<PAGE> 1
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box(es):
[X] Preliminary Proxy Statement
[ ] Confidential, For use of the Commission Only (as
permitted by Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ING FUNDS TRUST
(Name of Registrant as Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration no.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
ING FUNDS TRUST
1475 DUNWOODY DRIVE
WEST CHESTER, PA 19380-1478
OCTOBER 11, 1999
ING SMALL CAP GROWTH FUND
Dear Shareholder,
You are cordially invited to attend a Special Meeting of Shareholders of the ING
Small Cap Growth Fund (the "Fund")to be held on October 29, 1999, at the Fund's
offices located at 1475 Dunwoody Drive, West Chester, PA 19380.
The purpose of the Special Meeting is to approve a new investment sub-advisory
agreement for the Fund with Furman Selz Capital Management LLC, which would
replace the existing investment sub-advisory agreement with Baring Asset
Management, Inc. The terms of the new investment sub-advisory agreement are the
same in all material respects as the existing investment sub-advisory agreement,
except for the appointment of the new sub-adviser. If the new agreement is
approved:
- There will be no changes to the investment management fees paid by the
Fund, and
- The management of the Fund will continue to be supervised by ING
Mutual Funds Management Co. LLC.
Included with this letter are a Notice of Special Meeting of Shareholders, a
Proxy Statement and a proxy card. Regardless of the number of shares you own, it
is important that your shares are represented and voted. If you cannot
personally attend the Special Shareholders' Meeting, we would appreciate your
promptly voting, signing and returning the enclosed proxy card in the
postage-paid envelope provided.
We thank you for your time and for your investment in ING Funds Trust.
Sincerely,
John J. Pileggi, President
ING Funds Trust
<PAGE> 3
ING FUNDS TRUST
1475 DUNWOODY DRIVE
WEST CHESTER, PA 19380-1478
ING SMALL CAP GROWTH FUND
OCTOBER 11, 1999
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
A Special Meeting of Shareholders of the ING Small Cap Growth Fund will be held
at the Fund's offices, located at 1475 Dunwoody Drive, West Chester, PA 19380,
on October 29, 1999, at 10:00 a.m. (Eastern time) for the following purposes:
1. To approve a new investment sub-advisory agreement between ING Mutual
Fund Management Co. LLC and Furman Selz Capital Management LLC
("Furman Selz"), pursuant to which Furman Selz would serve as the new
sub-adviser to the ING Small Cap Growth Fund.
2. To transact such other business as may properly come before the
Meeting, or any adjournments thereto.
Shareholders of record at the close of business on September 30, 1999, are
entitled to notice of, and to vote at, the Meeting. The ING Small Cap Growth
Fund is a series of ING Funds Trust, a Delaware business trust.
Rachelle I. Rehner, Secretary
ING Funds Trust
<PAGE> 4
ING FUNDS TRUST
PROXY STATEMENT
FOR A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 29, 1999
ING SMALL CAP GROWTH FUND
INTRODUCTION
This proxy statement is solicited by the Board of Trustees (the "Board") of ING
Funds Trust for voting at the special meeting of shareholders of the ING Small
Cap Growth Fund (the "Fund") to be held at 10:00 a.m. (Eastern time) on October
29, 1999, at the Fund's offices at 1475 Dunwoody Drive, West Chester, PA 19380,
and at any and all adjournments thereof (the "Meeting"), for the purposes set
forth in the accompanying Notice of Special Meeting of Shareholders. This proxy
statement was first mailed to shareholders on or about October 11, 1999.
PROPOSAL
The purpose of the Meeting is to have shareholders vote on a Proposal to approve
a new investment sub-advisory agreement for the Fund with Furman Selz Capital
Management LLC, which would replace the existing investment sub-advisory
agreement with Baring Asset Management, Inc.
Each share of the Fund is entitled to one vote on the Proposal and on each other
matter that it is entitled to vote upon at the Meeting.
Each valid proxy that we receive will be voted in accordance with your
instructions and as the persons named in the proxy determine on such other
business as may come before the Meeting. If no instructions are given on an
executed proxy that has been returned to us, that proxy will be voted FOR the
Proposal. Shareholders who execute proxies may revoke them at any time before
they are voted, either by writing to ING Funds Trust, or by voting in person at
the Meeting.
The Proposal requires the affirmative vote of a "majority of the outstanding
voting securities" of the Fund. The term "majority of the outstanding voting
securities" of the Fund as defined by the Investment Company Act of 1940, as
amended (the "1940 Act"), means: the affirmative vote of the lesser of (i) 67%
of the voting securities of the Fund present at the meeting if more than 50% of
the outstanding shares of the Fund are present in person or by proxy or (ii)
more than 50% of the outstanding shares of the Fund.
THE BOARD OF TRUSTEES OF ING FUNDS TRUST RECOMMENDS THAT YOU VOTE IN FAVOR OF
THE PROPOSAL.
<PAGE> 5
The Board of ING Funds Trust has fixed the close of business on September 30,
1999 as the record date (the "Record Date") for determining holders of the
Funds' shares entitled to notice of and to vote at the Meeting. Each shareholder
will be entitled to one vote for each share held. At the close of business on
the Record Date, there were _______ shares outstanding of Fund.
BACKGROUND
ING Mutual Fund Management Co. LLC (the "Manager"), a wholly-owned indirect
subsidiary of ING Groep, N.V. ("ING Group"), is engaged by ING Funds Trust to
exercise overall responsibility, subject to the supervision of the Board, for
engaging sub-advisers and for monitoring and evaluating the management of the
Fund's assets by its sub-adviser. The Manager is also responsible for monitoring
and evaluating the sub-adviser on a periodic basis, and will consider its
performance record with respect to the investment policies of the Fund. The
Manager also provides certain administrative services necessary for the Fund's
operations. For its services, the Manager receives from the Fund a fee, payable
monthly, at the annual rate of 1% of the Fund's average daily net assets. The
Manager has agreed to discount its fees during the Fund's first and second years
of operations.
The Manager has entered into a Sub-Advisory Agreement (the "Existing
Sub-Advisory Agreement") on behalf of the Fund with Baring Asset Management,
Inc. ("BAM"). Under the Existing Sub-Advisory Agreement, BAM has full investment
discretion and makes all determinations with respect to the investment of the
Fund's assets and the purchases and sale of portfolio securities and other
investments. BAM, located at 125 High Street, Boston, MA 02110, is a
wholly-owned subsidiary of Baring Asset Management Holdings Limited, a global
company registered in England and Wales, which is in turn a wholly-owned
subsidiary of ING Group.
On September 30, 1999, the Manager recommended to the Board that it enter into a
new Sub-Advisory Agreement (the "New Sub-Advisory Agreement") with Furman Selz
Capital Management LLC ("Furman Selz"), which would replace the Existing
Sub-Advisory Agreement. Furman Selz, like BAM, is an affiliate of the Manager by
reason of common ownership. Furman Selz anticipates that George Paoletti, an
employee of Furman Selz, will be the portfolio manager of the Fund. Mr. Paoletti
has been employed at Furman Selz since July 1999, and previously was employed at
Morgan Stanley Dean Witter Advisors from May 1997 to July 1999.
After careful consideration of a variety of factors (see "The Trustees'
Considerations" below), the Board unanimously approved the New Sub-Advisory
Agreement, subject to approval of a majority of the outstanding voting
securities of the Fund at the Meeting. If shareholders vote to approve the New
Sub-Advisory Agreement, the New Sub-Advisory Agreement will replace the Existing
Sub-Advisory Agreement with respect to the Fund, thus terminating BAM's
involvement with the Fund. If shareholders do not approve the New Sub-Advisory
Agreement, the Board will consider its alternatives, including retaining BAM as
sub-adviser of the Fund.
<PAGE> 6
THE LEGAL FRAMEWORK
Section 15(a) of the 1940 Act prohibits any person from serving as an investment
adviser to a registered investment company except pursuant to a written contract
that has been approved by the registered investment company's shareholders.
Therefore, in order for Furman Selz to provide investment advisory services to
the Fund, the shareholders of the Fund must approve the New Sub-Advisory
Agreement with Furman Selz. The Board believes that it is in the best interests
of the Fund for Furman Selz to manage the Fund.
COMPARISON OF THE NEW SUB-ADVISORY AGREEMENT AND THE EXISTING SUB-ADVISORY
AGREEMENT
ING America Insurance Holdings, Inc., as the initial shareholder of the Fund,
initially approved the Existing Sub-Advisory Agreement on October 30, 1998. The
Existing Sub-Advisory Agreement is dated October 30, 1998.
Under the Existing Sub-Advisory Agreement, as compensation for the services
performed by BAM, the Manager pays BAM a fee, accrued daily and paid monthly at
the rate of 0.50% per annum of the Fund's average daily net assets. BAM has
agreed to discount its fees during the first and second years of the Existing
Sub-Advisory Agreement.
Other than the change in the sub-adviser, the terms of the New Sub-Advisory
Agreement will be substantially identical in all material respects to the
Existing Sub-Advisory Agreement, including the amount of compensation paid to
the sub-adviser. A form of the New Sub-Advisory Agreement is attached to this
Proxy Statement as Exhibit A. The following description of the New Sub-Advisory
Agreement is only a summary. You should refer to Exhibit A for a form of the
complete New Sub-Advisory Agreement.
As is the case under the Existing Sub-Advisory Agreement, the New Sub- Advisory
Agreement provides that the sub-adviser will provide investment advisory
services to the Fund, including deciding what securities will be purchased and
sold by the Fund, when such purchases and sales are to be made, and arranging
for those purchases and sales, all in accordance with the provisions of the 1940
Act and the rules thereunder, the governing documents of ING Funds Trust, the
fundamental policies of the Fund, as reflected in its registration statement,
and any policies and determinations of the Board.
If approved by shareholders, the New Sub-Advisory Agreement will continue in
effect for two years from its effective date, and will continue in effect
thereafter for successive annual periods, provided its continuance is
specifically approved at least annually by (1) a majority vote, cast in person
at a meeting called for that purpose, of the Board or (2) a vote of the holders
of a majority of the outstanding voting securities (as defined in the 1940 Act
and the rules thereunder) of the Fund, and (3) in either event by a majority of
the Trustees who are not parties to the New Sub-Advisory Agreement or interested
persons of ING Funds Trust or of any such party. The New Sub-Advisory Agreement
provides that it may be terminated at any time, without penalty, by either party
upon 60 days' written notice, provided that such termination by the Fund shall
be directed or approved by a vote of
<PAGE> 7
the Board, or by a vote of holders of a majority of the shares of the Fund.
Both the Existing Sub-Advisory Agreement and the New Sub-Advisory Agreement
provide that the sub-adviser would have no liability to the Manager for any act
or omission in connection with rendering services under the respective
agreements, including any loss arising out of any investment, except for
liability resulting from willful misfeasance, bad faith, gross negligence or
reckless disregard on the part of the sub-adviser of its duties under the
Agreements ("Disabling Conduct").
- --------------------------------------------------------------------------------
THE BOARD OF ING FUNDS TRUST HAS UNANIMOUSLY RECOMMENDED THAT SHAREHOLDERS
APPROVE AND VOTE "FOR" THE PROPOSAL.
- --------------------------------------------------------------------------------
The Board has determined that the New Sub-Advisory Agreement is fair and in the
best interests of the Fund's shareholders. In making this recommendation, the
Board exercised its independent judgment based on a careful review of the
proposed arrangements and potential benefits.
THE TRUSTEES' CONSIDERATIONS
The New Sub-Advisory Agreement was presented to the Board for its consideration
at a Board of Trustees' meeting held on September 30, 1999. The full Board, and,
separately, the independent Trustees, voted unanimously to approve the New
Sub-Advisory Agreement.
In evaluating the New Sub-Advisory Agreement, the Board reviewed materials
furnished by the Manager and Furman Selz, including information about Furman
Selz's personnel, operations and anticipated management of the Fund.
The Board also gave consideration to the basis for the Manager's recommendation
of Furman Selz, including (i) the relative performance of the Fund under BAM's
direction, (ii) the performance of Furman Selz personnel who will be involved in
the management of the Fund, (iii) the Manager's assessment of Furman Selz's
operational and compliance capabilities, and (iv) the overall reputation and
standing of Furman Selz in the investment community.
The Board also considered that the terms of the New Sub-Advisory Agreement will
remain materially unchanged from those of the Existing Sub-Advisory Agreement
and that the advisory fees payable by the Fund will remain the same.
<PAGE> 8
Based upon it evaluation, the Board concluded that the Manager's engagement of
Furman Selz as sub-adviser to the Fund likely would offer the Fund the access to
highly effective management and advisory agreement services and capabilities.
The Board concluded further that the terms of the New Sub-Advisory Agreement,
including the fees contemplated thereby, are fair and reasonable and in the best
interests of the Fund and its shareholders.
In order to provide for the services described above in the New Sub Advisory
Agreement, the shareholders are being asked to approve the New Sub-Advisory
Agreement.
THE MANAGER
The Manager is a wholly-owned subsidiary of ING America Insurance Holdings,
Inc., which in turn is a wholly-owned subsidiary of ING Group. ING Group's
address is Schenkkade 65, 2595 AS, The Hague, The Netherlands, and the Manager's
address is 1475 Dunwoody Drive, West Chester, PA 19380. The directors of the
Manager are set forth in the table below.
<TABLE>
<CAPTION>
Name and Address Principal Occupation
- ---------------- --------------------
<S> <C>
John J. Pileggi President and Chief Operating Officer of
1475 Dunwoody Drive the Manager; Trustee of ING Funds Trust
West Chester, PA 19380
Alexander H. Rinnnooy-Kan Member of the Executive Board of ING
Schenkkade 65, 2595 AS Group
The Hague, The Netherlands
Glenn Hilliard Chairman and Chief Executive Officer of
5780 Powers Ferry Road, N.W. ING North America Insurance Holdings
Atlanta, Georgia 30327
Frederick S. Hubbell Member of the Executive Committee of ING
Schenkkade 65, 2595 AS Financial Services, International
The Hague, The Netherlands
</TABLE>
The Manager currently serves as investment manager to 23 separate portfolios of
the ING Funds Trust, 15 of which are currently operatioinal and being offered to
investors. The net assets of each of these portfolios and the management fee
paid to the Manager by each of these portfolios (expressed as a percentage of
average daily net assets) are set forth in the table below.
<PAGE> 9
<TABLE>
<CAPTION>
ANNUAL
------
MANAGEMENT FEE
--------------
NET ASSETS (BEFORE
---------- -------
NAME OF PORTFOLIO (AUG. 31, 1999) WAIVERS)
- ----------------- --------------- --------
<S> <C> <C>
ING Large Cap Growth Fund $ 46,487,212 0.75%
ING Growth & Income Fund $ 35,364,291 0.75%
ING Mid Cap Growth Fund $ 28,509,727 1.00%
ING Small Cap Growth Fund $ 28,990,213 1.00%
ING Global Brand Names Fund $ 46,071,361 1.00%
ING International Equity Fund $ 31,134,875 1.25%
ING European Equity Fund $ 29,464,244 1.15%
ING Tax Efficient Equity Fund $ 52,140,773 0.80%
ING Focus Fund $ 36,110,845 1.00%
ING Global Information Technology Fund $ 46,911,118 1.25%
ING Internet Fund $ 22,392,432 1.25%
ING Intermediate Bond Fund $ 33,535,587 0.50%
ING High Yield Bond Fund $ 32,103,291 0.65%
ING International Bond Fund $ 24,846,593 1.00%
ING Money Market Fund $221,225,515 0.25%
</TABLE>
FURMAN SELZ
Furman Selz is a wholly owned subsidiary of ING Furman Selz Asset Management
Inc., which in turn is an indirect wholly owned subsidiary of ING Group. The
address of both Furman Selz and its parent company is 230 Park Avenue, New York,
NY 10169. Furman Selz is engaged in the business of providing investment advice
to institutional and individual client accounts having assets of approximately
$10 billion as of June 30, 1999. The President and Chief Executive Officer of
Furman Selz is Edmund A. Hajim, and the managing directors of Furman Selz are
set forth in the table below.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME PRINCIPAL OCCUPATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Jerrold Bertner Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Steven D. Blecher Vice President of Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
David C. Campbell Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Karen Cronk Portfolio manager with Northstar Asset Management, a division of Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Roger H. Felberbaum Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Carl L. Goldsmith Portfolio manager with Delta Asset Management, a division of Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Edmund A. Hajim Chairman of the Board and President of Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
William C. Hibschman Portfolio manager with Delta Asset Management, a division of Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Michael L. Kass Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Vincent J. Lepore Vice President of Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Robert Miller Vice President, Secretary, and Treasurer of Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Leighton H. McIlvaine Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 10
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Elizabeth Messina Marketing director with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Matthew S. Price Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Robert U. Sandroni Portfolio manager with Delta Asset Management, a division of Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Robert A. Schonbrunn Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Alan D. Segars Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
William W. Storff Institutional Marketing for Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
William Turchyn Chief operating officer of Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Burke C. Vandermast Portfolio manager with Northstar Asset Management, a division of Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Kirk C. Strawn Retail Marketing for Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
David Middlemiss Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
David Pearl Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
John Morosani Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Edward Cimilluca Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Adrian Jones Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
Grant A. Wood, Jr. Portfolio manager with Furman Selz
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The business address of each of the foregoing individuals is 230 Park Avenue,
New York, NY 10169, except for Messrs. Goldsmith, Hibschman and Sandroni, whose
business address is 333 South Grand Avenue, Los Angeles, CA 90071.
Furman Selz currently serves as the investment sub-advisor to three other
separate portfolios of ING Funds Trust. The size of each of these portfolios and
the sub-advisory fee paid to Furman Selz by the Manager (expressed as a
percentage of average daily net assets) are set forth below:
<TABLE>
<CAPTION>
ANNUAL SUB-
-----------
ADVISORY FEE
------------
NET ASSETS (BEFORE
---------- -------
NAME OF PORTFOLIO (AUG. 31, 1999) WAIVERS)
- ----------------- --------------- --------
<S> <C> <C>
ING Mid Cap Growth Fund $28,509,727 0.50%
ING Focus Fund $36,129,879 0.50%
ING Tax Efficient Equity Fund * $52,140,773 0.40%
</TABLE>
* Sub-advised by Delta Asset Management, a division of Furman Selz.
Furman Selz also serves as sub-adviser to two portfolios managed by SEI
Investments. The size of each of these portfolios and the fees paid to Furman
Selz by SEI Investments (expensed as a percentage of average daily net assets)
are set forth below:
<TABLE>
<CAPTION>
ANNUAL SUB-
-----------
ADVISORY FEE
------------
NET ASSETS (BEFORE
---------- -------
NAME OF PORTFOLIO (AUG. 31, 1999) WAIVERS)
- ----------------- --------------- --------
<S> <C> <C>
SEI Small Cap Growth Fund $114,346,276 0.50%
SEI Small Cap Fund $ 23,973,135 0.50%
</TABLE>
THE UNDERWRITER
The Fund's principal underwriter is ING Funds Distributor, Inc. (the
"Underwriter"), 1475 Dunwoody Drive, West Chester, PA 19380. The Underwriter is
a wholly-owned indirect subsidiary of ING Group and thus an affiliate of the
Manager, Furman Selz and BAM.
<PAGE> 11
OFFICERS OF ING FUNDS TRUST
The officers of ING Funds Trust are listed below. The address of each officer is
the same as that of ING Funds Trust and the Manager.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
POSITION WITH ING POSITION WITH THE
NAME FUNDS TRUST MANAGER
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John J. Pileggi Chairman of the Board and President President and Chief Executive Officer
- ------------------------------------------------------------------------------------------------------------------------------
Donald Brostrom Treasurer Executive Vice President and Chief Financial
Officer
- ------------------------------------------------------------------------------------------------------------------------------
Louis S. Citron Vice President Senior Vice President and General Counsel
- ------------------------------------------------------------------------------------------------------------------------------
Ralph G. Norton, III Vice President Vice President and Chief Investment Officer
- ------------------------------------------------------------------------------------------------------------------------------
Lisa M. Buono Vice President Vice President - Financial Operations
- ------------------------------------------------------------------------------------------------------------------------------
Rachelle I. Rehner Secretary Fund Legal Manager
- ------------------------------------------------------------------------------------------------------------------------------
Charles Eng Asst. Treasurer Fund Accounting Manager
- ------------------------------------------------------------------------------------------------------------------------------
Amy Lau Asst. Treasurer Fund Administration Manager
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SHAREHOLDER MEETING COSTS AND VOTING PROCEDURES
The Trust Instrument of ING Funds Trust provides that the presence at a
shareholder meeting in person or by proxy of one-third of the shares of the Fund
entitled to vote at the Meeting constitutes a quorum. Thus, the Meeting will
take place on its scheduled date if one-third or more of the shares of the Fund
are represented. If a quorum of shareholders of the Fund is not present or if a
quorum is present but sufficient votes in favor of the Proposal are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies with respect to any
proposal for which sufficient votes have not been received. Any such adjournment
will require the affirmative vote of a majority of the votes cast on the
question of adjournment in person or by proxy. The persons named as proxies will
vote in favor of any such adjournment.
For purposes of determining the presence of a quorum for transacting business at
the Meeting, abstentions and broker "non-votes" (that is, proxies from brokers
or nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present. However, while broker non-votes are
considered "present," they are disregarded in calculating the percentage of
votes cast in favor of or against a proposal by those "voting securities
present" when the voting requirement is based on achieving a percentage of the
voting securities present in person or by proxy at the Meeting.
<PAGE> 12
As of the close of business on September 30, 1999, ING America Insurance
Holdings, Inc. owned of record __% of the shares of the Fund and thus may be
deemed to control the Fund. As a shareholder of more than 50% of the Fund's
shares, ING America Insurance Holdings, Inc. will be able to cast the deciding
vote on the Proposal. To the knowledge of management, at the close of business
on September 30, 1999, the officers and Trustees of ING Funds Trust owned,
collectively, less than 1% of the shares of the Fund.
The cost of preparing, printing and mailing the enclosed proxy, accompanying
notice and proxy statement and all other costs in connection with solicitation
of proxies related to the required approvals will be paid by the Manager,
including any additional solicitation made by letter, telephone or telegraph.
SEMI-ANNUAL REPORT
A copy of the Fund's semi-annual report for the period ended April 30, 1999 is
available without charge upon request by writing to ING Funds Trust, 1475
Dunwoody Drive, West Chester, PA 19380, or by calling 1-877-463-6464.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board is not aware of any matters that will be presented for action at the
Meeting other than the matters set forth herein. Should any other matters
requiring a vote of shareholders arise, the proxy in the accompanying form will
confer upon the persons entitled to vote the shares represented by such proxy
the discretionary authority to vote matters in accordance with their best
judgment.
Any shareholder proposal intended to be presented at the next shareholder
meeting must be received by ING Funds Trust for inclusion in its proxy statement
and form of proxy relating to such meeting at a reasonable time before the
solicitation of proxies for the meeting is made.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
By order of the Board of Trustees,
John J. Pileggi, President
ING Funds Trust
October 11, 1999
<PAGE> 13
EXHIBIT A
SUBADVISORY AGREEMENT
THIS AGREEMENT is made this 30th day of October, 1998 by and between ING MUTUAL
FUNDS MANAGEMENT CO. LLC, a Delaware limited liability company (the "Investment
Adviser"), and Furman Selz Capital Management LLC (the "Sub-Adviser").
W I T N E S S E T H
WHEREAS, the Investment Adviser is registered and will remain registered
during the term of this Agreement as an investment adviser under the Investment
Advisers Act of 1940, as amended (the "Investment Advisers Act"), and engages in
the business of acting as an investment adviser; and
WHEREAS, the Sub-Adviser is registered and will remain registered during
the term of this Agreement as an investment adviser under the Investment
Advisers Act, and engages in the business of acting as an investment adviser;
and
WHEREAS, the Investment Adviser desires to retain the Sub-Adviser to
furnish investment advisory services to the Investment Adviser in connection
with the underlying investment funds specified on Schedule A hereto
(collectively, the "Funds," and each, a "Fund"), each of which is an investment
portfolio of the ING Funds Trust (the "Trust"); and
WHEREAS, the Sub-Adviser is willing to make available to the Investment
Adviser and to the Funds certain sub-investment advisory services;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment. The Investment Adviser hereby appoints the Sub-Adviser to
provide certain sub-investment advisory services for the period and on the terms
set forth in this Agreement. The Sub-Adviser accepts such appointment and agrees
to furnish the services herein set forth for the compensation herein provided.
2. Sub-Investment Advisory Services. Subject always to the supervision of the
Investment Adviser and the Trust's Board of Trustees, the Sub-Adviser will
furnish an investment program in respect of, and make investment decisions for,
the portion of the Funds allocated to it by the Investment Adviser, and place
all orders for the purchase and sale of securities for such portions of the
Funds. In the performance of its duties, the Sub-Adviser will comply with the
provisions of the Trust's organizational documentation, and the respective
stated investment objective, policies and restrictions of the Funds, as amended,
will use its best efforts to safeguard and promote the welfare of the Funds, and
will comply with other policies which the Trust's Board of Trustees or the
Investment Adviser, as the
<PAGE> 14
case may be, may from time to time determine and communicate in writing to the
Sub-Adviser.
The Sub-Adviser further agrees that it:
(a) will use the same skill and care in providing such services as it
uses in providing services to other accounts for which it has investment
management responsibilities;
(b) will place orders pursuant to its investment determinations for the
Funds either directly with the issuer or with any broker or dealer;
(c) will report regularly to the Board of Trustees of the Trust and to
the Investment Adviser and will make appropriate persons available for the
purpose of reviewing with representatives of the Investment Adviser on a regular
basis the management of the Funds, including, without limitation, review of the
general investment strategy of the Funds, interest rate considerations and
general conditions affecting the marketplace;
(d) will maintain books and records with respect to the Funds' securities
transactions as are required by applicable laws and regulations to be maintained
and will furnish the Trust's Board of Trustees such periodic and special reports
as are required by applicable laws and regulations to be furnished or as the
Board may reasonably request;
(e) will treat confidentially and as proprietary information of the Trust
all records and other information relative to the Trust, and will not use
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval shall not be unreasonably
withheld and may not be withheld where the Sub-Adviser may be exposed to civil
or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Trust;
(f) in making investment recommendations for the Funds, the Sub-Adviser's
personnel will not inquire as to or take into consideration whether the issuers
of securities proposed for purchase or sale for a Fund's accounts are clients of
the Sub-Adviser or of its affiliates. In dealing with such clients, the
Sub-Adviser and its affiliates will not inquire as to or take into consideration
whether securities of those customers are held by the Trust; and
(g) will provide advice and recommendations with respect to other aspects
of the business and affairs of the Funds and perform such other functions
related to the provision of investment management services as the Investment
Adviser may reasonably request.
3. Broker-Dealer Relationships. With regard to the portions of the Funds
allocated to it, the Sub-Adviser is responsible for decisions to buy and sell
securities, broker-dealer selection, and negotiation of brokerage commission
rates. The Sub-Adviser may select any affiliated person of the Trust, the
Investment Adviser, or the Sub-Adviser to the
<PAGE> 15
extent permitted pursuant to the Trust's procedures for securities transactions
with affiliated brokers pursuant to Section 17(e)(2) and Rule 17e-1 under the
Investment Company Act of 1940, as amended (the "Investment Company Act").
The Sub-Adviser's primary consideration in effecting a security
transaction will be execution at a price that is reasonable and fair compared to
the commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions, including similar securities
being purchased or sold on a securities exchange during a comparable period of
time. In selecting a broker-dealer to execute each particular transaction, the
Sub-Adviser will take the following into consideration: the best net price
available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-dealer to the investment performance
of the Fund on a continuing basis. Accordingly, the price to a Fund in any
transaction may be less favorable than that available from another broker-dealer
if the difference is reasonably justified by other aspects of the portfolio
execution services offered.
Subject to such policies and procedures as the Board of Trustees may
determine, the Sub-Adviser shall not be deemed to have acted unlawfully or to
have breached any duty created by this Agreement or otherwise solely by reason
of its having caused a Fund to pay a broker or dealer that provides brokerage
and research services to the Sub-Adviser for the Fund's use an amount of
commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Sub-Adviser determines in good faith that such amount
of commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Sub-Adviser's overall responsibilities with
respect to the Fund. The Sub-Adviser is further authorized to allocate the
orders placed by it on behalf of a Fund to such brokers and dealers who also
provide research or statistical material, or other services to the Fund or the
Sub-Adviser for the Fund's use. Such allocation shall be in such amounts and
proportions as the Sub-Adviser shall determine and the Sub-Adviser will report
regularly to the Board of Trustees of the Trust indicating the brokers to whom
such allocations have been made and the basis therefor.
4. Compliance with Applicable Requirements. In carrying out its obligations
under this Agreement, the Sub-Adviser shall at all times conform to: (a) all
applicable provisions of the Investment Company Act and the Investment Advisers
Act and any rules and regulations adopted thereunder as amended; (b) the
provisions of the Registration Statement of the Trust under the Securities Act
of 1933, as amended, and the Investment Company Act; (c) the provisions of the
Trust Instrument of the Trust, as amended; (d) the provisions of the By-laws of
the Trust, as amended; and (e) any other applicable provisions of state and
federal law.
5. Books and Records. In compliance with Rule 3la-3 under the Investment Company
Act, the Sub-Adviser hereby agrees that all records which it maintains for the
Trust on behalf of the Investment Adviser
<PAGE> 16
are the property of the Trust and further agrees to surrender promptly to the
Trust or to the Investment Adviser copies of any of such records upon request.
The Sub-Adviser further agrees to preserve for the periods prescribed by Rule
3la-2 adopted under the Investment Company Act all records required to be
maintained by the Sub-Adviser on behalf of the Investment Adviser under Rule
3la-1(b)(5), (6), (7), (9) and (10) under the Investment Company Act.
6. Expenses. During the term of this Agreement, the Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Funds.
7. Compensation. For the services provided and the expenses assumed pursuant to
this Agreement, the Investment Adviser will pay the Sub-Adviser and the
Sub-Adviser will accept as full compensation therefor a fee computed daily and
paid monthly in arrears at the annual rate set forth of Schedule A, based on
each Fund's average daily net assets, computed in the manner set forth in the
Registration Statement of the Trust. In the event that investment advisory fees
charged to a Fund by the Investment Adviser are waived, deferred or reduced,
then sub-advisory fees payable in accordance with this Paragraph 7 shall be
proportionally waived, deferred or reduced. Such fee reduction, if applicable,
shall be applied on a monthly basis at the time each payment of sub-advisory
fees is due hereunder. Further, if the fees payable to the Sub-Adviser begin to
accrue before the end of any month, or if this Agreement terminates before the
end of any month, then such fees for such month shall be prorated according to
the proportion which the partial period bears to the full month in which such
effectiveness or termination occurs.
8. Liability of Sub-Adviser. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Sub-Adviser or any of its officers, directors or employees, the
Sub-Adviser shall not be subject to liability to the Investment Adviser for any
act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security.
9. Limit of Liability. The terms the "ING Funds Trust" and "Trustees" (of the
Trust) refer, respectively to the trust created and the Trustees, as trustees
but not individually or personally, acting from time to time under the Trust's
organizational documentation, to which reference is hereby made. The obligations
of the "ING Funds Trust" entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not individually, but in such
capacities and are not binding upon any of the Trustees, shareholders or
representatives of the Trust personally, but bind only the assets of the Funds,
and all persons dealing with the Funds or other series of the Trust must look
solely to the assets of the Funds for the enforcement of any claims against the
Trust.
10. Term. This Agreement shall become effective as it pertains to a Fund at the
close of business on the date opposite the Fund's name on Schedule A and shall
remain in force and effect for two years from such date and thereafter from year
to year, provided that such continuance
<PAGE> 17
is specifically approved at least annually: (a) (i) by the Trust's Board of
Trustees or (ii) by the vote of a majority of the Fund's outstanding voting
securities (as defined in Section 2(a)(42) of the Investment Company Act); and
(b) by the affirmative vote of a majority of the Trustees who are not parties to
this Agreement or interested persons of a party to this Agreement (other than as
Trust trustees), by votes cast in person at a meeting specifically called for
such purpose.
11. Termination. This Agreement may be terminated at any time as it pertains to
a Fund, without the payment of any penalty, by vote of the Trust's Board of
Trustees or by vote of a majority of the Fund's outstanding voting securities,
by the Investment Adviser, or by the Sub-Adviser on sixty (60) days' written
notice to the other parties. The notice provided for herein may be waived by any
party. This Agreement shall automatically terminate as it pertains to all Funds
in the event of its assignment. The term "assignment" for the purpose of this
paragraph has the meaning defined in Section 2(a)(4) of the Investment Company
Act.
12. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
13. Notices. Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Trust and the
Investment Adviser shall be 1475 Dunwoody Drive, West Chester, PA 19380, and the
address of the Sub-Adviser shall be 230 Park Avenue, New York, NY 10169, attn:
Vincent J. Lepore.
14. Questions of Interpretation. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the Investment Company Act shall be resolved by reference
to such term or provision of the Act. In addition, where the effect of a
requirement of the Investment Company Act reflected in any provision of this
Agreement is released by rules, regulation or order of the Securities and
Exchange Commission, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
15. Counterparts. This Agreement may be executed in counterparts, each of which
shall constitute an original and both of which, collectively, shall constitute
one agreement.
16. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and shall be governed by the laws of the
State of New York.
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their respective officers on the day and year first above
written.
FURMAN SELZ CAPITAL MANAGEMENT ING MUTUAL FUNDS MANAGEMENT CO.
LLC LLC
By: /s/ Vincent J. Lepore By: /s/ John J. Pileggi
Title: Vice President Title: President
Attest By: /s/ Valerie S. King Attest By: /s/ Louis S. Citron
Title: Managing Director Title: Vice President
<PAGE> 19
Schedule A
<TABLE>
<CAPTION>
Name of Fund Fee Rate Approval Date
- ------------ -------- -------------
<S> <C> <C>
ING National Tax-Exempt Bond Fund 0.250%* October 30, 1998
ING Mid Cap Growth Fund 0.500%* October 30, 1998
ING Balanced Fund 0.400%* October 30, 1998
ING Focus Fund 0.500%* October 30, 1998
ING Small Cap Growth Fund 0.500%** October 31, 1999
</TABLE>
- --------------
* For the first year of operations, the fee rate will be one-quarter (1/4) of
the annual fee rate reflected herein. For the second year of operations,
the fee rate will be one-half (1/2) of the annual rate reflected herein.
** For the fiscal year ended October 31, 2000, the fee rate will be one-half
(1/2) of the annual fee rate reflected herein.
<PAGE> 20
EXHIBIT B
FORM OF PROXY
[Shareholder Name]
[Title (if applicable)]
[Address]
[Address]
[Shares Held]
ING FUNDS TRUST
SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 29, 1999
ING SMALL CAP GROWTH FUND
SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF ING FUNDS TRUST
The undersigned hereby appoints Louis S. Citron and Rachelle I. Rehner, and each
of them, as proxies of the undersigned, each with the power to appoint his
substitute, for the Special Meeting of Shareholders of the ING Small Cap Growth
Fund (the "Fund"), a separate series ING Funds Trust, to be held at 10:00 a.m.
(Eastern time) on October 29, 1999, at the Fund's offices located at 1475
Dunwoody Drive, West Chester, PA 19380, and at any and all adjournments thereof
(the "Meeting"), to vote, as designated below, all shares of the Fund, held by
the undersigned at the close of business on September 30, 1999.
A signed proxy will be voted in favor of the Proposal listed below unless you
have specified otherwise. Please sign, date and return this proxy promptly. You
may vote only if you held shares in the Fund at the close of business on
September 30, 1999. Your signature authorizes the proxies to vote in their
discretion on such other business as may properly come before the Meeting
including, without limitation, all matters incident to the conduct of the
Meeting.
PLEASE VOTE BY FILLING IN ONE OF THE BOXES BELOW.
PROPOSAL: To approve a new investment sub-advisory agreement between ING Mutual
Fund Management Co. LLC and Furman Selz Capital Management LLC ("Furman Selz"),
pursuant to which Furman Selz would serve as the new sub-adviser of the Fund.
FOR |_| AGAINST |_| ABSTAIN |_|
Signed: ____________________________________ Dated: __________________
[Shareholder Name]
Signed: ____________________________________ Dated: __________________
[Signature(s) (if held jointly)]
Please sign exactly as the name or names appear on your shareholder account
statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give your full title. If shares
are held jointly, each shareholder should sign.
