As filed with the Securities and Exchange Commission on December 15, 2000
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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 FUNDS TRUST
(Exact Name of Registrant as Specified in Charter)
1475 Dunwoody Drive, West Chester, Pennsylvania 19380
(Address of Principal Executive Offices) (Zip Code)
1-877-463-6364
(Registrant's Area Code and Telephone Number)
James M. Hennessy Louis S. Citron
ING Pilgrim Investments, Inc. ING Mutual Funds Management, Inc.
7337 East Doubletree Ranch Road 1475 Dunwoody Drive
Scottsdale, Arizona 85258 West Chester, Pennsylvania 19380
(Name and Address of Agent for Service) (Name and Address of Agent for Service)
With copies to:
Jeffrey S. Puretz, Esq. Steven R. Howard, Esq.
Dechert Paul, Weiss, Rifkind, Wharton & Garrison
1775 Eye Street, N.W. 1285 Avenue of the Americas
Washington, DC 20006 New York, NY 10019
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Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration Statement becomes effective.
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It is proposed that this filing will become effective on January 14, 2001
pursuant to Rule 488 under the Securities Act of 1933.
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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.
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<PAGE>
Pilgrim Global Technology Fund
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258
(800) 992-0180
_____________, 2000
Dear Shareholder:
Your Board of Directors has called a Special Meeting of Shareholders of the
Pilgrim Global Technology Fund scheduled to be held at _______ [a.m./p.m.],
local time, on February 23, 2001 at 7337 East Doubletree Ranch Road, Scottsdale,
Arizona 85258.
The Board of Directors has approved a reorganization of Pilgrim Global
Technology Fund, which is managed by ING Pilgrim Investments, Inc. and is part
of the Pilgrim Funds, into ING Global Information Technology Fund, which is
managed by ING Mutual Funds Management Co. LLC and is part of the ING Funds (the
"Reorganization"). If approved by shareholders, you would become a shareholder
of ING Global Information Technology Fund on the date that the Reorganization
occurs. ING Global Information Technology Fund has investment objectives and
policies that are similar in many respects to those of Pilgrim Global Technology
Fund, and the Reorganization is expected to result in operating expenses that
are lower for shareholders.
You are being asked to vote to approve an Agreement and Plan of
Reorganization. The accompanying document describes the proposed transaction and
compares the policies and expenses of the funds for your evaluation.
After careful consideration, the Board of Directors of Pilgrim Global
Technology Fund, Inc. unanimously approved this proposal and recommended
shareholders vote "FOR" the proposal.
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. IN ORDER
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 FEBRUARY 22,
2001.
We appreciate your participation and prompt response in this matter and
thank you for your continued support.
Sincerely,
Robert W. Stallings
President
<PAGE>
Pilgrim Global Technology Fund
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258
(800) 992-0180
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
PILGRIM GLOBAL TECHNOLOGY FUND
SCHEDULED FOR FEBRUARY 23, 2001
To the Shareholder:
A Special Meeting of Shareholders of the Pilgrim Global Technology Fund
("Special Meeting") is scheduled for February 23, 2001 at _______ [a.m./p.m.],
local time, at 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258.
The purposes of the Special Meeting are as follows:
1. To approve an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets and liabilities of Class A shares of
Pilgrim Global Technology Fund by ING Global Information Technology
Fund in exchange for shares of the corresponding Class of ING Global
Information Technology Fund and the subsequent liquidation of the
Pilgrim Global Technology Fund; and
2. To transact such other business as may properly come before the
Special Meeting or any adjournments thereof.
Shareholders of record at the close of business on December 26, 2000, are
entitled to notice of, and to vote at, the meeting. Your attention is called to
the accompanying Proxy Statement/Prospectus. Regardless of whether you plan to
attend the 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. If you are present at the meeting, you may change your vote, if desired,
at that time.
By Order of the Board of Directors
James M. Hennessy,
Secretary
______________, 2000
<PAGE>
TABLE OF CONTENTS
INTRODUCTION................................................................ 1
SUMMARY..................................................................... 2
Comparison of Investment Objectives and Strategies ...................... 4
Comparison of Portfolio Characteristics.................................. 6
Relative Performance..................................................... 6
Comparison of Investment Techniques and Risks of the Funds............... 9
COMPARISON OF FEES AND EXPENSES............................................. 9
Operating Expenses....................................................... 9
General Information...................................................... 11
ADDITIONAL INFORMATION ABOUT ING GLOBAL INFORMATION
TECHNOLOGY FUND........................................................... 12
Investment Personnel..................................................... 12
Performance of ING Global Information Technology Fund.................... 12
INFORMATION ABOUT THE REORGANIZATION........................................ 14
ADDITIONAL INFORMATION ABOUT THE FUNDS...................................... 16
GENERAL INFORMATION ABOUT THE PROXY STATEMENT............................... 17
Solicitation of Proxies.................................................. 17
Voting Rights............................................................ 18
Other Matters to Come Before the Meeting................................. 19
Shareholder Proposals.................................................... 19
Reports to Shareholders.................................................. 19
APPENDIX A.................................................................. A-1
APPENDIX B.................................................................. B-1
APPENDIX C.................................................................. C-1
APPENDIX D.................................................................. D-1
APPENDIX E.................................................................. E-1
i
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PROXY STATEMENT/PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS SCHEDULED FOR
FEBRUARY 23, 2001
PILGRIM GLOBAL TECHNOLOGY FUND, INC.
Relating to the Reorganization into
ING GLOBAL INFORMATION TECHNOLOGY FUND
(A SERIES OF ING FUNDS TRUST)
(EACH, A "FUND" AND COLLECTIVELY, THE "FUNDS")
INTRODUCTION
This Proxy Statement/Prospectus provides you with information about a
proposed transaction. This transaction involves the transfer of all the assets
and liabilities of Class A shares of Pilgrim Global Technology Fund to ING
Global Information Technology Fund in exchange for Class A shares of ING Global
Information Technology Fund (the "Reorganization"). Pilgrim Global Technology
Fund would then distribute to its shareholders their portion of the shares of
ING Global Information Technology Fund it receives in the Reorganization. The
result would be a liquidation of Pilgrim Global Technology Fund. You would
receive shares of ING Global Information Technology Fund having an aggregate
value equal to the aggregate value of the shares you held of Pilgrim Global
Technology Fund, as of the close of business on the business day of the closing
of the Reorganization. You are being asked to vote on the Agreement and Plan of
Reorganization through which these transactions would be accomplished.
Because you, as a shareholder of Pilgrim Global Technology Fund, are being
asked to approve transactions that will result in your holding of shares of ING
Global Information Technology Fund, this Proxy Statement also serves as a
Prospectus for ING Global Information Technology Fund.
This Proxy Statement/Prospectus, which you should retain for future
reference, contains important information about ING Global Information
Technology Fund that you should know before investing. For a more detailed
discussion of the investment objectives, policies, restrictions and risks of ING
Global Information Technology Fund, see the Prospectus (the "ING Prospectus")
and the Statement of Additional Information ("SAI") for the ING Funds dated
November 6, 2000, which are incorporated herein by reference. For a more
detailed discussion of the investment objectives, policies, restrictions and
risks of the Pilgrim Global Technology Fund, see the Prospectus (the "Pilgrim
Prospectus") and the Statement of Additional Information for Pilgrim Global
Technology Fund dated August 18, 2000, which are incorporated herein by
reference. Each of the Funds also provides periodic reports to its shareholders
which highlight certain important information about the Funds, including
investment results and financial information. The annual report for ING Global
Information Technology Fund dated October 31, 1999, and the semi-annual report
dated April 30, 2000, are incorporated herein by reference. The annual report
for Pilgrim Global Technology Fund dated December 31, 1999, and the semi-annual
report dated June 30, 2000, are incorporated herein by reference. You may
receive a copy of the ING Prospectus, the Pilgrim Prospectus, and the most
recent annual report and semi-annual report for either of the Funds, without
charge, by calling (800) 992-0180.
You can copy and review information about each Fund (including the SAI) at
the Commission's Public Reference Room in Washington, D. C. You may obtain
information on the operation of the Public Reference Room by calling the
Commission at 1-202-942-8090. Reports and other information about the Fund are
available on the EDGAR Database on the Commission'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:
[email protected], or by writing the Commission's Public Reference Section,
Washington, D. C. 20549-0102.
THE 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
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SUMMARY
You should read this entire Proxy Statement/Prospectus carefully. For
additional information, you should consult the ING Prospectus, the Pilgrim
Prospectus and the Agreement and Plan of Reorganization, which is attached
hereto as Appendix B.
THE PROPOSED REORGANIZATION. On November 2, 2000, the Board of Directors of
Pilgrim Global Technology Fund, Inc. approved an Agreement and Plan of
Reorganization with respect to Pilgrim Global Technology Fund (the
"Reorganization Agreement"). Subject to shareholder approval, the Reorganization
Agreement provides for:
* the transfer of all of the assets of Pilgrim Global Technology Fund to ING
Global Information Technology Fund, in exchange for Class A shares of ING
Global Information Technology Fund;
* the assumption by ING Global Information Technology Fund of all of the
liabilities of Pilgrim Global Technology Fund;
* the distribution of ING Global Information Technology Fund Class A shares
to the shareholders of Pilgrim Global Technology Fund; and
* the complete liquidation of Pilgrim Global Technology Fund.
The Reorganization is expected to be effective at the opening of business
on February 26, 2001, or on a later date as the parties may agree (the
"Closing"). As a result of the Reorganization, each shareholder of Class A
shares of Pilgrim Global Technology Fund, would become a shareholder of Class A
shares of ING Global Information Technology Fund. Each shareholder would hold,
immediately after the Closing, shares of Class A of ING Global Information
Technology Fund having an aggregate value equal to the aggregate value of the
shares of the corresponding Class of Pilgrim Global Technology Fund held by that
shareholder as of the close of business on the business day of the Closing.
The Reorganization is one of many reorganizations that are proposed among
various ING Funds and various Pilgrim Funds. These reorganizations are occurring
in connection with the integration of the ING Funds and Pilgrim Funds, as part
of which the distributor, administrator and other service providers of the ING
Funds have been changed to those of the Pilgrim Funds. In September 2000, ING
Groep N.V., the indirect parent company of ING Mutual Funds Management Co. LLC
("IMFC"), the investment adviser to the ING Funds, acquired ReliaStar Financial
Corp., the indirect parent company of ING Pilgrim Investments, Inc. ("ING
Pilgrim Investments"), the investment adviser to the Pilgrim Funds. Management
of the ING Funds and the Pilgrim Funds have proposed the consolidation of a
number of the ING Funds and Pilgrim Funds that they believe have similar or
compatible investment policies. The proposed reorganizations are designed to
reduce the substantial overlap in funds offered by both the ING Funds and
Pilgrim Funds, thereby eliminating duplication of costs and other inefficiencies
arising from having similar portfolios within the same fund group. IMFC and ING
Pilgrim Investments also believe that the reorganizations may benefit fund
shareholders by resulting in surviving funds with a greater asset base. This is
expected to achieve economies of scale for shareholders and may provide greater
investment opportunities for the surviving funds or the potential to take larger
portfolio positions. The integration of the ING Funds and the Pilgrim Funds is
expected to provide further benefits to shareholders of the ING Funds and
Pilgrim Funds because shareholders will have the ability to exchange into all
2
<PAGE>
ING Funds and Pilgrim Funds that offer the same Class of shares. For information
about a Pilgrim Fund or an ING Fund, call 1-800-992-0180 to request a
prospectus. You should read a fund's prospectus before investing in the fund.
In considering whether to approve the Reorganization, you should note that:
* The Funds have investment objectives and policies that are similar;
* The proposed Reorganization is expected to result in a reduction in
operating expenses for shareholders of the Pilgrim Global Technology Fund.
For example, the operating expenses, expressed as a percentage of net asset
value per share for Class A shares, are as follows:
* Expenses of Pilgrim Global Technology Fund(1): 2.27%
* Expenses of ING Global Information Technology Fund -
before management subsidies (2): 2.07%
* Expenses of ING Global Information Technology
after management subsidies (based on the 12 month
period ended June 30, 2000) (2): 1.59%
* Estimated expenses of ING Global Information Technology
after the Reorganization and before management
reimbursement (PRO FORMA): 2.06%
* Estimated expenses of ING Global Information Technology
after the Reorganization and after management
reimbursement (PRO FORMA)(3): 1.59%
* Pilgrim Global Technology Fund is a non-diversified fund (which means that
a greater proportion of the Fund's assets may be invested in a single
company), whereas ING Global Information Technology Fund is a diversified
fund.
* The Funds have affiliated management. ING Pilgrim Investments, 7337 E.
Doubletree Ranch Road, Scottsdale, Arizona 85258, is the investment manager
to Pilgrim Global Technology Fund. IMFC, 1475 Dunwoody Drive, West Chester,
Pennsylvania 19380, is the investment manager to ING Global Information
Technology Fund. Both are affiliated subsidiaries of the same holding
company, ING Groep N.V. After the Reorganization, IMFC would continue to
manage ING Global Information Technology Fund, which would include the
assets from Pilgrim Global Technology Fund.
Approval of the Reorganization Agreement requires the affirmative vote of a
majority of the outstanding shares of Pilgrim Global Technology Fund.
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(1) Based upon expenses incurred by the Pilgrim Global Technology Fund since
the Fund commenced operations on January 13, 2000 through June 30, 2000,
adjusted for current expenses of contracts and 12b-1 plans which became
effective when ING Pilgrim Investments became adviser to the Fund on July
26, 2000.
(2) Based upon expenses incurred by the Fund for the 12 month period ended June
30, 2000, adjusted for current expenses of contracts and the 12b-1 plan
which became effective on November 6, 2000.
(3) Under the terms of the expense limitation contract for the ING Global
Information Technology Fund, IMFC has agreed to limit the expenses of the
Fund, excluding interest and taxes, brokerage and extraordinary expenses.
The current expense limitation contract provides that it will remain in
effect until February 28, 2001. There can be no assurance that the expense
limitation contract will be continued after that date.
3
<PAGE>
After careful consideration, the Board of Directors of Pilgrim Global
Technology Fund unanimously approved the proposed Reorganization. The Board
recommends that you vote "FOR" the proposed Reorganization.
COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES
<TABLE>
<CAPTION>
PILGRIM GLOBAL TECHNOLOGY FUND ING GLOBAL INFORMATION TECHNOLOGY FUND
------------------------------ --------------------------------------
<S> <C> <C>
INVESTMENT OBJECTIVE Seeks long-term growth of capital. Seeks long-term capital appreciation.
INVESTMENT STRATEGIES * Normally invests at least 80% of its * Normally invests at least 65% of its total
total assets in equity securities or assets in equity securities of information
equity equivalents (including common and technology companies. As a general matter,
and preferred stocks, warrants and the Fund expects these investments to be
convertible securities) of large, mid- in common stocks of large, mid-sized or
sized or small technology or information small companies. This portion of the
infrastructure companies. portfolio will have investments located in
at least three countries, including the
* Uses a "bottom-up" approach in stock United States.
selection, focusing on companies believed
to have rising earnings and rising * Generally, the Sub-Adviser's overall stock
valuations. Seeks growth companies with selection for the Fund will be based on an
long-term capital appreciation potential. assessment of the company's fundamental
Looks for companies that display or are prospects. The Sub-Adviser anticipates,
expected to display the following however, that a portion of the Fund's
characteristics: holdings will be invested in newly issued
securities being sold in the primary or
- Robust growth prospects; secondary market.
- High profit margins or return on * Uses broad industry analysis and
capital; "bottom-up" company analysis to identify
the stocks of companies it believes will
- Attractive valuations relative to become future information technology
expected earnings or cash flow; leaders. First identifies themes that
address industry and technological
- Quality management; changes, then analyzes individual
companies worldwide to find those firms
- Unique technological and competitive most likely to benefit from the selected
advantages. investment themes.
* Generally sells a stock if the Adviser * Defines information technology companies
believes that its target price has been as those companies that derive at least
reached, its earnings are disappointing, 50% of their total revenues or earnings
its revenue growth has slowed or its from information technology, hardware or
underlying fundamentals have deteriorated. software, or related consulting and
services industries.
</TABLE>
4
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<TABLE>
<CAPTION>
PILGRIM GLOBAL TECHNOLOGY FUND ING GLOBAL INFORMATION TECHNOLOGY FUND
------------------------------ --------------------------------------
<S> <C> <C>
* Considers technology or information
infrastructure companies to be in the
following sectors: biotechnology;
broadcasting and media content; computers,
electronic components and equipment;
electronic commerce and data services;
data processing; information systems;
internet; medical technology; networking;
office automation; on-line services;
semiconductors; semiconductor capital
equipment; server hardware producers;
software companies; telecommunications;
telecommunications equipment and services;
and companies involved in the
distribution, servicing, science and
development of the above industries.
* May invest in any country, including
emerging market countries. The Fund
expects that such companies will be
located within Africa, Asia, Europe, the
Middle East and Latin America. However,
the Fund is not limited to these countries
and may invest in any country so long as
it meets the Fund's objective. Many of the
regions in which the Fund will invest will
include emerging market countries.
* May invest up to 20% of its assets in
investment-grade debt securities of any
maturity denominated in U.S. or foreign
currencies.
INVESTMENT ADVISER ING Pilgrim Investments, Inc. ING Mutual Funds Management Co. LLC
SUB-ADVISER N/A ING Investment Management Advisors B.V.
PORTFOLIO MANAGERS Richard T. Saler, Phillip A. Schwartz, and Guy Uding has primary responsibility for
Alan H. Wapnick. managing the Fund and heads a three-member
team of investment professionals.
</TABLE>
As you can see from the chart above, the investment objectives and
strategies of the Funds are similar.
5
<PAGE>
COMPARISON OF PORTFOLIO CHARACTERISTICS
The following table compares certain characteristics of the portfolios of
the Funds as of June 30, 2000:
<TABLE>
<CAPTION>
PILGRIM GLOBAL TECHNOLOGY FUND ING GLOBAL INFORMATION TECHNOLOGY FUND
------------------------------ --------------------------------------
<S> <C> <C>
Net Assets $12,226,339 $176,211,239
Number of Holdings 47 48
Portfolio Turnover Rate 312.27%(1) 59.00%(2)
As a percentage of net assets:
Equity Securities 90.21% 98.69%
Holdings in companies with
market capitalization over $10
billion (U.S.) 52.26% 78.23%
Holdings in companies with
market capitalization between
$5 billion and $10 billion (U.S.) 2.13% 10.82%
Holdings in companies with
market capitalization under $1
billion (U.S.) 12.53% 0.00%
Foreign Securities 64.35% 14.74%
U.S. Securities 25.86% 83.95%
Top 10 Countries United States 25.86% United States 83.95%
(as a % of net assets) Japan 24.03% Canada 3.69%
Netherlands 5.42% United Kingdom 3.18%
United Kingdom 5.33% Germany 2.76%
South Korea 5.12% Netherlands 2.28%
Germany 4.34% Ireland 1.72%
France 3.48% Japan 1.12%
Portugal 3.26%
Finland 2.66%
Switzerland 2.59%
Top 10 Holdings Entrust Technologies, Inc. 4.27% Brocade Communications System 4.06%
(as a % of net assets) Vitesse Semiconductor Corp. 3.55% Veritas Software Corp. 3.98%
Intersil Holding Corp. 3.49% EMC Corp-Mass 3.91%
Alcatel ADR 3.48% CIENA Corp. 3.90%
Fujitsu, Ltd. 3.40% Nortel Networks Corp. 3.69%
Flag Telecom Holdings, Ltd. 3.18% Oracle Corp. 3.62%
Mirae Co. ADR 3.15% JDS Uniphase Corp. 3.58%
Square Co., Ltd. 3.02% Texas Instruments, Inc. 3.48%
Lucent Technologies, Inc. 2.91% Sun Microsystems, Inc. 3.39%
NTT Docomo, Inc. 2.88% Siebel Systems, Inc. 3.39%
Top 5 Industries Telecommunications 30.6% Telecommunications 24.7%
(as a % of net assets) Semiconductors 15.4% Computer Software 20.4%
Internet Services 9.8% Internet Services 19.2%
Electrical & Electronics 7.9% Computers 14.7%
Consumer Durable Goods 7.3% Semiconductors 9.4%
</TABLE>
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(1) For the period January 13, 2000 (when the Fund commenced operations)
through June 30, 2000.
(2) For the 12 month period ended June 30, 2000.
RELATIVE PERFORMANCE
The following table shows, for the period January 1, 2000 to September 30,
2000, the average annual total return for: (a) Class A shares of Pilgrim Global
Technology Fund; (b) Class A shares of ING Global Information Technology Fund;
and (c) the Goldman Sachs Technology Industry Composite Index. Only this period
6
<PAGE>
is shown because Pilgrim Global Technology Fund commenced operations on January
13, 2000. Performance of the Funds in the table does not reflect the deduction
of sales loads, and would be lower if it did. The index has inherent performance
advantages over the Funds since it has no cash in its portfolio, 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.
ING GLOBAL GOLDMAN SACHS
CALENDAR YEAR PILGRIM GLOBAL TECHNOLOGY TECHNOLOGY INDUSTRY
ENDED/PERIOD TECHNOLOGY FUND INFORMATION FUND(3) COMPOSITE INDEX(4)
------------ --------------- ------------------- ------------------
1/01/00-9/30/00(1) -14.10% 12.36% -7.35%
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(1) Not annualized.
(2) Prior to July 26, 2000, Lexington Management Corp. ("Lexington") served as
adviser to the Pilgrim Global Technology Fund. Lexington was acquired by
the parent of ING Pilgrim Investments on July 26, 2000. Messrs. Saler,
Schwartz, and Wapnick have been primarily responsible for advising the Fund
since June 7, 2000, and continued to manage the Fund after the July 26th
transaction. Prior to June 7, 2000, a sub-adviser advised the Fund.
(3) For more information about the performance of ING Global Information
Technology Fund, see "Additional Information about ING Global Information
Technology Fund."
(4) The Goldman Sachs Technology Industry Composite Index ("GSTI Index") is a
widely recognized, unmanaged index of technology stocks.
COMPARISON OF INVESTMENT TECHNIQUES AND RISKS OF THE FUNDS
Because the Funds have investment objectives and policies that are similar
in many respects, many of the risks of investing in ING Global Information
Technology Fund are similar to the risks of investing in Pilgrim Global
Technology Fund. A principal risk of an investment in each of the Funds is that
you may lose money on your investment. Each Fund's shares may go up or down,
sometimes rapidly and unpredictably. Market conditions, financial conditions of
issuers represented in the portfolio, investment policies, portfolio management,
and other factors affect the volatility of each Fund's shares.
EQUITY SECURITIES. Both Funds invest in equity securities and securities
with equity characteristics, such as common stocks, preferred stocks,
convertible securities and warrants and other stock purchase rights. Both Funds
are subject to risks associated with investing primarily in equity securities,
including market risk, issuer risk, credit risk and market trends risk,
discussed below, among others. 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. Credit risk is the risk that an issuer may not be able
to meet its financial obligations when due, including payments on outstanding
debt. While equities may offer the potential for greater long-term growth than
most debt securities, they generally have higher volatility. Additionally, both
Funds invest in small and medium-sized companies. Investment in smaller
capitalization companies may involve greater risk than is customarily associated
with securities of larger, more established companies, because they may have
fewer financial resources, more limited product and market diversification, and
less depth of management. Smaller companies also may experience relatively high
growth rates and higher failure rates than do larger companies. The trading
volume of securities of smaller companies is normally less than that of larger
companies and, therefore, may disproportionately affect their market price,
tending to make them rise more in response to buying demand and fall more in
response to selling pressure than is the case with larger companies. The
securities of the smaller companies may trade in lower volumes and may be less
liquid than securities of larger, more established companies. The Fund could
lose money if it cannot sell a security at the time and price that would be most
beneficial to the Fund. Furthermore, smaller companies may be more susceptible
to more volatile price swings than larger, more established companies.
7
<PAGE>
FOREIGN SECURITIES. Each Fund invests in foreign securities. There are
certain risks in owning foreign securities, including those resulting from:
fluctuations in currency exchange rates; devaluation of currencies; political or
economic developments and the possible imposition of currency exchange blockages
or other foreign governmental laws or restrictions; reduced availability of
public information concerning issuers; accounting, auditing and financial
reporting standards or other regulatory practices and requirements that are not
uniform when compared to those applicable to domestic companies; settlement and
clearance procedures in some countries that may not be reliable and can result
in delays in settlement; higher transaction and custody expenses than for
domestic securities; and limitations on foreign ownership of equity securities.
Also, securities of many foreign companies may be less liquid and the prices
more volatile than those of domestic companies. With certain foreign countries,
there is the possibility of expropriation, nationalization, confiscatory
taxation and limitations on the use or removal of funds or other assets of the
Funds, including the withholding of dividends.
Many of the regions in which the Pilgrim Global Technology Fund will invest
include emerging market countries. Investments in emerging market countries are
generally riskier than other kinds of foreign investments, particularly because
emerging market countries may be less politically and economically stable than
other countries. It may also be more difficult to buy and sell securities in
emerging market countries.
RISK OF CONCENTRATION IN THE TECHNOLOGY SECTOR. Because the Funds
concentrate their investments in certain sectors, the value of the Funds may be
subject to greater volatility than a Fund with a portfolio that is less
concentrated. The ING Global Information Technology Fund focuses on a narrower
group of industry sectors than the Pilgrim Global Technology Fund, and presents
the risks of concentration to a greater degree. If the securities of companies
in these sectors fall out of favor, the Funds could underperform funds that
focus on other types of companies. Investments in companies in the rapidly
changing fields of technology and information technology face special risk such
as competitive pressures and technological obsolescence and may be subject to
increasing governmental regulation. Products and services of companies engaged
in the information technology industry are subject to relatively high risks of
rapid obsolescence caused by scientific and technological advances. Swings in
investor psychology or significant trading by large institutional investors can
result in significant price fluctuations and stock price declines.
NON-DIVERSIFICATION RISK. The Pilgrim Global Technology Fund is classified
as a non-diversified investment company. There is additional risk associated
with being non-diversified, since a greater proportion of the Fund's total
assets may be invested in a single company.
MARKET TRENDS RISK. From time to time, the stock market may not favor the
securities in which the Funds invest. For example, the market could favor value
stocks, stocks in industries to which the Fund is not exposed such as "old
economy" stocks, or may not favor equities at all.
DEBT SECURITIES. The Funds may invest in debt securities. The value of debt
securities may fall when interest rates rise. Debt securities with longer
maturities tend to be more sensitive to changes in interest rates, usually
making them more volatile than debt securities with shorter maturities.
PORTFOLIO TURNOVER. Each Fund may 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 effect on the
performance of a Fund.
TEMPORARY DEFENSIVE STRATEGIES. For both Funds, when the adviser or
sub-adviser to the Fund anticipates unusual market or other conditions, the Fund
may temporarily depart from its principal investment strategies as a defensive
measure. To the extent a Fund is engaged in temporary defensive investments, it
will not be pursuing its investment objective.
8
<PAGE>
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 ING Global
Information Technology Fund, see "Appendix C: Additional Information Regarding
ING Global Information Technology Fund."
OPERATING EXPENSES. The operating expenses of ING Global Information
Technology Fund, expressed as a ratio of expenses to average daily net assets
("expense ratio"), are lower than those of Pilgrim Global Technology Fund. For
the 12 month period ending June 30, 2000, the total expenses for Class A shares
of ING Global Information Technology Fund were 2.07% and net expenses for Class
A shares of the Fund were 1.59%(1), which are lower than those of Class A of
Pilgrim Global Technology Fund, which were 2.27%.
MANAGEMENT FEE. Both Funds have the same annual management fee, which is
1.25% of the Fund's average daily net assets.
DISTRIBUTION AND SERVICE FEES. The distribution (12b-1) and service fees
for Class A shares of ING Global Information Technology Fund are, in the
aggregate, 0.35%, 0.10% higher than the distribution and service fees of 0.25%
for Class A shares of Pilgrim Global Technology Fund.
EXPENSE LIMITATION ARRANGEMENTS. Expense limitation arrangements are in
place for each Fund. Under the terms of the expense limitation contract for the
ING Global Information Technology Fund, IMFC has agreed to limit the expenses of
the Fund, excluding interest and taxes, brokerage and extraordinary expenses, to
2.06% for Class A shares. The current expense limitation contract provides that
it will remain in effect until February 28, 2001. There can be no assurance that
the expense limitation contract will be continued after that date.
Expense limitation arrangements are in place for Pilgrim Global Technology
Fund. Under the terms of the expense limitation contract, ING Pilgrim
Investments has agreed to limit the expenses of Class A shares of the Pilgrim
Global Technology Fund, excluding interest, taxes, brokerage and extraordinary
and other expenses, to 2.75% of average net assets, subject to possible
recoupment by ING Pilgrim Investments within three years. The current expense
limitation agreement for the Fund provides that it will remain in effect through
at least July 26, 2002. There can be no assurance that the expense limitation
agreement will be continued after that date. Although ING Pilgrim Investments
has implemented an expense limitation contract for Class A shares of Pilgrim
Global Technology Fund, the Fund's actual expenses are lower than the expense
limitation contained in the contract. This information and similar information
is shown in the table below in the section entitled "Annual Fund Operating
Expenses."
It is expected that the expense ratio of Class A shares of the ING Global
Information Technology Fund after the Reorganization will be 2.06%, without
taking into account any expense subsidies from management.
EXPENSE TABLE. The current expenses of each of the Funds and estimated PRO
FORMA expenses giving effect to the proposed Reorganization are shown in the
following table. Expenses for the ING Global Information Technology Fund are
based upon the operating expenses incurred by Class A shares of the Fund for the
12 month period ended June 30, 2000, as adjusted for expenses of contracts and
the 12b-2 plan which became effective on November 6, 2000. Expenses for Pilgrim
Global Technology Fund are annualized based upon expenses incurred by the Fund
from January 13, 2000 (commencement of operations) through June 30, 2000,
adjusted for current expenses of contracts and the distribution plan which
became effective when ING Pilgrim Investments became adviser to the Fund on July
31, 2000. PRO FORMA fees show estimated fees of ING Global Information
----------
(1) Based upon expenses incurred by the Fund for the 12 month period ended June
30, 2000, adjusted for current expenses of contracts and the 12b-1 plan
which were in effect on November 6, 2000.
9
<PAGE>
Technology Fund after giving effect to the proposed Reorganization as adjusted
to reflect changes in contractual charges. PRO FORMA numbers are estimated in
good faith and are hypothetical.
ANNUAL FUND OPERATING EXPENSES (UNAUDITED)
(expenses that are deducted from Fund assets, shown as a ratio of
expenses to average daily net assets)(1)
<TABLE>
<CAPTION>
DISTRIBUTION
(12b-1) AND
SHAREHOLDER TOTAL FUND
MANAGEMENT SERVICING OTHER OPERATING FEE WAIVER NET FUND
FEES FEES(2) EXPENSES EXPENSES BY ADVISER(3) EXPENSES
---- ------- -------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
CLASS A(1)
Pilgrim Global
Technology Fund 1.25% 0.25% 0.77% 2.27% -- 2.27%
ING Global
Information
Technology Fund 1.25% 0.35% 0.47% 2.07% -0.48% 1.59%
ING Global Information
Technology Fund After
Reorganization (PRO FORMA) 1.25% 0.35% 0.46% 2.06% -0.47% 1.59%
</TABLE>
----------
(1) The fiscal year end for Pilgrim Global Technology Fund is October 31. Prior
to [October 31, 2000], the Fund's fiscal year end was December 31. The
fiscal year end for ING Global Information Technology Fund is October 31.
The operating expenses for the Pilgrim Global Technology Fund are based
upon expenses incurred by the Fund since the Fund commenced operations on
January 13, 2000 through June 30, 2000, adjusted for current expenses of
contracts and the distribution plan which became effective when ING Pilgrim
Investments became adviser to the Fund on July 31, 2000. Expenses of the
ING Global Information Technology Fund are based on expenses incurred by
the Fund for the 12 month period ended June 30, 2000, adjusted for current
expenses of contracts and the Rule 12b-1 plan which became effective on
November 6, 2000. The PRO FORMA expenses for the Funds are estimated based
upon expenses incurred by each Fund for the period ended June 30, 2000, as
adjusted to reflect material changes in expenses.
(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) IMFC has entered into an expense limitation contract that limits expenses
(excluding interest, taxes, brokerage and extraordinary expenses) to 1.59%
for Class A shares of ING Global Information Technology Fund. The expense
limitation contract for ING Global Information Technology Fund will remain
in effect until February 28, 2001. There is no assurance that the expense
limitation arrangements will be continued after this date. ING Pilgrim
Investments has entered into an expense limitation agreement that limits
expenses (excluding interest, taxes, brokerage and extraordinary expenses)
for Class A shares of Pilgrim Global Technology Fund to 2.75%, subject to
possible later recoupment. ING Pilgrim Investments has agreed that the
expense limitations will apply to Pilgrim Global Technology Fund until at
least July 26, 2002. There is no assurance that the expense limitation
arrangement will remain in effect after this date.
Following the Reorganization and in the ordinary course of business as a
mutual fund, certain holdings of Pilgrim Global Technology Fund that are
transferred to ING Global Information Technology Fund in connection with the
Reorganization may be sold. Such sales may result in increased transaction costs
for ING Global Information Technology Fund, and the realization of taxable gains
or losses for ING Global Information Technology Fund.
10
<PAGE>
EXAMPLES. The examples are intended to help you compare the cost of
investing in the Funds. The examples assume that you invest $10,000 in each Fund
for the time periods indicated and then redeem all of your shares at the end of
those periods. 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.
<TABLE>
<CAPTION>
PILGRIM GLOBAL ING GLOBAL
TECHNOLOGY FUND INFORMATION TECHNOLOGY FUND PRO FORMA - THE FUNDS COMBINED
------------------------------- ------------------------------- -------------------------------
1 3 5 10 1 3 5 10 1 3 5 10
YEAR YEARS YEARS YEARS YEAR YEARS YEARS YEARS YEAR YEARS YEARS YEARS
---- ----- ----- ----- ---- ----- ----- ----- ---- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $792 $1,244 $1,720 $3,030 $773 $1,186 $1,625 $2,837 $772 $1,184 $1,620 $2,827
You would pay the following expenses if you did not redeem your shares:
PILGRIM GLOBAL ING GLOBAL
TECHNOLOGY FUND INFORMATION TECHNOLOGY FUND PRO FORMA - THE FUNDS COMBINED
------------------------------- ------------------------------- -------------------------------
1 3 5 10 1 3 5 10 1 3 5 10
YEAR YEARS YEARS YEARS YEAR YEARS YEARS YEARS YEAR YEARS YEARS YEARS
---- ----- ----- ----- ---- ----- ----- ----- ---- ----- ----- -----
Class A $792 $1,244 $1,720 $3,030 $773 $1,186 $1,625 $2,837 $772 $1,184 $1,620 $2,827
</TABLE>
GENERAL INFORMATION
Class A shares of ING Global Information Technology Fund issued to a
shareholder in connection with the Reorganization will be subject to the same
contingent deferred sales load, if any, applicable to the corresponding shares
of Pilgrim Global Technology Fund held by that shareholder immediately prior to
the Reorganization. In addition, the period that the shareholder held shares of
Pilgrim Global Technology Fund will be included in the holding period of ING
Global Information Technology Fund shares for purposes of calculating any
contingent deferred sales load.
Class A shares of ING Global Information Technology Fund and Pilgrim Global
Technology Fund are subject to the sales structure described below.
11
<PAGE>
TRANSACTION FEES ON NEW INVESTMENTS
(fees paid directly from your investment)
PILGRIM ING GLOBAL
GLOBAL INFORMATION
TECHNOLOGY TECHNOLOGY
FUND FUND
CLASS A CLASS A
------- -------
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75%(1) 5.75%(1)
Maximum deferred sales charge (load) (as a
percentage of the lower of original purchase
price or redemption proceeds) None(2) None(2)
Redemption fee (as a percentage of amount
redeemed, if applicable) 2.00%(3) None
----------
(1) Reduced for purchases of $50,000 and over. For information on reduced sales
loads for ING Global Information Technology Fund, see "Class A Shares --
Initial Sales Load Alternative" in Appendix C.
(2) A contingent deferred sales load of no more than 1.00% may be assessed for
up to two years on redemptions of Class A shares that were purchased
without an initial sales charge as part of an investment of $1 million or
more. Shareholders of ING Global Information Technology Fund who invested
$1,000,000 or more in Class A Shares prior to November 6, 2000, are subject
to a contingent deferred sales load of 1.00% for a period of 12 months from
the date of purchase. Shareholders of Pilgrim Global Technology Fund who
purchased shares prior to July 26, 2000 are not subject to a contingent
deferred sales load.
(3) The 2.0% redemption fee applies only to shares held less than 90 days.
Neither ING Global Information Technology Fund nor Pilgrim Global
Technology Fund have any exchange fees or sales charges on reinvested dividends.
ADDITIONAL INFORMATION ABOUT ING GLOBAL INFORMATION TECHNOLOGY FUND
INVESTMENT PERSONNEL
The ING Global Information Technology Fund is managed by the sub-adviser,
ING Investment Management Advisors B.V. ("IIMA"). Mr. Guy Uding has primary
responsibility for managing the Fund and heads the three-member team of
investment professionals. Mr. Uding has been employed by IIMA and its affiliates
since 1995, and has five years of investment experience.
PERFORMANCE OF ING GLOBAL INFORMATION TECHNOLOGY FUND
The bar chart and table that follow provide an indication of the risks of
investing in ING Global Information Technology Fund by showing (on a calendar
year basis) changes in ING Global Information Technology Fund's annual total
return for the 12 month period ended December 31, 1999, and by showing (on a
calendar year basis) how ING Global Information Technology Fund's average annual
returns for one year and since inception compare to those of the GSTI Index. The
information in the bar chart is based on the performance of the Class A shares
of ING Global Information Technology Fund, although the bar chart does not
reflect the deduction of the sales load on Class A shares. If the bar chart
12
<PAGE>
included the sales load, returns would be less than those shown. ING Global
Information Technology Fund's past performance 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. All indices are unmanaged.
CALENDAR YEAR-BY-YEAR RETURNS(1)(2)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
140.15%
----------
(1) During the period shown in the chart, the Fund's best quarterly performance
was 78.51% for the quarter ended December 31, 1999, and the Fund's worst
quarterly performance was 7.43% for the quarter ended March 31, 1999. The
Fund's year to date total return as of September 30, 2000 is 12.36%.
(2) Returns in 1999 were primarily achieved during unusually favorable
conditions in the market, particularly for information technology
companies. (See "Comparison of Investment Techniques and Risks of the
Funds" above.) You should not expect that such favorable returns can
consistently be achieved.
The table below shows what the average annual total returns of ING Global
Information Technology Fund would equal if you averaged out actual performance
over various lengths of time, compared to the GSTI Index. The GSTI Index has
inherent performance advantages over ING Global Information Technology Fund
since it has no cash in its portfolio, imposes no sales charges and incurs no
operating expenses. An investor cannot invest directly in an index. ING Global
Information Technology Fund's performance reflected in the table assumes the
deduction of the maximum sales charge in all cases.
Average Annual Total Returns for the period ended December 31, 1999 (1)
SINCE
1 YEAR INCEPTION
------ ---------
ING Global Information Technology Fund - Class A(2) 126.30% 148.79%
GSTI Index(3) 88.58% 105.95%
----------
(1) The Fund commenced operations on December 15, 1998.
(2) Reflects deduction of sales charge of 5.75%.
(3) The GSTI Index is a widely recognized unmanaged index of technology stocks.
The table below shows the performance of ING Global Information Technology
Fund if sales charges are not reflected.
Average Annual Total Return for the period ended December 31, 1999
SINCE
1 YEAR INCEPTION
------ ---------
ING Global Information Technology Fund - Class A 140.15% 161.82%
For a discussion by the adviser regarding the performance of the ING Global
Information Technology Fund for the year ended October 31, 1999, see Appendix A
to this Proxy Statement/Prospectus. Additional information about ING Global
Information Technology Fund is included in Appendix C to this Proxy
Statement/Prospectus.
13
<PAGE>
INFORMATION ABOUT THE REORGANIZATION
THE REORGANIZATION AGREEMENT. The Reorganization Agreement provides for the
transfer of all of the assets and liabilities of Pilgrim Global Technology Fund
to ING Global Information Technology Fund in exchange for Class A shares of ING
Global Information Technology Fund. Pilgrim Global Technology Fund will
distribute the shares of ING Global Information Technology Fund received in the
exchange to the shareholders of Pilgrim Global Technology Fund and then Pilgrim
Global Technology Fund will be liquidated.
After the Reorganization, each shareholder of Pilgrim Global Technology
Fund will own Class A shares of ING Global Information Technology Fund having an
aggregate value equal to the aggregate value of Class A shares in Pilgrim Global
Technology Fund held by that shareholder as of the close of business on the
business day of the Closing. Shareholders of Class A shares of Pilgrim Global
Technology Fund will receive shares of the corresponding Class of ING Global
Information Technology Fund. In the interest of economy and convenience, shares
of ING Global Information Technology Fund generally will not be represented by
physical certificates, unless requested in writing.
Until the Closing, shareholders of Pilgrim Global Technology Fund will
continue to be able to redeem their shares. Redemption requests received after
the Closing will be treated as requests received by ING Global Information
Technology Fund for the redemption of its shares.
The obligations of the Funds under the Reorganization Agreement are subject
to various conditions, including approval of the shareholders of Pilgrim Global
Technology Fund. The Reorganization Agreement also requires that each of the
Funds 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 the Reorganization Agreement. The
Reorganization Agreement may be terminated by mutual agreement of the parties or
on certain other grounds. Please refer to Appendix B to review the terms and
conditions of the Reorganization Agreement.
REASONS FOR THE REORGANIZATION. The Reorganization is one of many
reorganizations that are proposed among various ING Funds and various Pilgrim
Funds. These reorganizations are occurring in connection with the integration of
the ING Funds and Pilgrim Funds, as part of which the distributor,
administrator, and other service providers of the ING Funds have been changed to
those of the Pilgrim Funds. In September 2000, ING Groep N.V., the indirect
parent company of IMFC, the investment adviser to the ING Funds, acquired
ReliaStar Financial Corp., the indirect parent company of ING Pilgrim
Investments, the investment adviser to the Pilgrim Funds. Management of the ING
Funds and the Pilgrim Funds have proposed the consolidation of a number of the
ING Funds and Pilgrim Funds that they believe have similar or compatible
investment policies. The proposed reorganizations are designed to reduce the
substantial overlap in funds offered by both the ING Funds and Pilgrim Funds,
thereby eliminating duplication of costs and other inefficiencies arising from
having similar portfolios within the same fund group. IMFC and ING Pilgrim
Investments also believe that the reorganizations may benefit fund shareholders
by resulting in surviving funds with a greater asset base. This is expected to
achieve economies of scale for shareholders and may provide greater investment
opportunities for the surviving funds or the potential to take larger portfolio
positions. The integration of the ING Funds and the Pilgrim Funds is expected to
provide further benefits to shareholders of the ING Funds and the Pilgrim Funds
because shareholders will have the ability to exchange into all ING Funds and
Pilgrim Funds that offer the same Class of shares. For information about a
Pilgrim Fund or an ING Fund, call 1-800-992-0180 to request a prospectus. You
should read a fund's prospectus before investing in the fund.
14
<PAGE>
The proposed Reorganization was presented to the Board of Directors of
Pilgrim Global Technology Fund, Inc. for consideration and approval at a meeting
held on November 2, 2000. For the reasons discussed below, the Directors,
including all of the Directors who are not "interested persons" (as defined in
the Investment Company Act of 1940) of Pilgrim Global Technology Fund,
determined that the interests of the shareholders of Pilgrim Global Technology
Fund will not be diluted as a result of the proposed Reorganization, and that
the proposed Reorganization is in the best interests of Pilgrim Global
Technology Fund and its shareholders.
The Reorganization will allow Pilgrim Global Technology Fund's shareholders
to continue to participate in a professionally-managed portfolio which seeks to
achieve an objective of long-term growth of capital. As shareholders of ING
Global Information Technology Fund, these shareholders will be able to exchange
into other mutual funds in the group of ING Funds and Pilgrim Funds that offer
the same Class of shares in which such shareholder is currently invested. A list
of the ING Funds and Pilgrim Funds and Classes available after the
Reorganization is contained in Appendix D.
BOARD CONSIDERATIONS. The Board of Directors of Pilgrim Global Technology
Fund, Inc., in recommending the proposed transaction, considered a number of
factors, including the following:
(1) the plans of management to integrate the ING Funds and the Pilgrim
Funds;
(2) expense ratios and information regarding fees and expenses of Pilgrim
Global Technology Fund and ING Global Information Technology Fund,
including the expense limitation arrangements offered by ING Pilgrim
Investments for Pilgrim Global Technology Fund and by IMFC for ING
Global Information Technology Fund;
(3) estimates that show that combining the Funds is expected to result in
lower expense ratios in the absence of management subsidies, because
of economies of scale expected to result from an increase in the asset
size of the reorganized Fund;
(4) the Reorganization would not dilute the interests of Pilgrim Global
Technology Fund's current shareholders;
(5) the relative investment performance and risks of ING Global
Information Technology Fund as compared to Pilgrim Global Technology
Fund;
(6) the similarity of ING Global Information Technology Fund's investment
objectives, policies and restrictions with those of Pilgrim Global
Technology Fund;
(7) the investment resources of IMFC;
(8) alternatives to combining the Funds; and
(9) the tax-free nature of the Reorganization to Pilgrim Global Technology
Fund and its shareholders.
The Board of Directors also considered the future potential benefits to
IMFC in that its costs to limit the expenses of ING Global Information Fund are
likely to be reduced if the Reorganization is approved.
THE DIRECTORS OF PILGRIM GLOBAL TECHNOLOGY FUND, INC. RECOMMEND THAT
SHAREHOLDERS APPROVE THE REORGANIZATION WITH ING GLOBAL INFORMATION TECHNOLOGY
FUND.
15
<PAGE>
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 Pilgrim Global Technology Fund nor its shareholders nor ING
Global Information Technology Fund is expected to recognize any gain or loss for
federal income tax purposes from the transactions contemplated by the
Reorganization Agreement. As a condition to the Closing of the Reorganization,
the Funds will receive an opinion from the law firm of Dechert to the effect
that the 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 ING Funds Trust and Pilgrim Global
Technology Fund, Inc.
Immediately prior to the Reorganization, Pilgrim Global Technology Fund
will pay a dividend or dividends which, together with all previous dividends,
will have the effect of distributing to its shareholders all of Pilgrim Global
Technology 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 Pilgrim Global Technology Fund's shareholders.
EXPENSES OF THE REORGANIZATION. IMFC, adviser to the ING Global Information
Technology Fund, will bear half the cost of the Reorganization. The Funds will
bear the other half of the expenses relating to the proposed Reorganization
including, but not limited to, the costs of solicitation of voting instructions
and any necessary filings with the Securities and Exchange Commission. Of the
Reorganization expenses allocated to the Funds, each Fund will bear a ratable
portion based on its relative net asset value immediately before Closing.
ADDITIONAL INFORMATION ABOUT THE FUNDS
FORM OF ORGANIZATION. ING Global Information Technology Fund is a separate
series of ING Funds Trust, a Delaware business trust. Pilgrim Global Technology
Fund, Inc. is a Maryland corporation. ING Global Information Technology Fund is
governed by a Board of Trustees, and Pilgrim Global Technology Fund, Inc. is
governed by a Board of Directors. ING Funds Trust's Board of Trustees consists
of four Trustees, and Pilgrim Global Technology Fund, Inc.'s Board of Directors
is comprised of eleven Directors.
DISTRIBUTOR. ING Pilgrim Securities, Inc. (the "Distributor"), whose
address is 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258, is the
principal distributor for both of the Funds. The ING Global Information
Technology Fund also offers Class B, Class C, and Class I shares, which have
different sales charges and other expenses that may affect their performance.
You can obtain more information about these other share Classes by calling (800)
992-0180.
DIVIDENDS AND OTHER DISTRIBUTIONS. Both ING Global Information Technology
Fund and Pilgrim Global Technology Fund pay dividends from net investment income
and net 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 the Reorganization Agreement is approved by Pilgrim Global Technology
Fund's shareholders, then as soon as practicable before the Closing, Pilgrim
Global Technology Fund will pay its shareholders a cash distribution of
substantially all undistributed net investment income and undistributed realized
net capital gains.
16
<PAGE>
CAPITALIZATION. The following table shows on an unaudited basis, the
capitalization of each of the Funds as of June 30, 2000, and on a PRO FORMA
basis as of June 30, 2000, giving effect to the Reorganization:
<TABLE>
<CAPTION>
NET ASSET VALUE SHARES
NET ASSETS PER SHARE OUTSTANDING
---------- --------- -----------
<S> <C> <C> <C>
PILGRIM GLOBAL TECHNOLOGY FUND
Class A $12,226,339 $10.48 1,166,544
ING GLOBAL INFORMATION TECHNOLOGY FUND
Class A $112,091,254 $28.27 3,965,674
Class B $37,413,936 $28.02 1,335,339
Class C $18,499,125 $28.01 660,499
Class X* $8,206,924 $28.00 293,067
</TABLE>
----------
* Class X shares merged into Class B shares on November 16, 2000.
<TABLE>
<CAPTION>
NET ASSET VALUE SHARES
NET ASSETS PER SHARE OUTSTANDING
---------- --------- -----------
<S> <C> <C> <C>
PRO FORMA - ING GLOBAL INFORMATION TECHNOLOGY
FUND INCLUDING PILGRIM GLOBAL TECHNOLOGY FUND
Class A $124,317,593 $28.27 4,398,159
Class B $45,620,860 $28.02 1,628,234
Class C $18,499,125 $28.01 660,499
</TABLE>
GENERAL INFORMATION ABOUT THE PROXY STATEMENT
SOLICITATION OF PROXIES
Solicitation of proxies is being made primarily by the mailing of this
Notice and Proxy Statement with its enclosures on or about December __, 2000.
Shareholders of Pilgrim Global Technology 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
Pilgrim Investments and its affiliates, without additional compensation, may
solicit proxies in person or by telephone, telegraph, facsimile, or oral
communication.
A shareholder may revoke the accompanying proxy at any time prior to its
use by filing with Pilgrim Global Technology 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 Meeting, thereby
canceling any proxy previously given. The persons named in the accompanying
proxy will vote as directed by the proxy card, but in the absence of voting
directions in any proxy card that is signed and returned, they intend to vote
"FOR" the Reorganization proposal and may vote in their discretion with respect
to other matters not now known to the Board of Directors of Pilgrim Global
Technology Fund, Inc. that may be presented at the Meeting.
17
<PAGE>
VOTING RIGHTS
Shareholders of Pilgrim Global Technology Fund are entitled to one vote for
each share held as to any matter on which they are entitled to vote and each
fractional share shall be entitled to a proportionate fractional vote. Shares
have no preemptive or subscription rights.
Shareholders of Pilgrim Global Technology Fund at the close of business on
December 26, 2000 (the "Record Date") will be entitled to be present and give
voting instructions for Pilgrim Global Technology Fund at the Special Meeting
with respect to their shares owned as of that Record Date. As of the Record
Date, ______ shares of Pilgrim Global Technology Fund were outstanding and
entitled to vote.
Approval of the Reorganization of the Pilgrim Global Technology Fund
requires the affirmative vote of a majority of the outstanding shares of Pilgrim
Global Technology Fund.
The holders of one-third of the outstanding shares present in person or
represented 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. As a result, an abstention or
broker non-vote will have the same effect as a vote against the Reorganization.
The Pilgrim Global Technology Fund expects that, before the Special
Meeting, broker-dealer firms holding shares of Pilgrim Global Technology 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
Pilgrim Global Technology Fund understands that the broker-dealers that are
members of the New York Stock Exchange may vote on the items to be considered at
the Special Meeting on behalf of their customers and beneficial owners under the
rules of the New York Stock Exchange.
To the knowledge of Pilgrim Global Technology Fund as of November 1, 2000,
no current Director owns 1% or more of the outstanding shares of Pilgrim Global
Technology Fund, and the officers and Directors own, as a group, less than 1% of
the shares of Pilgrim Global Technology Fund.
Appendix E hereto lists the persons that, as of December 1, 2000, owned
beneficially or of record 5% or more of the outstanding shares of any Class of
Pilgrim Global Technology Fund or ING Global Information Technology Fund.
18
<PAGE>
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
Pilgrim Global Technology Fund does 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 proxy holders will vote thereon in accordance with their best
judgment.
SHAREHOLDER PROPOSALS
Pilgrim Global Technology Fund is not 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 Pilgrim Global Technology 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 Pilgrim Investments will furnish, without charge, a copy of the most
recent Annual Report regarding Pilgrim Global Technology Fund and the most
recent Semi-Annual Report succeeding the Annual Report, if any, on request.
Requests for such reports should be directed to ING Pilgrim Investments at 7337
East Doubletree Ranch Road, Scottsdale, Arizona 85258 or at (800) 992-0180.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE 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.
James M. Hennessy,
Secretary
___________, 2000
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258
19
<PAGE>
APPENDIX A
Set forth below is an excerpt from ING Global Information Technology Fund's
Annual Report, dated October 31, 1999, regarding the Fund's performance.
ING GLOBAL INFORMATION TECHNOLOGY FUND
FOR INVESTORS SEEKING LONG-TERM GROWTH
GROWTH OF A $10,000 INVESTMENT
ING GLOBAL INFORMATION TECH. FUND VS. GS TECH. INDUSTRY COMPOSITE INDEX:
12/15/98 - 10/31/99
GS TECHNOLOGY INDUSTRY
CLASS A SHARES CLASS B SHARES CLASS C SHARES COMPOSITE INDEX
-------------- -------------- -------------- ---------------
9,425 10,000 10,000 10,000
10,782 11,440 11,440 11,295
12,234 12,960 12,970 13,109
11,320 11,990 11,990 11,533
11,583 12,270 12,270 12,517
11,376 12,040 12,040 12,911
11,301 11,960 11,960 12,768
12,790 13,530 13,520 14,268
12,762 13,490 13,480 14,129
13,421 14,180 14,180 14,862
14,505 15,310 15,310 15,009
16,381 16,780 17,180 15,540
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSL of 5% and 1%,
respectively. The GS Technology Industry Composite Index is unmanaged with no
sales charges or expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS X SHARES
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Without Sales Charge 73.80% 72.80% 72.80% 39.21%
With Sales Charge 63.81 67.80 71.80 34.21
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class X shares is
1/11/99.
A-1
<PAGE>
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
REGIONAL BREAKDOWN (1)
North America 81.4%
Europe 10.6
Pacific Rim 8.0
TOP FIVE HOLDINGS (1)
12 Technologies, Inc. 3.9%
Microsoft Corp. 3.8
BroadVision, Inc. 3.7
Sun Microsystems, Inc. 3.7
VERITAS Software Corp. 3.6
TOP FIVE COUNTRIES (1)
United States 79.0%
Japan 8.0
Netherlands 4.9
United Kingdom 2.6
Canada 2.4
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value
and reinvestment of distributions.
Manager's Overview
OBJECTIVE
GROWTH OF CAPITAL through investment in a diversified portfolio of primarily
global information technology stocks.
"...our investments in Internet infrastructure companies were rewarded
handsomely."
QUESTION: Technology stocks have generated outstanding results this year. How
has the Fund fared?
A-2
<PAGE>
ANSWER: The Fund handily outperformed its benchmark, the Goldman Sachs
Technology Index.
QUESTION: As we entered the year you were cautious about the market's prospects.
Why?
ANSWER: We believed that two issues would affect the broader market. First, that
Y2K compliance issues would impact investor's perceptions of IT spending
patterns. Second, that uncertainty regarding the interest rate environment would
lead to increased stock market volatility. Given these concerns, we positioned
the portfolio with a more defensive bias as the year began -- favoring companies
in the outsourcing, storage and networking equipment industries.
QUESTION: The Fund had many success stories during the year. Could you share a
few?
ANSWER: We strongly believed that 1999 would be a pivotal year for the Internet.
Business-to-consumer usage had already reached a critical mass. More
importantly, in our opinion the opportunity for business-to-business Internet
related applications would gain momentum as we moved into the next millennium.
We took advantage of Internet market weakness in July and increased our exposure
to the sector. In particular, our investments in Internet infrastructure
companies were rewarded handsomely.
A natural extension of this theme was the inevitable growth of the physical
communication infrastructure. Therefore, we increased our exposure in this area,
especially in the optical components/equipment industries. Our exposure to
software vendors was also beneficial.
QUESTION: What detracted from performance?
ANSWER: We underestimated the impact of Y2K on the IT services sector. We
assumed that the labor intensity of IT projects would make this sector more
immune to a slowdown. Also, the transition of IT services companies towards the
Internet was more difficult than expected. Companies like Computer Sciences and
Unisys experienced a significant slowdown in their bookings.
QUESTION: What is your outlook for the Fund?
ANSWER: We are still very positive about the outlook for the IT sector.
Companies are using technology more and more as a strategic advantage rather
than a cost cutting tool. As a result, IT companies that deliver solutions to
business problems, such as supply chain software firms, will likely experience
strong demand for their products. Companies are also increasing their Internet
presence to generate revenue. This should drive significant long-term demand for
IT products and services.
A-3
<PAGE>
APPENDIX B
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this _____ day of _____________, 2001, by and between ING Funds Trust , a
Delaware business trust (the "Trust"), with its principal place of business at
7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258, on behalf of its
series, ING Global Information Technology Fund (the "Acquiring Fund"), and
Pilgrim Global Technology Fund, Inc., a Maryland corporation (the "Company"),
with its principal place of business at 7337 East Doubletree Ranch Road,
Scottsdale, Arizona 85258, on behalf of its sole series, the Lexington Global
Technology Fund Series, doing business as the Pilgrim Global Technology 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 voting shares
of beneficial interest (_____ par value per share) 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 open-end, registered
investment companies of the management type or a series thereof 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 the 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 Directors of the Company, 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 Acquiring
Fund Shares determined by dividing the value of the Acquired Fund's net assets,
computed in the manner and as of the time and date set forth in paragraph 2.1,
by the net asset value of one Class A Acquiring Fund Share, 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").
B-1
<PAGE>
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 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 (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,
determined as of immediately after the close of business on the Closing Date
(the "Acquired Fund Shareholders"), on a pro rata basis, the Acquiring Fund
Shares received by the Acquired Fund pursuant to paragraph 1.1, and will
completely liquidate. Such distribution and liquidation will be accomplished,
with respect to 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 Acquiring Fund Shares to be so credited to Class A Acquired Fund
Shareholders shall be equal to the aggregate net asset value of the Acquired
Fund shares 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 shares of the Acquired Fund will represent a number of Class A 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 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.
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 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 Directors.
2.2 The net asset value of a Class A 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 information with respect to
the Acquiring Fund, and valuation procedures established by the Acquiring Fund's
Board of Directors.
B-2
<PAGE>
2.3 The number of the Class A Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund's assets shall be
determined by dividing the value of the net assets with respect to the Class A
shares of the Acquired Fund 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.
2.4 All computations of value shall be made by the Acquired Fund's
designated record keeping agent and shall be subject to confirmation by the
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 _____ ___, 2001, or such other date as the
parties may agree to in writing. 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 Brown Brothers Harriman & Co. 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 by the Acquired Fund Custodian to the
custodian for the Acquiring Fund for examination 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 such depositories and the
Custodian, the Acquired Fund's portfolio securities and instruments deposited
with a securities depository, as defined in Rule 17f-4 under the Investment
Company Act of 1940, as amended (the "1940 Act"). 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 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 Directors
of the Acquired Fund or the Board of Trustees of the Acquiring Fund, accurate
appraisal of the value of the net assets of the Acquiring Fund or the Acquired
B-3
<PAGE>
Fund, respectively, 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 the Company, the Company on behalf of the
Acquired Fund represents and warrants to the Trust as follows:
(a) The Acquired Fund is duly organized as a series of the Company, which
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Maryland with power under the Company's Articles of
Incorporation to own all of its properties and assets and to carry on its
business as it is now being conducted;
(b) The Company 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 the Company's Articles of Incorporation or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the Company
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
the Company 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 on
or prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by the 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
B-4
<PAGE>
or, to its knowledge, threatened against the Company on behalf of 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. The Company 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 Portfolio of Investments of the Acquired Fund at
December 31, 1999, have been audited by KPMG LLP, independent auditors, and are
in accordance with generally accepted accounting principles ("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 December 31, 1999 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 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 by the Company 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;
B-5
<PAGE>
(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 Directors of the Company 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 the Trust on behalf of the Acquiring Fund,
the Trust on behalf of the Acquiring Fund represents and warrants to the Company
as follows:
(a) The Acquiring Fund is duly organized as a series of the Trust, which is
a business trust duly organized, validly existing and in good standing under the
laws of the State of Delaware with power under the 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) The 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
Acquiring 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;
B-6
<PAGE>
(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 the Trust's Declaration of Trust or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the 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
the 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 the Company
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 the 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. The 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 the Acquiring Fund's business or the
Acquiring Fund's 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
October 31, 1999, have been audited by Ernst & Young LLP, independent
accountants, 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 October 31, 1999, 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 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
including 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 and has computed (or will compute) its
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<PAGE>
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 (recognizing that, under Delaware law, it is theoretically
possible that shareholders of the Acquired Fund could, under certain
circumstances, be held personally liable for obligations of the Acquired 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. 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 the Trust on behalf of the Acquiring Fund and
this Agreement will constitute a valid and binding obligation of the Trust on
behalf 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 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 (recognizing that, under
Delaware law, it is theoretically possible that shareholders of the Acquired
Fund could, under certain circumstances, be held personally liable for
obligations of the Acquired Fund);
(o) The information to be furnished by 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 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.
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<PAGE>
5.3 The Acquired Fund covenants that the Class A 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 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 The Company on behalf of the Acquired Fund covenants that the Company
will, from time to time, as and when reasonably requested by the Trust on behalf
of 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 the Trust on behalf of the Acquiring Fund may reasonably
deem necessary or desirable in order to vest in and confirm (a) the Company's on
behalf of the Acquired Fund's title to and possession of the Acquiring Fund
Shares to be delivered hereunder, and (b) the Trust's on behalf of the Acquiring
Fund's title to and possession of all the assets, and 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 the Company on behalf of the Acquired Fund to consummate
the transactions provided for herein shall be subject, at the Company's
election, to the performance by the 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 the 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;
6.2 The Trust shall have delivered to the Company a certificate executed in
its name by its President or Vice President and its Treasurer or Assistant
Treasurer, in a form reasonably satisfactory to the Company and dated as of the
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<PAGE>
Closing Date, to the effect that the representations and warranties of the 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 the Company shall
reasonably request;
6.3 The 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 the 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 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 the Trust on behalf of the Acquiring Fund to complete
the transactions provided for herein shall be subject, at the Trust's election,
to the performance by the Company 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 the Company 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 Company 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 the Company;
7.3 The Company 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 the
Trust and dated as of the Closing Date, to the effect that the representations
and warranties of the Company 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 the Trust shall reasonably request;
7.4 The Company 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 the Company 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 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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<PAGE>
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 the Company on behalf of the Acquired
Fund or the 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 the Company's Articles of
Incorporation, By-Laws, applicable Maryland 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
Trust nor the Company 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
the Trust or the Company 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 the
Company and the Trust and reasonably satisfactory to each of them 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 the
Trust and the Company. Notwithstanding anything herein to the contrary, neither
the Company nor the Trust may waive the condition set forth in this paragraph
8.5.
9. INDEMNIFICATION
9.1 The Trust, out of the Acquiring Fund's assets, agrees to indemnify and
hold harmless the Company and each of the Company's Directors and officers from
and against any and all losses, claims, damages, liabilities or expenses
(including, without limitation, the payment of reasonable legal fees and
reasonable costs of investigation) to which jointly and severally the Company or
any of its Directors or officers may become subject, insofar as any such loss,
claim, damage, liability or expense (or actions with respect thereto) arises out
or or is based on any breach by the Trust of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
9.2 The Company, out of the Acquired Fund's assets, agrees to indemnify and
hold harmless the Trust and each of its Trustees and officers from and against
any and all losses, claims, damages, liabilities or expenses (including, without
limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which jointly and severally the Trust or any of its Trustees
or officers may become subject, insofar as any such loss, claim, damage,
liability or expense (or actions with respect thereto) arises out or or is based
on any breach by the Company of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
B-11
<PAGE>
10. BROKERAGE FEES AND EXPENSES
10.1 The Company on behalf of the Acquired Fund and the 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.
10.2 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 Acquired
and Acquiring Funds, 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 Acquiring Fund as of the close of
business on the record date for determining the shareholders of the Acquired
Fund entitled to vote on the Reorganization. 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 expenses would result in the disqualification of such
party as a "regulated investment company" within the meaning of Section 851 of
the Code.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1 The Trust and the Company 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.
11.2 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.
12. 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 ___________
__, 200_, 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 Directors/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.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be deemed necessary or advisable by the authorized officers of the Company
and the Trust; provided, however, that following the meeting of the shareholders
of the Acquired Fund called by the Acquired Fund 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 Acquiring Fund Shares to be issued to
the Acquired Fund Shareholders under this Agreement to the detriment of such
shareholders without their further approval.
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<PAGE>
14. 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 the
Company, 7337 E. Doubletree Ranch Road, Scottsdale, Arizona 85258, attn: James
M. Hennessy, in each case with a copy to Dechert, 1775 Eye Street, N.W.,
Washington, D.C. 20006, attn: Jeffrey S. Puretz; and to the Trust, 1475 Dunwoody
Drive, West Chester, Pennsylvania 19380, attn: Louis S. Citron, in each case
with a copy to Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the
Americas, New York, New York 10169, attn: Steven R. Howard.
15. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
15.1 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.
15.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
15.3 This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to its principles of conflicts
of laws.
15.4 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.
15.5 It is expressly agreed that the obligations of the parties hereunder
shall not be binding upon any of the Directors/Trustees, shareholders, nominees,
officers, agents, or employees of the Trust personally, but shall bind only the
trust property of the Acquiring Fund, as provided in the Declaration of Trust of
the 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 as
provided in the Declaration of Trust.
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<PAGE>
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.
Attest: ING FUNDS TRUST on behalf of its
ING GLOBAL INFORMATION
TECHNOLOGY series
---------------------------------- ----------------------------------------
SECRETARY
Title:
----------------------------------
Attest: PILGRIM GLOBAL TECHNOLOGY FUND, INC. on
behalf of its sole series
---------------------------------- ----------------------------------------
SECRETARY
Title:
----------------------------------
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<PAGE>
APPENDIX C
ADDITIONAL INFORMATION REGARDING ING GLOBAL INFORMATION TECHNOLOGY FUND
(THE "FUND")
MANAGEMENT OF THE FUND
The Investment Manager. ING Mutual Funds Management Co. LLC (the
"Investment Manager") serves as the Fund's investment manager. The Investment
Manager is a wholly owned indirect subsidiary of ING Groep N.V. ("ING Group")
and is registered with the Securities and Exchange Commission. The Investment
Manager is located at 1475 Dunwoody Drive, West Chester, PA 19380. As of October
31, 2000, the Investment Manager managed over $1.50 billion in assets.
The Investment Manager supervises all aspects of the Fund's operations and
provides investment advisory services to the Fund. This includes engaging
sub-advisers, as well as monitoring and evaluating the management of the assets
of the Fund by its sub-adviser. The Investment Manager has acted as an
investment adviser to mutual funds since 1998. As of October 31, 2000, the
Investment Manger advises or manages 19 investment portfolios, including the
Fund, encompassing a broad range of investment objectives.
Investment Manager Compensation. The aggregate annual advisory fee to be
paid by the Fund as a percentage of the Fund's average daily net assets is
1.25%.
Sub-Advisers. The Investment Manager has engaged an affiliated investment
manager firm, ING Investment Management Advisors B.V., to act as sub-adviser to
the Fund, as discussed below. The sub-adviser has full investment discretion to
make all determinations with respect to the investment of the Fund's assets and
the purchase and sale of portfolio securities and other investments. The
sub-adviser is a wholly owned indirect subsidiary of ING Group and is registered
with the Securities and Exchange Commission.
ING Investment Management Advisors B.V. ING Investment Manager Advisors
B.V. ("IIMA") serves as sub-adviser to the ING Global Brand Name Fund, the ING
European Equity Fund, the ING Global Information Technology Fund, the ING
Internet Fund, and the ING Global Communications Fund. IIMA is located at
Schenkkade 65, 2595 AS The Hauge, The Netherlands. IIMA is a company organized
to manage investments and provide investment advice on a worldwide basis to
entities affiliated and unaffiliated with ING Group. IIMA operates under the
collective management of ING Investment Management which has assets under
management of $159.91 billion as of September 30, 2000.
PRICING ALTERNATIVES
The Fund offers a choice of share Classes, each with its own sales load and
expense structure, allowing you to invest in the way that best suits your needs.
The characteristics of Class A shares are outlined below. The Fund also offers
Class B, Class C and Class I shares, which have different sales charges and
other expenses that may affect their performance. You can obtain more
information about these other share Classes by calling 1-800-992-0180. Each
share Class represents an ownership interest in the same investment portfolio.
When you choose your Class of shares you should consider the size of your
investment and how long you plan to hold your shares. In this Appendix C, the
separate series that comprise the ING Funds Trust are referred to collectively
as the "ING Funds," and each an "ING Fund."
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<PAGE>
If you purchase Class A shares, you generally pay a sales load at the time
of purchase. If you buy Class A shares, you will also be subject to distribution
fee of 0.10% and shareholder servicing fees of 0.25%. You may be eligible for a
sales load reduction or waiver.
The Fund's shares are distributed by ING Pilgrim Securities, Inc. (the
"Distributor"), an affiliate of ING Mutual Funds Management Co. LLC. The Fund's
shares may be sold by retail broker-dealers that are under common control with
the ING Funds. As of the date of this statement, such broker-dealers are
Compulife Investor Services, Inc., IFG Network Securities, Inc., Locust Street
Securities, Inc., Multi-Financial Securities Corporation, VESTAX Securities
Corporation, ING Barings Furman Selz LLC, ING Barings LLC, Washington Square
Securities, PrimeVest Financial Services Granite Investment Services, Split Rock
Financial, Inc., BancWest Investment Services, and Financial Northeastern
Securities, Inc.
The table below summarizes key features of Class A shares.
Class A
-------
Availability Available directly from the Fund or
through authorized securities
dealers or investment advisors
Initial Sales Load? Yes. Payable at time of purchase.
Lower sales loads are available for
larger investments.
Deferred Sales Load? No. (May be charged for purchases
over $1 million that are redeemed
within one or two years.)
Redemption Fee? No.
Maintenance and Distribution Fees? Shareholder Servicing fee of 0.25%
and Rule 12b-1 Plan Distribution
Fees of 0.10%.
CLASS A SHARES - INITIAL SALES LOAD ALTERNATIVE
If you select Class A shares, you will pay a sales load at a the time of
purchase according to the following schedules:
DEALER
COMPENSATION
SALES LOAD SALES LOAD AS A % OF
AS OF A % OF AS A % YOUR OFFERING
YOUR INVESTMENT OFFERING PRICE INVESTMENT PRICE
--------------- -------------- ---------- -----
Less than $50,000 5.75% 6.10% 5.00%
$50,00 but less than $100,000 4.50% 4.71% 3.75%
$100,000 but less than $250,000 3.50% 3.63% 2.75%
$250,000 but less than $500,000 2.50% 2.56% 2.00%
$500,000 but less than $1,000,000 2.00% 2.04% 1.75%
$1,000,000 and over* None None See Below
----------
* If you invest $1,000,000 or more in Class A shares, the Distributor
normally pays the dealer compensation ranging from 0.25% to 1% of the
purchase price of the shares of the dealer from its own resources at the
time of the investment. Although you will not pay an initial sales load, if
you redeem your shares within one or two years after purchase, you may be
charged a deferred sales load of up to 1% of the lesser of the original of
the shares being redeemed or your redemption proceeds.
PERIOD DURING WHICH
YOUR INVESTMENT CDSL CDSL APPLIES
--------------- ---- ------------
$1,000,000 but less than $2,500,000 1.00% 2 years
$2,500,000 but less than $5,000,000 0.50% 1 year
$5,000,000 and over 0.25% 1 year
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<PAGE>
The deferred sales load relating to Class A shares will be reduced or
waived in certain circumstances described below. Persons who invested $1,000,000
or more in Class A shares prior to November 6, 2000 are subject to a CDSL of
1.00% for a period of 12 months from the date of purchase.
No initial sales load is applied to Class A shares of the Fund that you
purchase through the reinvestment of dividends or distributions.
A reduced or waived sales load on a purchase of Class A shares may apply
for purchases under a "Right of Accumulation" or "Letter of Intent." The Right
of Accumulation permits you to pay the sales load that would apply to the cost
or value (whichever is higher) of all shares you own in the ING Funds and
Pilgrim Funds at the time of your current purchase. A Letter of Intent permits
you to pay the sales load that would be applicable if you add up all shares of
ING Funds and Pilgrim Funds that you agree to buy within a 13 month period. Of
the Letter of Intent amount, 5% will be held in escrow to cover additional sales
charges which may be due if your total investments over the 13 month period are
not sufficient to qualify for a sales charge reduction. Certain restrictions
apply. With regard to the Class A CDSL, all shares held in the ING Funds and
Pilgrim Funds at the time of purchase will be included for purposes of
determining the amount of your investment. In order for the sales charge
reductions to be effective under either of these programs, the Transfer Agent
must be notified of the reduction request when the purchase order is placed.
Additional information concerning these programs can be obtained from the Fund
by calling 1-800-992-0180.
With regard to ING Funds that charge an initial sales load, the initial
sales load on Class A shares is waived with respect to the following types of
investments:
* Purchases by discretionary advisory accounts of the Investment Manager or
any Sub-Adviser.
* Purchases by any ING Fund or Pilgrim Fund and purchases by officers,
directors, trustees and employees of the ING Funds, the Investment Manager,
any Sub-Advisers, the Distributor, any service provider to the Funds or
affiliates thereof, including any trust, pension, profit sharing or other
benefit plan for such persons.
* Purchases by broker-dealers who have a sales agreement with the Distributor
and their registered personnel and employees, including members of the
immediate families of such registered personnel and employees.
* Purchases by certain fee-based registered investment advisers, trust
companies and bank trust departments, on their own behalf or on behalf of
their clients, provided that the aggregate amount invested in the ING Funds
and Pilgrim Funds during the 13 month period starting with the first
investment equals at least $1 million.
* Purchases by any charitable organization or any state, county or city, or
any instrumentality, department, authority or agency thereof that has
determined that a Fund is a legally permissible investment and that is
prohibited by applicable investment law from paying a sales charge or
commission in connection with the purchase of shares.
C-3
<PAGE>
* Purchases paid for with the proceeds of shares redeemed in the prior 90
days from another unaffiliated mutual fund on which an initial sales load
or CDSL was subject to or paid. The ING Fund or Pilgrim Fund into which the
investment is made must, in the sole discretion of the Distributor, have
substantially similar investment objectives and investments.
* Purchases by shareholders who have authorized the automatic transfer of
dividends from the same class of another ING Fund or Pilgrim Fund.
* Purchases by broker-dealers using third party administrators for qualified
retirement plans who have a sales agreement with the Distributor, subject
to certain operational and minimum size requirements specified from time to
time by the Funds.
* Purchases by accounts as to which a bank or broker-dealer charges an
account management fee ("wrap accounts").
Class A shares of the Funds may be purchased at net asset value, without a
sales load, by persons who have redeemed their Class A shares of any ING Fund or
Pilgrim Fund within the previous 90 days. The amount eligible for this privilege
may not exceed the amount of your redemption proceeds and this privilege may
only be exercised once in any calendar year. To exercise the privilege, contact
the Funds at 1-800-992-0180.
If you redeem Class A shares and within 90 days buy new shares of the same
Class, you will not pay a sales load on the new purchase amount and you will
receive a credit for any CDSL paid. If such reinstated shares are then redeemed
within one year of the initial purchase, the CDSL will be imposed upon the
redemption. The amount eligible for this "Reinstatement Privilege" may not
exceed the amount of your redemption proceeds. To exercise the privilege,
contact the Funds at 1-800-992-0180.
HOW TO PURCHASE SHARES
Orders for the purchase of shares of the Fund will be executed at the net
asset value per share plus any applicable sales load ("the public offering
price") next determined after an order has been received. The public offering
price of the Fund is determined as of the close of regular trading on the New
York Stock Exchange (normally 4 p.m. Eastern time) on each day the Exchange is
open for business.
The minimum initial investment in the Fund is $1,000 ($250 for an IRA
investment or any qualified plan). Any subsequent investments must be at least
$100, including an IRA or qualified plan investment. The Distributor may waive
these minimums from time to time. All initial investments should be accompanied
by a completed Account Application. A separate application is required for an
IRA qualified plan investor. All funds received are invested in full and
fractional shares of the Fund. Certificates for shares are not issued. Shares of
the Fund may be purchased by investors for retirement and non-retirement
accounts.
C-4
<PAGE>
When you purchase shares of an ING Fund, please specify the Class of shares
that you wish to purchase. If you do not choose a Class of shares, then your
investment will be made in Class A shares. ING Funds reserve the right to reject
any purchase order. ING Funds will accept third party checks from qualified
financial institutions, such as broker-dealers and investment advisers that are
registered with the Securities and Exchange Commission, as well as insurance
companies, banks, credit unions and thrift companies. Cash, travelers checks,
third-party checks, money orders and checks drawn on non-U.S. banks will not be
accepted. All initial investments may be made using any of the following
methods.
By Mail Send your completed and signed application and
check payable to ING Funds Trust by regular
mail to:
ING Funds
P.O. Box 219368
Kansas City, MO 64121-9368
Or by express, registered, or certified mail to:
ING Funds
c/o DST Systems, Inc.
330 W. 9th Street
Kansas City, MO 64105
Through an Authorized Broker Contact your broker or investment adviser for
or Investment Adviser instructions on purchasing shares through their
organizations. These organizations may impose
additional requirements and charges for the
services rendered.
C-5
<PAGE>
By Wire First contact the ING Funds at 1-800-336-3436
to obtain a fund account number and reference
number for the wire. Then contact your bank and
request it to wire federal funds to the
applicable ING Fund. Your bank will normally
charge you a fee for handling the transaction.
The following wire instructions should be used:
State Street Bank and Trust Company
ABA 101003621
A/C # 751-8315
Credit to ING Global Information
Technology Fund For Account of
[insert your ING Fund account number]
After wiring funds you must complete the
Account Application and send it to:
ING Funds
P.O. Box 219368
Kansas City, Missouri 64121-9368
You may purchase additional shares after your account has been established
using any of the following methods:
By Mail Send a check payable to ING Funds Trust, along
with a remittance slip from a confirmation
statement or with a letter of instructions
including your account number and ING Fund name,
to the appropriate address listed above.
Through an Authorized Broker Contact your broker or investment adviser.
or Investment Adviser
By Wire Follow the instructions above for initial
investments by wire.
Pre-Authorized This plan permits you to purchase Fund shares
Investment Plan (minimum of $100 per transaction) on a monthly
basis by transferring funds from your bank
account. This plan also permits you to purchase
Fund shares by having your employer
automatically transfer a portion of your
paycheck to the Funds. In addition, social
security recipients may have all or a portion of
their social security check transferred
automatically to purchase Fund shares. Call the
Fund at 1-800-992-0180 to obtain the necessary
authorization form. The Fund reserves the right
upon 30 days' written notice to make reasonable
charges for this service.
IRA investments made through the Pre-Authorized Investment Plan will be
treated as current year contributions only. Prior year contributions through the
Pre-Authorized Investment Plan are prohibited. IRA investments cannot exceed
Internal Revenue Service stated maximums for investing in a calendar year. It is
the account holder's responsibility to ensure that their account(s) are within
these maximum investment guidelines.
C-6
<PAGE>
HOW TO REDEEM SHARES
You may redeem your shares, in whole or in part, on each day the Fund is
valued. Shares will be redeemed without charge (except for any applicable CDSL)
at the net asset value next determined after a redemption request in good order
has been received by the ING Funds.
When purchases are made by check in the Fund, redemption proceeds will be
made available immediately upon clearance of the purchase check, which may take
up to 15 calendar days. You may avoid this delay by investing through wire
transfers of federal funds.
The Fund will ordinarily send the proceeds by check to you at the address
of record, within three business days. To ensure acceptance of your redemption
request, it is important to follow the procedures described below. If you
purchased your shares through an Authorized Broker or Investment Adviser, please
contact them to inquire which redemption methods are available to you. Under
certain circumstances described below, a signature guarantee may be required.
You may redeem your shares using any of the following methods:
By Mail Send your letter of instructions for redemption
to the appropriate address.
By regular mail to:
ING Funds
P.O. Box 219368
Kansas City, MO 64121-9368
Or by express, registered or certified mail to:
ING Funds
c/o DST Systems, Inc.
330 W. 9th Street
Kansas City, MO 64105
Your letter of instructions must include:
* the name of the Fund and account number
you are redeeming from
* your names(s) and address as they appear
on your account
* the dollar amount or number of shares you
wish to redeem
* your signature(s) as it appears on your
account
* a signature guarantee, if required (see
below)
* additional information may be required for
redemptions from IRAs or other retirement
plans. Please call the ING Funds at
1-800-992-0180 for instructions.
If you have a pre-designated bank account on
file, you may request to have your redemption
proceeds wired directly into your bank account.
If we do not have bank instructions on your
account, or if you would like the proceeds to be
sent to another account, a signature guarantee
will be required.
C-7
<PAGE>
By Telephone The telephone redemption privilege is available
unless you specifically decline this option on
your Account Application. To request a telephone
redemption, call an ING Funds representative at
1-800-992-0180 and be prepared to give the
representative your account number, social
security number and account registration, the
ING Fund name from which you are redeeming
shares, and the amount to be redeemed. Your
redemption proceeds (subject to a minimum of
$5,000) will be wired to your predesignated bank
account. If no pre-designated bank account is on
file, a check (up to a maximum of $100,000) will
be sent to your address of record. If you did
not complete the bank account information
section on your application at the time of your
initial purchase, you may obtain the necessary
authorization form by contacting the Fund's
representative at the above phone number.
Telephone redemptions will be suspended for a
period of 30 days following an address change.
Your bank may charge you a fee for receiving a
wire payment on your behalf. This feature is not
available to IRAs or other retirement plans.
Through an Authorized You may redeem your shares by contacting your
Broker or Investment Adviser authorized broker or investment advisor and
instructing him or her to redeem your shares.
Your representative will then contact the ING
Funds and place a redemption trade on your
behalf. These organizations may impose certain
restrictions on redemptions and may charge you a
fee for the transaction.
By Systematic Provided your account has a current value of at
Withdrawal Plan least $10,000, you may arrange to receive
automatic cash payments (minimum $100)
periodically. You may choose from monthly,
quarterly, semi-annual or annual payments. Call
1-800-992-0180 for more information and an
enrollment form.
The Fund reserves the right to redeem in kind. That is, the Fund may honor
redemption requests with readily marketable portfolio securities instead of cash
if during any 90-day period redemptions exceed the lesser of $250,000 or 1% of
the net assets of the Fund at the beginning of such period. You may incur
transaction costs associated with converting these securities to cash.
Due to the high costs of maintaining small accounts, the Fund may ask that
you increase your account balance if the value of your account falls below
$1,000 ($250 for IRAs) as a result of redemptions or exchanges. If the account
balance remains below the minimum requirement for 30 days after you are
notified, the Fund may close your account and send you the redemption proceeds.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the Fund and their agents by verifying the signature of certain
investors seeking to redeem, transfer, or exchange shares of the ING Funds.
Signature guarantees are required for:
* redemptions by mail in excess of $50,000;
* redemptions by mail if the proceeds are to be paid to someone other than
the name(s) in which the account is registered.
C-8
<PAGE>
* redemptions requesting proceeds to be sent by wire to other than the bank
of record for the account;
* redemptions requesting proceeds to be sent to a new address or an address
that has been changed within the past 30 days;
* requests to transfer the registration of shares to another owner;
* telephone exchange and telephone redemption authorization forms;
* changes in previously designated wiring instructions; and
* redemptions or exchanges of shares previously reported as lost/abandoned
property, whether or not the redemption amount is under $50,000 or the
proceeds are to be sent to the address of record.
The foregoing requirements may be waived or modified upon notice to
shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions,
national securities exchanges, savings associations and any other organization,
provided that such institution or organization qualifies as an "eligible
guarantor institution" as that term is defined in rules adopted by the
Securities and Exchange Commission. For information regarding whether a
particular institution or organization qualifies as an "eligible guarantor
institution," contact the ING Funds at 1-800-992-0180.
Telephone Orders. The 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. The 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
the 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 PRIVILEGE
Except as described below, Class A shares of the Fund may be exchanged for
Class A shares of any other ING Fund or Pilgrim Fund which permit exchanges. Any
sales load previously paid on the shares being exchanged will be credited toward
the sales load payable on the shares being acquired.
Your exchange will be processed at the next determined net asset value (or
offering price, if there is a sales load) after ING Funds receives your request.
A new account opened by exchange must be established with the same name(s),
address and social security number as the existing account.
You may only exchange shares into an ING Fund or Pilgrim Fund which is
authorized for sale in your state of residence. The Fund may limit each account
to four exchanges per calendar year. The Fund may change or discontinue the
exchange privilege after giving you 60 days' prior notice. The Fund may also, on
60 days' prior notice, impose charges of up to $5 for exchanges. An exchange of
shares is a taxable event on which you may realize a gain or loss. You may
exchange shares using any of the following methods:
C-9
<PAGE>
By Telephone You are automatically eligible to exchange
shares by telephone unless you specifically
decline this option on your Account Application.
To speak with a service representative, call
1-800-992-0180. Be prepared to provide the
representative with the following information:
* your account number, social security
number and account registration
* the name of the Fund into which you wish
to make the exchange
* the dollar amount or the number of shares
you wish to exchange
Telephone exchanges will be suspended for a
period of ten days following an address change.
By Mail Send a letter of instructions to the ING Funds
which includes the following information:
* the name of the ING Fund and the account
number you are exchanging from
* your name(s), address and social security
number
* the dollar amount or number of shares you
wish to exchange
* the name of the ING Fund or Pilgrim Fund
you are exchanging into
* your signature(s) as it appears on your
account
Send your instructions by regular mail to:
ING Funds
P.O. Box 219368
Kansas City, MO 64121-9368
Or by express, registered or certified mail to:
ING Funds
c/o DST Systems, Inc.
330 W. 9th Street
Kansas City, MO 64105
Systematic Exchange
Privilege Provided your initial account balance is at
least $5,000, the Systematic Exchange Privilege
enables you to invest regularly, in exchange for
share of a Fund, in shares of other ING Funds
and Pilgrim Funds of which you are a
shareholder. The amount designated will be
exchanged automatically according to the
schedule you have selected. The right to
exercise this privilege may be changed or
terminated by the Funds upon 60 days' prior
notice. For more information on this privilege
or to obtain a Systematic Exchange Privilege
Authorization Form, call the Funds at
1-800-992-0180.
C-10
<PAGE>
PRICING OF SHARES
The Fund prices its shares based on its net asset value. The Fund values
portfolio securities for which market quotations are readily available at market
price. The Fund values all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the Fund may value the security at its fair value as determined in
good faith by or under the supervision of the Board of Trustees. The effect of
using fair value pricing is that the Fund's net asset value will be subject to
the judgment of the Board of Trustees or its designee instead of being
determined by the market. Because the Fund may invest in securities that are
primarily listed on foreign exchanges, the value of the Fund's shares may change
on days when you will not be able to purchase or redeem shares.
The Fund determines the net asset value of its shares as of the close of
the NYSE (normally 4:00 p.m., Eastern time) on each day the NYSE is open for
business. The price at which a purchase or redemption is effected is based on
the next calculation of the Fund's net asset value after the order is placed.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute to its shareholders substantially all of its
investment company taxable income (which includes dividends and interest and the
excess, if any, of net short-term capital gains over net long-term capital
losses). The Fund will declare and pay these dividends annually. In addition,
the Fund intends to distribute, at least annually, substantially all of its net
capital gains (the excess of net long-term capital gains over net short-term
capital loses). In determining amounts of capital gains to be distributed, any
capital loss carryovers from prior years will be applied against capital gains.
Dividends and distributions will be reinvested in additional shares of the
Fund at net asset value unless you elect to receive such dividends and
distributions in cash. If you redeem all or a portion of Fund shares prior to a
dividend payment date, you will be entitled on the next dividend payment date to
all dividends declared but unpaid on those shares at the time of their
redemption.
If you elect to receive distributions in cash and the post office cannot
deliver your checks or if you do not cash your checks within six months, your
dividends may be reinvested in your account at the then-current net asset value
and your account will be converted to the reinvestment option. You will not
receive interest on the amount of your uncashed checks.
You may also elect to automatically invest dividends and distributions paid
by the Fund in shares of any other ING Fund of which you are a shareholder.
Shares of the other Fund will be purchased at that Fund's then-current net asset
value.
You may also elect to transfer electronically dividends and distributions
paid by the Fund to your designated bank account if your financial institution
is an Automated Clearing House member. Banks may charge a fee for the service.
The elections described above may be made either on the Account Application
or by calling the Fund at 1-800-992-0180.
C-11
<PAGE>
TAXES
Each ING Fund is treated as a separate entity for federal income tax
purposes. The Fund intends to qualify as a regulated investment company by
satisfying the requirements under Subchapter M of the Internal Revenue Code of
1986 (the "Code"), including requirements with respect to diversification of
assets, distribution of income and sources of income. By so qualifying, the Fund
generally will not be subject to federal income tax to the extent that it
distributes investment company taxable income and net realized capital gains in
the manner required under the Code.
Distributions by the Fund of its taxable net investment income and the
excess, if any, of its net short-term capital gain over its net long-term
capital loss are taxable to shareholders as ordinary income. Such distributions
are treated as dividends for federal income tax purposes but may qualify for the
70% dividends-received deduction for corporate shareholders. Distributions by
the Fund of excess, if any, of its net long-term capital gain over its net
short-term capital loss are designated as capital gain dividends and are taxable
as long-term capital gains, regardless of the length of time you have held your
shares.
Distributions will be treated in the same manner for federal income tax
purposes whether you receive them in cash or reinvest them in additional shares
of the Fund. In general, distributions by the Fund are taxable to you in the
year in which the distributions are made. However, certain distributions made
during January will be treated as having been paid by the Fund and received by
you on December 31 of the preceding year.
Investment income received by the Fund from sources within foreign
countries may be subject to foreign income taxes withheld at the source. To the
extent the Fund is liable for foreign income taxes withheld at the source, the
Fund intends, if possible, to operate so as to meet the requirements of the Code
to "pass through" to the Fund's shareholders credits for foreign income taxes
paid, but there can be no assurance that the Fund will be able to do so.
A redemption or an exchange of shares is a taxable transaction on which you
may realize a gain or loss. Any gain or loss realized upon the sale or other
disposition of shares of the Fund generally will be a capital gain or loss which
will be long-term or short-term depending on how long you have held the shares.
Any loss realized upon a sale or disposition of shares within six months from
the date of their purchase will be treated as a long-term capital loss to the
extent of any capital gain distributions received on such shares.
Under the backup withholding rules of the Code, you may be subject to 31%
withholding of federal income tax on ordinary income dividends paid by the Fund.
In order to avoid this backup withholding, you must provide the Fund with a
correct taxpayer identification number or certify that you are otherwise exempt
from or not subject to backup withholding.
You will be notified annually as to the federal tax status of distributions
made by the Fund. Depending on your residence for tax purposes, distributions
also may be subject to state and local taxes. You should consult your own tax
advisor as to the federal, state and local tax consequences of investing in
shares of the Fund in your particular circumstances.
C-12
<PAGE>
FINANCIAL HIGHLIGHTS
ING GLOBAL INFORMATION TECHNOLOGY FUND
This information has been derived from the Fund's Financial Statements. The
information for the year ended October 31, 1999 has been audited by Ernst &
Young LLP, whose report, along with the Fund's financial statements is included
in the Fund's Annual Report.
For a share of beneficial interest outstanding throughout each period:
CLASS A SHARES(1)
----------------------
4/30/00(2) 10/31/99
---------- --------
Net asset value per share, beginning
of period.......................................... $ 17.38 $ 10.00
From investment operations:
Net investment loss................................ (0.16) (0.13)
Net realized and unrealized gain(3)................ 12.29 7.51
-------- -------
Total from investment operations.................. 12.13 7.38
-------- -------
Distributions paid from capital gain................ (0.84) --
-------- -------
Net asset value per share, end of period............ $ 28.67 $ 17.38
======== =======
Net assets, end of period (in thousands)............ $108,760 $54,798
Total investment return at net asset
value(4)(5)........................................ 70.82% 73.80%
Ratios to average net assets(6):
Net expenses....................................... 1.51% 1.57%
Gross expenses..................................... 2.69% 2.95%
Net investment loss................................ (1.24%) (1.29%)
Portfolio turnover rate(5).......................... 51.20% 56.88%
----------
(1) Class A shares commenced operations on December 15, 1998.
(2) Unaudited.
(3) Includes gains and losses on foreign currency transactions.
(4) Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares. Total returns would be lower
if part of the Fund's expenses were not waived or reimbursed.
(5) Not annualized.
(6) Annualized.
C-13
<PAGE>
APPENDIX D
The following is a list of the ING Funds and Pilgrim Funds and the classes of
shares of each Fund that are expected to be offered at or shortly after the
Reorganization:
FUND CLASSES OFFERED
---- ---------------
ING FUNDS
U.S. EQUITY
Internet Fund A, B and C
Tax Efficient Equity Fund A, B and C
GLOBAL/INTERNATIONAL EQUITY
European Equity Fund A, B and C
Global Communications Fund A, B and C
Global Information Technology Fund A, B and C
FIXED INCOME
High Yield Bond Fund A, B and C
Intermediate Bond Fund A, B and C
Money Market Fund A, B, C and I
National Tax-Exempt Bond Fund A, B and C
PILGRIM FUNDS
U.S. EQUITY
Balanced Fund A, B, C, Q and T
Bank and Thrift Fund A and B
Convertible Fund A, B, C and Q
Corporate Leaders Trust Fund A
Growth and Income Fund A, B, C and Q
Growth + Value Fund A, B, C and Q
Growth Opportunities Fund A, B, C, Q, I and T
LargeCap Growth Fund A, B, C and Q
MagnaCap Fund A, B, C, Q and M
MidCap Growth Fund A, B, C and Q
MidCap Opportunities Fund A, B, C, Q and I
Research Enhanced Index Fund A, B, C, Q and I
SmallCap Growth Fund A, B, C, Q
SmallCap Opportunities Fund A, B, C, Q, I and T
GLOBAL/INTERNATIONAL EQUITY
Asia-Pacific Equity Fund A, B and M
Emerging Countries Fund A, B, C and Q
Gold Fund (to be renamed Precious Metals Fund) A
International Fund A, B, C and Q
International Core Growth Fund A, B, C and Q
International SmallCap Growth Fund A, B, C and Q
International Value Fund A, B, C and Q
Troika Dialog Russia Fund A
Worldwide Growth Fund A, B, C and Q
FIXED INCOME
GNMA Income Fund A, B, C, Q, M and T
High Yield Fund A, B, C, Q and M
High Yield Fund II A, B, C, Q and T
Lexington Money Market Trust A
Pilgrim Money Market Fund A, B and C
Strategic Income Fund A, B, C and Q
D-1
<PAGE>
APPENDIX E
As of December 1, 2000, the following persons owned beneficially or of
record 5% or more of the outstanding shares of Class A of ING Global Information
Technology Fund:
<TABLE>
<CAPTION>
% OF CLASS % OF FUND
BEFORE BEFORE % OF FUND AFTER
NAME AND ADDRESS CLASS REORGANIZATION REORGANIZATION REORGANIZATION
---------------- ----- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ING America Insurance Holdings, Inc. Class A 46.08% 28.71% ____%
Investment Accounts Record
5780 Powers Ferry Rd. NW Holder
Atlanta, GA 30327-4347
</TABLE>
As of December 1, 2000, the following persons owned beneficially or of
record 5% or more of the outstanding shares of Class A of Pilgrim Global
Technology Fund:
<TABLE>
<CAPTION>
CLASS AND % OF % OF FUND
TYPE OF CLASS BEFORE BEFORE % OF FUND AFTER
NAME AND ADDRESS OWNERSHIP REORGANIZATION REORGANIZATION REORGANIZATION
---------------- --------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
The Public Institution for Class A 78.67% 78.67% ___%
Social Security Record
P.O. Box 24324 Holder
Safat 13104
Kuwait
</TABLE>
E-1
<PAGE>
PART B
ING FUNDS TRUST
--------------------------------------------------------------------------------
Statement of Additional Information
________ __, 2001
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Acquisition of the Assets and Liabilities of By and in Exchange for Shares of
Pilgrim Global Technology Fund, Inc. ING Global Information Technology Fund
7337 East Doubletree Ranch Road (a series of ING Funds Trust)
Scottsdale, Arizona 85258 1475 Dunwoody Drive
West Chester, Pennsylvania 19380
</TABLE>
This Statement of Additional Information is available to the Shareholders of
Pilgrim Global Technology Fund in connection with a proposed transaction whereby
all of the assets and liabilities of Pilgrim Global Technology Fund, will be
transferred to ING Global Information Technology Fund, a series of ING Funds
Trust, in exchange for Class A shares of ING Global Information Technology Fund.
This Statement of Additional Information of the ING Funds Trust consists of this
cover page and the following documents, each of which was filed electronically
with the Securities and Exchange Commission and is incorporated by reference
herein:
1. The Statement of Additional Information for ING Global Information
Technology Fund dated November 6, 2000, as filed on November 13, 2000, and
Pilgrim Global Technology Fund dated August 11, 2000, as filed on August
11, 2000.
2. The Financial Statements of ING Global Information Technology Fund are
included in the Annual Report of ING Funds Trust dated October 31, 1999,
as filed on December 29, 1999.
3. The Financial Statements of ING Global Information Technology Fund are
included in the Semi-Annual Report of ING Funds Trust, dated April 30,
2000, as filed on July 7, 2000.
4. The Financial Statements of Pilgrim Global Technology Fund are included in
the Annual Report of Pilgrim Global Technology Fund dated December 31,
1999, as filed on February 29, 2000.
5. The Financial Statements of Pilgrim Global Technology Fund are included in
the Semi-Annual Report of Pilgrim Global Technology Fund dated June 30,
2000, as filed on August 31, 2000.
This Statement of Additional Information is not a Prospectus. A Proxy
Statement/Prospectus dated ________ ___, 2000 relating to the Reorganization of
Pilgrim Global Technology Fund may be obtained, without charge, by writing to
ING Funds Trust at 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258 or
calling 1-800-992-0180. This Statement of Additional Information should be read
in conjunction with the Proxy Statement/Prospectus.
1
<PAGE>
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 June 30, 2000. The first table presents Statements of Assets and Liabilities
(unaudited) for each Fund and pro forma figures for the combined Fund. The
second table presents Statements of Operations (unaudited) for each Fund and pro
forma figures for the combined Fund. The third table presents Portfolio of
Investments (unaudited) for each Fund and pro forma figures for the combined
Fund. The tables are followed by the Notes to the Pro Forma Financial Statements
(unaudited).
STATEMENTS OF ASSETS AND LIABILITIES AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
ING PILGRIM
GLOBAL GLOBAL
INFORMATION TECHNOLOGY PRO FORMA PRO FORMA
TECHNOLOGY FUND FUND ADJUSTMENTS COMBINED
--------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at value* $ 173,902,662 $ 11,029,164 $ 184,931,826
Short-term investments 2,149,000 -- 2,149,000
Foreign currencies** 1,802,929 -- 1,802,929
Cash 41,694 1,291,631 1,333,325
Due from affiliate 90 65,848 65,938
Receivable for investment securities sold 180,617 -- 180,617
Receivable for fund shares sold 371,064 -- 371,064
Dividends and interest receivable 16,365 8,138 24,503
Other -- 18 18
Prepaid expenses 29,017 -- 29,017
------------- ------------ ------------- ------------
Total Assets 178,493,438 12,394,799 -- 190,888,237
------------- ------------ ------------- ------------
LIABILITIES:
Payable for investment securities purchased 96,512 46,333 142,845
Payable for fund shares redeemed 77,373 5,114 82,487
Other liabilities and accrued expenses 2,108,314 117,013 2,225,327
------------- ------------ ------------- ------------
Total Liabilities 2,282,199 168,460 -- 2,450,659
------------- ------------ ------------- ------------
NET ASSETS $ 176,211,239 $ 12,226,339 $ -- $188,437,578
============= ============ ============= ============
NET ASSETS CONSIST OF:
Paid-in capital $ 104,780,184 $ 13,538,851 $118,319,035
Accumulated net investment income (loss) (1,809,273) (83,016) (1,892,289)
Accumulated net realized gain (loss) on investments 41,058,456 319,288 41,377,744
Unrealized appreciation (depreciation) of investments 32,181,872 (1,548,784) 30,633,088
------------- ------------ ------------- ------------
Net Assets $ 176,211,239 $ 12,226,339 $ 0 $188,437,578
============= ============ ============= ============
CLASS A:
Net Assets $ 112,091,254 $ 12,226,339 $124,317,593
Shares outstanding 3,965,674 1,166,544 (734,059)(A) 4,398,159
Net asset value and redemption price per share $ 28.27 $ 10.48 $ 28.27
CLASS B:
Net Assets $ 37,413,936 N/A $ 8,206,924 (B) $ 45,620,860
Shares outstanding 1,335,339 N/A 292,895 (B) 1,628,234
Net asset value and redemption price per share $ 28.02 N/A $ 28.02
CLASS C:
Net Assets $ 18,499,125 N/A $ 18,499,125
Shares outstanding 660,499 N/A 660,499
Net asset value and redemption price per share $ 28.01 N/A $ 28.01
CLASS X:
Net Assets $ 8,206,924 N/A $ (8,206,924)(B) N/A
Shares outstanding 293,067 N/A (293,067)(B) N/A
Net asset value and redemption price per share $ 28.00 N/A N/A
* Cost of Securities $ 141,709,021 $ 12,577,782 $154,286,803
** Cost of Foreign Currencies $ 1,770,954 -- $ 1,770,954
</TABLE>
(A) Reflects new shares issued, net of retired shares of Pilgrim Global
Technology Fund.
(B) Reflects the merging of Class X into Class B.
See accompanying notes to financial statements.
2
<PAGE>
STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
ING PILGRIM
GLOBAL GLOBAL
INFORMATION TECHNOLOGY PRO FORMA PRO FORMA
TECHNOLOGY FUND FUND ADJUSTMENTS COMBINED
--------------- ------------- -------------- -----------
TWELVE MONTHS PERIOD PERIOD PERIOD
ENDED ENDED ENDED ENDED
30-JUN-2000 30-JUN-2000(1) 30-JUN-2000 30-JUN-2000
------------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 93,139 $ 14,082 $ 107,221
Interest 213,353 23,279 236,632
------------ ----------- ------------ ------------
306,492 37,361 -- 343,853
Less: foreign tax expense 3,574 2,546 6,120
------------ ----------- ------------ ------------
Total investment income 302,918 34,815 -- 337,733
------------ ----------- ------------ ------------
EXPENSES:
Management fees 1,402,709 58,755 1,461,464
Distribution expenses
Class A 609,146 35,349 (A) 644,495
Class B 174,681 49,922 (D) 224,603
Class C 89,702 89,702
Class X 49,922 (49,922)(D) --
Transfer agent fees 526,838 18,067 544,905
Directors' fees 386 98,467 (88,620)(B) 10,233
Administrative fees -- -- 117,363 (A) 117,363
Professional fees 70,239 18,693 (14,954)(B) 73,978
Accounting expenses 47,460 2,093 (1,674)(B) 47,879
Custodian expenses 39,478 15,011 54,489
Registration fees 47,281 17,405 (13,924)(B) 50,762
Reports to shareholders 31,837 16,922 48,759
Computer processing fees -- 4,342 (4,342)(C) --
Other expenses 15,221 9,532 24,753
------------ ----------- ------------ ------------
Total expenses 3,104,900 259,287 29,197 3,393,384
Less: expenses recovered under contract with
investment advisor 1,201,288 130,347 (444,016) (A) 887,619
redemption fee proceeds 11,109 (11,109) (C) --
------------ ----------- ------------ ------------
Net expenses 1,903,612 117,831 484,322 2,505,765
Net investment income (loss) (1,600,694) (83,016) (484,322) (2,168,032)
------------ ----------- ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments 42,403,342 319,312 42,722,654
Foreign currency translations (192,396) (24) (192,420)
Net change in unrealized appreciation (depreciation) of:
Investments 24,655,783 (1,548,618) 23,107,165
Foreign currency translations 5,468 (166) 5,302
------------ ----------- ------------ ------------
Net gain (loss) from investments 66,872,197 (1,229,496) 65,642,701
------------ ----------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 65,271,503 $(1,312,512) $ (484,322) $ 63,474,669
============ =========== ============ ============
</TABLE>
(1) Fund commenced operations on January 13, 2000.
(A) Reflects adjustment in expenses due to effects of proposed contract rate.
(B) Reflects adjustment in expenses due to elimination of duplicative services.
(C) Reflects adjustment to concur with Pilgrim expense structure.
(D) Reflects the merging of Class X into Class B.
See accompanying notes to financial statements.
3
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
As of June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ING ING
GLOBAL PILGRIM GLOBAL PILGRIM
INFORMATION GLOBAL INFORMATION GLOBAL
TECHNOLOGY TECHNOLOGY PRO FORMA TECHNOLOGY TECHNOLOGY PRO FORMA
SHARES SHARES SHARES MARKET VALUE MARKET VALUE MARKET VALUE
------ ------ ------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCK: 98.14%
CANADA: 3.45%
95,330 95,330 Nortel Networks Corp. $ 6,506,273 $ 6,506,273
----------- ---------- -----------
FINLAND: 0.17%
7,100 7,100 Sonera Corp. $ 324,986 324,986
----------- ---------- -----------
FRANCE: 0.23%
6,400 6,400 Alcatel ADR 425,600 425,600
----------- ---------- -----------
GERMANY: 2.86%
499 499 @ Adlink Internet Media AG 5,644 5,644
4,000 4,000 Elmos Semiconductor AG 207,055 207,055
4,000 4,000 @ Infineon Technologies AG 318,252 318,252
14,169 14,169 SAP AG 2,617,638 2,617,638
24,332 24,332 Software AG 2,241,788 2,241,788
----------- ---------- -----------
4,859,426 530,951 5,390,377
----------- ---------- -----------
HONG KONG: 0.06%
200,000 200,000 @ Yuxing Infotech Holdings, Ltd. 109,685 109,685
----------- ---------- -----------
IRELAND: 1.60%
62,963 62,963 SmartForce PLC 3,022,224 3,022,224
----------- ---------- -----------
ISRAEL: 0.04%
2,500 2,500 @ Orckit Communications, Ltd. 75,000 75,000
----------- ---------- -----------
JAPAN: 2.61%
5,250 5,250 Capcom Company, Ltd. 169,208 169,208
1,400 1,400 Citizen Electronics Company, Ltd. 153,495 153,495
10,000 10,000 @ Crayfish Company, Ltd. ADR 69,375 69,375
12,000 12,000 Fujitsu, Ltd 416,251 416,251
600 600 Hikari Tsushin, Inc. 24,669 24,669
9,000 9,000 Matsushita Electronics 233,929 233,929
28,000 28,000 Mitsubishi Electronics 303,814 303,814
13 13 NTT Data Corp. 133,930 133,930
13 13 NTT Docomo, Inc. 352,642 352,642
5,800 600 6,400 Softbank Corp. 787,219 81,662 868,881
3,800 3,800 Sony Corp. 355,572 355,572
21,000 21,000 Square Co., Ltd. 1,183,656 1,183,656
5,000 5,000 Sumisho Computer Systems 369,560 369,560
2,000 2,000 Tokyo Electron, Ltd. 274,476 274,476
----------- ---------- -----------
1,970,875 2,938,583 4,909,458
----------- ---------- -----------
NETHERLANDS: 2.48%
64,970 64,970 ASM Lithography Holding NV 2,792,594 2,792,594
6,500 6,500 Koninklijke (Royal) Philips
Electronics NV 307,803 307,803
46,540 8,000 54,540 United Pan-Europe Communications NV 1,217,049 210,046 1,427,095
12,000 12,000 @ World Online International NV 144,939 144,939
----------- ---------- -----------
4,009,643 662,788 4,672,431
----------- ---------- -----------
PORTUGAL: 0.21%
2,000 2,000 @ Impresa-Sociedade Gestora de
Participacoes, SA 22,048 22,048
9,667 9,667 @ ParaRede, SGPS SA 62,828 62,828
48,335 48,335 @ ParaRede, SGPS SA (Rights) 314,140 314,140
----------- ---------- -----------
-- 399,016 399,016
----------- ---------- -----------
SOUTH KOREA: 0.33%
5,000 5,000 @ Korea Telecom Corp. ADR 241,875 241,875
47,900 47,900 @ Mirae Co. ADR 384,697 384,697
----------- ---------- -----------
-- 626,572 626,572
----------- ---------- -----------
SPAIN: 0.17%
14,500 14,500 @ Telefonica SA 312,740 312,740
----------- ---------- -----------
SWEDEN: 0.16%
14,800 14,800 Telefonaktiebolaget LM Ericsson AB 294,457 294,457
----------- ---------- -----------
SWITZERLAND: 0.17%
9,000 9,000 Swisscom AG 317,250 317,250
----------- ---------- -----------
TAIWAN: 0.11%
5,120 5,120 @ Taiwan Semiconductor Manufacturing
Company, Ltd. ADR 198,400 198,400
----------- ---------- -----------
UNITED KINGDOM: 3.32%
169,192 169,192 CMG PLC 2,390,733 2,390,733
26,000 26,000 @ Flag Telecom Holdings, Ltd. 388,375 388,375
63,586 63,586 Logica PLC 1,504,755 1,504,755
120,556 120,556 Sema Group PLC 1,714,684 1,714,684
65,200 65,200 @ Vodafone AirTouch PLC 263,546 263,546
----------- ---------- -----------
5,610,172 651,921 6,262,093
----------- ---------- -----------
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UNITED STATES: 80.17%
1,500 1,500 @ Agilent Technologies, Inc. 110,625 110,625
56,309 56,309 Amdocs Ltd. 4,321,715 4,321,715
67,097 67,097 America Online, Inc. 3,539,367 3,539,367
25,702 25,702 Applied Materials, Inc. 2,329,244 2,329,244
25,190 25,190 Art Technology Group, Inc. 2,542,615 2,542,615
120,190 120,190 BEA Systems, Inc. 5,941,893 5,941,893
84,276 84,276 BroadVision, Inc. 4,282,274 4,282,274
38,977 38,977 Brocade Communications System 7,151,670 7,151,670
30,610 30,610 Brooks Automation, Inc. 1,957,127 1,957,127
4,500 4,500 @ Caliper Technologies Corp. 206,859 206,859
41,209 41,209 CIENA Corp. 6,869,025 6,869,025
75,044 75,044 Cisco Systems, Inc. 4,769,984 4,769,984
45,141 45,141 Citrix Systems, Inc. 854,858 854,858
42,774 42,774 Computer Associates International, Inc. 2,189,494 2,189,494
30,406 30,406 Computer Sciences Corp. 2,270,948 2,270,948
2,500 2,500 @ Conexant Systems, Inc. 121,797 121,797
49,564 49,564 Convergys Corp. 2,571,133 2,571,133
23,780 23,780 DoubleClick, Inc. 906,612 906,612
4,000 4,000 @ Electronic Arts, Inc. 291,875 291,875
89,466 89,466 EMC Corp-Mass 6,883,290 6,883,290
6,300 6,300 @ Entrust Technologies, Inc. 522,506 522,506
44,118 44,118 I2 Technologies, Inc. 4,599,991 4,599,991
21,879 21,879 Inktomi Corp. 2,587,192 2,587,192
35,997 35,997 Intel Corp. 4,812,349 4,812,349
18,610 18,610 International Business Machines Corp. 2,038,958 2,038,958
7,900 7,900 @ Intersil Holding Corp. 426,600 426,600
52,688 52,688 JDS Uniphase Corp. 6,315,974 6,315,974
20,000 20,000 @ Litronic, Inc. 178,125 178,125
6,000 6,000 Lucent Technologies, Inc. 355,500 355,500
85,238 85,238 MarchFirst, Inc. 1,555,594 1,555,594
34,100 34,100 Micron Technology, Inc. 3,002,931 3,002,931
63,890 63,890 Microsoft Corp. 5,111,200 5,111,200
9,000 9,000 @ Motient Corp. 141,469 141,469
163,840 163,840 Motorola, Inc. 4,761,600 4,761,600
64,988 64,988 Network Appliance, Inc. 5,231,534 5,231,534
67,096 67,096 Network Associates, Inc. 1,367,081 1,367,081
500 500 @ New Focus, Inc. 41,250 41,250
75,918 75,918 Oracle Corp. 6,381,857 6,381,857
4,000 4,000 @ Phone.com, Inc. 260,875 260,875
94,648 94,648 Razorfish, Inc. 1,520,284 1,520,284
33,864 33,864 RF Micro Devices, Inc. 2,967,333 2,967,333
25,000 25,000 @ Saflink Corp. 69,531 69,531
36,433 36,433 Sapient Corp. 3,896,054 3,896,054
36,497 36,497 Siebel Systems, Inc. 5,969,541 5,969,541
29,753 29,753 Software.Com, Inc. 3,864,171 3,864,171
65,782 65,782 Sun Microsystems, Inc. 5,982,051 5,982,051
89,296 89,296 Texas Instruments, Inc. 6,133,519 6,133,519
62,050 62,050 Veritas Software Corp. 7,012,620 7,012,620
5,900 5,900 @ Vitesse Semiconductor Corp. 434,203 434,203
27,697 27,697 Yahoo, Inc. 3,430,966 3,430,966
----------- ---------- -----------
147,924,049 3,161,215 151,085,264
TOTAL LONG-TERM INVESTMENTS
(COST: $141,709,021, $12,577,782,
$154,286,803) 173,902,662 11,029,164 184,931,826
----------- ---------- -----------
PRINCIPAL AMOUNT SHORT-TERM INVESTMENTS: 1.14%
-------------------------------------
$2,149,000 $2,149,000 State Street Bank & Trust 6.550%
due 07/03/00 2,149,000 2,149,000
----------- ---------- -----------
TOTAL SHORT-TERM INVESTMENTS
($2,149,000, $0, $2,149,000) 2,149,000 -- 2,149,000
----------- ---------- -----------
TOTAL INVESTMENTS (COST:
$143,858,021, $12,577,782,
$156,435,803) 99.28% 176,051,662 11,029,164 187,080,826
OTHER ASSETS IN EXCESS OF
LIABILITIES 0.72% 159,577 1,197,175 1,356,752
----------- ---------- -----------
TOTAL NET ASSETS 100.00% 176,211,239 12,226,339 188,437,578
====== =========== ========== ===========
</TABLE>
@ Non-income producing security
ADR - American Depository Receipt
See Accompanying Notes to Financial Statements.
5
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
Note 1 - Basis of Combination:
On November 16, 2000, the Board of ING Global Information Technology Fund
("Global Information Technology Fund") and on November 2, 2000 the Board of
Pilgrim Global Technology Fund ("Global Technology Fund"), approved an Agreement
and Plan of Reorganization (the "Plan") whereby, subject to approval by the
shareholders of Global Technology Fund, Global Information Technology Fund will
acquire all the assets of Global Technology Fund subject to the liabilities of
such Fund, in exchange for a number of shares equal to the pro rata net assets
of shares of the Global Information Technology 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 June 30, 2000. The unaudited pro forma portfolio of
investments, and unaudited statement of assets and liabilities reflect the
financial position of Global Information Technology Fund and Global Technology
Fund at June 30, 2000. The unaudited pro forma statement of operations reflects
the results of operations of Global Information Technology Fund and Global
Technology Fund for the period ended June 30, 2000. These statements have been
derived from the Funds' respective books and records utilized in calculating
daily net asset value at the dates indicated above for Global Information
Technology Fund and Global Technology Fund under generally accepted accounting
principles. The historical cost of investment securities will be carried forward
to the surviving entity and results of operations of Global Information
Technology Fund for pre-combination periods will not be restated.
The unaudited pro forma portfolio of investments, and unaudited pro forma
statements of assets and liabilities and operations should be read in
conjunction with the historical financial statements of the Funds incorporated
by reference in the Statements of Additional Information.
Note 2 - Security Valuation:
Investments in equity securities traded on a national securities exchange
or included on the NASDAQ National Market System are valued at the last reported
sale 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. U.S. Government obligations
are valued by using market quotations or independent pricing services which use
prices provided by market-makers or estimates of market values obtained from
yield data relating to instruments or securities with similar characteristics.
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 the
time such valuation is determined by each Fund's Custodian. Securities for which
market quotations are not readily available are valued at their respective fair
values as determined in good faith and in accordance with policies set by the
Board of Directors. Investments in securities maturing in less than 60 days are
valued at cost, which, when combined with accrued interest, approximates market
value.
Note 3 - Foreign Currency Transactions:
The books and records of the funds are maintained in U.S. dollars. Any
foreign currency amounts are translated into U.S. dollars on the following
basis:
(1) Market value of investment securities, other assets and
liabilities--at the exchange rates prevailing at the end of the day.
(2) Purchases and sales of investment securities, income and expenses - at
the rates of exchange prevailing on the respective dates of such
transactions.
6
<PAGE>
Although the net assets and the market values are presented at the foreign
exchange rates at the end of the day, the Funds do not isolate the portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from the changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gains or losses from the investments. Reported net realized foreign
exchange gains or losses arise from sales and maturities of short-term
securities, sales of foreign currencies, currency gains or losses realized
between the trade and settlement on securities transactions, and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities other than investments
in securities at fiscal year end, resulting from changes in the exchange rate.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with investing in U.S. companies and the U.S.
Government. These risks include but are not limited to re-evaluation of
currencies and future adverse political and economic developments which could
cause securities and their markets to be less liquid and prices more volatile
than those in the United States.
Note 4 - 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 Global
Technology Fund by Global Information Technology Fund as of June 30, 2000. The
number of additional shares issued was calculated by dividing the net asset
value of each Class of Global Technology Fund by the respective Class net asset
value per share of Global Information Technology Fund.
Note 5 - Unaudited Pro Forma Adjustments:
The accompanying unaudited pro forma financial statements reflect changes
in fund shares as if the merger had taken place on June 30, 2000. Global
Technology Fund expenses were adjusted assuming Global Information Technology
Fund's fee structure was in effect for the year ended June 30, 2000.
Note 6 - Merger Costs:
Merger costs are estimated at approximately $125,000 and are not included
in the unaudited pro forma statement of operations since these costs are not
reccurring. These costs represent the estimated expense of both 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.
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. In
addition, no capital gain distribution shall be made until the capital loss
carryforward has been fully utilized or expires.
7
<PAGE>
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Reference is made to Article IX of Registrant's By-Laws and paragraph 1.11
of the Distribution Agreement.
The Registrant is covered under an insurance policy insuring its officers
and trustees against liabilities, and certain costs of defending claims against
such officers and trustees, to the extent such officers and trustees are not
found to have committed conduct constituting willful misfeasance, bad faith,
gross negligence or reckless disregard in the performance of their duties. The
insurance policy also insures the Registrant against the cost of indemnification
payments to officers under certain circumstances.
Section 12 of the Management Agreement between Registrant and Manager,
Section 8 of the Sub-Advisory Agreements and Section 1.11 of the Distribution
Agreement between the Registrant and Distributor limit the liability of Manager,
the Sub-Advisors and the Distributor to liabilities arising from willful
misfeasance, bad faith or gross negligence in the performance of their
respective duties or from reckless disregard by them of their respective
obligations and duties under the agreements.
The Registrant hereby undertakes that it will apply the indemnification
provisions of its Trust Instrument, By-Laws, Management Agreement and
Distribution Agreement in a manner consistent with Release No. 11330 of the
Securities and Exchange Commission under the 1940 Act so long as the
interpretations of Section 17(h) and 17(i) of such Act remain in effect and are
consistently applied.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant understands that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities 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 whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issues.
ITEM 16. EXHIBITS
(1) Declaration of Trust (1)
(2) Bylaws of Registrant (1)
(3) Not Applicable
(4) Form of Agreement and Plan of Reorganization between Pilgrim Global
Technology Fund, Inc. and ING Funds Trust on behalf of ING Global
Information Technology Fund (6)
(5) The rights of holders of the securities being registered are set out in
Articles II, VII, IX and X of the Declaration of Trust referenced in
Exhibit (1) above and in Articles IV, VI and XIII of the By-Laws referenced
in Exhibit (2) above.
1
<PAGE>
(6) (A) Management Agreement between the Trust and ING Mutual Funds Management
Co. LLC (the "Manager") (5)
(B) Sub-Advisory Agreement between the Manager and Baring Asset
Management, Inc. (5)
(C) Sub-Advisory Agreement between the Manager and Baring International
Investment Limited (5)
(D) Sub-Advisory Agreement between the Manager and Baring Asset Management
(Asia) Limited (5)
(E) Sub-Advisory Agreement between the Manager and ING Investment
Management Advisors B.V. (5)
(F) Sub-Advisory Agreement between the Manager and ING Investment
Management LLC (5)
(G) Sub-Advisory Agreement between the Manager and Furman Selz Capital
Management LLC (5)
(H) Sub-Advisory Agreement between the Manager and Furman Selz Capital
Management LLC on behalf of Delta Asset Management (5)
(I) Sub-Advisory Agreement between the Manager and CRA Real Estate
Securities, L.P. (5)
(J) First Amendment to Sub-Advisory Agreement between the Manager and ING
Investment Management Advisors B.V. (5)
(5) (A) Form of Underwriting Agreement between Registrant and ING Pilgrim
Securities, Inc. (5)
(B) Form of Financial Institution Selling Group Agreement (5)
(C) Form of Selling Group Agreement (5)
(D) Distribution Agreement between the Trust and ING Pilgrim Securities,
Inc. (5)
(8) None
(9) (A) Form of Custodian Agreement between Registrant and State Street Bank
and Trust Company, with respect to the Registrants U.S. Funds (5)
(B) Form of Custodian Agreement between Registrant and Brown Brothers
Harriman & Co., with respect to the Registrants Global and
International Funds (5)
(C) Form of Amendment to the Custodian Agreement between Registrant and
Brown Brothers Harriman & Co. (5)
(D) Form of Appendix A to Custodian Agreement between Registrant and Brown
Brothers Harriman & Co. (5)
(E) Form of Appendix B to Custodian Agreement between Registrant and Brown
Brothers Harriman & Co. (5)
(F) Form of Appendix C to Custodian Agreement between Registrant and Brown
Brothers Harriman & Co. (5)
(10) (A) Rule 12b-1 Distribution Plan and Agreement with respect to Class A
Shares (5)
(B) Rule 12b-1 Distribution Plan and Agreement with respect to Class B,
Class C and Class X Shares (5)
(C) Amended and Restated Rule 18f-3 Plan (5)
(11) Opinion and Consent of Counsel to the Trust (6)
3
<PAGE>
(12) Opinion and Consent of Dechert supporting tax matters and consequences (6)
(13) (A) Form of Service Agreement (5)
(B) Fund Services Agreement between Registrant and ING Fund Services Co.
LLC (2)
(C) Form of Recordkeeping Agreement with State Street Bank and Trust
Company (5)
(D) Amended and Restated Shareholder Servicing Plan (5)
(E) Form of Administration Agreement (5)
(14) Consents of Independent Auditors (6)
(15) (A) Annual Report containing the audited financial statements for the
period ended October 31, 1999 (3)
(B) Semi-Annual Reports containing the unaudited financial statements for
the period ended April 30, 2000 (4)
(16) Powers of Attorney (5)
(17) Not Applicable
----------
(1) Filed as an exhibit to Pre-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A filed electronically on October 28,
1998, and incorporated herein by reference.
(2) Filed as an exhibit to Post-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A filed electronically on April 15, 1999,
and incorporated herein by reference.
(3) Previously filed in Registrant's N-30D on December 29, 1999, and
incorporated herein by reference.
(4) Previously filed in Registrant's N-30D's on July 7, 2000, and incorporated
herein by reference.
(5) Filed as an exhibit to Post-Effective Amendment No. 6 to Registrant's
Registration Statement on Form N-1A filed electronically on November 6,
2000, and incorporated herein by reference.
(6) Filed herewith.
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) of 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.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale
and State of Arizona on the 14th day of December, 2000.
ING FUNDS TRUST
By: /s/ Robert W. Stallings
-------------------------------------
Robert W. Stallings
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective-Amendment to this Registration Statement has been signed below by
the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert W. Stallings President and Chief December 14, 2000
-------------------------- Executive Officer
Robert W. Stallings
/s/ Michael J. Roland Treasurer December 14, 2000
--------------------------
Michael J. Roland
/s/ Joseph N. Hankin* Trustee December 14, 2000
--------------------------
Joseph N. Hankin
/s/ Jack D. Rehm* Trustee December 14, 2000
--------------------------
Jack D. Rehm
/s/ Blaine E. Rieke* Trustee December 14, 2000
--------------------------
Blaine E. Rieke
/s/ Richard A. Wedemeyer* Trustee December 14, 2000
--------------------------
Richard A. Wedemeyer
/s/ Robert W. Stallings December 14, 2000
--------------------------
Robert W. Stallings
Attorney-in-Fact*
----------
* Powers of Attorney are incorporated by reference from Post-Effective
Amendment No. 6 to Registrant's Registration Statement on Form N-1A filed
with the Securities and Exchange Commission on November 6, 2000.
5
<PAGE>
EXHIBIT INDEX
(4) Form of Agreement and Plan of Reorganization between Pilgrim Global
Technology Fund, Inc. and ING Funds Trust on behalf of ING Global
Information Technology Fund.
(11) Form of Opinion and Consent of Counsel
(12) Form of Opinion and Consent of Dechert supporting tax matters and
consequences
(14) Consents of Independent Auditors
<PAGE>
PILGRIM GLOBAL TECHNOLOGY FUND
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS ON ________ ___, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Robert W. Stallings and James M. Hennessy or
any one or more of them, proxies, with full power of substitution, to vote all
shares of the Pilgrim Global Technology Fund (the "Fund") 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 on ________ ___, 2001 at ______ 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 DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL:
1. To approve an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets of Pilgrim Global Technology Fund by ING Global
Information Technology Fund in exchange for Class A shares of beneficial
interest of ING Global Information Technology Fund and the assumption by ING
Global Information Technology Fund of all of the liabilities of Pilgrim Global
Technology Fund.
For [ ] Against [ ] Abstain [ ]
This proxy 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
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Signature (if held jointly) Date
