from mid-March through the end of May 2003.
This seemed in part to reflect some improvement in corporate profit trends; in
addition the market's advance may well have reflected investors' increasing
optimism about the economy's growth later this year and into 2004.
There are reasons to believe that the conditions are favorable for both the
economy and for common stocks. The combination of low interest rates (with the
possibility of even further Federal Reserve loosening) and stimulative tax cuts
could well spur an acceleration of the economy. And inflation certainly is not
an imminent concern, notwithstanding the toll that energy prices are taking on
the economy.
The Fund's investment discipline is not dependent on the forecast for the
economy. The Fund will build a diversified portfolio of mostly smaller common
stocks selected for their growth prospects, reasonable valuation, and evidence
of relative strength.
* A team of investment professionals led by Matthew Price, CFA and David
Campbell, ING Investments, LLC assumed responsibility for the Fund on April 21,
2003.
A-1
8/20/98 5/31/99 5/31/00 5/31/01 5/31/02 5/31/03
------- ------- ------- ------- ------- -------
ING MidCap Opportunities Fund Class A
With Sales Charge $ 9,425 $14,581 $24,651 $18,865 $14,375 $13,094
ING MidCap Opportunities Fund Class A
Without Sales Charge $10,000 $15,470 $26,155 $20,016 $15,252 $13,893
S&P MidCap 400 Index $10,000 $14,218 $17,268 $19,154 $19,612 $17,820
Russell MidCap Growth Index $10,000 $14,521 $20,869 $15,801 $13,091 $12,326
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED MAY 31, 2003
---------------------------------------------------------------
SINCE INCEPTION
1 YEAR 8/20/98
------ -------
Including Sales Charge:
Class A(1) -14.16% 5.80%
Class B(2) -14.04% 6.14%
Class C(3) -10.38% 6.38%
Excluding Sales Charge:
Class A -8.91% 7.12%
Class B -9.51% 6.47%
Class C -9.47% 6.38%
Russell MidCap Growth Index(4) -5.84% 4.50%(5)
S&P MidCap 400 Index -9.14% 12.93%(5)
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of ING MidCap Opportunities Fund against the S&P MidCap 400 Index.
The Index has no cash in its portfolio, imposes no sales charges and incurs no
operating expenses. An investor cannot invest directly in an index. The Fund's
performance is shown both with and without the imposition of sales charges.
Performance graph and table do not reflect the deduction of taxes that a
shareholder will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND
WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
This report contains statements that may be "forward-looking" statements.
Actual results may differ materially from those projected in the
"forward-looking" statements.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS,
ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO
MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
Fund holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% and 2%,
respectively, for the 1 year and since inception returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) The Fund normally invests in mid-cap companies that the portfolio managers
feel have above average prospects for growth. The Russell MidCap Growth
Index tracks the performance of mid-cap growth companies.
(5) Since inception performance for the index is shown from 9/1/98.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. In exchange for higher growth potential, investing in
stocks of mid-size companies may entail greater price volatility than investing
in stocks of larger companies. From time to time, the stock market may not
favor the mid-cap growth securities in which the Fund invests.
* * * *
A-2
APPENDIX B-1
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 11th day of November, 2003, by and between ING Equity Trust, a
Massachusetts business trust with its principal place of business at 7337 East
Doubletree Ranch Road, Scottsdale, Arizona 85258-2034, on behalf of one of its
series, ING MidCap Opportunities Fund (the "Acquiring Fund"), and on behalf of
another of its series, ING Growth Opportunities Fund (the "Acquired Fund").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer of all of the
assets of the Acquired Fund to the Acquiring Fund in exchange solely for Class
A, Class B, Class C, Class I and Class Q voting shares of beneficial interest of
the Acquiring Fund (the "Acquiring Fund Shares"), the assumption by the
Acquiring Fund of all liabilities of the Acquired Fund, and the distribution of
the Acquiring Fund Shares to the shareholders of the Acquired Fund in complete
liquidation of the Acquired Fund as provided herein, all upon the terms and
conditions hereinafter set forth in this Agreement.
WHEREAS, the Acquired Fund and the Acquiring Fund are series of
open-end, registered investment companies of the management type and the
Acquired Fund owns securities which generally are assets of the character in
which the Acquiring Fund is permitted to invest;
WHEREAS, the Trustees of ING Equity Trust have determined that the
exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares and
the assumption of all liabilities of the Acquired Fund by the Acquiring Fund is
in the best interests of the Acquiring Fund and its shareholders and that the
interests of the existing shareholders of the Acquiring Fund would not be
diluted as a result of this transaction; and
WHEREAS, the Trustees of ING Equity Trust have determined that the
exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares and
the assumption of all liabilities of the Acquired Fund by the Acquiring Fund is
in the best interests of the Acquired Fund and its shareholders and that the
interests of the existing shareholders of the Acquired Fund would not be diluted
as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND IN
EXCHANGE FOR THE ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED
FUND LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED FUND
1.1. Subject to the requisite approval of the Acquired Fund
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer all of the Acquired Fund's assets, as set forth in paragraph
1.2, to the Acquiring Fund, and the Acquiring Fund agrees in exchange therefor:
(i) to deliver to the Acquired Fund the number of full and fractional Class A,
Class B, Class C, Class I and Class Q Acquiring Fund Shares determined by
dividing the value of the Acquired Fund's net assets with respect to each class,
computed in the manner and as of the time and date set forth in paragraph 2.1,
by the net asset value of one Acquiring Fund Share of the same class, computed
in the manner and as of the time and date set forth in paragraph 2.2; and (ii)
to assume all liabilities of the Acquired Fund, as set forth in paragraph 1.3.
Such transactions shall take place at the closing provided for in paragraph 3.1
(the "Closing").
1.2. The assets of the Acquired Fund to be acquired by the
Acquiring Fund shall consist of all assets and property, including, without
limitation, all cash, securities, commodities and futures interests and
dividends or interests receivable that are owned by the Acquired Fund and any
deferred or prepaid expenses shown as an asset on
B-1
the books of the Acquired Fund on the closing date provided for in paragraph 3.1
(the "Closing Date") (collectively, "Assets").
1.3. The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Acquiring Fund shall
also assume all of the liabilities of the Acquired Fund, whether accrued or
contingent, known or unknown, existing at the Valuation Date, as defined in
paragraph 2.1 (collectively, "Liabilities"). On or as soon as practicable prior
to the Closing Date, the Acquired Fund will declare and pay to its shareholders
of record one or more dividends and/or other distributions so that it will have
distributed substantially all (and in no event less than 98%) of its investment
company taxable income (computed without regard to any deduction for dividends
paid) and realized net capital gain, if any, for the current taxable year
through the Closing Date.
1.4. Immediately after the transfer of assets provided for in
paragraph 1.1, the Acquired Fund will distribute to the Acquired Fund's
shareholders of record with respect to each class of its shares, determined as
of immediately after the close of business on the Closing Date (the "Acquired
Fund Shareholders"), on a pro rata basis within that class, the Acquiring Fund
Shares of the same class received by the Acquired Fund pursuant to paragraph
1.1, and will completely liquidate. Such distribution and liquidation will be
accomplished, with respect to each class of the Acquired Fund's shares, by the
transfer of the Acquiring Fund Shares then credited to the account of the
Acquired Fund on the books of the Acquiring Fund to open accounts on the share
records of the Acquiring Fund in the names of the Acquired Fund Shareholders.
The aggregate net asset value of Class A, Class B, Class C, Class I and Class Q
Acquiring Fund Shares to be so credited to Class A, Class B, Class C, Class I
and Class Q Acquired Fund Shareholders shall, with respect to each class, be
equal to the aggregate net asset value of the Acquired Fund shares of that same
class owned by such shareholders on the Closing Date. All issued and outstanding
shares of the Acquired Fund will simultaneously be canceled on the books of the
Acquired Fund, although share certificates representing interests in Class A,
Class B, Class C, Class I and Class Q shares of the Acquired Fund will represent
a number of the same class of Acquiring Fund Shares after the Closing Date, as
determined in accordance with Section 2.3. The Acquiring Fund shall not issue
certificates representing the Class A, Class B, Class C, Class I and Class Q
Acquiring Fund Shares in connection with such exchange.
1.5. Ownership of Acquiring Fund Shares will be shown on the books
of the Acquiring Fund's transfer agent, as defined in paragraph 3.3.
1.6. Any reporting responsibility of the Acquired Fund including,
but not limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the U.S. Securities and Exchange Commission
(the "Commission"), any state securities commission, and any federal, state or
local tax authorities or any other relevant regulatory authority, is and shall
remain the responsibility of the Acquired Fund.
2. VALUATION
2.1. The value of the Assets shall be the value computed as of
immediately after the close of business of the New York Stock Exchange and after
the declaration of any dividends on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation procedures in the
then-current prospectus and statement of additional information with respect to
the Acquiring Fund, and valuation procedures established by the Acquiring Fund's
Board of Trustees.
2.2. The net asset value of a Class A, Class B, Class C, Class I
and Class Q Acquiring Fund Share shall be the net asset value per share computed
with respect to that class as of the Valuation Date, using the valuation
procedures set forth in the Acquiring Fund's then-current prospectus and
statement of additional and valuation procedures established by the Acquiring
Fund's Board of Trustees.
2.3. The number of the Class A, Class B, Class C, Class I and Class
Q Acquiring Fund Shares to be issued (including fractional shares, if any) in
exchange for the Acquired Fund's assets shall be determined with respect to each
such class by dividing the value of the net assets with respect to the Class A,
Class B, Class C, Class I and Class Q shares of the Acquired Fund, as the case
may be, determined using the same valuation procedures referred to in paragraph
2.1, by the net asset value of an Acquiring Fund Share, determined in accordance
with paragraph 2.2.
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2.4. All computations of value shall be made by the Acquired Fund's
designated record keeping agent and shall be subject to review by Acquiring
Fund's record keeping agent and by each Fund's respective independent
accountants.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be April [__], 2004, or such other date
as the parties may agree. All acts taking place at the Closing shall be deemed
to take place simultaneously as of immediately after the close of business on
the Closing Date unless otherwise agreed to by the parties. The close of
business on the Closing Date shall be as of 4:00 p.m., Eastern Time. The Closing
shall be held at the offices of the Acquiring Fund or at such other time and/or
place as the parties may agree.
3.2. The Acquired Fund shall direct Bank of New York, as custodian
for the Acquired Fund (the "Custodian"), to deliver, at the Closing, a
certificate of an authorized officer stating that (i) the Assets shall have been
delivered in proper form to the Acquiring Fund within two business days prior to
or on the Closing Date, and (ii) all necessary taxes in connection with the
delivery of the Assets, including all applicable federal and state stock
transfer stamps, if any, have been paid or provision for payment has been made.
The Acquired Fund's portfolio securities represented by a certificate or other
written instrument shall be presented for examination by the Acquired Fund
Custodian to the custodian for the Acquiring Fund no later than five business
days preceding the Closing Date, and shall be transferred and delivered by the
Acquired Fund as of the Closing Date for the account of the Acquiring Fund duly
endorsed in proper form for transfer in such condition as to constitute good
delivery thereof. The Custodian shall deliver as of the Closing Date by book
entry, in accordance with the customary practices of the Custodian and any
securities depository (as defined in Rule 17f-4 under the Investment Company Act
of 1940, as amended (the "1940 Act")) in which the Acquired Fund's Assets are
deposited, the Acquired Fund's portfolio securities and instruments deposited
with such depositories. The cash to be transferred by the Acquired Fund shall be
delivered by wire transfer of federal funds on the Closing Date.
3.3. The Acquired Fund shall direct DST Systems, Inc. (the
"Transfer Agent"), on behalf of the Acquired Fund, to deliver at the Closing a
certificate of an authorized officer stating that its records contain the names
and addresses of the Acquired Fund Shareholders and the number and percentage
ownership of outstanding Class A, Class B, Class C, Class I and Class Q shares
owned by each such shareholder immediately prior to the Closing. The Acquiring
Fund shall issue and deliver a confirmation evidencing the Acquiring Fund Shares
to be credited on the Closing Date to the Secretary of the Acquiring Fund, or
provide evidence satisfactory to the Acquired Fund that such Acquiring Fund
Shares have been credited to the Acquired Fund's account on the books of the
Acquiring Fund. At the Closing each party shall deliver to the other such bills
of sale, checks, assignments, share certificates, if any, receipts or other
documents as such other party or its counsel may reasonably request.
3.4. In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Acquiring Fund or the Acquired Fund shall be closed to trading or trading
thereupon shall be restricted, or (b) trading or the reporting of trading on
such Exchange or elsewhere shall be disrupted so that, in the judgment of the
Board of Trustees of the Acquired Fund or the Acquiring Fund, accurate appraisal
of the value of the net assets of the Acquiring Fund or the Acquired Fund is
impracticable, the Closing Date shall be postponed until the first business day
after the day when trading shall have been fully resumed and reporting shall
have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1. Except as has been disclosed to the Acquiring Fund in a
written instrument executed by an officer of ING Equity Trust on behalf of the
Acquired Fund, represents and warrants to the Acquiring Fund as follows:
(a) The Acquired Fund is duly organized as a series of ING Equity
Trust, which is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, with power under
ING Equity Trust's Declaration of Trust to own all of its properties and assets
and to carry on its business as it is now being conducted;
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(b) ING Equity Trust is a registered investment company classified
as a management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act, and the registration of
shares of the Acquired Fund under the Securities Act of 1933, as amended ("1933
Act"), is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired Fund of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act")
and the 1940 Act and such as may be required by state securities laws;
(d) The current prospectus and statement of additional information
of the Acquired Fund and each prospectus and statement of additional information
of the Acquired Fund used during the three years previous to the date of this
Agreement conforms or conformed at the time of its use in all material respects
to the applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not or did not at the time
of its use include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading;
(e) On the Closing Date, the Acquired Fund will have good and
marketable title to the Assets and full right, power, and authority to sell,
assign, transfer and deliver such Assets hereunder free of any liens or other
encumbrances, and upon delivery and payment for such Assets, the Acquiring Fund
will acquire good and marketable title thereto, subject to no restrictions on
the full transfer thereof, including such restrictions as might arise under the
1933 Act, other than as disclosed to the Acquiring Fund;
(f) The Acquired Fund is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of ING Equity Trust's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
ING Equity Trust, on behalf of the Acquired Fund, is a party or by which it is
bound, or (ii) the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract, lease, judgment
or decree to which ING Equity Trust, on behalf of the Acquired Fund, is a party
or by which it is bound;
(g) All material contracts or other commitments of the Acquired
Fund (other than this Agreement and certain investment contracts including
options, futures, and forward contracts) will terminate without liability to the
Acquired Fund prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by
ING Equity Trust, on behalf of the Acquiring Fund, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to its knowledge, threatened against
the Acquired Fund or any of its properties or assets that, if adversely
determined, would materially and adversely affect its financial condition or the
conduct of its business. ING Equity Trust, on behalf of the Acquired Fund, knows
of no facts which might form the basis for the institution of such proceedings
and is not a party to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially and adversely
affects its business or its ability to consummate the transactions herein
contemplated;
(i) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets, and Schedule of Investments of the
Acquired Fund at May 31, 2003 have been audited by KPMG LLP, independent
auditors, and are in accordance with generally accepted accounting principles in
the United States ("GAAP") consistently applied, and such statements (copies of
which have been furnished to the Acquiring Fund) present fairly, in all material
respects, the financial condition of the Acquired Fund as of such date in
accordance with GAAP, and there are no known contingent liabilities of the
Acquired Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed therein;
(j) Since May 31, 2003, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquired Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Acquiring Fund. For the purposes of this
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subparagraph (j), a decline in net asset value per share of the Acquired Fund
due to declines in market values of securities in the Acquired Fund's portfolio,
the discharge of Acquired Fund liabilities, or the redemption of Acquired Fund
Shares by shareholders of the Acquired Fund shall not constitute a material
adverse change;
(k) On the Closing Date, all Federal and other tax returns,
dividend reporting forms, and other tax-related reports of the Acquired Fund
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Acquired Fund's knowledge, no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
(l) For each taxable year of its operation (including the taxable
year ending on the Closing Date), the Acquired Fund has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company, has been (or will be) eligible to and has computed (or will
compute) its federal income tax under Section 852 of the Code, and will have
distributed all of its investment company taxable income and net capital gain
(as defined in the Code) that has accrued through the Closing Date, and before
the Closing Date will have declared dividends sufficient to distribute all of
its investment company taxable income and net capital gain for the period ending
on the Closing Date;
(m) All issued and outstanding shares of the Acquired Fund are,
and on the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable (recognizing that, under Massachusetts law, it is
theoretically possible that shareholders of the Acquiring Fund could, under
certain circumstances, be held personally liable for obligations of the
Acquiring Fund) and have been offered and sold in every state and the District
of Columbia in compliance in all material respects with applicable registration
requirements of the 1933 Act and state securities laws. All of the issued and
outstanding shares of the Acquired Fund will, at the time of Closing, be held by
the persons and in the amounts set forth in the records of the Transfer Agent,
on behalf of the Acquired Fund, as provided in paragraph 3.3. The Acquired Fund
does not have outstanding any options, warrants or other rights to subscribe for
or purchase any of the shares of the Acquired Fund, nor is there outstanding any
security convertible into any of the Acquired Fund shares;
(n) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action, if
any, on the part of the Trustees of ING Equity Trust, on behalf of the Acquired
Fund, and, subject to the approval of the shareholders of the Acquired Fund,
this Agreement will constitute a valid and binding obligation of the Acquired
Fund, enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(o) The information to be furnished by the Acquired Fund for use
in registration statements, proxy materials and other documents filed or to be
filed with any federal, state or local regulatory authority (including the
National Association of Securities Dealers, Inc.), which may be necessary in
connection with the transactions contemplated hereby, shall be accurate and
complete in all material respects and shall comply in all material respects with
Federal securities and other laws and regulations thereunder applicable thereto;
and
(p) The proxy statement of the Acquired Fund (the "Proxy
Statement") to be included in the Registration Statement referred to in
paragraph 5.6, insofar as it relates to the Acquired Fund, will, on the
effective date of the Registration Statement and on the Closing Date (i) not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not materially
misleading provided, however, that the representations and warranties in this
subparagraph (p) shall not apply to statements in or omissions from the Proxy
Statement and the Registration Statement made in reliance upon and in conformity
with information that was furnished by the Acquiring Fund for use therein, and
(ii) comply in all material respects with the provisions of the 1933 Act, the
1934 Act and the 1940 Act and the rules and regulations thereunder.
4.2. Except as has been disclosed to the Acquired Fund in a written
instrument executed by an officer of ING Equity Trust, ING Equity Trust, on
behalf of the Acquiring Fund, represents and warrants to the Acquired Fund as
follows:
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(a) The Acquiring Fund is duly organized as a series of ING Equity
Trust, which is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, with power under
ING Equity Trust's Declaration of Trust to own all of its properties and assets
and to carry on its business as it is now being conducted;
(b) ING Equity Trust is a registered investment company classified
as a management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act and the registration of
the shares of the Acquired Fund under the 1933 Act, is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring Fund of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by state
securities laws;
(d) The current prospectus and statement of additional information
of the Acquiring Fund and each prospectus and statement of additional
information of the Acquiring Fund used during the three years previous to the
date of this Agreement conforms or conformed at the time of its use in all
material respects to the applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission thereunder and does not or
did not at the time of its use include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not materially misleading;
(e) On the Closing Date, the Acquiring Fund will have good and
marketable title to the Acquiring Fund's assets, free of any liens of other
encumbrances, except those liens or encumbrances as to which the Acquired Fund
has received notice and necessary documentation at or prior to the Closing;
(f) The Acquiring Fund is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of ING Equity Trust's Declaration of Trust or By-Laws or of
any agreement, indenture, instrument, contract, lease or other undertaking to
which ING Equity Trust, on behalf of the Acquiring Fund, is a party or by which
it is bound, or (ii) the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which ING Equity Trust, on behalf of the Acquiring Fund,
is a party or by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by
ING Equity Trust, on behalf of the Acquired Fund, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to its knowledge, threatened against
ING Equity Trust, on behalf of the Acquiring Fund, or any of the Acquiring
Fund's properties or assets that, if adversely determined, would materially and
adversely affect the Acquiring Fund's financial condition or the conduct of the
Acquiring Fund's business. ING Equity Trust, on behalf of the Acquiring Fund,
knows of no facts which might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects its business or its ability to consummate the transactions
herein contemplated;
(h) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets and Schedule of Investments of the
Acquiring Fund at May 31, 2003 have been audited by KPMG LLP, independent
auditors, and are in accordance with GAAP consistently applied, and such
statements (copies of which have been furnished to the Acquired Fund) present
fairly, in all material respects, the financial condition of the Acquiring Fund
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Acquiring Fund required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein;
(i) Since May 31, 2003, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Acquired Fund. For purposes of this subparagraph (i), a
decline in net asset value per share of the Acquiring Fund due to declines in
market values of
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securities in the Acquiring Fund's portfolio, the discharge of Acquiring Fund
liabilities, or the redemption of Acquiring Fund Shares by shareholders of the
Acquiring Fund, shall not constitute a material adverse change;
(j) On the Closing Date, all Federal and other tax returns,
dividend reporting forms, and other tax-related reports of the Acquiring Fund
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Acquiring Fund's knowledge no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
(k) For each taxable year of its operation (including the taxable
year that includes the Closing Date), the Acquiring Fund has met (or will meet)
the requirements of Subchapter M of the Code for qualification as a regulated
investment company, has been eligible to (or will be eligible to) and has
computed (or will compute) its federal income tax under Section 852 of the Code,
and has distributed all of its investment company taxable income and net capital
gain (as defined in the Code) for periods ending prior to the Closing Date;
(l) All issued and outstanding Acquiring Fund Shares are, and on
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by ING Equity Trust and have been offered and sold in every
state and the District of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act and state securities laws.
The Acquiring Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any Acquiring Fund Shares, nor is there
outstanding any security convertible into any Acquiring Fund Shares;
(m) The execution, delivery and performance of this Agreement will
have been fully authorized prior to the Closing Date by all necessary action, if
any, on the part of the Trustees of ING Equity Trust, on behalf of the Acquiring
Fund, and this Agreement will constitute a valid and binding obligation of the
Acquiring Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(n) The Class A, Class B, Class C, Class I and Class Q Acquiring
Fund Shares to be issued and delivered to the Acquired Fund, for the account of
the Acquired Fund Shareholders, pursuant to the terms of this Agreement, will on
the Closing Date have been duly authorized and, when so issued and delivered,
will be duly and validly issued Acquiring Fund Shares, and will be fully paid
and non-assessable;
(o) The information to be furnished by ING Equity Trust for use in
the registration statements, proxy materials and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto; and
(p) That insofar as it relates to the Acquiring Fund, the
Registration Statement relating to the Acquiring Fund Shares issuable hereunder,
and the proxy materials of the Acquired Fund to be included in the Registration
Statement, and any amendment or supplement to the foregoing, will, from the
effective date of the Registration Statement through the date of the meeting of
shareholders of the Acquired Fund contemplated therein (i) not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading, provided,
however, that the representations and warranties in this subparagraph (p) shall
not apply to statements in or omissions from the Registration Statement made in
reliance upon and in conformity with information that was furnished by the
Acquired Fund for use therein, and (ii) comply in all material respects with the
provisions of the 1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1. The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing Date, it
being understood that such ordinary course of business will include
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the declaration and payment of customary dividends and distributions, and any
other distribution that may be advisable.
5.2. The Acquired Fund will call a meeting of the shareholders of
the Acquired Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
5.3. The Acquired Fund covenants that the Class A, Class B, Class
C, Class I and Class Q Acquiring Fund Shares to be issued hereunder are not
being acquired for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
5.4. The Acquired Fund will assist the Acquiring Fund in obtaining
such information as the Acquiring Fund reasonably requests concerning the
beneficial ownership of the Acquired Fund shares.
5.5. Subject to the provisions of this Agreement, the Acquiring
Fund and the Acquired Fund will each take, or cause to be taken, all action, and
do or cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.6. The Acquired Fund will provide the Acquiring Fund with
information reasonably necessary for the preparation of a prospectus (the
"Prospectus") which will include the Proxy Statement referred to in paragraph
4.1(p), all to be included in a Registration Statement on Form N-14 of the
Acquiring Fund (the "Registration Statement"), in compliance with the 1933 Act,
the 1934 Act and the 1940 Act, in connection with the meeting of the
shareholders of the Acquired Fund to consider approval of this Agreement and the
transactions contemplated herein.
5.7. As soon as is reasonably practicable after the Closing, the
Acquired Fund will make a liquidating distribution to its shareholders
consisting of the Class A, Class B, Class C, Class I and Class Q Acquiring Fund
Shares received at the Closing.
5.8. The Acquiring Fund and the Acquired Fund shall each use its
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this Agreement as promptly
as practicable.
5.9. ING Equity Trust, on behalf of the Acquired Fund, covenants
that ING Equity Trust will, from time to time, as and when reasonably requested
by the Acquiring Fund, execute and deliver or cause to be executed and delivered
all such assignments and other instruments, and will take or cause to be taken
such further action as ING Equity Trust, on behalf of the Acquiring Fund, may
reasonably deem necessary or desirable in order to vest in and confirm (a) the
ING Equity Trust's, on behalf of the Acquired Fund's, title to and possession of
the Acquiring Fund's Shares to be delivered hereunder, and (b) ING Equity
Trust's, on behalf of the Acquiring Fund's, title to and possession of all the
assets and otherwise to carry out the intent and purpose of this Agreement.
5.10. The Acquiring Fund will use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act and such
of the state blue sky or securities laws as may be necessary in order to
continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of ING Equity Trust, on behalf of the Acquired Fund, to
consummate the transactions provided for herein shall be subject, at ING Equity
Trust's election, to the performance by ING Equity Trust, on behalf of the
Acquiring Fund, of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions:
6.1. All representations and warranties of ING Equity Trust, on
behalf of the Acquiring Fund, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and as of the Closing
Date;
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6.2. ING Equity Trust, on behalf of the Acquiring Fund, shall have
delivered to ING Equity Trust, on behalf of the Acquired Fund, a certificate
executed in its name by its President or Vice President and its Treasurer or
Assistant Treasurer, in a form reasonably satisfactory to ING Equity Trust, on
behalf of the Acquired Fund, and dated as of the Closing Date, to the effect
that the representations and warranties of ING Equity Trust, on behalf of the
Acquiring Fund, made in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the transactions contemplated by
this Agreement and as to such other matters as ING Equity Trust, on behalf of
the Acquired Fund, shall reasonably request;
6.3. ING Equity Trust, on behalf of the Acquiring Fund, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by ING Equity Trust, on
behalf of the Acquiring Fund, on or before the Closing Date; and
6.4. The Acquired Fund and the Acquiring Fund shall have agreed on
the number of full and fractional Acquiring Fund Shares of each Class to be
issued in connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of ING Equity Trust, on behalf of the Acquiring Fund,
to complete the transactions provided for herein shall be subject, at ING Equity
Trust's election, on behalf of the Acquiring Fund, to the performance by ING
Equity Trust, on behalf of the Acquired Fund, of all of the obligations to be
performed by it hereunder on or before the Closing Date and, in addition
thereto, the following conditions:
7.1. All representations and warranties of ING Equity Trust, on
behalf of the Acquired Fund, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and as of the Closing
Date;
7.2. The ING Equity Trust, on behalf of the Acquired Fund, shall
have delivered to the Acquiring Fund a statement of the Acquired Fund's assets
and liabilities, as of the Closing Date, certified by the Treasurer of ING
Equity Trust;
7.3. The ING Equity Trust, on behalf of the Acquired Fund, shall
have delivered to the Acquiring Fund on the Closing Date a certificate executed
in its name by its President or Vice President and its Treasurer or Assistant
Treasurer, in form and substance satisfactory to ING Equity Trust, on behalf of
the Acquiring Fund, and dated as of the Closing Date, to the effect that the
representations and warranties of ING Equity Trust, on behalf of the Acquired
Fund, made in this Agreement are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated by this
Agreement, and as to such other matters as ING Equity Trust, on behalf of the
Acquiring Fund, shall reasonably request;
7.4. ING Equity Trust, on behalf of the Acquired Fund, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by ING Equity Trust, on
behalf of the Acquired Fund, on or before the Closing Date;
7.5. The Acquired Fund and the Acquiring Fund shall have agreed on
the number of full and fractional Acquiring Fund Shares of each class to be
issued in connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1; and
7.6. The Acquired Fund shall have declared and paid a distribution
or distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing; and (ii) any undistributed investment company
taxable income and net realized capital gains from any period to the extent not
otherwise already distributed.
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8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE ACQUIRED FUND
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to ING Equity Trust, on behalf of the
Acquired Fund, or ING Equity Trust, on behalf of the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1. The Agreement and the transactions contemplated herein shall
have been approved by the requisite vote of the holders of the outstanding
shares of the Acquired Fund in accordance with the provisions of ING Equity
Trust's Declaration of Trust, By-Laws, applicable Massachusetts law and the 1940
Act, and certified copies of the resolutions evidencing such approval shall have
been delivered to the Acquiring Fund. Notwithstanding anything herein to the
contrary, neither the ING Equity Trust, on behalf of the Acquiring Fund, nor the
ING Equity Trust, on behalf of the Acquired Fund, may waive the conditions set
forth in this paragraph 8.1;
8.2. On the Closing Date no action, suit or other proceeding shall
be pending or, to its knowledge, threatened before any court or governmental
agency in which it is sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions contemplated
herein;
8.3. All consents of other parties and all other consents, orders
and permits of Federal, state and local regulatory authorities deemed necessary
by ING Equity Trust, on behalf of the Acquiring Fund, or ING Equity Trust, on
behalf of the Acquired Fund, to permit consummation, in all material respects,
of the transactions contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve a risk of
a material adverse effect on the assets or properties of the Acquiring Fund or
the Acquired Fund, provided that either party hereto may for itself waive any of
such conditions;
8.4. The Registration Statement shall have become effective under
the 1933 Act and no stop orders suspending the effectiveness thereof shall have
been issued and, to the best knowledge of the parties hereto, no investigation
or proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act; and
8.5. The parties shall have received the opinion of Dechert
addressed to ING Equity Trust, on behalf of the Acquired Fund, and ING Equity
Trust, on behalf of the Acquiring Fund, substantially to the effect that, based
upon certain facts, assumptions, and representations, the transaction
contemplated by this Agreement shall constitute a tax-free reorganization for
Federal income tax purposes. The delivery of such opinion is conditioned upon
receipt by Dechert of representations it shall request of ING Equity Trust, on
behalf of the Acquiring Fund, and ING Equity Trust, on behalf of the Acquired
Fund. Notwithstanding anything herein to the contrary, neither ING Equity Trust,
on behalf of the Acquiring Fund, nor ING Equity Trust, on behalf of the Acquired
Fund, may waive the condition set forth in this paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
9.1. ING Equity Trust, on behalf of the Acquiring Fund, and ING
Equity Trust, on behalf of the Acquired Fund, represent and warrant to each
other that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
9.2. The expenses relating to the proposed Reorganization will be
shared so that (1) half of such costs are borne by the investment adviser to the
Acquiring Fund, and (2) half are borne by the Acquired and Acquiring Funds and
will be paid by the Acquired Fund and Acquiring Fund pro rata based upon the
relative net assets of the Acquired Fund and the Acquiring Fund as of the close
of business on the Closing Date. The costs of the Reorganization shall include,
but not be limited to, costs associated with obtaining any necessary order of
exemption from the 1940 Act, preparation of the Registration Statement, printing
and distributing the Acquiring Fund's prospectus and the Acquired Fund's proxy
materials, legal fees, accounting fees, securities registration fees, and
expenses of holding shareholders' meetings. Notwithstanding any of the
foregoing, expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of such
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expenses would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1. ING Equity Trust, on behalf of the Acquired Fund, and ING
Equity Trust, on behalf of the Acquiring Fund, agree that neither party has made
any representation, warranty or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties.
10.2. The representations, warranties and covenants contained in
this Agreement or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated
hereunder. The covenants to be performed after the Closing shall survive the
Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by either party by (i) mutual agreement of the parties,
or (ii) by either party if the Closing shall not have occurred on or before July
31, 2004, unless such date is extended by mutual agreement of the parties, or
(iii) by either party if the other party shall have materially breached its
obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective Trustees or officers,
except for any such material breach or intentional misrepresentation, as to each
of which all remedies at law or in equity of the party adversely affected shall
survive.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be deemed necessary or advisable by the authorized officers of ING Equity
Trust, on behalf of the Acquiring Fund, and ING Equity Trust, on behalf of the
Acquired Fund; provided, however, that following the meeting of the shareholders
of the Acquired Fund called by the ING Equity Trust pursuant to paragraph 5.2 of
this Agreement, no such amendment may have the effect of changing the provisions
for determining the number of the Class A, Class B, and Class C, Class I and
Class Q Acquiring Fund Shares to be issued to the Acquired Fund Shareholders
under this Agreement to the detriment of such shareholders without their further
approval.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, personal service or prepaid or certified mail addressed to ING Equity
Trust, on behalf of the Acquiring Fund. or ING Equity Trust, on behalf of the
Acquired Fund, 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258-2034,
attn: Huey P. Falgout, Jr., in each case with a copy to Dechert LLP, 1775 I
Street, N.W., Washington, D.C. 20006, attn: Jeffrey S. Puretz.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
14.1. The Article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
14.3. This Agreement shall be governed by and construed in
accordance with the laws of the State of Massachusetts without regard to its
principles of conflicts of laws.
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14.4. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
14.5. It is expressly agreed that the obligations of the parties
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of ING Equity Trust personally, but shall bind
only the trust property of the Acquired Fund, as provided in the Declaration of
Trust of ING Equity Trust. The execution and delivery by such officers shall not
be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
such party.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its President or Vice President and its seal to be affixed thereto
and attested by its Secretary or Assistant Secretary.
ING EQUITY TRUST on behalf of its
ING MIDCAP OPPORTUNITIES FUND series
Attest:
____________________________________ By:_________________________________
Secretary
Title:______________________________
ING EQUITY TRUST on behalf of its
ING GROWTH OPPORTUNITIES FUND series
Attest:
____________________________________ By:_________________________________
Secretary
Title:______________________________
B-13
APPENDIX B-2
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 11th day of November, 2003, by and between ING Equity Trust, a
Massachusetts business trust with its principal place of business at 7337 East
Doubletree Ranch Road, Scottsdale, Arizona 85258-2034, on behalf of its series,
ING MidCap Opportunities Fund (the "Acquiring Fund"), and ING Mayflower Trust, a
Massachusetts business trust with its principal place of business at 7337 East
Doubletree Ranch Road, Scottsdale, Arizona 85258-2034, on behalf of another of
its series, ING Growth + Value Fund (the "Acquired Fund").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer of all of the
assets of the Acquired Fund to the Acquiring Fund in exchange solely for Class
A, Class B, Class C and Class Q voting shares of beneficial interest of the
Acquiring Fund (the "Acquiring Fund Shares"), the assumption by the Acquiring
Fund of all liabilities of the Acquired Fund, and the distribution of the
Acquiring Fund Shares to the shareholders of the Acquired Fund in complete
liquidation of the Acquired Fund as provided herein, all upon the terms and
conditions hereinafter set forth in this Agreement.
WHEREAS, the Acquired Fund and the Acquiring Fund are series of
open-end, registered investment companies of the management type and the
Acquired Fund owns securities which generally are assets of the character in
which the Acquiring Fund is permitted to invest;
WHEREAS, the Trustees of ING Equity Trust have determined that the
exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares and
the assumption of all liabilities of the Acquired Fund by the Acquiring Fund is
in the best interests of the Acquiring Fund and its shareholders and that the
interests of the existing shareholders of the Acquiring Fund would not be
diluted as a result of this transaction; and
WHEREAS, the Trustees of ING Mayflower Equity Trust have determined
that the exchange of all of the assets of the Acquired Fund for Acquiring Fund
Shares and the assumption of all liabilities of the Acquired Fund by the
Acquiring Fund is in the best interests of the Acquired Fund and its
shareholders and that the interests of the existing shareholders of the Acquired
Fund would not be diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND IN
EXCHANGE FOR THE ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED
FUND LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED FUND
1.1. Subject to the requisite approval of the Acquired Fund
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer all of the Acquired Fund's assets, as set forth in paragraph
1.2, to the Acquiring Fund, and the Acquiring Fund agrees in exchange therefor:
(i) to deliver to the Acquired Fund the number of full and fractional Class A,
Class B, Class C and Class Q Acquiring Fund Shares determined by dividing the
value of the Acquired Fund's net assets with respect to each class, computed in
the manner and as of the time and date set forth in paragraph 2.1, by the net
asset value of one Acquiring Fund Share of the same class, computed in the
manner and as of the time and date set forth in paragraph 2.2; and (ii) to
assume all liabilities of the Acquired Fund, as set forth in paragraph 1.3. Such
transactions shall take place at the closing provided for in paragraph 3.1 (the
"Closing").
1.2. The assets of the Acquired Fund to be acquired by the
Acquiring Fund shall consist of all assets and property, including, without
limitation, all cash, securities, commodities and futures interests and
dividends or interests receivable that are owned by the Acquired Fund and any
deferred or prepaid expenses shown as an asset on
B-1
the books of the Acquired Fund on the closing date provided for in paragraph 3.1
(the "Closing Date") (collectively, "Assets").
1.3. The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Acquiring Fund shall
also assume all of the liabilities of the Acquired Fund, whether accrued or
contingent, known or unknown, existing at the Valuation Date, as defined in
paragraph 2.1 (collectively, "Liabilities"). On or as soon as practicable prior
to the Closing Date, the Acquired Fund will declare and pay to its shareholders
of record one or more dividends and/or other distributions so that it will have
distributed substantially all (and in no event less than 98%) of its investment
company taxable income (computed without regard to any deduction for dividends
paid) and realized net capital gain, if any, for the current taxable year
through the Closing Date.
1.4. Immediately after the transfer of assets provided for in
paragraph 1.1, the Acquired Fund will distribute to the Acquired Fund's
shareholders of record with respect to each class of its shares, determined as
of immediately after the close of business on the Closing Date (the "Acquired
Fund Shareholders"), on a pro rata basis within that class, the Acquiring Fund
Shares of the same class received by the Acquired Fund pursuant to paragraph
1.1, and will completely liquidate. Such distribution and liquidation will be
accomplished, with respect to each class of the Acquired Fund's shares, by the
transfer of the Acquiring Fund Shares then credited to the account of the
Acquired Fund on the books of the Acquiring Fund to open accounts on the share
records of the Acquiring Fund in the names of the Acquired Fund Shareholders.
The aggregate net asset value of Class A, Class B, Class C and Class Q Acquiring
Fund Shares to be so credited to Class A, Class B, Class C and Class Q Acquired
Fund Shareholders shall, with respect to each class, be equal to the aggregate
net asset value of the Acquired Fund shares of that same class owned by such
shareholders on the Closing Date. All issued and outstanding shares of the
Acquired Fund will simultaneously be canceled on the books of the Acquired Fund,
although share certificates representing interests in Class A, Class B, Class C
and Class Q shares of the Acquired Fund will represent a number of the same
class of Acquiring Fund Shares after the Closing Date, as determined in
accordance with Section 2.3. The Acquiring Fund shall not issue certificates
representing the Class A, Class B, Class C and Class Q Acquiring Fund Shares in
connection with such exchange.
1.5. Ownership of Acquiring Fund Shares will be shown on the books
of the Acquiring Fund's transfer agent, as defined in paragraph 3.3.
1.6. Any reporting responsibility of the Acquired Fund including,
but not limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the U.S. Securities and Exchange Commission
(the "Commission"), any state securities commission, and any federal, state or
local tax authorities or any other relevant regulatory authority, is and shall
remain the responsibility of the Acquired Fund.
2. VALUATION
2.1. The value of the Assets shall be the value computed as of
immediately after the close of business of the New York Stock Exchange and after
the declaration of any dividends on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation procedures in the
then-current prospectus and statement of additional information with respect to
the Acquiring Fund, and valuation procedures established by the Acquiring Fund's
Board of Trustees.
2.2. The net asset value of a Class A, Class B, Class C and Class Q
Acquiring Fund Share shall be the net asset value per share computed with
respect to that class as of the Valuation Date, using the valuation procedures
set forth in the Acquiring Fund's then-current prospectus and statement of
additional and valuation procedures established by the Acquiring Fund's Board of
Trustees.
2.3. The number of the Class A, Class B, Class C and Class Q
Acquiring Fund Shares to be issued (including fractional shares, if any) in
exchange for the Acquired Fund's assets shall be determined with respect to each
such class by dividing the value of the net assets with respect to the Class A,
Class B, Class C and Class Q shares of the Acquired Fund, as the case may be,
determined using the same valuation procedures referred to in paragraph 2.1, by
the net asset value of an Acquiring Fund Share, determined in accordance with
paragraph 2.2.
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2.4. All computations of value shall be made by the Acquired Fund's
designated record keeping agent and shall be subject to review by Acquiring
Fund's record keeping agent and by each Fund's respective independent
accountants.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be April [__], 2004, or such other date
as the parties may agree. All acts taking place at the Closing shall be deemed
to take place simultaneously as of immediately after the close of business on
the Closing Date unless otherwise agreed to by the parties. The close of
business on the Closing Date shall be as of 4:00 p.m., Eastern Time. The Closing
shall be held at the offices of the Acquiring Fund or at such other time and/or
place as the parties may agree.
3.2. The Acquired Fund shall direct Bank of New York, as custodian
for the Acquired Fund (the "Custodian"), to deliver, at the Closing, a
certificate of an authorized officer stating that (i) the Assets shall have been
delivered in proper form to the Acquiring Fund within two business days prior to
or on the Closing Date, and (ii) all necessary taxes in connection with the
delivery of the Assets, including all applicable federal and state stock
transfer stamps, if any, have been paid or provision for payment has been made.
The Acquired Fund's portfolio securities represented by a certificate or other
written instrument shall be presented for examination by the Acquired Fund
Custodian to the custodian for the Acquiring Fund no later than five business
days preceding the Closing Date, and shall be transferred and delivered by the
Acquired Fund as of the Closing Date for the account of the Acquiring Fund duly
endorsed in proper form for transfer in such condition as to constitute good
delivery thereof. The Custodian shall deliver as of the Closing Date by book
entry, in accordance with the customary practices of the Custodian and any
securities depository (as defined in Rule 17f-4 under the Investment Company Act
of 1940, as amended (the "1940 Act")) in which the Acquired Fund's Assets are
deposited, the Acquired Fund's portfolio securities and instruments deposited
with such depositories. The cash to be transferred by the Acquired Fund shall be
delivered by wire transfer of federal funds on the Closing Date.
3.3. The Acquired Fund shall direct DST Systems, Inc. (the
"Transfer Agent"), on behalf of the Acquired Fund, to deliver at the Closing a
certificate of an authorized officer stating that its records contain the names
and addresses of the Acquired Fund Shareholders and the number and percentage
ownership of outstanding Class A, Class B, Class C and Class Q shares owned by
each such shareholder immediately prior to the Closing. The Acquiring Fund shall
issue and deliver a confirmation evidencing the Acquiring Fund Shares to be
credited on the Closing Date to the Secretary of the Acquiring Fund, or provide
evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have
been credited to the Acquired Fund's account on the books of the Acquiring Fund.
At the Closing each party shall deliver to the other such bills of sale, checks,
assignments, share certificates, if any, receipts or other documents as such
other party or its counsel may reasonably request.
3.4. In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Acquiring Fund or the Acquired Fund shall be closed to trading or trading
thereupon shall be restricted, or (b) trading or the reporting of trading on
such Exchange or elsewhere shall be disrupted so that, in the judgment of the
Board of Trustees of the Acquired Fund or the Bond of Trustees of the Acquiring
Fund, accurate appraisal of the value of the net assets of the Acquiring Fund or
the Acquired Fund is impracticable, the Closing Date shall be postponed until
the first business day after the day when trading shall have been fully resumed
and reporting shall have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1. Except as has been disclosed to the Acquiring Fund in a
written instrument executed by an officer of ING Mayflower Trust on behalf of
the Acquired Fund, represents and warrants to ING Equity Trust, on behalf of the
Acquiring Fund, as follows:
(a) The Acquired Fund is duly organized as a series of ING
Mayflower Trust, which is a business trust duly organized, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts, with power
under ING Mayflower Trust's Declaration of Trust to own all of its properties
and assets and to carry on its business as it is now being conducted;
B-3
(b) ING Mayflower Trust is a registered investment company
classified as a management company of the open-end type, and its registration
with the Commission as an investment company under the 1940 Act, and the
registration of shares of the Acquired Fund under the Securities Act of 1933, as
amended ("1933 Act"), is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired Fund of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act")
and the 1940 Act and such as may be required by state securities laws;
(d) The current prospectus and statement of additional information
of the Acquired Fund and each prospectus and statement of additional information
of the Acquired Fund used during the three years previous to the date of this
Agreement conforms or conformed at the time of its use in all material respects
to the applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not or did not at the time
of its use include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading;
(e) On the Closing Date, the Acquired Fund will have good and
marketable title to the Assets and full right, power, and authority to sell,
assign, transfer and deliver such Assets hereunder free of any liens or other
encumbrances, and upon delivery and payment for such Assets, the Acquiring Fund
will acquire good and marketable title thereto, subject to no restrictions on
the full transfer thereof, including such restrictions as might arise under the
1933 Act, other than as disclosed to the Acquiring Fund;
(f) The Acquired Fund is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of ING Mayflower Trust's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
ING Mayflower Trust, on behalf of the Acquired Fund, is a party or by which it
is bound, or (ii) the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract, lease, judgment
or decree to which ING Mayflower Trust, on behalf of the Acquired Fund, is a
party or by which it is bound;
(g) All material contracts or other commitments of the Acquired
Fund (other than this Agreement and certain investment contracts including
options, futures, and forward contracts) will terminate without liability to the
Acquired Fund prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by
ING Equity Trust, on behalf of the Acquiring Fund, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to its knowledge, threatened against
the Acquired Fund or any of its properties or assets that, if adversely
determined, would materially and adversely affect its financial condition or the
conduct of its business. ING Mayflower Trust, on behalf of the Acquired Fund,
knows of no facts which might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects its business or its ability to consummate the transactions
herein contemplated;
(i) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets, and Schedule of Investments of the
Acquired Fund at May 31, 2003 have been audited by KPMG LLP, independent
auditors, and are in accordance with generally accepted accounting principles in
the United States ("GAAP") consistently applied, and such statements (copies of
which have been furnished to the Acquiring Fund) present fairly, in all material
respects, the financial condition of the Acquired Fund as of such date in
accordance with GAAP, and there are no known contingent liabilities of the
Acquired Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed therein;
(j) Since May 31, 2003, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquired Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Acquiring Fund. For the purposes of this
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subparagraph (j), a decline in net asset value per share of the Acquired Fund
due to declines in market values of securities in the Acquired Fund's portfolio,
the discharge of Acquired Fund liabilities, or the redemption of Acquired Fund
Shares by shareholders of the Acquired Fund shall not constitute a material
adverse change;
(k) On the Closing Date, all Federal and other tax returns,
dividend reporting forms, and other tax-related reports of the Acquired Fund
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Acquired Fund's knowledge, no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
(l) For each taxable year of its operation (including the taxable
year ending on the Closing Date), the Acquired Fund has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company, has been (or will be) eligible to and has computed (or will
compute) its federal income tax under Section 852 of the Code, and will have
distributed all of its investment company taxable income and net capital gain
(as defined in the Code) that has accrued through the Closing Date, and before
the Closing Date will have declared dividends sufficient to distribute all of
its investment company taxable income and net capital gain for the period ending
on the Closing Date;
(m) All issued and outstanding shares of the Acquired Fund are,
and on the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable (recognizing that, under Massachusetts law, it is
theoretically possible that shareholders of the Acquiring Fund could, under
certain circumstances, be held personally liable for obligations of the
Acquiring Fund) and have been offered and sold in every state and the District
of Columbia in compliance in all material respects with applicable registration
requirements of the 1933 Act and state securities laws. All of the issued and
outstanding shares of the Acquired Fund will, at the time of Closing, be held by
the persons and in the amounts set forth in the records of the Transfer Agent,
on behalf of the Acquired Fund, as provided in paragraph 3.3. The Acquired Fund
does not have outstanding any options, warrants or other rights to subscribe for
or purchase any of the shares of the Acquired Fund, nor is there outstanding any
security convertible into any of the Acquired Fund shares;
(n) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action, if
any, on the part of the Trustees of ING Mayflower Trust, on behalf of the
Acquired Fund, and, subject to the approval of the shareholders of the Acquired
Fund, this Agreement will constitute a valid and binding obligation of the
Acquired Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(o) The information to be furnished by the Acquired Fund for use
in registration statements, proxy materials and other documents filed or to be
filed with any federal, state or local regulatory authority (including the
National Association of Securities Dealers, Inc.), which may be necessary in
connection with the transactions contemplated hereby, shall be accurate and
complete in all material respects and shall comply in all material respects with
Federal securities and other laws and regulations thereunder applicable thereto;
and
(p) The proxy statement of the Acquired Fund (the "Proxy
Statement") to be included in the Registration Statement referred to in
paragraph 5.6, insofar as it relates to the Acquired Fund, will, on the
effective date of the Registration Statement and on the Closing Date (i) not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not materially
misleading provided, however, that the representations and warranties in this
subparagraph (p) shall not apply to statements in or omissions from the Proxy
Statement and the Registration Statement made in reliance upon and in conformity
with information that was furnished by the Acquiring Fund for use therein, and
(ii) comply in all material respects with the provisions of the 1933 Act, the
1934 Act and the 1940 Act and the rules and regulations thereunder.
4.2. Except as has been disclosed to the Acquired Fund in a written
instrument executed by an officer of ING Equity Trust, ING Equity Trust, on
behalf of the Acquiring Fund, represents and warrants to ING Mayflower Trust as
follows:
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(a) The Acquiring Fund is duly organized as a series of ING Equity
Trust, which is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, with power under
ING Equity Trust's Declaration of Trust to own all of its properties and assets
and to carry on its business as it is now being conducted;
(b) ING Equity Trust is a registered investment company classified
as a management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act and the registration of
the shares of the Acquired Fund under the 1933 Act, is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring Fund of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by state
securities laws;
(d) The current prospectus and statement of additional information
of the Acquiring Fund and each prospectus and statement of additional
information of the Acquiring Fund used during the three years previous to the
date of this Agreement conforms or conformed at the time of its use in all
material respects to the applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission thereunder and does not or
did not at the time of its use include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not materially misleading;
(e) On the Closing Date, the Acquiring Fund will have good and
marketable title to the Acquiring Fund's assets, free of any liens of other
encumbrances, except those liens or encumbrances as to which the Acquired Fund
has received notice and necessary documentation at or prior to the Closing;
(f) The Acquiring Fund is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of ING Equity Trust's Declaration of Trust or By-Laws or of
any agreement, indenture, instrument, contract, lease or other undertaking to
which ING Equity Trust, on behalf of the Acquiring Fund, is a party or by which
it is bound, or (ii) the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which ING Equity Trust, on behalf of the Acquiring Fund,
is a party or by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by
ING Mayflower Trust, on behalf of the Acquired Fund, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to its knowledge, threatened against
ING Equity Trust, on behalf of the Acquiring Fund, or any of the Acquiring
Fund's properties or assets that, if adversely determined, would materially and
adversely affect the Acquiring Fund's financial condition or the conduct of the
Acquiring Fund's business. ING Equity Trust, on behalf of the Acquiring Fund,
knows of no facts which might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects its business or its ability to consummate the transactions
herein contemplated;
(h) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets and Schedule of Investments of the
Acquiring Fund at May 31, 2003 have been audited by KPMG LLP, independent
auditors, and are in accordance with GAAP consistently applied, and such
statements (copies of which have been furnished to the Acquired Fund) present
fairly, in all material respects, the financial condition of the Acquiring Fund
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Acquiring Fund required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein;
(i) Since May 31, 2003, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Acquired Fund. For purposes of this subparagraph (i), a
decline in net asset value per share of the Acquiring Fund due to declines in
market values of
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securities in the Acquiring Fund's portfolio, the discharge of Acquiring Fund
liabilities, or the redemption of Acquiring Fund Shares by shareholders of the
Acquiring Fund, shall not constitute a material adverse change;
(j) On the Closing Date, all Federal and other tax returns,
dividend reporting forms, and other tax-related reports of the Acquiring Fund
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Acquiring Fund's knowledge no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
(k) For each taxable year of its operation (including the taxable
year that includes the Closing Date), the Acquiring Fund has met (or will meet)
the requirements of Subchapter M of the Code for qualification as a regulated
investment company, has been eligible to (or will be eligible to) and has
computed (or will compute) its federal income tax under Section 852 of the Code,
and has distributed all of its investment company taxable income and net capital
gain (as defined in the Code) for periods ending prior to the Closing Date;
(l) All issued and outstanding Acquiring Fund Shares are, and on
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by ING Equity Trust and have been offered and sold in every
state and the District of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act and state securities laws.
The Acquiring Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any Acquiring Fund Shares, nor is there
outstanding any security convertible into any Acquiring Fund Shares;
(m) The execution, delivery and performance of this Agreement will
have been fully authorized prior to the Closing Date by all necessary action, if
any, on the part of the Trustees of ING Equity Trust, on behalf of the Acquiring
Fund, and this Agreement will constitute a valid and binding obligation of the
Acquiring Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(n) The Class A, Class B, Class C and Class Q Acquiring Fund
Shares to be issued and delivered to the Acquired Fund, for the account of the
Acquired Fund Shareholders, pursuant to the terms of this Agreement, will on the
Closing Date have been duly authorized and, when so issued and delivered, will
be duly and validly issued Acquiring Fund Shares, and will be fully paid and
non-assessable;
(o) The information to be furnished by ING Equity Trust for use in
the registration statements, proxy materials and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto; and
(p) That insofar as it relates to the Acquiring Fund, the
Registration Statement relating to the Acquiring Fund Shares issuable hereunder,
and the proxy materials of the Acquired Fund to be included in the Registration
Statement, and any amendment or supplement to the foregoing, will, from the
effective date of the Registration Statement through the date of the meeting of
shareholders of the Acquired Fund contemplated therein (i) not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading, provided,
however, that the representations and warranties in this subparagraph (p) shall
not apply to statements in or omissions from the Registration Statement made in
reliance upon and in conformity with information that was furnished by the
Acquired Fund for use therein, and (ii) comply in all material respects with the
provisions of the 1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1. The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing Date, it
being understood that such ordinary course of business will include
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the declaration and payment of customary dividends and distributions, and any
other distribution that may be advisable.
5.2. The Acquired Fund will call a meeting of the shareholders of
the Acquired Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
5.3. The Acquired Fund covenants that the Class A, Class B, Class C
and Class Q Acquiring Fund Shares to be issued hereunder are not being acquired
for the purpose of making any distribution thereof, other than in accordance
with the terms of this Agreement.
5.4. The Acquired Fund will assist the Acquiring Fund in obtaining
such information as the Acquiring Fund reasonably requests concerning the
beneficial ownership of the Acquired Fund shares.
5.5. Subject to the provisions of this Agreement, the Acquiring
Fund and the Acquired Fund will each take, or cause to be taken, all action, and
do or cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.6. The Acquired Fund will provide the Acquiring Fund with
information reasonably necessary for the preparation of a prospectus (the
"Prospectus") which will include the Proxy Statement referred to in paragraph
4.1(p), all to be included in a Registration Statement on Form N-14 of the
Acquiring Fund (the "Registration Statement"), in compliance with the 1933 Act,
the 1934 Act and the 1940 Act, in connection with the meeting of the
shareholders of the Acquired Fund to consider approval of this Agreement and the
transactions contemplated herein.
5.7. As soon as is reasonably practicable after the Closing, the
Acquired Fund will make a liquidating distribution to its shareholders
consisting of the Class A, Class B, Class C and Class Q Acquiring Fund Shares
received at the Closing.
5.8. The Acquiring Fund and the Acquired Fund shall each use its
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this Agreement as promptly
as practicable.
5.9. ING Mayflower Trust, on behalf of the Acquired Fund, covenants
that ING Mayflower Trust will, from time to time, as and when reasonably
requested by the Acquiring Fund, execute and deliver or cause to be executed and
delivered all such assignments and other instruments, and will take or cause to
be taken such further action as ING Equity Trust, on behalf of the Acquiring
Fund, may reasonably deem necessary or desirable in order to vest in and confirm
(a) the ING Mayflower Trust's, on behalf of the Acquired Fund's, title to and
possession of the Acquiring Fund's Shares to be delivered hereunder, and (b) ING
Equity Trust's, on behalf of the Acquiring Fund's, title to and possession of
all the assets and otherwise to carry out the intent and purpose of this
Agreement.
5.10. The Acquiring Fund will use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act and such
of the state blue sky or securities laws as may be necessary in order to
continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of ING Mayflower Trust, on behalf of the Acquired Fund,
to consummate the transactions provided for herein shall be subject, at ING
Equity Trust's election, to the performance by ING Equity Trust, on behalf of
the Acquiring Fund, of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions:
6.1. All representations and warranties of ING Equity Trust, on
behalf of the Acquiring Fund, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and as of the Closing
Date;
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6.2. ING Equity Trust, on behalf of the Acquiring Fund, shall have
delivered to ING Mayflower Trust, on behalf of the Acquired Fund, a certificate
executed in its name by its President or Vice President and its Treasurer or
Assistant Treasurer, in a form reasonably satisfactory to ING Mayflower Trust,
on behalf of the Acquired Fund, and dated as of the Closing Date, to the effect
that the representations and warranties of ING Equity Trust, on behalf of the
Acquiring Fund, made in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the transactions contemplated by
this Agreement and as to such other matters as ING Mayflower Trust, on behalf of
the Acquired Fund, shall reasonably request;
6.3. ING Equity Trust, on behalf of the Acquiring Fund, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by ING Equity Trust, on
behalf of the Acquiring Fund, on or before the Closing Date; and
6.4. The Acquired Fund and the Acquiring Fund shall have agreed on
the number of full and fractional Acquiring Fund Shares of each Class to be
issued in connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of ING Equity Trust, on behalf of the Acquiring Fund,
to complete the transactions provided for herein shall be subject, at ING Equity
Trust's election, on behalf of the Acquiring Fund, to the performance by ING
Mayflower Trust, on behalf of the Acquired Fund, of all of the obligations to be
performed by it hereunder on or before the Closing Date and, in addition
thereto, the following conditions:
7.1. All representations and warranties of ING Mayflower Trust, on
behalf of the Acquired Fund, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and as of the Closing
Date;
7.2. The ING Mayflower Trust, on behalf of the Acquired Fund, shall
have delivered to the Acquiring Fund a statement of the Acquired Fund's assets
and liabilities, as of the Closing Date, certified by the Treasurer of ING
Equity Trust;
7.3. The ING Mayflower Trust, on behalf of the Acquired Fund, shall
have delivered to the Acquiring Fund on the Closing Date a certificate executed
in its name by its President or Vice President and its Treasurer or Assistant
Treasurer, in form and substance satisfactory to ING Equity Trust, on behalf of
the Acquiring Fund, and dated as of the Closing Date, to the effect that the
representations and warranties of ING Mayflower Trust, on behalf of the Acquired
Fund, made in this Agreement are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated by this
Agreement, and as to such other matters as ING Equity Trust, on behalf of the
Acquiring Fund, shall reasonably request;
7.4. ING Mayflower Trust, on behalf of the Acquired Fund, shall
have performed all of the covenants and complied with all of the provisions
required by this Agreement to be performed or complied with by ING Mayflower
Trust, on behalf of the Acquired Fund, on or before the Closing Date;
7.5. The Acquired Fund and the Acquiring Fund shall have agreed on
the number of full and fractional Acquiring Fund Shares of each class to be
issued in connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1; and
7.6. The Acquired Fund shall have declared and paid a distribution
or distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing; and (ii) any undistributed investment company
taxable income and net realized capital gains from any period to the extent not
otherwise already distributed.
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8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE ACQUIRED FUND
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to ING Mayflower Trust, on behalf of the
Acquired Fund, or ING Equity Trust, on behalf of the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1. The Agreement and the transactions contemplated herein shall
have been approved by the requisite vote of the holders of the outstanding
shares of the Acquired Fund in accordance with the provisions of ING Mayflower
Trust's Declaration of Trust, By-Laws, applicable Massachusetts law and the 1940
Act, and certified copies of the resolutions evidencing such approval shall have
been delivered to the Acquiring Fund. Notwithstanding anything herein to the
contrary, neither the ING Equity Trust, on behalf of the Acquiring Fund, nor the
ING Mayflower Trust, on behalf of the Acquired Fund, may waive the conditions
set forth in this paragraph 8.1;
8.2. On the Closing Date no action, suit or other proceeding shall
be pending or, to its knowledge, threatened before any court or governmental
agency in which it is sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions contemplated
herein;
8.3. All consents of other parties and all other consents, orders
and permits of Federal, state and local regulatory authorities deemed necessary
by ING Equity Trust, on behalf of the Acquiring Fund, or ING Mayflower Trust, on
behalf of the Acquired Fund, to permit consummation, in all material respects,
of the transactions contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve a risk of
a material adverse effect on the assets or properties of the Acquiring Fund or
the Acquired Fund, provided that either party hereto may for itself waive any of
such conditions;
8.4. The Registration Statement shall have become effective under
the 1933 Act and no stop orders suspending the effectiveness thereof shall have
been issued and, to the best knowledge of the parties hereto, no investigation
or proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act; and
8.5. The parties shall have received the opinion of Dechert
addressed to ING Mayflower Trust, on behalf of the Acquired Fund, and ING Equity
Trust, on behalf of the Acquiring Fund, substantially to the effect that, based
upon certain facts, assumptions, and representations, the transaction
contemplated by this Agreement shall constitute a tax-free reorganization for
Federal income tax purposes. The delivery of such opinion is conditioned upon
receipt by Dechert of representations it shall request of ING Equity Trust, on
behalf of the Acquiring Fund, and ING Mayflower Trust, on behalf of the Acquired
Fund. Notwithstanding anything herein to the contrary, neither ING Equity Trust,
on behalf of the Acquiring Fund, nor ING Mayflower Trust, on behalf of the
Acquired Fund, may waive the condition set forth in this paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
9.1. ING Mayflower Trust, on behalf of the Acquired Fund, and ING
Equity Trust, on behalf of the Acquiring Fund, represent and warrant to each
other that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
9.2. The expenses relating to the proposed Reorganization will be
shared so that (1) half of such costs are borne by the investment adviser to the
Acquiring Fund, and (2) half are borne by the Acquired and Acquiring Funds and
will be paid by the Acquired Fund and Acquiring Fund pro rata based upon the
relative net assets of the Acquired Fund and the Acquiring Fund as of the close
of business on the Closing Date. The costs of the Reorganization shall include,
but not be limited to, costs associated with obtaining any necessary order of
exemption from the 1940 Act, preparation of the Registration Statement, printing
and distributing the Acquiring Fund's prospectus and the Acquired Fund's proxy
materials, legal fees, accounting fees, securities registration fees, and
expenses of holding shareholders' meetings. Notwithstanding any of the
foregoing, expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of such
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expenses would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1. ING Equity Trust, on behalf of the Acquiring Fund, and ING
Mayflower Trust, on behalf of the Acquired Fund, agree that neither party has
made any representation, warranty or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties.
10.2. The representations, warranties and covenants contained in
this Agreement or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated
hereunder. The covenants to be performed after the Closing shall survive the
Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by either party by (i) mutual agreement of the parties,
or (ii) by either party if the Closing shall not have occurred on or before July
31, 2004, unless such date is extended by mutual agreement of the parties, or
(iii) by either party if the other party shall have materially breached its
obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective Trustees or officers,
except for any such material breach or intentional misrepresentation, as to each
of which all remedies at law or in equity of the party adversely affected shall
survive.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be deemed necessary or advisable by the authorized officers of ING Equity
Trust, on behalf of the Acquiring Fund, and ING Mayflower Trust, on behalf of
the Acquired Fund; provided, however, that following the meeting of the
shareholders of the Acquired Fund called by the ING Mayflower Trust pursuant to
paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of the Class A, Class B, and
Class C and Class Q Acquiring Fund Shares to be issued to the Acquired Fund
Shareholders under this Agreement to the detriment of such shareholders without
their further approval.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, personal service or prepaid or certified mail addressed to ING
Investment Funds, Inc. or ING Equity Trust, 7337 East Doubletree Ranch Road,
Scottsdale, Arizona 85258-2034, attn: Kimberly A. Anderson, in each case with a
copy to Dechert LLP, 1775 I Street, N.W., Washington, D.C. 20006, attn: Jeffrey
S. Puretz.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
14.1. The Article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
14.3. This Agreement shall be governed by and construed in
accordance with the laws of the State of Massachusetts without regard to its
principles of conflicts of laws.
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14.4. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
14.5. It is expressly agreed that the obligations of the parties
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of ING Mayflower Trust personally, but shall bind
only the trust property of the Acquired Fund, as provided in the Declaration of
Trust of ING Mayflower Trust. The execution and delivery by such officers shall
not be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
such party.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its President or Vice President and its seal to be affixed thereto
and attested by its Secretary or Assistant Secretary.
ING EQUITY TRUST on behalf of its
ING MIDCAP OPPORTUNITIES FUND series
Attest:
______________________________ By:__________________________________
Secretary
Title:________________________________
ING MAYFLOWER TRUST on behalf of its
ING GROWTH + VALUE FUND series
Attest:
______________________________ By:__________________________________
Secretary
Title:________________________________
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APPENDIX C
ADDITIONAL INFORMATION REGARDING ING MIDCAP OPPORTUNITIES FUND
("MIDCAP OPPORTUNITIES FUND")
SHAREHOLDER GUIDE
ING PURCHASE OPTIONS(TM)
This Proxy Statement/Prospectus relates to five separate Classes of
shares of MidCap Opportunities Fund: Class A, Class B, Class C, Class I and
Class Q, each of which represents an identical interest in MidCap Opportunities
Fund's investment portfolio, but are offered with different sales charges and
distribution (Rule 12b-1) and service fee arrangements. As described below and
elsewhere in this Proxy Statement/Prospectus, the contingent deferred sales load
structure and conversion characteristics of MidCap Opportunities Fund shares
that will be issued to you in the Reorganization will be the same as those that
apply to ING Growth + Value Fund ("Growth + Value Fund") or ING Growth
Opportunities ("Growth Opportunities Fund") shares held by you immediately prior
to the Reorganization, and the period that you held shares of these Funds will
be included in the holding period of MidCap Opportunities Fund shares for
purposes of calculating any contingent deferred sales charges and determining
any conversion rights. Purchases of the shares of MidCap Opportunities Fund
after the Reorganization will be subject to the sales load structure and
conversion rights discussed below.
The sales charges and fees for each Class of shares of MidCap
Opportunities Fund are shown and contrasted in the chart below.
CLASS A CLASS B CLASS C CLASS I CLASS Q
------- ------- ------- ------- -------
Maximum Initial Sales Charge on Purchases 5.75%(1) None None None None
Contingent Deferred Sales Charge
("CDSC") None(2) 5.00%(3) 1.00%(4) None None
Annual Distribution (12b-1) and Service
Fees(5) 0.30% 1.00% 1.00% None 0.25%
Maximum Purchase Unlimited $ 250,000 Unlimited Unlimited Unlimited
Automatic Conversion to Class A N/A 8 Years(6) N/A N/A N/A
- -------------------
(1) Reduced for purchases of $50,000 and over.
(2) For investments of $1 million or more, a CDSC of no more than 1% may be
assessed on redemptions of shares that were purchased without an
initial sales charge. See "Class A Shares: Initial Sales Charge
Alternative" in this APPENDIX C.
(3) Imposed upon redemption within 6 years from purchase. Fee has scheduled
reductions after the first year. See "Class B Shares: Deferred Sales
Charge Alternative" in this APPENDIX C.
(4) Imposed upon redemption within 1 year from purchase.
(5) Annual asset-based distribution charge.
(6) Class B shares of MidCap Opportunities Fund issued to shareholders of
Growth + Value Fund or Growth Opportunities Fund in the Reorganization
will convert to Class A shares in the eighth year from the original
date of purchase of the Class B shares of Growth + Value Fund or Growth
Opportunities Fund.
The relative impact of the initial sales charges and ongoing annual
expenses will depend on the length of time a share is held. Orders for Class B
shares in excess of $250,000 will be accepted as orders for Class A shares or
declined.
CLASS A SHARES: INITIAL SALES CHARGE ALTERNATIVE. Class A shares of
MidCap Opportunities Fund are sold at the net asset value ("NAV") per share in
effect plus a sales charge as described in the following table. For waivers or
reductions of the Class A shares sales charges, see "Special Purchases Without a
Sales Charge" and "Reduced Sales Charges" below.
C-1
CLASS A SHARES(1)(2)(3)
AS A % OF THE AS A %
YOUR INVESTMENT OFFERING PRICE OF NAV
- --------------- -------------- ------
Less than $50,000 5.75% 6.10%
$50,000 - $99,999 4.50% 4.71%
$100,000 - $249,999 3.50% 3.63%
$250,000 - $499,999 2.50% 2.56%
$500,000 - $1,000,000 2.00% 2.04%
$1,000,000 and over See below
- -----------------------
(1) Shareholders that purchased funds that were part of the Lexington family
of funds at the time of purchase are not subject to sales charges for the
life of their account.
(2) Shareholders that purchased funds prior to February 2, 1998 that were a
part of the Aetna family of funds at the time of purchase, are not subject
to sales charges for the life of their account.
(3) The term "offering price" includes the front-end sales charge.
There is no initial sales charge on purchases of Class A shares of
$1,000,000 or more. However, the shares will be subject to a CDSC if they are
redeemed within one or two years of purchase, depending on the amount of the
purchase, as follows:
PERIOD DURING
YOUR INVESTMENT CDSC WHICH CDSC APPLIES
- --------------- ---- ------------------
$1,000,000 - $2,499,999 1.00% 2 years
$2,500,000 - $4,999,999 0.50% 1 year
$5,000,000 and over 0.25% 1 year
REDUCED SALES CHARGES. An investor may immediately qualify for a
reduced sales charge on a purchase of Class A shares of MidCap Opportunities
Fund or other open-end funds in the ING Funds which offer Class A shares, or
shares with front-end sales charges ("Participating Funds") by completing the
Letter of Intent section of an Application to purchase MidCap Opportunities Fund
shares. Executing the Letter of Intent expresses an intention to invest during
the next 13 months a specified amount, which, if made at one time, would qualify
for a reduced sales charge. An amount equal to the Letter of Intent amount
multiplied by the maximum sales charge imposed on purchases of the applicable
fund and class will be restricted within your account to cover additional sales
charges that may be due if your actual total investment fails to qualify for the
reduced sales charges. See the Statement of Additional Information ("SAI") for
MidCap Opportunities Fund for details on the Letter of Intent option or contact
the Shareholder Services Representative, as described below, at 1-800-992-0180
for more information.
A sales charge may also be reduced by taking into account the current
value of your existing holdings in MidCap Opportunities Fund or any other
open-end funds in the ING Fund complex (excluding ING Aeltus Money Market Fund)
("Rights of Accumulation"). The reduced sales charges apply to quantity
purchases made at one time or on a cumulative basis over any period of time. See
the SAI for MidCap Opportunities Fund for details or contact the Shareholder
Servicing Representative, as defined below, at 1-800-992-0180 for more
information.
For the purposes of Rights of Accumulation and the Letter of Intent
Privilege, shares held by investors in the ING Funds that impose a CDSC may be
combined with Class A shares for a reduced sales charge but this will not affect
any CDSC that may be imposed upon the redemption of shares of MidCap
Opportunities Fund.
SALES CHARGE WAIVERS. Class A shares may be purchased without a sales
charge by certain individuals and institutions. For additional information,
contact the Shareholder Services Representative at 1-800-992-0180, or see the
SAI for MidCap Opportunities Fund.
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CLASS B SHARES: DEFERRED SALES CHARGE ALTERNATIVE. Class B shares are
offered at their NAV per share without any initial sales charge. Class B shares
that are redeemed within six years of purchase, however, will be subject to a
CDSC as described in the table that follows. Class B shares of MidCap
Opportunities Fund are subject to distribution and service fees at an annual
rate of 1.00% of the average daily net assets of the Class, which is higher than
the distribution and service fees of Class A shares. The higher distribution and
service fees mean a higher expense ratio, so Class B shares pay correspondingly
lower dividends and may have a lower NAV than Class A shares. Orders for Class B
shares in excess of $250,000 will be accepted as orders for Class A shares or
declined. The amount of the CDSC is based on the lesser of the NAV of the Class
B shares at the time of purchase or redemption. There is no CDSC on Class B
shares acquired through the reinvestment of dividends and capital gains
distributions. The CDSCs are as follows:
YEAR OF REDEMPTION AFTER PURCHASE(1) CDSC
- --------------------------------- ----
First 5%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
After Sixth Year None
(1) Class B shares that were purchased through funds that were part of the
Northstar family of funds at the time of purchase are subject to a
different CDSC. Please see the SAI for further information.
Class B shares will automatically convert into Class A shares eight
years after purchase. Class B shares of MidCap Opportunities Fund issued in
connection with the Reorganization will convert to Class A shares eight years
after the purchase of the original shares of Growth + Value Fund or Growth
Opportunities Fund. For additional information on the CDSC and the conversion of
Class B, see MidCap Opportunities Fund's SAI.
CLASS C SHARES. Class C shares are offered at their NAV per share
without an initial sales charge. Class C shares may be subject to a CDSC of 1%
if redeemed within one year of purchase. The amount of the CDSC is based on the
lesser of the NAV of the Class C shares at the time of purchase or redemption.
There is no CDSC on Class C shares acquired through the reinvestment of
dividends and capital gains distributions.
CLASS I SHARES. Class I shares are offered at NAV without a sales
charge to qualified retirement plans, financial and other institutions and "wrap
accounts." The minimum initial investment is $1,000,000, and the minimum
subsequent investment is $100,000. The Distributor may waive these minimums from
time to time.
CLASS Q SHARES. Class Q shares are offered at NAV without a sales
charge to qualified retirement plans, financial and other institutions and "wrap
accounts." The minimum initial investment is $250,000, and the minimum
subsequent investment is $10,000. The Distributor may waive these minimums from
time to time.
WAIVERS OF CDSC. The CDSC will be waived in the following cases. In
determining whether a CDSC is applicable, it will be assumed that shares held in
the shareholder's account that are not subject to such charge are redeemed
first.
(i) The CDSC will be waived in the case of redemption following
the death or permanent disability of a shareholder if made
within one year of death or the initial determination of
permanent disability. The waiver is available only for those
shares held at the time of death or initial determination of
permanent disability.
(ii) The CDSC also may be waived for Class B and Class C shares
redeemed pursuant to a Systematic Withdrawal Plan, up to a
maximum of 12% per year of a shareholder's account value based
on the
C-3
value of the account at the time the plan is established and
annually thereafter, provided all dividends and distributions
are reinvested and the total redemptions do not exceed 12%
annually.
(iii) The CDSC also will be waived in the case of mandatory
distributions from a tax-deferred retirement plan or an IRA.
(iv) The CDSC will be waived for reinvestment of dividends and
capital gains distributions.
However, if you purchased shares that were part of the
Nicholas-Applegate Mutual Funds, you may be eligible for a CDSC waiver prior to
the mandatory distribution age.
If you think you may be eligible for a CDSC waiver, contact a
Shareholder Servicing Representative at 1-800-992-0180.
REINSTATEMENT PRIVILEGE. Class B or Class C shareholders who have
redeemed their shares in any open-end ING Fund may reinvest some or all of the
proceeds in the same share class within 90 days without a sales charge.
Reinstated Class B and Class C shares will retain their original cost and
purchase date for purposes of the CDSC. This privilege can be used only once per
calendar year. See the SAI for MidCap Opportunities Fund for details or contact
the Shareholder Servicing Representative at 1-800-992-0180 for more information.
RULE 12B-1 PLAN. MidCap Opportunities Fund has a distribution plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended
("1940 Act") applicable to Class A, Class B, Class C and Class Q shares of
MidCap Opportunities Fund ("Rule 12b-1 Plan"). Under the Rule 12b-1 Plan, ING
Funds Distributor, LLC (the "Distributor") may receive from MidCap Opportunities
Fund an annual fee in connection with the offering, sale and shareholder
servicing of MidCap Opportunities Fund's Class A, Class B , Class C and Class Q
shares.
DISTRIBUTION AND SHAREHOLDER SERVICE FEES. As compensation for services
rendered and expenses borne by the Distributor in connection with the
distribution of shares of MidCap Opportunities Fund and in connection with
services rendered to shareholders of MidCap Opportunities Fund, MidCap
Opportunities Fund pays the Distributor servicing fees and distribution fees up
to the annual rates set forth below (calculated as a percentage of MidCap
Opportunities Fund's average daily net assets attributable to that Class):
SERVICING FEE DISTRIBUTION FEE
------------- ----------------
Class A 0.00% 0.30%
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class I 0.00% 0.00%
Class Q 0.25% 0.00%
Fees paid under the Rule 12b-1 Plan may be used to cover the expenses
of the Distributor from the sale of Class A, Class B or Class C shares of MidCap
Opportunities Fund, including payments to Authorized Dealers, and for
shareholder servicing. Because these fees are paid out of MidCap Opportunities
Fund's assets on an on-going basis, over time these fees will increase the cost
of your investment and may cost you more than paying other types of sales
charges.
OTHER EXPENSES. In addition to the management fee and other fees
described previously, MidCap Opportunities Fund pays other expenses, such as
legal, audit, transfer agency and custodian fees, proxy solicitation costs and
the compensation of Trustees who are not affiliated with ING Investments, LLC
("ING Investments"). Most MidCap Opportunities Fund expenses are allocated
proportionately among all of the outstanding shares of MidCap Opportunities
Fund. However, the Rule 12b-1 Plan fees for each Class of shares are charged
proportionately only to the outstanding shares of that Class.
PURCHASING SHARES
C-4
The minimum initial investment in MidCap Opportunities Fund is $1,000
($1,000,000 for Class I shares, $250,000 for Class Q shares or $250 for IRAs),
and the minimum for additional investment in MidCap Opportunities Fund is $100
($10,000 for Class Q shares). The minimum initial investment for a
pre-authorized retirement plan is $1,000, plus monthly installments of at least
$100. MidCap Opportunities Fund reserves the right to liquidate sufficient
shares to recover annual Transfer Agent fees should the investor fail to
maintain his/her account value at a minimum of $1,000 ($10,000 for Class I
shares, $250,000 for Class Q shares or $250 for IRAs).
MidCap Opportunities Fund and the Distributor reserve the right to
reject any purchase order. Please note that cash, travelers checks, third party
checks, money orders and checks drawn on non-U.S. banks (even if payment may be
effected through a U.S. bank) will not be accepted. The ING Funds reserve the
right to waive minimum investment amounts.
CUSTOMER IDENTIFICATION. To help the government fight the funding of
terrorism and money laundering activities, Federal law requires all financial
institutions to obtain, verify and record information that identifies each
person that opens an account, and to determine whether such person that opens an
account, and to determine whether such person's name appears on government lists
of known or suspected terrorists and terrorist organizations.
What this means for you: The Fund and the Distributor must obtain the
following information for each person that opens an account:
- Name;
- Date of Birth
- Physical residential address (although post office
boxes are still permitted for mailing); and
- Social security number, taxpayer identification
number, or other identifying number.
You may also be asked to show your driver's license, passport or other
identifying documents in order to verify your identity. In addition, it may be
necessary to verify your identity by cross-referencing your identification
information with a consumer report or other electronic database. Additional
information may be required to open accounts for corporations and other
non-natural persons.
EFFECTIVE OCTOBER 1, 2003, FEDERAL LAW PROHIBITS THE FUNDS, THE
DISTRIBUTOR AND OTHER FINANCIAL INSTITUTIONS FORM OPENING ACCOUNTS UNLESS THEY
RECEIVE THE MINIMUM IDENTIFYING INFORMATION LISTED ABOVE. THEY ALSO MAY BE
REQUIRED TO CLOSE YOUR ACCOUNT IF THEY ARE UNABLE TO VERIFY YOUR IDENTITY WITHIN
A REASONABLE TIME.
MARKET TIMERS. MidCap Opportunities Fund may restrict or refuse
purchase orders, whether directly or by exchange, by market timers. "Market
timing" is defined as effective frequent trades into or out of a Fund in an
effort to anticipate or time market movements. Due to the frequent and
disruptive nature of this activity, it can adversely impact the ability of the
Adviser or Sub-Adviser to invest assets in an orderly, long-term manner, which
in turn may adversely impact the performance of MidCap Opportunities Fund.
PRICE OF SHARES. When you buy shares, you pay the NAV plus any
applicable sales charge. When you sell shares, you receive the NAV minus any
applicable deferred sales charge. Exchange orders are effected at NAV.
DETERMINATION OF NET ASSET VALUE. The NAV per share for each class of
MidCap Opportunities Fund is determined each business day as of the close of
trading on the New York Stock Exchange (usually at 4:00 p.m. Eastern Time). The
NAV per share for each class of MidCap Opportunities Fund is calculated by
taking the value of MidCap Opportunities Fund's assets attributable to that
class, subtracting MidCap Opportunities Fund's liabilities attributable to that
Class, and dividing by the number of shares of that class that are outstanding.
Because foreign securities may trade on days when MidCap Opportunities Fund does
not price shares, the NAV of MidCap Opportunities Fund may change on days when
shareholders will not be able to purchase and redeem MidCap Opportunities Fund
shares.
C-5
In general, assets are valued based on actual or estimated market
value, with special provisions for assets not having readily available market
quotations, and short-term debt securities, and for situations where market
quotations are deemed unreliable. Short-term debt securities having a maturity
of 60 days or less are valued at amortized cost, unless the amortized cost does
not approximate market value. Securities prices may be obtained from automated
pricing services. When market quotations are not readily available or are deemed
unreliable, securities are valued at their fair value as determined in good
faith under the supervision of the Board of Trustees. Valuing securities at fair
value involves greater reliance on judgment than securities that have readily
available market quotations.
PRE-AUTHORIZED INVESTMENT PLAN. You may establish a pre-authorized
investment plan to purchase shares with automatic bank account debiting. For
further information on pre-authorized investment plans, contact the Shareholder
Services Representative at 1-800-992-0180.
RETIREMENT PLANS. MidCap Opportunities Fund has available prototype
qualified retirement plans for both corporations and for self-employed
individuals. Also available are prototype IRA, Roth IRA and Simple IRA plans
(for both individuals and employers), Simplified Employee Pension Plans, Pension
and Profit Sharing Plans and Tax Sheltered Retirement Plans for employees of
public educational institutions and certain non-profit, tax-exempt
organizations. State Street Bank and Trust Company ("SSB") acts as the custodian
under these plans. For further information, contact the Shareholder Services
Representative at 1-800-992-0180. SSB currently receives a $12 custodian fee
annually for the maintenance of such accounts.
EXECUTION OF REQUESTS. Purchase and sale requests are executed at the
NAV next determined after the order is received in proper form by the Transfer
Agent or Distributor. A purchase order will be deemed to be in proper form when
all of the required steps set forth in MidCap Opportunities Fund's Prospectus
under the section "How to Purchase Shares" have been completed. If you purchase
by wire, however, the order will be deemed to be in proper form after the
telephone notification and the federal funds wire have been received. If you
purchase by wire, you must submit an application form in a timely fashion. If an
order or payment by wire is received after the close of regular trading on the
New York Stock Exchange (normally 4:00 p.m. Eastern Time), the shares will not
be credited until the next business day. For your transaction to be counted on
the day you place your order with your broker-dealer or other financial
institution, they must receive your order before 4:00 p.m. Eastern Time and
promptly transmit the order to the Transfer Agent or Distributor.
You will receive a confirmation of each new transaction in your
account, which also will show you the number of Fund shares you own including
the number of shares being held in safekeeping by the Transfer Agent for your
account. You may rely on these confirmations in lieu of certificates as evidence
of your ownership. Certificates representing shares of MidCap Opportunities Fund
will not be issued unless you request them in writing.
TELEPHONE ORDERS. MidCap Opportunities Fund and its Transfer Agent will
not be responsible for the authenticity of phone instructions or losses, if any,
resulting from unauthorized shareholder transactions if they reasonably believe
that such instructions were genuine. MidCap Opportunities Fund and its Transfer
Agent have established reasonable procedures to confirm that instructions
communicated by telephone are genuine. These procedures include recording
telephone instructions for exchanges and expedited redemptions, requiring the
caller to give certain specific identifying information, and providing written
confirmation to shareholders of record not later than five days following any
such telephone transactions. If MidCap Opportunities Fund and its Transfer Agent
do not employ these procedures, they may be liable for any losses due to
unauthorized or fraudulent telephone instructions.
EXCHANGE PRIVILEGES AND RESTRICTIONS
An exchange privilege is available. Exchange requests may be made in
writing to the Transfer Agent or by calling the Shareholder Services
Representative at 1-800-992-0180. There is no specific limit on exchange
frequency; however, MidCap Opportunities Fund is intended for long term
investment and not as a trading vehicle. ING Investments or the Distributor may
prohibit excessive exchanges (more than four per year). ING Investments reserves
the right, upon 60 days' prior notice, to cancel the exchange policy or restrict
the frequency of, otherwise modify, or impose charges of up to $5.00 upon
exchanges. The total value of shares being exchanged must at least equal the
minimum investment requirement of MidCap Opportunities Fund into which they are
being exchanged.
C-6
Shares of one class of MidCap Opportunities Fund generally may be
exchanged for shares of that same Class of any other open-end ING Fund without
payment of any additional sales charge. In most instances, if you exchange and
subsequently redeem your shares, any applicable CDSC will be based on the full
period of the share ownership. If you exchange shares of an ING Fund that at the
time you acquired the shares was a Nicholas-Applegate Mutual Fund, the shares
you receive on the exchange will be subject to the current CDSC structure and
conversion rights of the ING Fund being acquired, although the shares will
continue to age for CDSC and conversion purposes from the date the original
shares were acquired. Shareholders exercising the exchange privilege with any
other open-end ING Fund should carefully review the Prospectus of that Fund.
Exchanges of shares are sales and may result in a gain or loss for federal and
state income tax purposes. You will automatically be assigned the telephone
exchange privilege unless you mark the box on the Account Application that
signifies you do not wish to have this privilege. The exchange privilege is only
available in states where shares of MidCap Opportunities Fund being acquired may
be legally sold.
If you exchange into ING Senior Income Fund, your ability to sell or
liquidate your investment will be limited. ING Senior Income Fund is a
closed-end interval fund and does not redeem its shares on a daily basis, and it
is not expected that a secondary market for the fund's shares will develop, so
you will not be able to sell them through a broker or other investment
professional. To provide a measure of liquidity, ING Senior Income Fund will
normally make monthly repurchase offers for 5% of its outstanding common shares.
If more than 5% of the fund's common shares are tendered, you may not be able to
completely liquidate your holdings in any one month. You also would not have
liquidity between these monthly repurchase dates. Investors exercising the
exchange privilege with ING Senior Income Fund should carefully review the
prospectus of that fund. Investors may obtain a copy of the ING Senior income
Fund prospectus or any other ING prospectus by calling 1-800-992-0180.
You will automatically have the ability to request an exchange by
calling the Shareholder Service Agent at 1-800-992-0180 unless you mark the box
on the Account Application that indicates that you do not wish to have the
telephone exchange privilege. A Fund may change or cancel its exchange policies
at any time, upon 60 days' written notice to shareholders.
CDSC ON EXCHANGE INTO ING SENIOR INCOME FUND. You are not required to
pay an applicable CDSC upon any exchange from MidCap Opportunities Fund (or any
other ING Fund) into the ING Senior Income Fund. However, if you exchange into
ING Senior Income Fund and subsequently offer your shares for repurchase by that
fund, the CDSC will apply from the fund from which you exchanged. The time
period for application of the CDSC will be calculated based on the first date
you acquired your shares in MidCap Opportunities Fund (or other ING Fund).
SYSTEMATIC EXCHANGE PRIVILEGE. With an initial account balance of at
least $5,000, subject to the information and limitations outlined above, you may
elect to have a specified dollar amount of shares systematically exchanged,
monthly, quarterly, semi-annually or annually (on or about the 10th of the
applicable month), from your account to an identically registered account in the
same class of any other open-end ING Fund, except ING Lexington Money Market
Trust and ING Corporate Leaders Trust Fund. This exchange privilege may be
modified at any time or terminated upon 60 days' written notice to shareholders.
SMALL ACCOUNTS. Due to the relatively high cost of handling small
investments, MidCap Opportunities Fund reserves the right upon 30 days' written
notice to redeem, at NAV, the shares of any shareholder whose account (except
for IRAs) has a value of less than $1,000 other than as a result of a decline in
the NAV per share.
HOW TO REDEEM SHARES
Shares of MidCap Opportunities Fund will be redeemed at the NAV (less
any applicable CDSC and/or federal income tax withholding) next determined after
receipt of a redemption request in good form on any day the New York Stock
Exchange is open for business.
SYSTEMATIC WITHDRAWAL PLAN. You may elect to have monthly, quarterly,
semi-annual or annual payments in any fixed amount of $100 or more made to
yourself, or to anyone else you properly designate, as long as the account has a
current value of at least $10,000. For additional information, contact the
Shareholder Services Representative at 1-800-992-0180, or see MidCap
Opportunities Fund's SAI.
C-7
PAYMENTS. Normally, payment to shareholders for shares redeemed will be
made within three days after receipt by the Transfer Agent of a written request
in good order. MidCap Opportunities Fund has the right to take up to seven days
to pay your redemption proceeds, and may postpone payment longer in the event of
an economic emergency as determined by the SEC. When you place a request to
redeem shares for which the purchase money has not yet been collected, the
request will be executed at the next determined net asset value, but MidCap
Opportunities Fund will not release the proceeds until your purchase payment
clears. This may take up to 15 days or more. To reduce such delay, purchases
should be made by bank wire or federal funds.
MidCap Opportunities Fund normally intends to pay in cash for all shares
redeemed, but under abnormal conditions that make payment in cash unwise, the
Fund may make payment wholly or partly in securities at their then current
market value equal to the redemption price. In such case, MidCap Opportunities
Fund could elect to make payment in securities for redemptions in excess of
$250,000 or 1% of its net assets during any 90-day period for any one
shareholder. An investor may incur brokerage costs in converting such securities
to cash.
ACCOUNT ACCESS
Unless your Fund shares are held through a third-party fiduciary or in
an omnibus registration at your bank or brokerage firm, you may be able to
access your account information over the internet at www.ingfunds.com or via a
touch tone telephone by calling 1-800-992-0180 and selecting Option 1. Should
you wish to speak with a Shareholder Services Representative, you may call the
toll-free number listed above and selection Option 2.
PRIVACY POLICY
MidCap Opportunities Fund has adopted a policy concerning investor
privacy. To review the privacy policy, contact a Shareholder Services
Representative at 1-800-992-0180 and select Option 1 or obtain a policy over the
internet at www.ingfunds.com.
HOUSEHOLDING
To reduce expenses, we may mail only one copy of the Fund's prospectus
and each annual and semi-annual report to those addresses shared by two or more
accounts. If you wish to receive individual copies of these documents. please
call us at (800) 992-0180 or your financial consultant. We will begin sending
you individual copies thirty days after receiving your request.
MANAGEMENT OF MIDCAP OPPORTUNITIES FUND
INVESTMENT ADVISER. ING Investments, an Arizona limited liability
company, serves as the investment adviser to MidCap Opportunities Fund. ING
Investments provides or oversees all investment advisory and portfolio
management services for MidCap Opportunities Fund.
ING Investments has engaged a Sub-Adviser to provide the day-to-day
management of the MidCap Opportunities Fund's portfolio. The Sub-Adviser has, at
least in part, been selected on the basis of its successful application of a
consistent, well-defined and long-term investment approach over a period of
several market cycles. ING Investments is responsible for monitoring the
investment program and performance of the Sub-Adviser. Under the terms of the
sub-advisory agreement, the agreement can be terminated by either ING
Investments or the Board of Trustees of MidCap Opportunities Fund. In the event
the sub-advisory agreement is terminated, the Sub-Adviser may be replaced
subject to any regulatory requirements or ING Investments may assume day-to-day
investment management of the MidCap Opportunities Fund.
SUB-ADVISER. Aeltus Investment Management, Inc. ("ING Aeltus"), a
Connecticut corporation serves as the Sub-Adviser to MidCap Opportunities Fund.
Founded in 1972, ING Aeltus is registered as an investment adviser with
the SEC. ING Aeltus has acted as adviser or sub-adviser to mutual funds since
1994 and has managed institutional accounts since 1972. ING Aeltus is an
indirect wholly-owned subsidiary of ING Groep N.V. and is an affiliate of ING
Investments.
C-8
As of December 31, 2003, ING Aeltus managed over $____ billion in
assets. Its principal office is located at 10 State House Square, Hartford,
Connecticut 06103-3602.
MidCap Opportunities Fund has been managed by a team of investment
professionals led by Matthews S. Price and David C. Campbell since April 2003.
Matthew S. Price, Portfolio Manager, joined ING as a managing director and
portfolio manager in 1992. David C. Campbell, Portfolio Manager, joined ING as a
managing director and portfolio manager in 1990.
SHAREHOLDER SERVICES REPRESENTATIVE. ING Funds Services, LLC serves as
Shareholder Services Representative for MidCap Opportunities Fund. The
Shareholder Services Representative is responsible for responding to written and
telephonic inquiries from shareholders. MidCap Opportunities Fund pays the
Shareholder Services Representative a monthly fee on a per-contact basis, based
upon incoming and outgoing telephonic and written correspondence.
PORTFOLIO TRANSACTIONS. ING Aeltus will place orders to execute
securities transactions that are designed to implement MidCap Opportunities
Fund's investment objectives and policies. ING Aeltus will use its reasonable
efforts to place all purchase and sale transactions with brokers, dealers and
banks ("brokers") that provide "best execution" of these orders. In placing
purchase and sale transactions, ING Aeltus may consider brokerage and research
services provided by a broker to ING Aeltus or its affiliates, and MidCap
Opportunities Fund may pay a commission for effecting a securities transaction
that is in excess of the amount another broker would have charged if ING Aeltus
determines in good faith that the amount of commission is reasonable in relation
to the value of the brokerage and research services provided by the broker. In
addition, ING Aeltus may place securities transactions with brokers that provide
certain services to MidCap Opportunities Fund. ING Aeltus also may consider a
broker's sale of Fund shares if ING Aeltus is satisfied that MidCap
Opportunities Fund would receive best execution of the transaction from that
broker.
DIVIDENDS, DISTRIBUTIONS & TAXES
DIVIDENDS AND DISTRIBUTIONS. MidCap Opportunities Fund generally
distributes most or all of its net earnings in the form of dividends. MidCap
Opportunities Fund pays dividends, if any, on an annual basis. Capital gains, if
any, are distributed annually. Dividends and distributions will be determined on
a class basis.
Any dividends and distributions paid by MidCap Opportunities Fund will
be automatically reinvested in additional shares of the respective class of
MidCap Opportunities Fund, unless you elect to receive distributions in cash.
When a dividend or distribution is paid, the NAV per share is reduced by the
amount of the payment. You may, upon written request or by completing the
appropriate section of the Account Application in the Prospectus, elect to have
all dividends and other distributions paid on Class A, Class B, Class C, Class I
and Class Q shares of MidCap Opportunities Fund invested into an ING Fund that
offers Class A, Class B, Class C, Class I and Class Q shares.
FEDERAL TAXES. [SUBJECT TO TAX REVIEW.] The following information is
meant as a general summary for U.S. shareholders. Please see MidCap
Opportunities Fund's SAI for additional information. You should rely on your own
tax adviser for advice about the particular federal, state and local tax
consequences to you of investing in MidCap Opportunities Fund.
MidCap Opportunities Fund will distribute all or substantially all of
its net investment income and net capital gains to its shareholders each year.
Although MidCap Opportunities Fund will not be taxed on amounts it distributes,
most shareholders will be taxed on amounts they receive. A particular
distribution generally will be taxable as either ordinary income or long-term
capital gain. It does not matter how long you have held your Fund shares or
whether you elect to receive your distributions in cash or reinvest them in
additional Fund shares. For example, if MidCap Opportunities Fund designates a
particular distribution as a long-term capital gains distribution, it will be
taxable to you at your long-term capital gains rate.
Recently enacted tax legislation generally provides for a maximum tax
rate for individual taxpayers of 15% on long-term gains from sales on or after
May 6, 2003 and from certain qualifying dividends. These rate reductions
C-9
do not apply to corporate taxpayers. The following are guidelines for how
certain distributions by the funds are generally taxed to individual taxpayers:
Distributions of earnings from qualifying dividends and
qualifying long-term capital gains will be taxed at a maximum
rate of 15%.
Note that distributions of earnings from dividends paid by
certain "qualified foreign corporations" can also qualify for
the lower tax rates on qualifying dividends.
A shareholder will also have to satisfy a 60-day holding
period with respect to any distributions of qualifying
dividends in order to obtain the benefit of the lower tax
rate.
Distributions of earnings from non-qualifying dividends,
interest income, other types of ordinary income and short-term
capital gains will be taxed at the ordinary income tax rate
applicable to the taxpayer.
Distributions of long-term gains from sales by the Funds before May 6,
2003 will be taxed at the maximum rate of 20%.
Dividends declared by MidCap Opportunities Fund in October, November or
December and paid during the following January may be treated as having been
received by shareholders in the year the distributions were declared.
You will receive an annual statement summarizing your dividend and
capital gains distributions.
If you invest through a tax-deferred account, such as a retirement
plan, you generally will not have to pay tax on dividends until they are
distributed from the account. These accounts are subject to complex tax rules,
and you should consult your tax adviser about investment through a tax-deferred
account.
There may be tax consequences to you if you sell or redeem Fund shares.
You will generally have a capital gain or loss, which will be long-term or
short-term, generally depending on how long you hold those shares. If you
exchange shares, you may be treated as if you sold them. You are responsible for
any tax liabilities generated by your transactions.
As with all mutual funds, MidCap Opportunities Fund may be required to
withhold U.S. federal income tax at the rate of 28% of all taxable distributions
payable to you if you fail to provide MidCap Opportunities Fund with your
correct taxpayer identification number or to make required certifications, or if
you have been notified by the IRS that you are subject to backup withholding.
Backup withholding is not an additional tax; rather, it is a way in which the
IRS ensures it will collect taxes otherwise due. Any amounts withheld may be
credited against your U.S. federal income tax liability.
C-10
FINANCIAL HIGHLIGHTS
The information for the period ended November 30, 2003 is unaudited. For the
periods ending on or before May 31, 2003, the information in the table below has
been derived from ING MidCap Opportunities Fund's financial statements. For the
years ended May 31, 2003, May 31, 2002, the five-month period ended May 31, 2001
and the year ended December 31, 2000, have been audited by KPMG LLP, independent
auditors. For all periods ended prior to December 31, 2000, the financial
information was audited by other independent auditors.
CLASS A
-----------------------------------------------------------------------------------
(UNAUDITED) FIVE
SIX MONTHS YEAR YEAR MONTHS AUGUST 20,
ENDED ENDED ENDED ENDED 1998(1) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, YEAR ENDED DECEMBER 31, DECEMBER 31,
2003 2003 2002 2001(2) 2000 1999 1998
---- ---- ---- ------- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.12 11.11 14.58 19.12 21.29 12.96 10.00
Income (loss) from investment operations:
Net investment loss $ (0.06) (0.12) (0.17)* (0.11) (0.15) (0.09) (0.03)
Net realized and unrealized gain (loss)
on investments $ 1.83 (0.87) (3.30) (4.43) 0.16 12.01 2.99
Total from investment operations $ 1.77 (0.99) (3.47) (4.54) 0.01 11.92 2.96
Less distributions from:
Net realized gains on investments $ - - - - 2.18 3.59 -
Total distributions $ - - - - 2.18 3.59 -
Net asset value, end of period $ 11.89 10.12 11.11 14.58 19.12 21.29 12.96
TOTAL RETURN(3): % 17.49 (8.91) (23.80) (23.74) (0.35) 103.24 29.60
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $49,810 44,010 68,106 24,265 25,742 6,291 610
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.50 1.50 1.77 2.06 1.66 1.74 1.80
Gross expenses prior to expense
reimbursement(4) % 1.78 1.83 1.99 2.06 1.66 1.74 2.42
Net investment loss(4)(5) % (1.17) (1.15) (1.45) (1.52) (0.96) (1.34) (1.10)
Portfolio turnover rate % 37 345 399 182 188 201 61
- -----------------
(1) Commencement of operations of Class
(2) The Fund changed its fiscal year end to May 31.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the
deduction of sales charges. Total return for less than one year is not
annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding
interest, taxes, brokerage and extraordinary expenses) subject to
possible recoupment by ING Investments, LLC within three years.
* Per share data calculated using weighted average number of shares
outstanding throughout the period.
C-11
CLASS B
----------------------------------------------------------------------------------
(UNAUDITED) FIVE
SIX MONTHS YEAR YEAR MONTHS AUGUST 20,
ENDED ENDED ENDED ENDED 1998(1) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, YEAR ENDED DECEMBER 31, DECEMBER 31,
2003 2003 2002 2001(2) 2000 1999 1998
---- ---- ---- ------- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.80 10.83 14.30 18.79 21.12 12.97 10.00
Income (loss) from investment operations:
Net investment loss $ (0.10) (0.20) (0.25)* (0.14) (0.24) (0.07) (0.03)
Net realized and unrealized gain (loss)
on investments $ 1.77 (0.83) (3.22) (4.35) 0.09 11.81 3.00
Total from investment operations $ 1.67 (1.03) (3.47) (4.49) (0.15) 11.74 2.97
Less distributions from:
Net realized gains on investments $ - - - - 2.18 3.59 -
Total distributions $ - - - - 2.18 3.59 -
Net asset value, end of period $ 11.47 9.80 10.83 14.30 18.79 21.12 12.97
TOTAL RETURN(3): % 17.04 (9.51) (24.27) (23.90) (1.13) 101.73 29.70
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $47,225 43,183 69,621 28,448 35,551 8,252 140
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.20 2.20 2.47 2.76 2.36 2.40 2.50
Gross expenses prior to expense
reimbursement(4) % 2.48 2.53 2.69 2.76 2.36 2.40 3.27
Net investment loss(4)(5) % (1.87) (1.85) (2.15) (2.22) (1.66) (2.00) (2.05)
Portfolio turnover rate % 37 345 399 182 188 201 61
- ------------------
(1) Commencement of operations of Class
(2) The Fund changed its fiscal year end to May 31.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the
deduction of sales charges. Total return for less than one year is not
annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding
interest, taxes, brokerage and extraordinary expenses) subject to
possible recoupment by ING Investments, LLC within three years.
* Per share data calculated using weighted average number of shares
outstanding throughout the period.
C-12
CLASS C
----------------------------------------------------------------------------------
(UNAUDITED) FIVE
SIX MONTHS YEAR YEAR MONTHS AUGUST 20,
ENDED ENDED ENDED ENDED 1998(1) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, YEAR ENDED DECEMBER 31, DECEMBER 31,
2003 2003 2002 2001(2) 2000 1999 1998
---- ---- ---- ------- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.75 10.77 14.24 18.72 21.03 12.96 10.00
Income (loss) from investment operations:
Net investment loss $ (0.10) (0.19) (0.25)* (0.14) (0.24) (0.07) (0.04)
Net realized and unrealized gain (loss)
on investments $ 1.76 (0.83) (3.22) (4.34) 0.11 11.73 3.00
Total from investment operations $ 1.66 (1.02) (3.47) (4.48) (0.13) 11.66 2.96
Less distributions from:
Net realized gains on investments $ - - - - 2.18 3.59 -
Total distributions $ - - - - 2.18 3.59 -
Net asset value, end of period $ 11.41 9.75 10.77 14.24 18.72 21.03 12.96
TOTAL RETURN(3): % 17.03 (9.47) (24.37) (23.93) (1.03) 101.16 29.60
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $73,547 67,730 100,888 18,901 25,939 4,560 87
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.20 2.20 2.47 2.76 2.36 2.36 2.50
Gross expenses prior to expense
reimbursement(4) % 2.48 2.53 2.69 2.76 2.36 2.36 3.22
Net investment loss(4)(5) % (1.87) (1.85) (2.15) (2.22) (1.66) (1.98) (2.04)
Portfolio turnover rate % 37 345 399 182 188 201 61
- ---------------
(1) Commencement of operations of Class
(2) The Fund changed its fiscal year end to May 31.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the
deduction of sales charges. Total return for less than one year is not
annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding
interest, taxes, brokerage and extraordinary expenses) subject to
possible recoupment by ING Investments, LLC within three years.
* Per share data calculated using weighted average number of shares
outstanding throughout the period.
C-13
CLASS I
----------------------------------------------------------------------------------
(UNAUDITED) FIVE
SIX MONTHS YEAR YEAR MONTHS AUGUST 20,
ENDED ENDED ENDED ENDED 1998(1) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, YEAR ENDED DECEMBER 31, DECEMBER 31,
2003 2003 2002 2001(2) 2000 1999 1998
---- ---- ---- ------- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.33 11.29 14.73 19.26 21.34 12.99 10.00
Income (loss) from investment operations:
Net investment income (loss) $ (0.05) (0.11) (0.11)* (0.06) (0.13) (0.15) (0.02)
Net realized and unrealized gain (loss)
on investments $ 1.85 (0.85) (3.33) (4.47) 0.23 12.09 3.01
Total from investment operations $ 1.80 (0.96) (3.44) (4.53) 0.10 11.94 2.99
Less distributions from:
Net investment income $ - - - - - - -
Net realized gains on investments $ - - - - 2.18 3.59 -
Total distributions $ - - - - 2.18 3.59 -
Net asset value, end of period $ 12.13 10.33 11.29 14.73 19.26 21.34 12.99
TOTAL RETURN(3): % 17.42 (8.50) (23.35) (23.52) 0.08 103.19 29.90
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 1,600 10,844 39,874 52,007 68,006 67,954 33,441
Ratios to average net assets:
Net expenses after expense reimbursement(4) % 1.09 1.09 1.26 1.52 1.36 1.41 1.50
Gross expenses prior to expense
reimbursement(4) % 1.37 1.41 1.50 1.52 1.36 1.41 2.01
Net investment income (loss)(4)(5) % (0.80) (0.71) (0.95) (0.97) (0.66) (1.04) (0.70)
Portfolio turnover rate % 37 345 399 182 188 201 61
- ----------------
(1) Commencement of operations of Class
(2) The Fund changed its fiscal year end to May 31.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the
deduction of sales charges. Total return for less than one year is not
annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding
interest, taxes, brokerage and extraordinary expenses) subject to
possible recoupment by ING Investments, LLC within three years.
* Per share data calculated using weighted average number of shares
outstanding throughout the period.
C-14
CLASS Q
-----------------------------------------------------------------
(UNAUDITED)
SIX MONTHS YEAR YEAR FIVE MONTHS APRIL 14,
ENDED ENDED ENDED ENDED 2000(1) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, DECEMBER 31,
2003 2003 2002 2001(2) 2000
---- ---- ---- ------- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.19 11.16 14.63 19.16 22.57
Income (loss) from investment operations:
Net investment income (loss) $ (0.06) (0.09) (0.17)* (0.08) (0.06)
Net realized and unrealized gain (loss)
on investments $ 1.85 (0.88) (3.30) (4.45) (1.17)
Total from investment operations $ 1.79 (0.97) (3.47) (4.53) (1.23)
Less distributions from:
Net investment income $ - - - - -
Net realized gains on investments $ - - - - 2.18
Total distributions $ - - - - 2.18
Net asset value, end of period $ 11.98 10.19 11.16 14.63 19.16
TOTAL RETURN(3): % 17.57 (8.69) (23.72) (23.64) (5.86)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 4,885 4,886 6,563 3,071 3,264
Ratios to average net assets:
Net expenses after expense reimbursement(4) % 1.31 1.33 1.63 1.82 1.61
Gross expenses prior to expense
reimbursement(4) % 1.59 1.66 1.69 1.82 1.61
Net investment income (loss)(4)(5) % (0.98) (0.98) (1.35) (1.28) (0.91)
Portfolio turnover rate % 37 345 399 182 188
- ----------------
(1) Commencement of operations of Class
(2) The Fund changed its fiscal year end to May 31.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the
deduction of sales charges. Total return for less than one year is not
annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding
interest, taxes, brokerage and extraordinary expenses) subject to
possible recoupment by ING Investments, LLC within three years.
* Per share data calculated using weighted average number of shares
outstanding throughout the period.
C-15
APPENDIX D
ING FUNDS
The following is a list of the ING Funds and the Classes of shares of each Fund
that are expected to be offered at or shortly after the Reorganization:
FUND CLASSES OFFERED
---- ---------------
U.S. EQUITY
Balanced Fund A, B, C and I
Convertible Fund A, B, C and Q
Corporate Leaders Trust Fund A
Disciplined LargeCap Fund A, B, C and I
Equity and Bond Fund A, B, C and Q
Financial Services Fund A and B
Growth Fund A, B, C and I
Growth and Income Fund A, B, C and I
Index Plus LargeCap Fund A, B, C and I
Index Plus MidCap Fund A, B, C and I
Index Plus SmallCap Fund A, B, C and I
LargeCap Growth Fund A, B, C, I and Q
LargeCap Value Fund A, B, C and I
MagnaCap Fund A, B, C, I, M and Q
MidCap Opportunities Fund A, B, C, I and Q
MidCap Value Fund A, B, C, I and Q
Real Estate Fund A, B, C, I and Q
SmallCap Opportunities Fund A, B, C, I and Q
SmallCap Value Fund A, B, C, I and Q
Small Company Fund A, B, C and I
Tax-Efficient Equity Fund A, B and C
Technology Fund A, B, C and I
Value Opportunity Fund A, B, C and I
GLOBAL/INTERNATIONAL EQUITY
Emerging Countries Fund A, B, C, M and Q
Foreign Fund A, B, C, I and Q
Global Equity Dividend Fund A, B, C, I and Q
Global Real Estate Fund A, B and C
International Fund A, B, C, I and Q
International Growth Fund A, B, C and I
International SmallCap Growth Fund A, B, C and Q
International Value Fund A, B, C, I and Q
Precious Metals Fund A
Russia Fund A
Worldwide Growth Fund A, B, C and Q
FIXED INCOME
Aeltus Money Market Fund A, B, C and I
Bond Fund A, B, C and I
Classic Money Market Fund A, B and C
GNMA Income Fund A, B, C, I, M and Q
D-1
Government Fund A, B, C and I
High Yield Opportunity Fund A, B, C, M and Q
High Yield Bond Fund A, B and C
Intermediate Bond Fund A, B, C and I
Lexington Money Market Trust A
Money Market Fund A, B and C
National Tax-Exempt Bond Fund A, B and C
Strategic Bond Fund A, B, C and Q
STRATEGIC ALLOCATION FUNDS
Strategic Allocation Growth Fund A, B, C and I
Strategic Allocation Balanced Fund A, B, C and I
Strategic Allocation Income Fund A, B, C and I
LOAN PARTICIPATION FUND
Senior Income Fund A, B, C and Q
D-2
APPENDIX E
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL AND RECORD OWNERS
The following tables provide information about the persons or entities
who, to the knowledge of each Fund, owned beneficially or of record 5% or more
of any class of that Fund's outstanding shares as of [____], 2004:
ING GROWTH + VALUE FUND
PERCENTAGE OF COMBINED
PERCENT OF CLASS OF SHARES FUND AFTER THE
NAME AND ADDRESS OF SHAREHOLDER AND TYPE OF OWNERSHIP PERCENTAGE OF FUND REORGANIZATION*
- ------------------------------- --------------------- ------------------ ---------------
ING GROWTH OPPORTUNITIES FUND
PERCENTAGE OF COMBINED
PERCENT OF CLASS OF SHARES FUND AFTER THE
NAME AND ADDRESS OF SHAREHOLDER AND TYPE OF OWNERSHIP PERCENTAGE OF FUND REORGANIZATION*
- ------------------------------- --------------------- ------------------ ---------------
ING MIDCAP OPPORTUNITIES FUND
PERCENTAGE OF COMBINED
PERCENT OF CLASS OF SHARES FUND AFTER THE
NAME AND ADDRESS OF SHAREHOLDER AND TYPE OF OWNERSHIP PERCENTAGE OF FUND REORGANIZATION*
- ------------------------------- --------------------- ------------------ ---------------
- ----------------------------
* On a pro forma basis, assuming that the value of the shareholder's
interest in the Fund on the date of consummation of the Reorganization
is the same as on [_______], 2004.
E-1
PART B
ING EQUITY TRUST
Statement of Additional Information
February 9, 2004
Acquisition of the Assets and Liabilities of: By and in Exchange for Shares of:
ING Growth + Value Fund ING MidCap Opportunities Fund
(a series of ING Mayflower Trust) (a series of ING Equity Trust)
ING Growth Opportunities Fund 7337 East Doubletree Ranch Road
(a series of ING Equity Trust) Scottsdale, Arizona 85258-2034
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258-2034
This Statement of Additional Information is available to the shareholders of ING
Growth + Value Fund and ING Growth Opportunities Fund in connection with a
proposed transaction whereby all of the assets and liabilities of those Funds
will be transferred to ING MidCap Opportunities Fund, a series of ING Equity
Trust, in exchange for shares of ING MidCap Opportunities Fund.
This Statement of Additional Information of ING Equity Trust consists of this
cover page and the following documents, each of which was filed electronically
with the U.S. Securities and Exchange Commission and is incorporated by
reference herein:
1. The Statement of Additional Information for ING Growth + Value Fund,
ING Growth Opportunities Fund and ING MidCap Opportunities Fund, dated
September 30, 2003, as filed on September 30, 2003.
2. The Financial Statements of ING Growth + Value Fund, ING Growth
Opportunities Fund and ING MidCap Opportunities Fund are included in
the Class A, B, C, M, and T Annual Report of the ING Funds, dated May
31, 2003, as filed on August 5, 2003, and the Class I and Q Annual
Report of ING Investment Funds, Inc. dated May 31, 2003, as filed on
August 5, 2003.
3. The Financial Statements of, ING Growth + Value Fund, ING Growth
Opportunities Fund and ING MidCap Opportunities Fund are included in
the Class A, B, C, M, and T Semi-Annual Report of the ING Funds, dated
November 30, 2003, as filed on [__________], and the Class I and Q
Semi-Annual Report of ING Growth + Value Fund, ING Growth Opportunities
Fund and ING MidCap Opportunities Fund, [dated November 30, 2003], as
filed [______________].
This Statement of Additional Information is not a prospectus. A Prospectus/Proxy
Statement dated February 9, 2004 relating to the Reorganization of ING Growth +
Value Fund and ING Growth Opportunities Fund may be obtained, without charge, by
writing to the ING Funds at 7337 East Doubletree Ranch Road, Scottsdale, Arizona
85258-2034 or calling 1-800-992-0180. This Statement of Additional Information
should be read in conjunction with the Prospectus/Proxy Statement.
PRO FORMA FINANCIAL STATEMENTS
Shown below are financial statements for each Fund and pro forma
financial statements for the combined Fund, assuming the Reorganization is
consummated, as of November 30, 2003. The first table presents Statements of
Assets and Liabilities for each Fund and estimated pro forma figures for the
combined Fund. The second table presents Statements of Operations for each Fund
and estimated pro forma figures for the combined Fund. The third table presents
Portfolio of Investments for each Fund and estimated pro forma figures for the
combined Fund. The tables are followed by the Notes to the Pro Forma Financial
Statements.
STATEMENTS OF ASSETS AND LIABILITIES AS OF NOVEMBER 30, 2003 (UNAUDITED)
ING ING ING
GROWTH + GROWTH MIDCAP
VALUE OPPORTUNITIES OPPORTUNITIES
FUND FUND FUND
------------- -------------- -------------
ASSETS:
Investments in securities, at value* $ 218,197,203 $ 180,652,748 $ 177,162,450
Short-term investments, at amortized cost 1,682,000 790,000 679,000
Cash 2,416 - 1,007
Receivables:
Investment securities sold 3,091,880 4,162,542 2,958,013
Fund shares sold 21,964 38,354 103,856
Dividends and interest 21,228 42,909 34,304
Other investments 58,996,743 - 47,739,843
Prepaid expenses 32,602 29,588 22,535
Reimbursement due from manager - - 2,346
------------- -------------- -------------
Total assets 282,046,036 185,716,141 228,703,354
------------- -------------- -------------
LIABILITIES:
Payable for securities purchased 4,514,092 3,780,200 3,260,125
Payable for fund shares redeemed 375,366 295,950 111,372
Payable upon return of securities loaned 58,996,743 - 47,739,843
Payable to custodian - 95,735 -
Payable to affiliates 403,129 269,566 301,023
Payable for trustee fees 4,589 4,148 4,755
Other accrued expenses and liabilities 442,771 347,551 218,008
------------- -------------- -------------
Total liabilities 64,736,690 4,793,150 51,635,126
------------- -------------- -------------
NET ASSETS $ 217,309,346 $ 180,922,991 $ 177,068,228
============= ============== =============
NET ASSETS CONSIST OF:
Paid-in capital $ 686,983,420 $ 600,068,138 $ 315,542,409
Undistributed net investment income (accumulated
net investment loss) (2,205,069) (1,232,981) (1,392,132)
Accumulated net realized loss on investments (513,740,691) (456,858,685) (177,112,793)
Net unrealized appreciation of investments 46,271,686 38,946,519 40,030,744
------------- -------------- -------------
NET ASSETS $ 217,309,346 $ 180,922,991 $ 177,068,228
============= ============== =============
*Cost of investments in securities $ 171,925,517 $ 141,706,229 $ 137,131,706
CLASS A:
Net Assets $ 48,362,085 $ 49,166,222 $ 49,810,293
Shares outstanding 4,942,681 3,766,378 4,187,879
Net asset value and redemption price per share $ 9.78 $ 13.05 $ 11.89
Maximum offering price per share (B) $ 10.38 $ 13.85 $ 12.62
CLASS B:
Net Assets $ 116,822,644 $ 54,174,520 $ 47,224,661
Shares outstanding 12,621,510 4,475,844 4,118,043
Net asset value and redemption price per share $ 9.26 $ 12.10 $ 11.47
CLASS C:
Net Assets $ 51,878,275 $ 25,186,576 $ 73,547,411
Shares outstanding 5,607,185 2,077,164 6,444,787
Net asset value and redemption price per share $ 9.25 $ 12.13 $ 11.41
CLASS I:
Net Assets n/a $ 52,392,562 $ 1,600,415
Shares outstanding n/a 3,874,430 131,892
Net asset value and redemption price per share n/a $ 13.52 $ 12.13
CLASS Q:
Net Assets $ 246,342 $ 3,111 $ 4,885,448
Shares outstanding 25,392 240 407,820
Net asset value and redemption price per share $ 9.70 $ 12.96 $ 11.98
PRO FORMA PRO FORMA
COMBINED COMBINED
(PRE-MERGER PRO FORMA (POST MERGER
EXPENSE) ADJUSTMENTS EXPENSE)
---------- --------------- ----------- ---------------
ASSETS:
Investments in securities, at value* $ 576,012,401 $ 576,012,401
Short-term investments, at amortized cost 3,151,000 3,151,000
Cash 3,423 3,423
Receivables: - -
Investment securities sold 10,212,435 10,212,435
Fund shares sold 164,174 164,174
Dividends and interest 98,441 98,441
Other investments 106,736,586 106,736,586
Prepaid expenses 84,725 84,725
Reimbursement due from manager 2,346 2,346
---------- --------------- ---------- ---------------
Total assets 696,465,531 - 696,465,531
---------- --------------- ---------- ---------------
LIABILITIES:
Payable for securities purchased 11,554,417 11,554,417
Payable for fund shares redeemed 782,688 782,688
Payable upon return of securities loaned 106,736,586 106,736,586
Payable to custodian 95,735 95,735
Payable to affiliates 973,718 973,718
Payable for trustee fees 13,492 13,492
Other accrued expenses and liabilities 1,008,330 175,000 (A) 1,183,330
---------- --------------- ---------- ---------------
Total liabilities 121,164,966 175,000 121,339,966
---------- --------------- ---------- ---------------
NET ASSETS $ 575,300,565 $ (175,000) $ 575,125,565
========== =============== ========== ===============
NET ASSETS CONSIST OF:
Paid-in capital $ 1,602,593,967 $ 1,602,593,967
Undistributed net investment income (accumulated
net investment loss) (4,830,182) (175,000)(A) (5,005,182)
Accumulated net realized loss on investments (1,147,712,169) (1,147,712,169)
Net unrealized appreciation of investments 125,248,949 125,248,949
---------- --------------- ---------- ---------------
NET ASSETS $ 575,300,565 $ (175,000) $ 575,125,565
========== =============== ========== ===============
*Cost of investments in securities $ 450,763,452 $ 450,763,452
CLASS A:
Net Assets $ 147,338,600 $ (44,819)(A) $ 147,293,781
Shares outstanding (506,510)(C) 12,390,428 12,390,428
Net asset value and redemption price per share $ 11.89 $ 11.89
Maximum offering price per share (B) $ 12.62 $ 12.62
CLASS B:
Net Assets $ 218,221,825 $ (66,381)(A) $ 218,155,444
Shares outstanding (2,189,144)(C) 19,026,253 19,026,253
Net asset value and redemption price per share $ 11.47 $ 11.47
CLASS C:
Net Assets $ 150,612,262 $ (45,814)(A) $ 150,566,448
Shares outstanding (930,199)(C) 13,198,937 13,198,937
Net asset value and redemption price per share $ 11.41 $ 11.41
CLASS I:
Net Assets $ 53,992,977 $ (16,424)(A) $ 53,976,553
Shares outstanding 444,825 (C) 4,451,147 4,451,147
Net asset value and redemption price per share $ 12.13 $ 12.13
CLASS Q:
Net Assets $ 5,134,901 $ (1,562)(A) $ 5,133,339
Shares outstanding (4,810)(C) 428,642 428,642
Net asset value and redemption price per share $ 11.98 $ 11.98
(A) Reflects adjustment for estimated one time merger expenses (See Note 5 in
Notes to Unaudited Pro Forma Financial Statements).
(B) Maximum offering price is computed at 100/94.25 of net asset value. On
purchases of $50,000 or more, the offering price is reduced.
(C)Reflects new shares issued, net of retired shares of ING Growth + Value and
ING Growth Opportunities. (Calculation: Net Assets / NAV per share)
See Accompanying Notes to Financial Statements
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED NOVEMBER 30, 2003 (UNAUDITED)
ING ING ING
GROWTH + GROWTH MIDCAP
VALUE OPPORTUNITIES OPPORTUNITIES
FUND FUND** FUND
----------- ------------- -------------
INVESTMENT INCOME:
Dividends, net of foreign taxes* $ 640,528 $ 814,677 $ 413,471
Interest 71,407 27,766 59,329
Securities loaned income 4,403 - 4,157
----------- ------------ ------------
Total investment income 716,338 842,443 476,957
----------- ------------ ------------
EXPENSES:
Investment management fees 2,056,805 1,651,875 1,665,416
Distribution and Service fees:
Class A 147,242 153,232 130,874
Class B 1,062,661 504,257 428,532
Class C 501,088 240,836 668,128
Class Q 562 8 11,080
Class T - 35,564 -
Transfer agent fees:
Class A 51,590 48,605 47,980
Class B 114,425 53,582 46,693
Class C 52,846 25,190 74,504
Class I - 1,883 176
Class Q 218 - 88
Class T - 3,475 -
Administrative service fees 513,289 432,559 323,876
Shareholder reporting expense 315,757 211,607 116,983
Registration fees 55,446 64,260 87,706
Professional fees 2,673 36,209 2,681
Custody and accounting expense 38,983 47,500 35,404
Directors' fees 11,005 11,104 8,100
Insurance expense 6,700 5,189 4,833
Miscellaneous expense 9,523 11,587 3,880
----------- ------------ ------------
Total expenses 4,940,813 3,538,522 3,656,934
Less:
Net waived and reimbursed fees - - 430,772
----------- ------------ ------------
Net expenses 4,940,813 3,538,522 3,226,162
----------- ------------ ------------
Net investment income (loss) (4,224,475) (2,696,079) (2,749,205)
----------- ------------ ------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments 15,841,767 8,574,523 13,758,300
Net change in unrealized appreciation on investments 33,076,374 19,913,194 20,708,993
----------- ------------ ------------
Net realized and unrealized gain on investments 48,918,141 28,487,717 34,467,293
----------- ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $44,693,666 $ 25,791,638 $ 31,718,088
=========== ============ ============
$ 3,692 $ 4,441 $ 2,570
PRO FORMA PRO FORMA
COMBINED ADJUSTMENTS COMBINED
------------ ----------- -------------
INVESTMENT INCOME:
Dividends, net of foreign taxes* $ 1,868,676 $ 1,868,676
Interest 158,502 158,502
Securities loaned income 8,560 8,560
------------ --------- -------------
Total investment income 2,035,738 - 2,035,738
------------ --------- -------------
EXPENSES:
Investment management fees 5,374,096 86,941 (A) 5,461,037
Distribution and Service fees:
Class A 431,348 431,348
Class B 1,995,450 1,995,450
Class C 1,410,052 1,410,052
Class Q 11,650 11,650
Class T 35,564 35,564
Transfer agent fees:
Class A 148,175 148,175
Class B 214,700 214,700
Class C 152,540 152,540
Class I 2,059 2,059
Class Q 306 306
Class T 3,475 3,475
Administrative service fees 1,269,724 (141,877) (B) 1,127,847
Shareholder reporting expense 644,347 (263,682) (B) 380,665
Registration fees 207,412 (59,853) (B) 147,559
Professional fees 41,563 41,563
Custody and accounting expense 121,887 121,887
Directors' fees 30,209 30,209
Insurance expense 16,722 16,722
Miscellaneous expense 24,990 175,000 (C) 199,990
------------ --------- -------------
Total expenses 12,136,269 (203,471) 11,932,798
Less:
Net waived and reimbursed fees 430,772 - 430,772
------------ --------- -------------
Net expenses 11,705,497 (203,471) 11,502,026
------------ --------- -------------
Net investment income (loss) (9,669,759) 203,471 (9,466,288)
------------ --------- -------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments 38,174,590 38,174,590
Net change in unrealized appreciation on investments 73,698,561 73,698,561
------------ --------- -------------
Net realized and unrealized gain on investments 111,873,151 111,873,151
------------ --------- -------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $102,203,392 $ 203,471 $ 102,406,863
============ ========= =============
$ 10,703 $ - $ 10,703
*Foreign taxes
** Effective June, 2003, Class T shares converted into the corresponding Class A
shares within this Fund.
(A) Reflects adjustment in expenses due to effects of new contractual rates.
(B) Reflects adjustment in expenses due to elimination of duplicative services.
(C) Reflects adjustment for estimated one time merger expenses (See Note 5 in
Notes to Unaudited Pro Forma Financial Statements).
See Accompanying Notes to Financial Statements
PORTFOLIOS OF INVESTMENTS AS OF NOVEMBER 30, 2003 (UNAUDITED)
GROWTH + GROWTH MIDCAP GROWTH + GROWTH MIDCAP
VALUE OPPORTUNITIES OPPORTUNITIES VALUE OPPORTUNITIES OPPORTUNITIES PRO FORMA
FUND FUND FUND PRO FORMA FUND FUND FUND FUND
SHARES SHARES SHARES SHARES VALUE VALUE VALUE VALUE
- ----------- ------------- ------------- --------- ----------- ------------- ------------- -----------
COMMON STOCK: 99.3%
AIRLINES: 0.8%
224,400 (L) 60,000 52,000 336,400 @ Airtran Holdings, Inc. $ 3,312,144 $ 885,600 $ 767,520 $ 4,965,264
-----------------------------------------------------
3,312,144 885,600 767,520 4,965,264
-----------------------------------------------------
APPAREL: 1.5%
84,600 69,000 61,000 214,600 @ Coach, Inc. 3,370,464 2,748,960 2,430,240 8,549,664
-----------------------------------------------------
3,370,464 2,748,960 2,430,240 8,549,664
-----------------------------------------------------
AUTO PARTS &
EQUIPMENT: 1.2%
20,000 21,900 20,300 62,200 Johnson Controls, Inc. 2,188,800 2,396,736 2,221,632 6,807,168
-----------------------------------------------------
2,188,800 2,396,736 2,221,632 6,807,168
-----------------------------------------------------
BANKS: 1.7%
- - 24,700 24,700 Bank of Hawaii Corp. - - 1,021,345 1,021,345
65,400 54,600 53,300 173,300 Banknorth Group, Inc. 2,143,158 1,789,242 1,746,641 5,679,041
74,800 - - 74,800 UCBH Holdings, Inc. 2,924,680 - - 2,924,680
- - - - Wells Fargo & Co. - - - -
-----------------------------------------------------
5,067,838 1,789,242 2,767,986 9,625,066
-----------------------------------------------------
BIOTECHNOLOGY: 3.8%
- 28,600 - 28,600 @ Amgen, Inc. - 1,644,786 - 1,644,786
77,200 (L) 64,100 62,910 (L) 204,210 @ Celgene Corp. 3,530,356 2,931,293 2,876,874 9,338,523
- 58,200 - 58,200 @ Digene Corp. - 2,313,450 - 2,313,450
66,300 (L) - - 66,300 @ Genzyme Corp. 3,098,862 - - 3,098,862
77,200 (L) - - 77,200 @ Integra LifeSciences
Holdings Corp. 2,423,308 - - 2,423,308
17,900 14,600 15,600 48,100 @ Invitrogen Corp. 1,220,243 995,282 1,063,452 3,278,977
-----------------------------------------------------
10,272,769 7,884,811 3,940,326 22,097,906
-----------------------------------------------------
BUILDING MATERIALS: 0.7%
11,000 9,200 22,700 42,900 @ American Standard Cos.,
Inc. 1,096,700 917,240 2,263,190 4,277,130
-----------------------------------------------------
1,096,700 917,240 2,263,190 4,277,130
-----------------------------------------------------
CHEMICALS: 0.2%
- - 14,000 14,000 Praxair, Inc. - - 1,004,920 1,004,920
-----------------------------------------------------
- - 1,004,920 1,004,920
-----------------------------------------------------
COMMERCIAL SERVICES: 5.3%
37,700 32,300 30,600 100,600 @ Alliance Data Systems
Corp. 1,130,246 968,354 917,388 3,015,988
15,800 (L) - - 15,800 @ Apollo Group, Inc. 1,090,674 - - 1,090,674
63,500 53,100 51,800 168,400 @ Career Education Corp. 3,246,755 2,715,003 2,648,534 8,610,292
50,200 (L) 9,300 40,500 100,000 @ Corporate Executive
Board Co. 2,439,720 451,980 1,968,300 4,860,000
48,100 39,000 43,400 130,500 @ Education Management Corp. 3,251,560 2,636,400 2,933,840 8,821,800
33,100 - 25,800 58,900 Paychex, Inc. 1,273,357 - 992,526 2,265,883
- 17,400 - 17,400 Strayer Education, Inc. - 1,944,102 - 1,944,102
-----------------------------------------------------
12,432,312 8,715,839 9,460,588 30,608,739
-----------------------------------------------------
COMPUTERS: 4.8%
43,400 41,100 42,000 126,500 @ CACI International, Inc. 2,160,018 2,045,547 2,090,340 6,295,905
- 58,100 - 58,100 @ Dell, Inc. - 2,004,450 - 2,004,450
- 299,400 - 299,400 @ EMC Corp.-Mass - 4,113,756 - 4,113,756
International Business
- - - - Machines Corp. - - - -
30,700 (L) - - 30,700 @ Micros Systems, Inc. 1,328,082 - - 1,328,082
123,600 (L) - - 123,600 @ NetScreen Technologies,
Inc. 3,114,720 - - 3,114,720
173,500 (L) 154,200 134,300 (L) 462,000 @ Network Appliance, Inc. 4,009,585 3,563,562 3,103,673 10,676,820
-----------------------------------------------------
10,612,405 11,727,315 5,194,013 27,533,733
-----------------------------------------------------
DISTRIBUTION/
WHOLESALE: 0.5%
74,100 61,600 60,300 196,000 @ Ingram Micro, Inc. 1,080,378 898,128 879,174 2,857,680
-----------------------------------------------------
1,080,378 898,128 879,174 2,857,680
-----------------------------------------------------
DIVERSIFIED FINANCIAL
SERVICES: 1.6%
170,700 144,000 139,100 (L) 453,800 @ Ameritrade Holding Corp. 2,145,699 1,810,080 1,748,487 5,704,266
- - 24,300 24,300 Bear Stearns Cos., Inc. - - 1,760,778 1,760,778
- 38,300 - 38,300 Citigroup, Inc. - 1,801,632 - 1,801,632
-----------------------------------------------------
2,145,699 3,611,712 3,509,265 9,266,676
-----------------------------------------------------
ELECTRICAL COMPONENTS &
EQUIPMENT: 0.8%
122,400 - 104,900 227,300 @ American Power Conversion 2,675,664 - 2,293,114 4,968,778
-----------------------------------------------------
2,675,664 - 2,293,114 4,968,778
-----------------------------------------------------
ELECTRONICS: 5.8%
45,000 (L) 37,000 38,000 (L) 120,000 @ Agilent Technologies, Inc. 1,272,600 1,046,360 1,074,640 3,393,600
97,050 - - 97,050 @ Benchmark Electronics, Inc. 3,564,647 - - 3,564,647
50,400 (L) - - 50,400 @ Dionex Corp. 2,367,792 - - 2,367,792
110,800 (L) 92,200 112,700 (L) 315,700 @ Gentex Corp. 4,669,112 3,885,308 4,749,178 13,303,598
93,000 46,400 66,700 206,100 @ Jabil Circuit, Inc. 2,558,430 1,276,464 1,834,917 5,669,811
36,100 62,500 60,200 158,800 @ Waters Corp. 1,154,478 1,998,750 1,925,196 5,078,424
-----------------------------------------------------
15,587,059 8,206,882 9,583,931 33,377,872
-----------------------------------------------------
ENGINEERING &
CONSTRUCTION: 2.3%
57,500 50,000 44,700 (L) 152,200 Fluor Corp. 2,107,950 1,833,000 1,638,702 5,579,652
@ Jacobs Engineering Group,
53,100 47,500 63,700 164,300 Inc. 2,439,414 2,182,150 2,926,378 7,547,942
-----------------------------------------------------
4,547,364 4,015,150 4,565,080 13,127,594
-----------------------------------------------------
ENTERTAINMENT: 1.2%
29,500 - - 29,500 GTECH Holdings Corp. 1,467,920 - - 1,467,920
International Game
97,300 (L) 32,200 33,300 (L) 162,800 Technology 3,375,337 1,117,018 1,155,177 5,647,532
-----------------------------------------------------
4,843,257 1,117,018 1,155,177 7,115,452
-----------------------------------------------------
ENVIRONMENTAL CONTROL: 1.0%
42,000 - - 42,000 @ Stericycle, Inc. 2,074,800 - - 2,074,800
138,800 (L) - - 138,800 @ Tetra Tech, Inc. 3,539,400 - - 3,539,400
-----------------------------------------------------
5,614,200 - - 5,614,200
-----------------------------------------------------
FOOD: 2.4%
65,400 59,400 58,000 182,800 @ Dean Foods Co. 2,145,774 1,948,914 1,902,980 5,997,668
95,300 (L) 25,800 48,700 (L) 169,800 @ Performance Food Group Co. 3,746,243 1,014,198 1,914,397 6,674,838
- 36,400 - 36,400 Sysco Corp. - 1,322,048 - 1,322,048
-----------------------------------------------------
5,892,017 4,285,160 3,817,377 13,994,554
-----------------------------------------------------
HEALTHCARE-PRODUCTS: 6.8%
@ Advanced Neuromodulation
30,600 (L) 22,100 - 52,700 Systems, Inc. 1,291,014 932,399 - 2,223,413
- 41,200 - 41,200 @ Boston Scientific Corp. - 1,478,668 - 1,478,668
36,400 30,000 30,800 97,200 @ Gen-Probe, Inc. 1,263,808 1,041,600 1,069,376 3,374,784
25,900 11,200 10,900 48,000 @ Inamed Corp. 2,029,524 877,632 854,124 3,761,280
- 36,600 - 36,600 Medtronic, Inc. - 1,654,320 - 1,654,320
31,800 (L) 26,600 25,900 (L) 84,300 @ Patterson Dental Co. 2,165,580 1,811,460 1,763,790 5,740,830
34,100 34,415 35,400 103,915 @ St. Jude Medical, Inc. 2,159,894 2,179,846 2,242,236 6,581,976
@ Varian Medical Systems,
35,500 16,400 60,200 (L) 112,100 Inc. 2,449,855 1,131,764 4,154,402 7,736,021
22,400 (L) 38,600 37,100 (L) 98,100 @ Zimmer Holdings, Inc. 1,476,608 2,544,512 2,445,632 6,466,752
-----------------------------------------------------
12,836,283 13,652,201 12,529,560 39,018,044
-----------------------------------------------------
HEALTHCARE-SERVICES: 2.0%
- 25,500 23,300 48,800 A Aetna, Inc. - 1,641,690 1,500,054 3,141,744
37,300 (L) - 29,600 66,900 @ Amsurg Corp. 1,387,933 - 1,101,416 2,489,349
13,500 (L) - 11,500 (L) 25,000 @ Anthem, Inc. 973,620 - 829,380 1,803,000
22,400 8,900 8,700 40,000 @ Coventry Health Care, Inc. 1,341,760 533,110 521,130 2,396,000
- 36,800 - 36,800 UnitedHealth Group, Inc. - 1,983,520 - 1,983,520
-----------------------------------------------------
3,703,313 4,158,320 3,951,980 11,813,613
-----------------------------------------------------
HOME FURNISHINGS: 0.6%
Harman International
13,700 - 12,100 25,800 Industries, Inc. 1,866,899 - 1,648,867 3,515,766
-----------------------------------------------------
1,866,899 - 1,648,867 3,515,766
-----------------------------------------------------
HOUSEHOLD PRODUCTS/
WARES: 0.6%
37,800 35,700 37,200 110,700 @ Yankee Candle Co., Inc. 1,115,856 1,053,864 1,098,144 3,267,864
-----------------------------------------------------
1,115,856 1,053,864 1,098,144 3,267,864
-----------------------------------------------------
INSURANCE: 2.2%
- 41,000 - 41,000 Aflac, Inc. - 1,474,770 - 1,474,770
American International
- 18,200 - 18,200 Group, Inc. - 1,054,690 - 1,054,690
18,400 14,800 31,800 65,000 MBIA, Inc. 1,069,408 860,176 1,848,216 3,777,800
- - 48,500 48,500 @ ProAssurance Corp. - - 1,498,650 1,498,650
62,100 40,500 31,150 133,750 WR Berkley Corp. 2,120,715 1,383,075 1,063,773 4,567,563
-----------------------------------------------------
3,190,123 4,772,711 4,410,639 12,373,473
-----------------------------------------------------
INTERNET: 1.2%
- - - - @ Amazon.Com, Inc. - - - -
- 89,000 59,200 (L) 148,200 @ InterActiveCorp. - 2,923,650 1,944,720 4,868,370
107,550 (L) - - 107,550 @ United Online, Inc. 1,958,486 - - 1,958,486
-----------------------------------------------------
1,958,486 2,923,650 1,944,720 6,826,856
-----------------------------------------------------
MACHINERY-DIVERSIFIED: 2.1%
72,300 60,300 58,400 191,000 Cognex Corp. 1,986,081 1,656,441 1,604,248 5,246,770
38,700 59,100 73,300 171,100 Rockwell Automation, Inc. 1,286,775 1,965,075 2,437,225 5,689,075
- - 21,900 21,900 @ Zebra Technologies Corp. - - 1,392,183 1,392,183
-----------------------------------------------------
3,272,856 3,621,516 5,433,656 12,328,028
-----------------------------------------------------
MEDIA: 1.7%
@ EchoStar Communications
- 33,500 40,900 74,400 Corp. - 1,155,080 1,410,232 2,565,312
@ Univision Communications,
65,100 (L) 26,500 59,300 (L) 150,900 Inc. 2,348,808 956,120 2,139,544 5,444,472
- 38,000 - 38,000 Viacom, Inc. - 1,494,160 - 1,494,160
-----------------------------------------------------
2,348,808 3,605,360 3,549,776 9,503,944
-----------------------------------------------------
MISCELLANEOUS
MANUFACTURING: 1.1%
29,100 (L) 24,900 23,000 (L) 77,000 Danaher Corp. 2,421,120 2,071,680 1,913,600 6,406,400
-----------------------------------------------------
2,421,120 2,071,680 1,913,600 6,406,400
-----------------------------------------------------
OFFICE/BUSINESS
EQUIPMENT: 0.7%
185,500 (L) - 159,400 (L) 344,900 @ Xerox Corp. 2,259,390 - 1,941,492 4,200,882
-----------------------------------------------------
2,259,390 - 1,941,492 4,200,882
-----------------------------------------------------
OIL & GAS: 5.5%
- 44,915 26,100 71,015 Apache Corp. - 3,224,897 1,873,980 5,098,877
189,100 (L) 156,900 85,400 (L) 431,400 Chesapeake Energy Corp. 2,307,020 1,914,180 1,041,880 5,263,080
- - 21,400 21,400 Devon Energy Corp. - - 1,056,304 1,056,304
91,200 - - 91,200 @ Evergreen Resources, Inc. 2,556,336 - - 2,556,336
- 48,755 23,900 (L) 72,655 @, @ @ Nabors Industries Ltd. - 1,809,786 887,168 2,696,954
87,000 - - 87,000 Patina Oil & Gas Corp. 3,904,560 - - 3,904,560
56,400 87,200 94,100 237,700 @ Patterson-UTI Energy, Inc. 1,620,372 2,505,256 2,703,493 6,829,121
- 85,400 79,300 (L) 164,700 XTO Energy, Inc. - 2,158,912 2,004,704 4,163,616
-------------------------------------------------
10,388,288 11,613,031 9,567,529 31,568,848
-------------------------------------------------
PHARMACEUTICALS: 5.6%
26,700 54,600 49,900 (L) 131,200 @ AdvancePCS 1,486,122 3,039,036 2,777,434 7,302,592
26,200 (L) 11,800 23,500 (L) 61,500 Allergan, Inc. 1,957,926 881,814 1,756,155 4,595,895
89,400 72,600 71,150 233,150 Mylan Laboratories 2,263,608 1,838,232 1,801,518 5,903,358
113,200 101,088 93,800 308,088 Omnicare, Inc. 4,518,944 4,035,433 3,744,496 12,298,873
- 55,300 - 55,300 Pfizer, Inc. - 1,855,315 - 1,855,315
@ Pharmaceutical Resources,
400 - - 400 Inc. 29,032 - - 29,032
-------------------------------------------------
10,255,632 11,649,830 10,079,603 31,985,065
-------------------------------------------------
RETAIL: 13.4%
- - - - @ Abercrombie & Fitch Co. - - - -
Applebees International,
33,200 26,700 - 59,900 Inc. 1,285,172 1,033,557 - 2,318,729
26,000 (L) 10,900 22,400 (L) 59,300 @ Autozone, Inc. 2,487,160 1,042,694 2,142,784 5,672,638
- - 40,900 40,900 @ Bed Bath & Beyond, Inc. - - 1,727,616 1,727,616
51,300 48,400 51,000 150,700 CBRL Group, Inc. 2,116,125 1,996,500 2,103,750 6,216,375
100,400 (L) 78,400 69,600 (L) 248,400 @ Chico's FAS, Inc. 3,853,352 3,008,992 2,671,248 9,533,592
49,800 41,600 40,600 132,000 Dollar General Corp. 1,051,776 878,592 857,472 2,787,840
122,100 70,950 99,000 292,050 @ HOT Topic, Inc. 3,638,580 2,114,310 2,950,200 8,703,090
48,800 (L) 39,900 41,000 (L) 129,700 Michaels Stores, Inc. 2,305,800 1,885,275 1,937,250 6,128,325
@ Pacific Sunwear Of
- 58,875 - 58,875 California - 1,339,995 - 1,339,995
42,300 (L) 35,100 34,400 (L) 111,800 @ Panera Bread Co. 1,648,854 1,368,198 1,340,912 4,357,964
44,000 64,500 62,800 171,300 Petsmart, Inc. 1,063,040 1,558,320 1,517,248 4,138,608
29,400 24,400 24,000 77,800 Regis Corp. 1,203,930 999,180 982,800 3,185,910
81,200 (L) 34,000 62,100 177,300 @ Sonic Corp. 2,506,644 1,049,580 1,917,027 5,473,251
- 118,500 123,400 241,900 @ Staples, Inc. - 3,217,275 3,350,310 6,567,585
22,600 26,300 57,700 106,600 Tiffany & Co. 1,024,910 1,192,705 2,616,695 4,834,310
78,400 - 12,800 91,200 @ Tractor Supply Co. 3,413,536 - 557,312 3,970,848
-------------------------------------------------
27,598,879 22,685,173 26,672,624 76,956,676
-------------------------------------------------
SAVINGS & LOANS: 1.5%
Independence Community
23,600 19,600 19,100 62,300 Bank Corp. 872,728 724,808 706,318 2,303,854
New York Community
72,200 25,700 63,866 161,766 Bancorp, Inc. 2,804,970 998,445 2,481,194 6,284,609
-------------------------------------------------
3,677,698 1,723,253 3,187,512 8,588,463
-------------------------------------------------
SEMICONDUCTORS: 6.2%
111,100 (L) 156,800 113,700 (L) 381,600 @ Altera Corp. 2,814,163 3,971,744 2,880,021 9,665,928
91,400 (L) 75,500 77,400 (L) 244,300 @ Broadcom Corp. 3,329,702 2,750,465 2,819,682 8,899,849
58,200 50,600 47,800 156,600 Linear Technology Corp. 2,510,748 2,182,884 2,062,092 6,755,724
71,200 (L) 130,000 69,500 (L) 270,700 @ Xilinx, Inc. 2,676,408 4,886,700 2,612,505 10,175,613
-------------------------------------------------
11,331,021 13,791,793 10,374,300 35,497,114
-------------------------------------------------
SOFTWARE: 6.2%
62,200 (L) 43,500 53,600 (L) 159,300 Adobe Systems, Inc. 2,570,104 1,797,420 2,214,752 6,582,276
91,800 (L) 34,200 33,300 (L) 159,300 @ Avid Technology, Inc. 4,854,384 1,808,496 1,760,904 8,423,784
- - 43,300 43,300 @ D&B Corp. - - 2,089,225 2,089,225
- - 59,500 59,500 Fair Isaac Corp. - - 3,282,020 3,282,020
26,300 - - 26,300 National Instruments Corp. 1,190,601 - - 1,190,601
143,400 - - 143,400 @ Packeteer, Inc. 2,720,155 - - 2,720,155
107,200 104,914 81,800 293,914 @ Veritas Software Corp. 4,075,851 3,988,935 3,110,118 11,174,904
----------------------------------------------------
15,411,095 7,594,851 12,457,019 35,462,965
----------------------------------------------------
TELECOMMUNICATIONS: 3.0%
19,500 (L) - - 19,500 Adtran, Inc. 1,283,490 - - 1,283,490
- 123,300 - 123,300 @ Cisco Systems, Inc. - 2,793,978 - 2,793,978
70,900 (L) - - 70,900 @ Foundry Networks, Inc. 1,868,924 - - 1,868,924
@ Nextel Communications,
- 66,800 - 66,800 Inc. - 1,692,044 - 1,692,044
92,420 (L) 86,400 77,425 (L) 256,245 @ Utstarcom, Inc. 3,500,870 3,272,832 2,932,859 9,706,561
----------------------------------------------------
6,653,284 7,758,854 2,932,859 17,344,997
----------------------------------------------------
TEXTILES: 1.3%
40,400 33,900 32,600 106,900 @ Mohawk Industries, Inc. 2,912,032 2,443,512 2,349,808 7,705,352
----------------------------------------------------
2,912,032 2,443,512 2,349,808 7,705,352
----------------------------------------------------
TOYS/GAMES/HOBBIES: 0.2%
- - 28,400 (L) 28,400 @ Leapfrog Enterprises, Inc. - - 891,760 891,760
----------------------------------------------------
- - 891,760 891,760
----------------------------------------------------
TRANSPORTATION: 1.8%
CH Robinson Worldwide,
56,400 - 68,900 125,300 Inc. 2,218,212 - 2,709,837 4,928,049
38,700 35,500 31,600 105,800 @ Forward Air Corp. 1,100,628 1,009,620 898,704 3,008,952
@ Knight Transportation,
- - - - Inc. - - - -
@ Swift Transportation Co.,
47,100 39,100 38,400 (L) 124,600 Inc. 938,232 778,872 764,928 2,482,032
----------------------------------------------------
4,257,072 1,788,492 4,373,469 10,419,033
----------------------------------------------------
Total Common Stock
(Cost $171,925,517,
$137,131,365, $137,131,706,
$446,218,588) 218,197,203 176,107,884 177,162,450 571,467,537
----------------------------------------------------
MUTUAL FUNDS: 0.8%
EQUITY FUND: 0.8%
- 43,600 - 43,600 Midcap SPDR Trust Series 1 - 4,544,864 - 4,544,864
----------------------------------------------------
Total Mutual Funds (Cost $0,
$4,544,864, $0, $4,544,864) - 4,544,864 - 4,544,864
----------------------------------------------------
Total Long-Term Investments
(Cost $171,925,517,
$141,706,229, $137,131,706,
$450,763,452) 218,197,203 180,652,748 177,162,450 576,012,401
----------------------------------------------------
PRINCIPAL AMOUNT VALUE
- ----------------------------------- ------------------------------------------------
SHORT-TERM INVESTMENTS: 0.6%
REPURCHASE AGREEMENTS: 0.6%
1,682,000 790,000 679,000 3,151,000 Morgan Stanley Repurchase Agreements dated
11/29/2003, 1.03% due 12/01/2003 $790,068,
$1,682,144, $679,058 to be received upon
repurchase (Collateralized by $815,000
various U.S. Treasury Securities, 0.000%,
Market $814,996, due 12/11/03-12/18/03,
collateralized by $1,745,000 USTN, 0.000%,
Market Value $1,745,000, due 12/18/03,
collateralized by $700,000 various U.S.
Treasury Securities, 0.000%, Market Value
$699,996, due 12/11/03 to 12/18/03) $ 1,682,000 $ 790,000 $ 679,000 $3,151,000
------------------------------------------------
Total Short-Term Investments (Cost
$1,682,000, $790,000, $679,000, $3,151,000) 1,682,000 790,000 679,000 3,151,000
------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST
$173,607,517, $142,496,229, $137,810,706,
$453,914,452)* 100.7% $219,879,203 $181,442,748 $177,841,450 $ 579,163,401
OTHER ASSETS AND LIABILITIES-NET -0.7% (2,569,857) (519,757) (773,222) (3,862,836)
---------------------------------------------------------------
NET ASSETS 100.0% 217,309,346 180,922,991 177,068,228 575,300,565
===============================================================
@ Non-income producing security
@@ Foreign Issuer
A Related Party
(L) Loaned security, a portion or all of the security is on loan at November 30,
2003.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF COMBINATION:
On November 11, 2003, the Board of Trustees of ING Growth + Value Fund
("Growth + Value Fund"), ING Growth Opportunities Fund ("Growth Opportunities
Fund") and ING MidCap Opportunities Fund ("MidCap Opportunities Fund"), approved
an Agreement and Plan of Reorganization (the "Plan") whereby, subject to
approval by the shareholders of Growth + Value Fund and Growth Opportunities
Fund, MidCap Opportunities Fund will acquire all of the assets of the Growth +
Value Fund and Growth Opportunities, subject to the liabilities of such Funds,
in exchange for a number of shares of MidCap Opportunities Fund equal in value
to the net assets of the Growth + Value Fund and Growth Opportunities Fund (the
"Merger").
The Merger will be accounted for as a tax-free merger of investment
companies. The unaudited pro forma combined financial statements are presented
for the information of the reader and may not necessarily be representative of
what the actual combined financial statements would have been had the
reorganization occurred at November 30, 2003. The unaudited pro forma portfolio
of investments, and statement of assets and liabilities reflect the financial
position of Growth + Value Fund and Growth Opportunities Fund and MidCap
Opportunities Fund at November 30, 2003. The unaudited pro forma statement of
operations reflects the results of operations of Growth + Value Fund and Growth
Opportunities Fund and MidCap Opportunities Fund for the year ended November 30,
2003. These statements have been derived from the Funds' respective books and
records utilized in calculating daily net asset value at the date indicated
above for Growth + Value Fund and Growth Opportunities Fund and MidCap
Opportunities Fund under generally accepted accounting principles in the United
States of America. The historical cost of investment securities will be carried
forward to the surviving entity and the results of operations of MidCap
Opportunities Fund for pre-combination periods will not be restated.
The unaudited pro forma portfolio of investments, and unaudited statement
of assets and liabilities and statement of operations should be read in
conjunction with the historical financial statements of each Fund which are
incorporated by reference in the Statements of Additional Information.
NOTE 2 - SECURITY VALUATION:
Investments in equity securities traded on a national securities exchange
are valued
at the last reported sale price. Fund securities reported by NASDAQ will be
valued at the NASDAQ official closing price. Securities traded on an exchange or
NASDAQ for which there has been no sale and securities traded in the
over-the-counter- market are valued at the mean between the last reported bid
and ask prices. All investments quoted in foreign currencies will be valued
daily in U.S. dollars on the basis of the foreign currency exchange rates
prevailing at that time. Debt securities are valued at bid prices obtained from
independent services or from one or more dealers making markets in the
securities. U.S. Government obligations are valued by using market quotations or
independent pricing services which uses prices provided by market-makers or
estimates of market values obtained from yield data relating to instruments or
securities with similar characteristics. Securities and assets for which market
quotations are not readily available (which may include certain restricted
securities which are subject to limitations as to their sale) are valued at
their fair values as determined in good faith by or under the supervision of the
Fund's Board of Trustees ("Board"), in accordance with methods that are
specifically authorized by the Board. Securities traded on exchanges, including
foreign exchanges, which close earlier than the time that a Fund calculates its
net asset value may also be valued at their fair values as determined in good
faith by or under the supervision of a Fund's Board, in accordance with methods
that are specifically authorized by the Board. If a significant event which is
likely to impact the value of one or more foreign securities held by a Fund
occurs after the time at which the foreign market for such security(ies) closes
but before the time that the Fund's net asset value is calculated on any
business day, such event may be taken into account in determining the fair value
of such security(ies) at the time the Fund calculates its net asset value. For
these purposes, significant events after the close of trading on a foreign
market may include, among others, securities trading in the U.S. and other
markets, corporate announcements, natural and other disasters, and
political and other events. Among other elements of analysis, the Board has
authorized the use of one or more research services to assist with the
determination of the fair value of foreign securities in light of significant
events. Research services use statistical analyses and quantitative models to
help determine fair value as of the time a Fund calculates its net asset value.
Unlike the closing price of a security on an exchange, fair value determinations
employ elements of judgment, and the fair value assigned to a security may not
represent the actual value that a Fund could obtain if it were to sell the
security at the time of the close of the NYSE. Investments in securities
maturing in less than 60 days from the date of acquisition are valued at
amortized cost, which, when combined with accrued interest, approximates market
value.
NOTE 3 - CAPITAL SHARES:
The unaudited pro forma net asset value per share assumes additional shares
of common stock issued in connection with the proposed acquisition of Growth +
Value Fund and Growth Opportunities Fund by MidCap Opportunities Fund as of
November 30, 2003. The number of additional shares issued was calculated by
dividing the net asset value of each Class of Growth + Value Fund and Growth
Opportunities Fund by the respective Class net asset value per share of MidCap
Opportunities Fund.
NOTE 4 - UNAUDITED PRO FORMA ADJUSTMENTS:
The accompanying unaudited pro forma financial statements reflect changes
in fund shares as if the merger had taken place on November 30, 2003. Growth +
Value Fund and Growth Opportunities Fund expenses were adjusted assuming MidCap
Opportunities Fund's fee structure was in effect for the year ended November 30,
2003.
NOTE 5 - MERGER COSTS:
Merger costs to be incurred by the Funds are estimated at approximately
$175,000. These costs represent one half of the estimated expense of all the
Funds carrying out their obligations under the Plan and consist of management's
estimate of legal fees, accounting fees, printing costs and mailing charges
related to the proposed merger. ING Investments LLC, Investment Adviser to the
Funds, will bear the other half of the cost of the Reorganization.
NOTE 6 - USE OF ESTIMATES
Management of the Funds has made certain estimates and assumptions relating
to the reporting of assets, liabilities, income, and expenses to prepare these
financial statements in conformity with accounting principles generally accepted
in the United States of America. Actual results could differ from these
estimates.
NOTE 7 - FEDERAL INCOME TAXES:
It is the policy of the Funds, to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies and
to distribute substantially all of their net investment income and any net
realized gains to their shareholders. Therefore, a federal income tax or excise
tax provision is not required. In addition, by distributing during each calendar
year substantially all of its net investment income and net realized capital
gains, each Fund intends not to be subject to any federal excise tax.
The Fund intends to offset any net capital gains with any available capital
loss carryforward until each carryforward has been fully utilized or expires.
The amount of capital loss carryforward, which may offset MidCap Opportunities
Fund's capital gains in any given year, may be limited as a result of previous
reorganizations. In addition, no capital gain distribution shall be made until
the capital loss carryforward has been fully utilized or expires.
ING GROWTH OPPORTUNITIES FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS ON MARCH 25, 2004. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoint(s) MICHAEL J. ROLAND AND HUEY P.
FALGOUT, JR. or any one or both of them, proxies, with full power of
substitution, to vote all shares of ING Growth Opportunities Fund (the "Fund"),
a series of ING Equity Trust, which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Fund to be held at the offices of the
Fund at 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258-2034 on March
25, 2004 at 10:00 a.m., Local time, and at any adjournment thereof.
This proxy will be voted as instructed. If no specification is made,
the proxy will be voted "FOR" the proposals.
Please vote, date and sign this proxy and return it promptly in the
enclosed envelope.
Please indicate your vote by an "x" in the appropriate box below.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS:
1. To approve an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets of ING Growth Opportunities Fund by ING MidCap
Opportunities Fund in exchange for Class A, Class B, Class C, Class I, and Class
Q shares of beneficial interest of ING MidCap Opportunities Fund and the
assumption by ING MidCap Opportunities Fund of all of the liabilities of ING
Growth Opportunities Fund, a series of ING Equity Trust; and
For [ ] Against [ ] Abstain [ ]
2. To transact such other business, not currently contemplated, that may
properly come before the Special Meeting or any adjournment(s) thereof in the
discretion of the proxies or their substitutes.
For [ ] Against [ ] Abstain [ ]
This proxy card must be signed exactly as your name(s) appears hereon.
If as an attorney, executor, guardian or in some representative capacity or as
an officer of a corporation, please add title(s) as such. Joint owners must each
sign.
______________________________ _________________
Signature Date
______________________________ _________________
Signature (if held jointly) Date
ING Equity Trust
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258-2034
ING GROWTH + VALUE FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS ON MARCH 25, 2004. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoint(s) MICHAEL J. ROLAND AND KIMBERLY A.
ANDERSON or any one or both of them, proxies, with full power of substitution,
to vote all shares of ING Growth + Value Fund (the "Fund"), a series of ING
Mayflower Trust, which the undersigned is entitled to vote at the Special
Meeting of Shareholders of the Fund to be held at the offices of the Fund at
7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258-2034 on March 25,
2004 at 10:00 a.m., Local time, and at any adjournment thereof.
This proxy will be voted as instructed. If no specification is made,
the proxy will be voted "FOR" the proposals.
Please vote, date and sign this proxy and return it promptly in the
enclosed envelope.
Please indicate your vote by an "x" in the appropriate box below.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS:
1. To approve an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets of ING Growth + Value Fund by ING MidCap
Opportunities Fund in exchange for Class A, Class B, Class C, and Class Q shares
of beneficial interest of ING MidCap Opportunities Fund and the assumption by
ING MidCap Opportunities Fund of all of the liabilities of ING Growth + Value
Fund, a series of ING Equity Trust; and
For [ ] Against [ ] Abstain [ ]
2. To transact such other business, not currently contemplated, that may
properly come before the Special Meeting or any adjournment(s) thereof in the
discretion of the proxies or their substitutes.
For [ ] Against [ ] Abstain [ ]
This proxy card must be signed exactly as your name(s) appears hereon.
If as an attorney, executor, guardian or in some representative capacity or as
an officer of a corporation, please add titles as such. Joint owners must each
sign.
____________________________ _________________
Signature Date
____________________________ _________________
Signature (if held jointly) Date
ING Mayflower Trust
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258-2034
PART C
OTHER INFORMATION
Item 15. Indemnification
Section 4.3 of Registrant's Declaration of Trust provides the following:
(a) Subject to the exceptions and limitations contained in paragraph (b)
below:
(i) every person who is, or has been, a Trustee or Officer of the
Trust shall be indemnified by the Trust to the fullest extent permitted
by law against all liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action, suit or
proceeding in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or Officer and against
amounts paid or incurred by him in the settlement thereof; and
(ii) the word "claim", "action", "suit" or "proceeding" shall apply
to all claims, actions or suits or proceedings (civil, criminal,
administrative or other including appeals), actual or threatened; and
the words "liability" and "expenses" shall include without limitation,
attorneys fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee or Officer:
(i) against any liability to the Trust, a Series thereof, or the
Shareholders by reason of a final adjudication by a court or other body
before which a proceeding was brought or that he engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office;
(ii) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in reasonable
belief that his action was in the best interest of the Trust; or
(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b) (i) or (b)
(ii) resulting in a payment by a Trustee or officer, unless there has
been a determination that such Trustee or officer did not engage in
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office:
(A) by the court or other body approving the settlement
or other disposition; or
(B) based upon the review of readily available facts (as
opposed to full trial-type inquiry) by (x) vote of a majority
of the Disinterested Trustees acting on the matter (provided
that a majority of the Disinterested Trustees then in office
act on the matter) or (y) written opinion of independent legal
counsel.
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Trustee or officer may now or hereafter be entitled, shall
continue as to a person who has ceased to be such Trustee or officer and shall
inure to the benefit of the heirs, executors, administrators and assigns of such
a person. Nothing
contained herein shall affect any rights to indemnification to which personnel
of the Trust other than Trustees and officers may be entitled by contract or
otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of this
Section 4.3 may be advanced by the Trust prior to final disposition thereof upon
receipt of an undertaking by or on behalf of the recipient to repay such amount
if it is ultimately determined that he is not entitled to indemnification under
this Section 4.3, provided that either:
(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust shall be insured
against losses arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees act on the matter) or an
independent legal counsel in a written opinion shall determine, based upon a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the recipient ultimately will be found
entitled to indemnification.
As used in this Section 4.3, a "Disinterested Trustee" is one who is
not (i) an Interested Person of the Trust (including anyone who has been
exempted from being an Interested Person by any rule, regulation or order of the
Commission), or (ii) involved in the claim, action, suit or proceeding.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("1933 Act") may be permitted to trustees, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the option of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a trustee, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
Item 16. Exhibits
(1) Amended and Restated Declaration of Trust -- previously filed
as an Exhibit to Post-Effective Amendment No. 43 to the
Registrant's Registration Statement on Form N-1A Registration
Statement on September 30, 2003 and incorporated herein by
reference.
(2) (A) Bylaws -- previously filed as an Exhibit to the Registrant's
initial Form N-1A Registration Statement on June 15, 1998 and
incorporated herein by reference.
(B) Form Amendment to Bylaws -- previously filed as an Exhibit to
Post-Effective Amendment No. 6 to the Registrant's
Registration Statement on Form N-1A on March 1, 2001 and
incorporated herein by reference.
(3) Not Applicable
(4) (A) Form of Agreement and Plan of Reorganization between ING
Equity Trust on behalf of ING Growth Opportunities Fund and
ING Equity Trust, on behalf of ING Growth Opportunities
Portfolio.
(B) Form of Agreement and Plan of Reorganization between ING
Mayflower Trust on behalf of ING Growth + Value Fund and ING
Equity Trust, on behalf of ING MidCap Opportunities Fund.
(5) Not Applicable
(6) (A) Form of Amended and Restated Investment Management
Agreement between Registrant and ING Investments, LLC. --
previously filed as an Exhibit to Post-Effective Amendment No.
30 to the Registrant's Registration Statement of Form N-1A on
September 23, 2002 and incorporated herein by reference.
(B) Sub-Adviser Agreement between ING Investments, LLC and Aeltus
Investment Management, Inc. -- to be filed in subsequent
post-effective amendment
(C) First Amendment to Sub-Adviser Agreement between ING
Investments, LLC and Aeltus Investment Management, Inc.
(D) Second Amendment to Sub-Advisory Agreement between ING
Investments, LLC and Aeltus Investment Management, Inc.
(E) Amended Schedule A with respect to Sub-Advisory Agreement
between ING Investments, LLC and Aeltus Investment Management,
Inc.
(7) (A) Form of Underwriting Agreement with ING Funds Distributor,
Inc. -- previously filed as an Exhibit to Post-Effective
Amendment No. 30 to the Registrant's Registration Statement on
Form N-1A on September 23, 2002 and incorporated herein by
reference.
(B) Form of Amended Schedule A to Underwriting Agreement with ING
Funds Distributor, LLC (formerly ING Funds Distributor, Inc.).
(C) Form of Selling Group Agreement -- previously filed as an
Exhibit to Post-Effective Amendment No. 8 to the Registrant's
Registration Statement on Form N-1A on April 30, 2001 and
incorporated herein by reference.
(D) Form of Financial Institutions Selling Group Agreement --
previously filed as an Exhibit to Post-Effective Amendment No.
8 to Registrant's Registration Statement on Form N-1A on April
30, 2001 and incorporated herein by reference.
(8) Not Applicable
(9) (A) Form of Custody and Investment Accounting Agreement
between Registrant and State Street Bank and Trust Company --
previously filed as an Exhibit to Post-Effective Amendment No.
13 to Registrant's Registration Statement on Form N-1A on
October 25, 2001 and incorporated herein by reference.
(B) Form of Amended and Restated Schedule A to the Custody and
Investment Accounting Agreement between Registrant and State
Street Bank and Trust Company -- previously filed as an
Exhibit to Post-Effective Amendment No. 33 to Registrant's
Registration Statement on Form N-1A on January 9, 2003 and
incorporated herein by reference.
(C) Form of Fund Accounting Agreement between Registrant and The
Bank of New York-- previously filed as an Exhibit to
Post-Effective Amendment No. 35 to Registrant's Registration
Statement on Form N-1A on April 9, 2003 and incorporated
herein by reference.
(D) Form of Custody Agreement between Registrant and The Bank of
New York-- previously filed as an Exhibit to Post-Effective
Amendment No. 35 to Registrant's Registration Statement on
Form N-1A on April 9, 2003 and incorporated herein by
reference.
(E) Form of Foreign Custody Manager Agreement between Registrant
and The Bank of New York-- previously filed as an Exhibit to
Post-Effective Amendment No. 35 to Registrant's Registration
Statement on Form N-1A on April 9, 2003 and incorporated
herein by reference.
(F) Amended Schedule 2 to Form of Foreign Custody Manager
Agreement between Registrant and The Bank of New York.
(G) Amendment to Custody Agreement, Foreign Custody Manager
Agreement, and Fund Accounting Agreement.
10 (A) Form of Fourth Amended and Restated Service and
Distribution Plan (Classes A, B, C, Q and T) - previously
filed as an Exhibit to Post -Effective Amendment No. 30 to
Registrant's Registration Statement on Form N-1A on September
23, 2002 and incorporated herein by reference.
(B) Amended and Restated Schedule A and Schedule B with respect to
the Fourth Amended and Restated Service and Distribution Plan
(Classes A, B, C, and Q).
(C) Form of Multiple Class Plan Pursuant to Rule 18f-3 Plan --
previously filed as an Exhibit to Post -Effective Amendment
No. 30 to Registrant's Registration Statement on Form N-1A on
September 23, 2002 and incorporated herein by reference.
(D) Amended Schedule A and Schedule B to Multiple Class Plan
Pursuant to Rule 18f-3 Plan.
(11) Form of Opinion and Consent of Counsel.
(12) Form of Opinion of Counsel Supporting Tax Matters and Consequence -- To
be filed in a Subsequent Post Effective Amendment.
(13) (A) Other Material Contracts -- previously filed as an Exhibit
to the Registrant's initial Form N-1A Registration Statement
on June 15, 1998 and incorporated herein by reference.
(B) Other Material Contracts -- previously filed as an Exhibit to
Pre-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form N-1A on July 28, 1998 and incorporated
herein by reference.
(C) Other Material Contracts -- previously filed as an Exhibit to
Post-Effective Amendment No. 43 to the Registrant's
Registration Statement on Form N-1A on September 30, 2003 and
incorporated herein by reference.
(C) Form of Transfer Agency Agreement between ING Pilgrim
Investments, LLC and DST Systems, Inc. -- previously filed as
an Exhibit to Post-Effective Amendment No. 9 to the
Registrant's Registration Statement on Form N-1A on July 3,
2001 and incorporated herein by reference.
(D) Amended and Restated Exhibit A to Transfer Agency Agreement
between ING Funds and DST Systems, Inc.
(E) Form of Third Amended and Restated Administrative Services
Agreement between Pilgrim Equity Trust and ING Pilgrim Group,
LLC -- previously filed as an Exhibit to Post-Effective
Amendment No. 13 to Registrant's Registration Statement on
Form N-1A on October 25, 2001 and incorporated herein by
reference.
(F) Form of Amended and Restated Schedule A to Third Amended and
Restated Administrative Services Agreement between Pilgrim
Equity Trust and ING Pilgrim Group LLC - previously filed as
an Exhibit to Post-Effective Amendment No. 27 to Registrant's
Registration Statement on Form N-1A on May 28, 2002 and
incorporated herein by reference.
(G) Form of Expense Limitation Agreement between ING Investments,
LLC and ING Equity Trust - previously filed as an Exhibit to
Post--Effective Amendment No. 30 to Registrant's Registration
Statement on Form N-1A on September 23, 2002 and incorporated
herein by reference.
(14) Consent of Independent Accountants
(15) Not Applicable
(16) Powers of Attorney.
Item 17. Undertakings
(1) The undersigned registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus which is
a part of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) under the Securities Act (17
CFR 230.145(c)), the reoffering prospectus will contain the information called
for by the applicable registration form for reofferings by persons who may be
deemed underwriters, in addition to the information called for by the other
items of the applicable form.
(2) The undersigned registrant agrees that every prospectus that
is filed under paragraph (1) above will be filed as a part of an amendment to
the registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act, each
post-effective amendment shall be deemed to be a new registration statement for
the securities offered therein, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of them.
(3) The undersigned registrant undertakes to file a post-effective
amendment to this registration statement upon the closing of the Reorganization
described in this Registration Statement that contains an opinion of counsel
supporting the tax matters discussed in this Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended
(the"1933 Act"), the Registrant has duly caused this Registration Statement on
Form N-14 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Scottsdale and the State of Arizona on the 23rd day
of December, 2003.
ING EQUITY TRUST
By: /s/ Huey Falgout, Jr.
----------------------
Huey Falgout, Jr.
Secretary
Pursuant to the requirements of the 1933 Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ John G. Turner Trustee and Chairman December 23, 2003
- -------------------------
John G. Turner*
/s/ James M. Hennessy President and Chief Executive December 23, 2003
- ------------------------- Officer
James M. Hennessy*
/s/ Michael J. Roland Executive Vice President and December 23, 2003
- ------------------------- Principal Financial Officer
Michael J. Roland*
/s/ Paul S. Doherty Trustee December 23, 2003
- -------------------------
Paul S. Doherty*
/s/ J. Michael Earley Trustee December 23, 2003
- -------------------------
J. Michael Earley*
/s/ R. Barbara Gitenstein Trustee December 23, 2003
- -------------------------
R. Barbara Gitenstein*
/s/ Walter H. May, Jr.
_________________________ Trustee December 23, 2003
Walter H. May, Jr.*
/s/ Thomas J. McInerney
_________________________ Trustee December 23, 2003
Thomas J. McInerney*
/s/ Jock Patton
_________________________ Trustee December 23, 2003
Jock Patton*
/s/ David W.C. Putnam
_________________________ Trustee December 23, 2003
David W.C. Putnam*
/s/ Blaine E. Rieke
_________________________ Trustee December 23, 2003
Blaine E. Rieke*
/s/ Roger B. Vincent
_________________________ Trustee December 23, 2003
Roger B. Vincent*
/s/ Richard A. Wedemeyer
_________________________ Trustee December 23, 2003
Richard A. Wedemeyer*
*By: /s/ Huey Falgout, Jr.
----------------------
Huey Falgout, Jr.
Attorney-in-Fact**
** Executed pursuant to powers of attorney filed in this Registration
Statement.
EXHIBIT INDEX
(4) (A) Form of Agreement and Plan of Reorganization between ING
Equity Trust on behalf of ING Growth Opportunities Fund and
ING Equity Trust, on behalf of ING MidCap Opportunities Fund.
(B) Form of Agreement and Plan of Reorganization between ING
Mayflower Trust on behalf of ING Growth + Value Fund and ING
Equity Trust, on behalf of ING MidCap Opportunities Fund.
(6) (B) Form of Sub-Advisory Agreement between ING Investments,
LLC and Aeltus Investment Management, Inc.
(C) First Amendment to Sub-Adviser Agreement between ING
Investments, LLC and Aeltus Investment Management, Inc.
(D) Second Amendment to Sub-Advisory Agreement between ING
Investments, LLC and Aeltus Investment Management, Inc.
(E) Amended Schedule A with respect to Sub-Advisory Agreement
between ING Investments, LLC and Aeltus Investment Management,
Inc.
(7) (B) Form of Amended Schedule A to Underwriting Agreement with
ING Funds Distributor, LLC (formerly ING Funds Distributor,
Inc.).
(9) (F) Amended Schedule 2 to Form of Foreign Custody Manager
Agreement between Registrant and The Bank of New York.
(G) Amendment to Custody Agreement, Foreign Custody Manager
Agreement, and Fund Accounting Agreement.
(10) (B) Amended and Restated Schedule A and Schedule B with
respect to the Fourth Amended and Restated Service and
Distribution Plan (Classes A, B, C, and Q).
(D) Amended Schedule A and Schedule B to Multiple Class Plan
Pursuant to Rule 18f-3 Plan.
(11) Form of Opinion and Consent of Counsel
(13) (D) Amendment to Transfer Agent Agreement
(14) Consent of Independent Accountants
(16) Powers of Attorney