As filed with the Securities and Exchange Commission on December 18, 2000
Securities Act File No. 333-_________
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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. [ ]
PILGRIM MUTUAL FUNDS
(Exact Name of Registrant as Specified in Charter)
7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258
(Address of Principal Executive Offices) (Zip Code)
(800) 992-0180
(Registrant's Area Code and Telephone Number)
James M. Hennessy
ING Pilgrim Investments, Inc.
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258
(Name and Address of Agent for Service)
With copies to:
Jeffrey S. Puretz Steven R. Howard
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 17, 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>
ING Global Brand Names Fund
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258
1-800-992-0180
_____________, 2000
Dear Shareholder:
Your Board of Trustees has called a Special Meeting of Shareholders of the
ING Global Brand Names Fund scheduled to be held at _______ [a.m./p.m.], local
time, on February __, 2001 at 7337 East Doubletree Ranch Road, Scottsdale,
Arizona 85258.
The Board of Trustees of ING Funds Trust, on behalf of the ING Global Brand
Names Fund (a series of ING Funds Trust), has approved a reorganization of ING
Global Brand Names Fund, which is managed by ING Mutual Funds Management Co.
LLC, into Pilgrim Worldwide Growth Fund, which is managed by ING Pilgrim
Investments, Inc. and is part of the Pilgrim Funds (the "Reorganization"). If
approved by shareholders, you would become a shareholder of Pilgrim Worldwide
Growth Fund on the date that the Reorganization occurs. Pilgrim Worldwide Growth
Fund has investment objectives and policies that are similar in many respects to
those of ING Global Brand Names Fund.
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 each of the funds for your evaluation.
After careful consideration, the Board of Trustees of ING Funds Trust
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 __________, 2001.
We appreciate your participation and prompt response in this matter and
thank you for your continued support.
Sincerely,
Robert W. Stallings,
President
<PAGE>
ING Global Brand Names Fund
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258
1-800-992-0180
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF ING GLOBAL BRAND NAMES FUND
SCHEDULED FOR ___________, 2001
To the Shareholders:
A Special Meeting of Shareholders of the ING Global Brand Names Fund
("Special Meeting") is scheduled for February _, 2001 at _______ [a.m./p.m.],
local time, at 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258.
The purposes of the Special Meeting of ING Global Brand Names Fund are as
follows:
1. To approve an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets and liabilities of each class of ING
Global Brand Names Fund by Pilgrim Worldwide Growth Fund in exchange
for shares in the corresponding Class of Pilgrim Worldwide Growth Fund
and the subsequent liquidation of ING Global Brand Names 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 ___________, 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 Trustees
James M. Hennessy,
Secretary
December __, 2000
<PAGE>
TABLE OF CONTENTS
INTRODUCTION................................................................ 1
SUMMARY..................................................................... 2
Comparison of Investment Objectives and Strategies....................... 4
Comparison of Portfolio Characteristics.................................. 5
Relative Performance..................................................... 6
Comparison of Investment Techniques and Risks of the Funds............... 7
COMPARISON OF FEES AND EXPENSES............................................. 8
Annual Fund Operating Expenses........................................... 9
General Information...................................................... 11
Special Rules for Class A Shares of ING Global Brand Names Fund.......... 12
ADDITIONAL INFORMATION ABOUT PILGRIM WORLDWIDE GROWTH FUND.................. 12
Investment Personnel..................................................... 12
Performance of Pilgrim Worldwide Growth Fund............................. 13
INFORMATION ABOUT THE REORGANIZATION........................................ 15
ADDITIONAL INFORMATION ABOUT THE FUNDS...................................... 18
GENERAL INFORMATION ABOUT THE PROXY STATEMENT............................... 19
Solicitation of Proxies.................................................. 19
Voting Rights............................................................ 19
Other Matters to Come Before the Special Meeting......................... 20
Shareholder Proposals.................................................... 20
Reports to Shareholders.................................................. 20
APPENDIX A.................................................................. A-1
APPENDIX B.................................................................. B-1
APPENDIX C.................................................................. C-1
APPENDIX D.................................................................. D-1
APPENDIX E.................................................................. E-1
<PAGE>
PROXY STATEMENT/PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS SCHEDULED FOR
FEBRUARY __, 2001
ING GLOBAL BRAND NAMES FUND
(a series of ING Funds Trust)
Relating to the Reorganization into
PILGRIM WORLDWIDE GROWTH FUND
(a series of Pilgrim Mutual Funds)
(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 ING Global Brand Names Fund to Pilgrim Worldwide Growth Fund
in exchange for shares of Pilgrim Worldwide Growth Fund (the "Reorganization").
ING Global Brand Names Fund would then distribute to its shareholders their
portion of the shares of Pilgrim Worldwide Growth Fund it receives in the
Reorganization. The result would be a liquidation of ING Global Brand Names
Fund. You would receive shares of Pilgrim Worldwide Growth Fund having an
aggregate value equal to the aggregate value of the shares you held of ING
Global Brand Names 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 ING Global Brand Names Fund, are being
asked to approve a transaction that will result in your holding of shares of
Pilgrim Worldwide Growth Fund, this Proxy Statement also serves as a Prospectus
for Pilgrim Worldwide Growth Fund.
This Proxy Statement/Prospectus, which you should retain for future
reference, contains important information about Pilgrim Worldwide Growth Fund
that you should know. For a more detailed discussion of the investment
objectives, policies, restrictions and risks of Pilgrim Worldwide Growth Fund,
see the Prospectus (the "Pilgrim Prospectus") and the Statement of Additional
Information ("SAI") for Pilgrim Funds dated November 1, 2000, which are
incorporated herein by reference and which may be obtained, without charge, by
calling 1-800-992-0180. For a more detailed discussion of the investment
objectives, policies, restrictions and risks of the ING Global Brand Names Fund,
see the ING Funds' Prospectus (the "ING Prospectus") and SAI, each dated
November 6, 2000, which are incorporated herein by reference and which may be
obtained without charge by calling 1-800-992-0180. 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 Pilgrim Worldwide Growth Fund dated June 30,
2000 is incorporated herein by reference. You may receive a copy of the most
recent annual report for either of the Funds, without charge, by calling
1-800-992-0180.
You can copy and review information about each Fund (including the SAI) at
the Securities and Exchange 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
<PAGE>
SUMMARY
You should read this entire Proxy Statement/Prospectus carefully. For
additional information, you should consult the Pilgrim Prospectus, the ING
Prospectus and the Agreement and Plan of Reorganization, which is attached
hereto as Appendix B
THE PROPOSED REORGANIZATION. On November 16, 2000, the Board of Trustees of
ING Funds Trust, on behalf of ING Global Brand Names Fund, approved an Agreement
and Plan of Reorganization with respect to ING Global Brand Names Fund (the
"Reorganization Agreement"). Subject to shareholder approval, the Reorganization
Agreement provides for:
* the transfer of all of the assets of ING Global Brand Names Fund to
Pilgrim Worldwide Growth Fund, in exchange for shares of Pilgrim
Worldwide Growth Fund;
* the assumption by Pilgrim Worldwide Growth Fund of all of the
liabilities of ING Global Brand Names Fund;
* the distribution of Pilgrim Worldwide Growth Fund shares to the
shareholders of ING Global Brand Names Fund; and
* the complete liquidation of ING Global Brand Names Fund.
The Reorganization is expected to be effective upon the opening of business
on February __, 2001, or on a later date as the parties may agree (the
"Closing"). As a result of the Reorganization, each shareholder of the following
Class of shares of ING Global Brand Names Fund would become a shareholder of the
following Class of shares of Pilgrim Worldwide Growth Fund.
ING GLOBAL BRAND NAMES FUND PILGRIM WORLDWIDE GROWTH FUND
--------------------------- -----------------------------
Class A Class A
Class B Class B
Class C Class C
Each shareholder would hold, immediately after the Closing, shares of each Class
of Pilgrim Worldwide Growth Fund having an aggregate value equal to the
aggregate value of the shares of the corresponding Class of ING Global Brand
Names 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 because shareholders
will have the ability to exchange into Pilgrim Funds that offer the
2
<PAGE>
same Class of shares. For information about a Pilgrim Fund, call the Pilgrim
Funds at 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 in many respects;
* The ING Global Brand Names Fund emphasizes securities that meet
narrowly focused criteria -- large, well-recognized companies with a
global presence, while the selection criteria for the Pilgrim
Worldwide Growth Fund emphasizes a much broader group of companies;
* Before giving effect to expense subsidies by management, the proposed
Reorganization is expected to result in a reduction in total operating
expenses for shareholders of ING Global Brand Names Fund. For example,
the operating expenses, expressed as a percentage of net asset value
per share of Class A shares, are as follows:
* Expenses of ING Global Brand Names Fund - 2.02%
before expense reimbursements by management
(based on the year ended June 30, 2000)(1):
* Expenses of ING Global Brand Names Fund - 1.53%
after expense reimbursements by management
(based on the year ended June 30, 2000)(1), (2):
* Expenses of Pilgrim Worldwide Growth Fund 1.67%
(based on the year ended June 30, 2000):
* Estimated expenses of Pilgrim Worldwide 1.63%
Growth Fund after the reorganization (PRO FORMA):
* The Funds have affiliated management. ING Pilgrim Investments, 7337
East Doubletree Ranch Road, Scottsdale, Arizona 85258, is the
investment manager to Pilgrim Worldwide Growth Fund. IMFC, also
located at 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258,
is the investment manager to ING Global Brand Names Fund. Both are
affiliated subsidiaries of the same holding company, ING Groep N.V.
Different investment personnel, however, manage the Funds. After the
Reorganization, ING Pilgrim Investments would continue to manage
Pilgrim Worldwide Growth Fund, which would include the assets from ING
Global Brand Names Fund.
Approval of the Reorganization, requires the vote of a majority of the
Shares present in person or by proxy of the ING Global Brand Names Fund.
AFTER CAREFUL CONSIDERATION, THE BOARD OF TRUSTEES OF ING FUNDS TRUST, ON
BEHALF OF ING GLOBAL BRAND NAMES FUND, UNANIMOUSLY APPROVED THE PROPOSED
REORGANIZATION. THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSED
REORGANIZATION.
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(1) Based upon expenses incurred by the the ING Global Brand Names Fund for the
12 month period ended June 30, 2000, adjusted for current expenses of
contracts and 12b-1 plans which were in effect on November 6, 2000.
(2) The current expense limitation contract will remain in effect until
February 28, 2001. There is no assurance that the expense limitation will
be continued after that date.
3
<PAGE>
COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES
<TABLE>
<CAPTION>
ING GLOBAL BRAND NAMES FUND PILGRIM WORLDWIDE GROWTH FUND
--------------------------- -----------------------------
<S> <C> <C>
INVESTMENT OBJECTIVE Seeks long-term capital appreciation. Seeks maximum long-term capital appreciation.
INVESTMENT STRATEGIES * Under normal market conditions invests * Normally invests at least 65% of its
at least 65% of its assets in equity assets in equity securities of issuers
securities of companies which the located in at least three countries, one
sub-adviser believes to have a well of which may be the U.S.
recognized franchise, a global presence
and derive most of their revenues from * Generally, invests at least 75% of its
sales of consumer goods. The Fund seeks total assets in common and preferred
to invest in well-established companies stocks, warrants and convertible
with strong brand names. securities.
* The Fund seeks investments in companies * May invest in companies located in
which have leading market positions or countries with emerging securities
ones which, in the sub-adviser's markets when the portfolio managers
opinion, have the potential to achieve believes they present attractive
leading market positions in the investment opportunities.
foreseeable future. This portion of the
portfolio generally has investments in * INTERNATIONAL COMPONENT. The
at least three different countries, portfolio managers primarily use a
including the United States. The Fund "bottom-up" fundamental analysis to
expects these investments will be in identify stocks which they believe offer
common stock of companies whose market good value relative to their peers in
capitalizations are in excess of $10 the same industry, sector or region.
billion. The portfolio managers will invest at
least 65% of the Fund's assets in
* The Fund has a two-tiered investment companies which, based upon fundamental
strategy. The first tier comprises analysis of a company's earnings
approximately 75% of the Fund's prospects, they believe will experience
portfolio and is composed of core stocks faster earnings per share growth than
with stable earnings development, low that of other companies located in one
cyclicality, large market or more of the same market, sector, or
capitalizations and longer-term industry. They also use "top-down"
investment horizons. The second tier analysis to identify important themes or
comprises about 25% of the portfolio and issues which may affect the investment
is composed of companies possessing environment in certain regions or
higher cyclicality, smaller market sectors and to estimate market risks.
capitalizations and shorter-term
investment horizons. * U.S. COMPONENT. The Fund normally
invests in equity securities of large
* The Fund is non-diversified which means U.S. companies that the portfolio
that it may invest a greater percentage managers feel have above-average
of its assets in a particular issuer. prospects for growth. The Fund
considers a company to be large if its
market capitalization corresponds at the
time of purchase to the upper 90% of the
S&P 500 Index, which as of October 19,
2000, meant market capitalizations in
the range of $10 billion to $571
billion. The portfolio managers focus
on both a "bottom-up analysis that
evaluates the financial condition and
competitiveness of individual companies
and a "top down" thematic approach and a
sell discipline. The portfolio managers
seek to identify themes that reflect
major social, economic and technological
trends that are likely to shape the
future of business and commerce over the
next three to five years, and seek to
provide a framework for identifying the
industries and companies they believe
may benefit most.
* The Adviser reviews the allocation
between U.S. stocks and non-U.S. stocks
in the portfolio and may rebalance the
portfolio, using factors it deems
appropriate.
* The Fund is diversified.
INVESTMENT ADVISER ING Mutual Funds Management Co. LLC ING Pilgrim Investments, Inc.
SUB-ADVISER ING Investment Management Advisors B.V. N/A
PORTFOLIO MANAGERS Herman Kleeven Mary Lisanti, Thomas J. Sullivan, Richard T.
Saler and Philip A. Schwartz
</TABLE>
As you can see from the chart above, the investment objectives and
strategies of the Funds are similar.
4
<PAGE>
COMPARISON OF PORTFOLIO CHARACTERISTICS
The following table compares certain characteristics of the portfolios of
the Funds as of June 30, 2000:
<TABLE>
<CAPTION>
ING GLOBAL BRAND NAMES FUND PILGRIM WORLDWIDE GROWTH FUND
--------------------------- -----------------------------
<S> <C> <C>
Net Assets $60,281,135 $660,179,270
Number of Holdings 38 146
Portfolio Turnover Rate(1) 29% 169%
As a percentage of net assets:
U.S. Equity Securities 60.09% 47.19%
Foreign Securities 37.90% 49.62%
Holdings in companies with market
capitalization under $5 billion 6.39% 8.24%
Holdings in companies with market
capitalization between $5 billion
and $10 billion 7.59% 17.28%
Holdings in companies with market
capitalization over $10 billion 84.01% 71.29%
Average market capitalization of
companies in portfolio: $99.2 billion $81.4 billion
Market capitalization range of
companies in portfolio: $1.5 - $447.7 billion $1.7 - $447.7 billion
Top 10 countries United States - 60.09% United States - 47.19%
(as a % of net assets) Netherlands - 10.12% Japan - 8.58%
France - 7.71% United Kingdom - 8.29%
Japan - 7.36% France - 5.98%
Finland - 3.47% Canada - 5.72%
Switzerland - 2.47% Netherlands - 3.48%
Germany - 2.36% Sweden - 3.34%
Australia - 2.32% Finland - 3.17%
Sweden - 2.10% Germany - 2.43%
Spain - 1.57%
Top 5 industries Cosmetics & Toiletries - 12.00% Computers - 10.01%
(as a % of net assets) Beverages - Non-alcoholic - 8.70% Media - 7.68%
Brewery - 7.70% Telecommunications Equipment - 7.48%
Multimedia - 7.40% Semiconductors - 6.95%
Applications Software - 6.10% Fiber Optics - 5.91%
Top 10 holdings Microsoft Corp. - 6.10% Nortel Networks Corporation - 2.88%
(as a % of net assets) Intel Corp. - 5.94% Nokia OYJ - 2.15%
Heineken NV - 5.35% Intel Corp. - 2.07%
The Coca-Cola Co. - 5.33% Corning, Inc. - 2.04%
L'Oreal SA - 5.32% Ciena Corp. - 2.00%
Time Warner, Inc. - 4.52% MGM Grand, Inc. - 1.92%
Johnson & Johnson - 3.89% JDS Uniphase Corp. - 1.88%
Nokia Oyj - 3.47% Oracle Corp. - 1.82%
McDonald's Corp. - 3.44% Wal-Mart Stores, Inc. - 1.80%
PepsiCo, Inc. - 3.35% Sun Microsystems, Inc. - 1.78%
</TABLE>
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(1) For the year ended June 30, 2000.
5
<PAGE>
RELATIVE PERFORMANCE
The following table shows, for the periods shown below, the average annual
total return for: (a) Class A shares of ING Global Brand Names Fund; (b) Class A
shares of Pilgrim Worldwide Growth Fund; and (c) the Morgan Stanley Capital
International World Index ("MSCI World Index"). Performance of the Funds in the
table does not reflect the deduction of sales loads, and would be lower if it
did. The MSCI World Index has an inherent performance advantage 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.
CALENDAR YEAR ING GLOBAL BRAND PILGRIM WORLDWIDE MSCI WORLD
ENDED/PERIOD NAMES FUND(1) GROWTH FUND(2)(3) INDEX(4)
------------ ------------- ----------------- --------
12/31/99 24.54% 83.52% 23.26%
1/1/00-9/30/00 -9.48% -7.62% -8.14%
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(1) The ING Global Brand Names Fund commenced operations on December 15, 1998.
(2) ING Pilgrim Investments is the Pilgrim Worldwide Growth Fund's investment
adviser since May 24, 1999; however, prior to October 1, 2000, another firm
served as sub-adviser. For more information about the performance of
Pilgrim Worldwide Growth Fund, see "Additional Information about Pilgrim
Worldwide Growth Fund."
(3) Prior to November 2, 2000, the Pilgrim Worldwide Growth Fund's portfolio
manager employed different stock selection criteria emphasizing a
"bottom-up" analysis of companies combined with a "top-down" thematic
approach.
(4) The MSCI World Index is an unmanaged index that measures the performance of
over 1,400 securities listed on exchanges in the U.S., Europe, Canada,
Australia, New Zealand and the Far East.
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 Pilgrim Worldwide Growth
Fund are similar to the risks of investing in ING Global Brand Names Fund. A
principal risk of an investment in either Fund 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 Pilgrim Worldwide Growth Fund and ING Global Brand
Names Fund invest in equity securities and securities with equity
characteristics, such as common stocks, preferred stocks, convertible securities
and warrants and other stock purchase rights. Normally, Pilgrim Worldwide Growth
Fund invests 75% of its total assets in common and preferred stocks, warrants
and convertible securities. ING Global Brand Names Fund normally invests at
least 65% of its assets in equity securities of large U.S. and foreign
companies. The Fund generally expects these investments to be in common stocks
of large companies with market capitalizations in excess of $10 billion.
6
<PAGE>
Both Pilgrim Worldwide Growth Fund and ING Global Brand Names Fund are
subject to risks associated with investing primarily in equity securities,
including market risks, issuer risks including credit risks, price volatility
risks, and market trend risks. 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. Market trend risk is the risk that the market may not favor the large
company securities in which the Funds invest. The market could instead favor
smaller company stocks, or not favor equities at all. While equities may offer
the potential for greater long-term growth than most debt securities, they
generally have higher volatility.
Both Funds may invest in smaller and medium-sized companies, and Pilgrim
Worldwide Growth Fund may invest to a greater degree in these companies.
Investment in smaller capitalization companies may involve greater risk than is
customarily associated with securities of larger, more established companies.
Smaller companies 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 smaller and mid-size companies
may trade in lower volume and may be less liquid than securities of larger, more
established companies. A Fund could lose money if it cannot sell a security at
the time and price that would be most beneficial to the Fund.
FOREIGN SECURITIES. Both Pilgrim Worldwide Growth Fund and ING Global Brand
Names Fund may invest in foreign securities. There are certain risks in owning
foreign securities, including: (i) fluctuations in currency exchange rates; (ii)
devaluation of currencies; (iii) political or economic developments and the
possible imposition of currency exchange blockages or other foreign governmental
laws or restrictions; (iv) reduced availability of public information concerning
issuers; (v) accounting, auditing and financial reporting standards or other
regulatory practices and requirements that are not uniform when compared to
those applicable to domestic companies; and (vi) 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.
EMERGING MARKETS SECURITIES. Pilgrim Worldwide Growth Fund can invest in
emerging markets securities. Investments in emerging markets countries are
generally riskier than other kinds of foreign investments, partly because
emerging market countries may be less politically and economically stable than
other countries. It also may be more difficult to buy and sell securities in
emerging market countries.
LACK OF DIVERSIFICATION. ING Global Brand Names Fund is classified as a
non-diversified investment company under the Investment Company Act of 1940,
which means that it may invest a greater percentage of its assets in a
particular issuer. The investment of a large percentage of a Fund's assets in
the securities of a small number of issuers may cause that Fund's share price to
fluctuate more than that of a diversified company.
7
<PAGE>
CHANGE IN PORTFOLIO MANAGER. The Pilgrim Worldwide Growth Fund recently
underwent a change in portfolio management. Since October 1, 2000, ING Pilgrim
Investments has managed the Pilgrim Worldwide Growth Fund directly; prior to
that date, another investment adviser served as sub-adviser to the Fund. The
current portfolio managers were not managing the Fund at the time of the
performance information presented in this Proxy Statement/Prospectus.
Shareholders bear the risk that the new portfolio managers will not be able to
sustain the Fund's historical relative performance.
With the assumption of portfolio management duties by ING Pilgrim
Investments, portfolio turnover may be higher than usual in connection with the
potential restructuring of the holdings of Pilgrim Worldwide Growth Fund to
reflect the management style of ING Pilgrim Investments. Such potential
restructuring may result in transactional costs to the Fund and may result in
accelerated capital gain distribution as a result of the turnover.
PORTFOLIO TURNOVER. Pilgrim Worldwide Growth Fund is generally expected to
engage in frequent and active trading of portfolio securities to achieve its
investment objective. A high portfolio turnover rate involves greater expenses
to the 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 the 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.
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 Pilgrim Worldwide
Growth Fund, see "Additional Information Regarding Pilgrim Worldwide Growth
Fund."
TOTAL OPERATING EXPENSES. The operating expenses of Pilgrim Worldwide
Growth Fund, expressed as a ratio of expenses to average daily net assets
("expense ratio"), are lower than those of ING Global Brand Names Fund, before
giving effect to the expense limitation contract for ING Global Brand Names Fund
described below. After giving effect to the expense limitation contract, the net
expenses for Class A, Class B, and Class C shares of ING Global Brand Names Fund
for the 12 month period ending June 30, 2000 were 1.53%, 2.18%, and 2.18%,
respectively, which are lower than those of the same Classes of Pilgrim
Worldwide Growth Fund. Without the expense limitation contract, the total
operating expenses for Class A, Class B, and Class C shares of ING Global Brand
Names Fund would have been 2.02%, 2.67%, and 2.67%, respectively, higher than
that for the same class of shares of Pilgrim Worldwide Growth Fund.
8
<PAGE>
MANAGEMENT FEE. Each Fund pays a management fee based on a percentage of
the Fund's average daily net assets, as follows:
ASSETS TO WHICH ING GLOBAL BRAND PILGRIM WORLDWIDE
FEE APPLIES NAMES FUND GROWTH FUND
----------- ---------- -----------
First $500 million 1.00% 1.00%
Next $500 million 1.00% 0.90%
Assets over $1 billion 1.00% 0.85%
DISTRIBUTION AND SERVICE FEES. The distribution (12b-1) and service fees of
Class A shares of ING Global Brand Names Fund, in the aggregate, are the same as
those of Class A shares of Pilgrim Worldwide Growth Fund.
EXPENSE LIMITATION ARRANGEMENTS. Expense limitation contracts are in place
for ING Global Brand Names Fund. Under the terms of the expense limitation
contract, IMFC has agreed to limit the expenses of the Fund, excluding interest,
taxes, brokerage and extraordinary expenses. The current expense limitation
contract for the Fund provides that it will remain in effect until February 28,
2001. There can be no assurances that the expense limitation contract will be
continued after that date. The expense limitations for Class A, B and C shares
of ING Global Brand Names Fund are 1.53%, 2.18% and 2.18%, respectively.
Absent this expense limitation contract, the expense ratio for each Class
of ING Global Brand Names Fund was higher than the expense ratio for the same
Class of Pilgrim Worldwide Growth Fund. For the year ended June 30, 2000, for
example, the expense ratio for Class A shares of ING Global Brand Names Fund was
2.02% compared to 1.67% for Pilgrim Worldwide Growth Fund. This information and
similar information for the other Classes is shown in the table below entitled
"Annual Fund Operating Expenses."
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 Funds are annualized based upon the operating
expenses incurred by Classes A, B, and C for the twelve month period ended June
30, 2000. Expenses of ING Global Brand Names Fund are based upon expenses
incurred for the 12-month period ended June 30, 2000, as adjusted for current
expenses of contracts and 12b-1 plans which were in effect on November 6, 2000.
PRO FORMA fees show estimated fees of Pilgrim Worldwide Growth 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.
9
<PAGE>
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
---- ------- -------- -------- ------------- --------
CLASS A
<S> <C> <C> <C> <C> <C> <C>
ING Global Brand Names Fund 1.00% 0.35%(4) 0.67% 2.02% -0.49% 1.53%
Pilgrim Worldwide Growth Fund 1.00% 0.35% 0.32% 1.67% -- 1.67%
Pilgrim Worldwide Growth Fund
after Reorganization (PRO FORMA) 1.00% 0.35% 0.28% 1.63% -- 1.63%
CLASS B
ING Global Brand Names Fund 1.00% 1.00% 0.67% 2.67% -0.49% 2.18%
Pilgrim Worldwide Growth Fund 1.00% 1.00% 0.32% 2.32% -- 2.32%
Pilgrim Worldwide Growth Fund
after Reorganization (PRO FORMA) 1.00% 1.00% 0.28% 2.28% -- 2.28%
CLASS C
ING Global Brand Names Fund 1.00% 1.00% 0.67% 2.67% -0.49% 2.18%
Pilgrim Worldwide Growth Fund 1.00% 1.00% 0.32% 2.32% -- 2.32%
Pilgrim Worldwide Growth Fund
after Reorganization (PRO FORMA) 1.00% 1.00% 0.28% 2.28% -- 2.28%
</TABLE>
----------
(1) The fiscal year end for Pilgrim Worldwide Growth Fund is October 31. Prior
to __________, 2000, the Pilgrim Worldwide Growth Fund's fiscal year end
was June 30. The fiscal year end for ING Global Brand Names Fund is October
31. Expenses of the Pilgrim Worldwide Growth Fund are based upon expenses
incurred for the 12-month period ended June 30, 2000. Expenses of ING
Global Brand Names Fund are based upon expenses incurred for the 12-month
period ended June 30, 2000, as adjusted for current expenses of contracts
and 12b-1 plans which were in effect on November 6, 2000. PRO FORMA
expenses are adjusted for anticipated contractual changes.
(2) As a result of distribution (Rule 12b-1) fees, a long term investor may pay
more than the economic equivalent of the maximum sales charge allowed by
the Rules of the National Association of Securities Dealers, Inc.
(3) ING Pilgrim Investments has entered into an expense limitation contract
with respect to Pilgrim Worldwide Growth Fund, pursuant to which ING
Pilgrim Investments has agreed to waive or limit its fees and to assume
other expenses through at least October 31, 2001 so that total annual
ordinary operating expenses of the Fund (excluding interest, taxes,
brokerage commissions, extraordinary expenses such as litigation, other
expenses not incurred in the ordinary course of the Fund's business,
expenses of any counsel or other persons or services retained by the Fund's
trustees who are not "interested persons" of ING Pilgrim Investments) do
not exceed 1.85%, 2.50%, and 2.50% for Class A, Class B, and Class C
shares, respectively, subject to recoupment within three years. There can
be no assurances that the expense limitation contract will remain in effect
after October 31, 2001. Although ING Pilgrim Investments has implemented an
expense limitation contract for the Pilgrim Worldwide Growth Fund, the
Fund's actual expenses are lower than the expense limitations contained in
the contract.
IMFC entered into an expense limitation contract that limits expenses
(excluding interest, taxes, brokerage and extraordinary expenses) for ING
Global Brand Names Fund to annual rates of 1.53%, 2.18%, and 2.18% for
Class A, Class B, and Class C shares, respectively. IMFC has agreed that
the expense limitations shown in the table will apply to ING Global Brand
Names Fund until at least February 28, 2001.
(4) Prior to November 6, 2000, the Class A distribution fee was 0.50% and the
shareholder servicing fee was 0.25% of net assets.
10
<PAGE>
Following the Reorganization and in the ordinary course of business as a
mutual fund, certain holdings of ING Global Brand Names Fund that are
transferred to Pilgrim Worldwide Growth Fund in connection with the
Reorganization may be sold. Such sales may result in increased transaction costs
for Pilgrim Worldwide Growth Fund, and the realization of taxable gains or
losses for Pilgrim Worldwide Growth Fund.
EXAMPLES. The examples are intended to help you compare the cost of investing in
the each of 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>
PRO FORMA:
ING GLOBAL BRAND NAMES FUND PILGRIM WORLDWIDE GROWTH FUND 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 $768 $1,172 $1,600 $2,788 $735 $1,071 $1,430 $2,438 $731 $1,060 $1,411 $2,397
Class B 770 1,129 1,615 *2,846 735 1,024 1,440 *2,494 731 1,012 1,420 *2,453
Class C 370 829 1,415 3,003 335 724 1,240 2,656 331 712 1,220 2,615
</TABLE>
----------
* The ten year calculations for Class B shares assume conversion of the Class
B shares to Class A shares at the end of the eighth year following the date
of purchase.
** Estimated.
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
PRO FORMA:
ING GLOBAL BRAND NAMES FUND PILGRIM WORLDWIDE GROWTH FUND 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 $768 $1,172 $1,600 $2,788 $735 $1,071 $1,430 $2,438 $731 $1,060 $1,411 $2,397
Class B 270 829 1,415 *2,846 235 724 1,240 *2,494 231 712 1,220 *2,453
Class C 270 829 1,415 3,003 235 724 1,240 2,656 231 712 1,220 2,615
</TABLE>
----------
* The ten year calculations for Class B shares assume conversion of the Class
B shares to Class A shares at the end of the eighth year following the date
of purchase.
** Estimated.
11
<PAGE>
GENERAL INFORMATION
All shares of Pilgrim Worldwide Growth Fund issued to a shareholder in
connection with the Reorganization will be subject to the same contingent
deferred sales charge, if any, applicable to the corresponding shares of ING
Global Brand Names Fund held by that shareholder immediately prior to the
Reorganization.
In addition, the period that the shareholder held shares of ING Global
Brand Names Fund will be included in the holding period of Pilgrim Worldwide
Growth Fund shares for purposes of calculating any contingent deferred sales
charge. Similarly, Class B shares of Pilgrim Worldwide Growth Fund issued to a
shareholder in connection with the Reorganization will convert to Class A shares
eight years after the date that the Class B shares of ING Global Brand Names
Fund were purchased by the shareholder. Pilgrim Worldwide Growth Fund and ING
Global Brand Names Fund are each subject to the sales load structure described
in the table below.
TRANSACTION FEES ON NEW INVESTMENTS
(fees paid directly from your investment)
CLASS A CLASS B CLASS C
------- ------- -------
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75%(1) None None
Maximum deferred sales charge (load) (as a
percentage of the lower of original purchase
price or redemption proceeds) None (2) 5.00%(3) 1.00%(4)
----------
(1) Reduced for purchases of $50,000 and over. See "Class A Shares: Initial
Sales Charge Alternative" in Appendix C.
(2) A contingent deferred sales charge of no more than 1.00% may be assessed on
redemptions of Class A shares that were purchased without an initial sales
charge as part of an investment of $1 million or more. See "Class A Shares:
Initial Sales Charge Alternative" in Appendix C.
(3) Imposed upon redemptions within 6 years of purchase. The fee has scheduled
reductions after the first year. See "Class B Shares: Deferred Sales Charge
Alternative" in Appendix C and "Shareholder Guide - Sales Charge
Calculation" in the Pilgrim Prospectus.
(4) Imposed upon redemptions within 1 year from purchase.
Neither Pilgrim Worldwide Growth Fund nor ING Global Brand Names Fund have
any redemption fees, exchange fees or sales charges on reinvested dividends.
SPECIAL RULES FOR CLASS A SHARES OF ING GLOBAL BRAND NAMES FUND
Prior to November 6, 2000, the contingent deferred sales charge on
purchases of Class A shares of ING Global Brand Names Fund in excess of $1
million was different than the contingent deferred sales charge on similar
purchases of Pilgrim Worldwide Growth Fund. Shareholders of ING Global Brand
Names Fund that purchased Class A shares subject to a contingent deferred sales
charge prior to November 6, 2000 will continue to be subject to the contingent
deferred sales charge in place when those shares were purchased. The contingent
deferred sales charges on such purchases before and after November 6, 2000 were
as follows:
TIME PERIOD DURING
CDSC WHICH CDSC APPLIES
--------------------- ----------------------
11/06/00 BEFORE 11/06/00 BEFORE
AND AFTER 11/06/00 AND AFTER 11/06/00
--------- -------- --------- --------
CDSC on Purchases of:
$1,000,000 to $2,499,999 1.00% 1.00% 24 Months 12 Months
$2,500,000 to $4,999,999 0.50% 1.00% 12 Months 12 Months
$5,000,000 and over 0.25% 1.00% 12 Months 12 Months
12
<PAGE>
ADDITIONAL INFORMATION ABOUT PILGRIM WORLDWIDE GROWTH FUND
INVESTMENT PERSONNEL
Effective October 1, 2000, the international investments of the Pilgrim
Worldwide Growth Fund are co-managed by Richard T. Saler and Philip A. Schwartz.
Mr. Saler has over 13 years of experience in international investments. He is
Senior Vice President of ING Pilgrim Investments and held a similar position
with Lexington Management Corporation ("LMC") prior to that firm's recent
acquisition by the parent company of ING Pilgrim Investments in July, 2000. Mr.
Saler has focused on international markets since joining LMC in 1986.
Mr. Schwartz has over 12 years experience in international investments. He
is a Vice President at ING Pilgrim Investments, and held the same position with
LMC prior to that firms' recent acquisition in July, 2000. He is also a
Chartered Financial Analyst and a member of the New York Society of Security
Analysts. Prior to joining LMC in 1993, he was Vice President of European
Research Sales with Cheuvreux De Virieu in Paris and New York, serving the
institutional market. Prior to Cheuvreux, Mr. Schwartz was affiliated with Olde
and Co. and Kidder, Peabody as a stockbroker.
Also effective October 1, 2000, Mary Lisanti and Thomas J. Sullivan are
primarily responsible for the day-to-day management of the domestic equity
component of the Pilgrim Worldwide Growth Fund. Ms. Lisanti, Executive Vice
President and Chief Investment Officer - Domestic Equities of ING Pilgrim
Investments, has served as Senior Portfolio Manager of the Pilgrim Worldwide
Growth Fund since October 1, 2000. Prior to joining ING Pilgrim Investments in
October 1999, Ms. Lisanti was Executive Vice President and Chief Investment
Officer - Domestic Equities with Northstar Investment Management Corp., which
subsequently merged into ING Pilgrim Investments. Ms. Lisanti was a Portfolio
Manager at Strong Capital Management. From 1993 to 1996, Ms. Lisanti was a
Managing Director and Head of Small- and Mid-Capitalization Equity Strategies at
Bankers Trust Corp.
Thomas J. Sullivan, Vice President of ING Pilgrim Investments, has served
as a Portfolio Manager of the Pilgrim Worldwide Growth Fund since October 1,
2000. Prior to joining ING Pilgrim Investments in September 2000, Mr. Sullivan
was a Partner and Equity Trader for First NY Securities, LLC. From April 1994 to
March 2000, Mr. Sullivan was Vice President and portfolio manager at
Nicholas-Applegate Capital Management.
PERFORMANCE OF PILGRIM WORLDWIDE GROWTH FUND
The bar chart and table that follow provide an indication of the risks of
investing in Pilgrim Worldwide Growth Fund by showing (on a calendar year basis)
changes in Pilgrim Worldwide Growth Fund's annual total return from year to year
and by showing (on a calendar year basis) how Pilgrim Worldwide Growth Fund's
average annual returns for one year, five years, and since inception compared to
those of the MSCI World Index. The information in the bar chart is based on the
performance of Class A shares of ING Pilgrim Worldwide Growth Fund although the
bar chart does not reflect the deduction of the sales load on Class A shares. If
the bar chart included the sales load, returns would be less than those shown.
The 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.
Investors should note that prior to October 1, 2000, another firm served as
the sub-adviser to Pilgrim Worldwide Growth Fund and the performance and
investment strategies were indicative of another firm's style of management. The
Fund is now managed by Richard T. Saler and Philip A. Schwartz, who are
responsible for the international investments of the Fund, and Mary Lisanti and
Thomas J. Sullivan, who are primarily responsible for the domestic equity
component of the Fund. Prior to November 2, 2000, the Pilgrim Worldwide Growth
Fund's portfolio manager employed different stock selection criteria emphasizing
a "bottom-up" analysis of companies combined with a "top-down" thematic
approach.
13
<PAGE>
CALENDAR YEAR-BY-YEAR RETURNS %(1)(2)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999(3)
---- ---- ---- ---- ---- ---- ---- ---- ---- -------
2.45% 14.74% 17.92% 17.28% 37.34% 83.52%
----------
(1) During the period shown in the chart, the Fund's best quarterly performance
was up 44.54% for the quarter ended December 31, 1999, and the Fund's worst
quarterly performance was down 13.43% for the quarter ended September 30,
1998. The Fund's year-to-date total return as of September 30, 2000 was
down 7.62%.
(2) ING Pilgrim Investments has been the Fund's investment adviser since May
24, 1999; however, prior to October 1, 2000, another firm served as
sub-adviser.
(3) 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 Pilgrim
Worldwide Growth Fund would equal if you averaged out actual performance over
various lengths of time, compared to the MSCI World Index. The MSCI World Index
has an inherent performance advantage over Pilgrim Worldwide Growth 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. Pilgrim
Worldwide Growth Fund's performance reflected in the table assumes the deduction
of the maximum sales charge in all cases.
AVERAGE ANNUAL TOTAL RETURNS for the periods ended December 31, 1999(1)
<TABLE>
<CAPTION>
SINCE SINCE
INCEPTION OF INCEPTION
1 YEAR 5 YEARS CLASSES A AND C OF CLASS B
------ ------- --------------- ----------
<S> <C> <C> <C> <C>
Pilgrim Worldwide Growth Fund - Class A (2) 72.95% 30.39% 24.78% N/A
Pilgrim Worldwide Growth Fund - Class B (3) 77.26% N/A N/A 32.79%
Pilgrim Worldwide Growth Fund - Class C (4) 81.35% 31.11% 25.09% N/A
MSCI World Index(5) 23.26% 18.09% 14.87% 17.77%
</TABLE>
----------
(1) This table shows performance of the Class A, B and C shares of the Fund.
Class A and Class C commenced operations on April 19, 1993. Class B
commenced operations on May 31, 1995.
(2) Reflects deduction of sales charge of 5.75%.
(3) Reflects deduction of deferred sales charge of 5% and 2%, respectively, for
1 year and since inception returns.
(4) Reflects deduction of a deferred sales charge of 1% for the 1 year return.
(5) The Morgan Stanley Capital International World (MSCI World) Index is an
unmanaged index that measures the performance of over 1,400 securities
listed on exchanges in the U.S., Europe, Canada, Australia, New Zealand and
the Far East.
14
<PAGE>
The table below shows the performance of Pilgrim Worldwide Growth Fund if
sales charges are not reflected.
AVERAGE ANNUAL TOTAL RETURNS for the periods ended December 31, 1999(1)
<TABLE>
<CAPTION>
SINCE SINCE
INCEPTION OF INCEPTION
1 YEAR 5 YEARS CLASSES A AND C OF CLASS B
------ ------- --------------- ----------
<S> <C> <C> <C> <C>
Pilgrim Worldwide Growth Fund - Class A 83.52% 30.39% 25.88% N/A
Pilgrim Worldwide Growth Fund - Class B 82.26% N/A N/A 32.95%
Pilgrim Worldwide Growth Fund - Class C 82.35% 31.11% 25.09% N/A
</TABLE>
----------
(1) This table shows performance of the Class A, B and C shares of the Fund.
Class A and Class C commenced operations on April 19, 1993. Class B
commenced operations on May 31, 1995.
For a discussion by the adviser regarding the performance of Pilgrim
Worldwide Growth Fund for the year ended June 30, see Appendix A to this Proxy
Statement/Prospectus. Additional information about Pilgrim Worldwide Growth Fund
is included in Appendix C to this Proxy Statement/Prospectus.
INFORMATION ABOUT THE REORGANIZATION
THE REORGANIZATION AGREEMENT. The Reorganization Agreement provides for the
transfer of all of the assets and liabilities of ING Global Brand Names Fund to
Pilgrim Worldwide Growth Fund in exchange for shares of Pilgrim Worldwide Growth
Fund. ING Global Brand Names Fund will distribute the shares of Pilgrim
Worldwide Growth Fund received in the exchange to the shareholders of ING Global
Brand Names Fund and then ING Global Brand Names Fund will be liquidated.
After the Reorganization, each shareholder of ING Global Brand Names Fund
will own shares in Pilgrim Worldwide Growth Fund having an aggregate value equal
to the aggregate value of each respective Class of shares in ING Global Brand
Names Fund held by that shareholder as of the close of business on the business
day of the Closing. Shareholders of the following Classes of shares of ING
Global Brand Names Fund will receive shares of the corresponding Class of
Pilgrim Worldwide Growth Fund.
ING GLOBAL BRAND NAMES FUND PILGRIM WORLDWIDE GROWTH FUND
--------------------------- -----------------------------
Class A Class A
Class B Class B
Class C Class C
In the interest of economy and convenience, shares of Pilgrim Worldwide Growth
Fund will not be represented by physical certificates, unless you request them
in writing.
15
<PAGE>
Until the Closing, shareholders of ING Global Brand Names Fund will
continue to be able to redeem their shares. Redemption requests received after
the Closing will be treated as requests received by Pilgrim Worldwide Growth
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 ING Global
Brand Names 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 Fund. 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 because shareholders
will have the ability to exchange into Pilgrim Funds that offer the same Class
of shares. For information about a Pilgrim Fund, call the Pilgrim Funds at
1-800-992-0180 to request a prospectus. You should read a fund's prospectus
before investing in the fund.
The proposed Reorganization was presented to the Board of Trustees of ING
Funds Trust, on behalf of ING Global Brand Names Fund, for consideration at a
meeting held on October 25, 2000 and for approval at a meeting held on November
16, 2000. For the reasons discussed below, the Trustees, including all of the
Trustees who are not "interested persons" (as defined in the Investment Company
Act of 1940) of ING Funds Trust, determined that the interests of the
shareholders of ING Global Brand Names Fund will not be diluted as a result of
the proposed Reorganization, and that the proposed Reorganization is in the best
interests of ING Global Brand Names Fund and its shareholders.
The Reorganization will allow ING Global Brand Names Fund's shareholders to
continue to participate in a professionally-managed portfolio which seeks to
achieve an objective of long-term capital appreciation. As shareholders of
Pilgrim Worldwide Growth Fund, these shareholders will be able to exchange into
other mutual funds in the group of Pilgrim Funds that offer the same Class of
shares in which such shareholder is currently invested. A list of the Pilgrim
Funds and Classes available after the reorganization is contained in Appendix D.
The Board of Trustees of Pilgrim Worldwide Growth Fund also has approved
the reorganization of another fund, Pilgrim Global Corporate Leaders Fund, into
Pilgrim Worldwide Growth Fund. If shareholders of Pilgrim Global Corporate
Leaders Fund approve that reorganization, it is expected that that
reorganization will occur during the first quarter of 2001.
16
<PAGE>
BOARD CONSIDERATIONS. The Board of Trustees of ING Funds Trust, on behalf
of ING Global Brand Names Fund, 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 ING
Global Brand Names Fund and Pilgrim Worldwide Growth Fund including
the expense limitation contract offered by IMFC for ING Global Brand
Names 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 ING Global Brand
Names Fund's current shareholders;
(5) the relative investment performance and risks of Pilgrim Worldwide
Growth Fund as compared to ING Global Brand Names Fund;
(6) the similarity of Pilgrim Worldwide Growth Fund's investment
objectives, policies and restrictions with those of ING Global Brand
Names Fund;
(7) the investment resources of ING Pilgrim Investments and the
distributing capabilities of ING Pilgrim Securities, Inc., distributor
of the Pilgrim Worldwide Growth Fund;
(8) the quality and caliber of services that have been enjoyed by
shareholders of the Pilgrim Worldwide Growth Fund;
(9) alternatives to combining the Funds; and
(10) the tax-free nature of the Reorganization to ING Global Brand Names
Fund and its shareholders.
The Board of Trustees also considered the future potential benefits to ING
Pilgrim Investments in that its costs to limit the expenses of Pilgrim Worldwide
Growth Fund are likely to be reduced if the Reorganization is approved.
THE TRUSTEES OF ING FUNDS TRUST, ON BEHALF OF ING GLOBAL BRAND NAMES FUND,
RECOMMEND THAT SHAREHOLDERS APPROVE THE REORGANIZATION WITH PILGRIM WORLDWIDE
GROWTH FUND.
TAX CONSIDERATIONS. The Reorganization is intended to qualify for Federal
income tax purposes as a tax-free reorganization under Section 368 of the
Internal Revenue Code of 1986, as amended. Accordingly, pursuant to this
treatment, neither ING Global Brand Names Fund nor its shareholders nor Pilgrim
Worldwide Growth 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 Mutual Funds.
Immediately prior to the Reorganization, ING Global Brand Names Fund will
pay a dividend or dividends which, together with all previous dividends, will
have the effect of distributing to its shareholders all of ING Global Brand
Names 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 ING Global Brand Names Fund's shareholders.
17
<PAGE>
EXPENSES OF THE REORGANIZATION. ING Pilgrim Investments, adviser to Pilgrim
Worldwide Growth 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. Pilgrim Worldwide Growth Fund is a series of Pilgrim
Mutual Funds, which is a Delaware business trust. ING Global Brand Names Fund is
a series of ING Funds Trust, which is a Delaware business trust. Pilgrim Mutual
Funds is governed by a Board of Trustees consisting of eleven members. ING Funds
Trust is governed by a Board of Trustees consisting of four members.
DISTRIBUTOR. ING Pilgrim Securities, Inc. (the "Distributor"), whose
address is 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258, is the
principal distributor for both Funds.
The Pilgrim Worldwide Growth Fund also offers Class Q shares, which have
different expenses that may affect their performance. You can obtain more
information about this Class by calling 1-800-992-0180.
DIVIDENDS AND OTHER DISTRIBUTIONS. Both Pilgrim Worldwide Growth Fund and
ING Global Brand Names 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 ING Global Brand Names
Fund's shareholders, then as soon as practicable before the Closing, ING Global
Brand Names Fund will pay its shareholders a cash distribution of substantially
all undistributed net investment income and undistributed realized net capital
gains.
CAPITALIZATION. The following table shows on an unaudited basis the
capitalization of each of the Funds as of June 30, 2000 and on a PRO FORMA basis
as of June 30, 2000 giving effect to the Reorganization:
NET ASSET
VALUE SHARES
NET ASSETS PER SHARE OUTSTANDING
---------- --------- -----------
ING GLOBAL BRAND NAMES FUND
Class A $ 37,991,675 $12.94 2,935,992
Class B $ 5,398,879 $12.81 421,438
Class C $ 14,137,604 $12.82 1,103,034
Class X (1) $ 2,752,977 $12.82 214,788
PILGRIM WORLDWIDE GROWTH FUND
Class A $235,341,134 $29.98 7,849,453
Class B $130,988,092 $33.66 3,891,880
Class C $239,432,294 $29.92 8,001,360
Class Q $ 54,417,750 $34.53 1,575,894
PRO FORMA - PILGRIM WORLDWIDE GROWTH FUND INCLUDING
ING GLOBAL BRAND NAMES FUND
Class A $273,332,809 $29.98 9,116,687
Class B $139,139,948 $33.66 4,134,062
Class C $253,569,898 $29.92 8,473,874
Class Q $ 54,417,750 $34.53 1,575,894
----------
(1) Class X shares merged into Class B shares effective November 16, 2000.
18
<PAGE>
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 ________ __, 2000.
Shareholders of ING Global Brand Names 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 Funds Trust
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 ING Global Brand Names Fund, a written revocation or duly
executed proxy bearing a later date. In addition, any shareholder who attends
the Special Meeting in person may vote by ballot at the Special Meeting, thereby
canceling any proxy previously given. The persons named in the accompanying
proxy card 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 Trustees of ING Funds Trust that
may be presented at the Special Meeting.
VOTING RIGHTS
Shareholders of ING Global Brand Names 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 ING Global Brand Names Fund at the close of business on
December __, 2000 (the "Record Date") will be entitled to be present and give
voting instructions for ING Global Brand Names Fund at the Special Meeting with
respect to their shares owned as of that Record Date. As of the Record Date,
______ shares of ING Global Brand Names Fund were outstanding and entitled to
vote.
Approval of the Reorganization requires the vote of a majority of the
Shares present in person or by proxy of the ING Global Brand Names 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.
ING Global Brand Names Fund expects that, before the Special Meeting,
broker-dealer firms holding shares of the Fund in "street name" for their
customers will request voting instructions from their customers and beneficial
owners. If these instructions are not received by the date specified in the
broker-dealer firms' proxy solicitation materials, the ING Global Brand Names
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.
19
<PAGE>
As of December 1, 2000, ING America Insurance Holdings, Inc. ("ING") owns
45.23% of the outstanding voting shares of the ING Global Brand Names Fund, and
therefore may control the Fund. ING intends to vote its shares in favor of the
Reorganization.
To the knowledge of ING Funds Trust, as of November 1, 2000, no current
Trustee owns 1% or more of the outstanding shares of ING Global Brand Names
Fund, and the officers and Trustees own, as a group, less than 1% of the shares
of ING Global Brand Names 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
ING Global Brand Names Fund or Pilgrim Worldwide Growth Fund.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
ING Funds Trust 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 proxyholders will
vote thereon in accordance with their best judgment.
SHAREHOLDER PROPOSALS
ING Funds Trust 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 ING Fund Trust'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 Funds Trust will furnish, without charge, a copy of the most recent
Annual Report regarding ING Global Brand Names 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 Funds Trust at 7337 East Doubletree
Ranch Road, Scottsdale, Arizona 85258 or at 1-800-992-0180.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE SPECIAL MEETING MAY BE
ASSURED, PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
James M. Hennessy,
Secretary
December __, 2000
7337 East Doubletree Ranch Road
Scottsdale, Arizona 85258
20
<PAGE>
APPENDIX A
PILGRIM WORLDWIDE GROWTH FUND
Set forth below is an excerpt from Pilgrim Worldwide Growth Fund's Annual
Report, dated June 30, 2000, regarding the Fund's performance.
MANAGEMENT TEAM: Catherine Somhegyi, Partner, Chief Investment Officer, Global
Equity Management; Andrew B. Gallagher, Partner, Portfolio Manager; Loretta J.
Morris, Partner, Portfolio Manager; Randall S. Kahn, CFA, Portfolio Manager;
Lawrence S. Speidell, CFA, Partner, Director of Global/Systematic Portfolio
Management and Research; Pedro V. Marcal, Partner, Portfolio Manager; Ernesto
Ramos, Ph.D., Melisa A. Grigolite, Portfolio Manager.
GOAL: The Worldwide Growth Fund (the "Fund" or "Worldwide Growth") seeks to
maximize long-term capital appreciation through investments in growth-oriented
companies around the world, regardless of geographic location.
Market Overview: A number of factors contributed to the positive environment for
global investing during the twelve-month period ended June 30, 2000.
In the US, strong corporate profits and investor confidence in the durability of
the economic expansion sent stocks higher in spite of rising interest rates and
volatility. For the twelve months ended June 30, 2000, the S&P 500 Index rose
7.2% and the tech-heavy Nasdaq Composite Index advanced 47.7%
In response to booming US GDP growth, the Federal Reserve increased short-term
interest rates a total of 1.75% on six separate occasions from June 1999 through
May 2000. Following a spring correction in the technology sector, renewed
optimism that the Federal Reserve Bank may be close to completing its round of
rate hikes drove equity prices higher in June 2000. During the month, most US
stock indexes posted positive returns, led by the Nasdaq, which was up 16.6%.
Amid acceleration in GDP growth in many of its member countries, the European
Central Bank also increased rates a total of 1.75% on five separate occasions
during the fiscal year.
Increased productivity, the technology revolution, and structural reform
propelled international stock markets higher during the twelve-month period,
despite rising rates. The MSCI EAFE Index gained 17.2% in the period, after
advancing 22.2% during the second half of 1999. In the first six months of 2000,
equities overseas moved in tandem with the US market, falling in response to
concerns over higher interest rates, inflation, and high valuations among
technology stocks.
PERFORMANCE: For the one year ended June 30, 2000 the Fund's Class A shares,
excluding sales charges, provided a total return of 42.43% versus 12.53% for the
MSCI World Index for the same period.
PORTFOLIO SPECIFICS: The Fund's strong performance was largely attributable to
stock selection in the US, although stock selection in Japan, the UK, and Canada
also positively impacted results. Strong domestic performers included computer
hardware manufacturer, Sun Microsystems; systems and business applications
software provider, Oracle Corporation; and Genentech, a biotechnology firm.
Other top-performing holdings were UK-based ARM Holdings, a microprocessor
designer, and Nortel Networks, a Canadian telecommunications company.
During the period, on a stock-specific basis, we significantly increased the
fund's exposure to technology, reflecting our conviction in this sector's
compelling long-term growth potential.
MARKET OUTLOOK: We remain optimistic in our outlook for global investing as we
continue to identify high-growth companies poised to benefit from positive
change. Favorable themes such as increased international trade, deregulation,
and restructuring should all bode well for the Worldwide Growth Fund.
A-1
<PAGE>
<TABLE>
<CAPTION>
4/19/93 6/93 6/94 6/95 6/96 6/97 6/98 6/99 6/30/00
------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pilgrim Worldwide Growth Fund
Class A With Sales Charge 10,000 9,925 11,071 11,807 14,296 17,279 21,621 29,815 42,464
Pilgrim Worldwide Growth Fund
Class A Without Sales Charge 10,000 10,528 11,744 12,524 15,165 18,329 22,936 31,628 45,045
MSCI World Index 10,000 10,148 11,241 12,501 14,876 18,269 21,459 24,909 28,032
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED JUNE 30, 2000
----------------------------------------------------------------
SINCE INCEPTION SINCE INCEPTION
OF CLASS A AND C OF CLASS B
1 YEAR 5 YEAR 4/19/93 5/31/95
------ ------ ------- -------
Including Sales Charge:
Class A (1) 34.24% 27.66% 22.24% --
Class B (2) 36.54% 28.27% -- 28.20%
Class C (3) 40.48% 28.37% 22.48% --
Excluding Sales Charge:
Class A 42.43% 29.17% 23.25% --
Class B 41.54% 28.42% -- 28.27%
Class C 41.48% 28.37% 22.48% --
MSCI World Index 12.53% 17.53% 15.47%(4) 17.21%(5)
</TABLE>
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim Worldwide Growth Fund against the Morgan Stanley Capital
International (MSCI) World Index. The Index has an inherent performance
advantage over the 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. The Fund's performance is shown both with and without the imposition
of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fees and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%
(2) Reflects deduction of the Class B deferred sales charge of 5% and 2%,
respectively, for the 1 year and since inception returns.
(3) Reflects deduction of the Class C deferred sales charge of 1.00% for the 1
year return.
(4) Since inception performance for index is shown from 05/01/93.
(5) Since inception performance for index is shown from 06/01/95.
PRINCIPAL RISK FACTOR(S): International investing does pose special risks,
including currency fluctuation, economic and political risks not found in
investments that are solely domestic.
The Fund may invest in companies located in countries with emerging securities
markets when the sub-advisor believes they present attractive invesment
opportunities. Risks of foreign investing are generally intensified for
investments in emerging markets.
A-2
<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 Pilgrim Mutual Funds a
Delaware business trust (the "Pilgrim Trust"), with its principal place of
business at 7337 E. Doubletree Ranch Road, Scottsdale, Arizona 85258, on behalf
of its series, Pilgrim Worldwide Growth Fund (the "Acquiring Fund"), and ING
Funds Trust, a Delaware business trust (the "ING Trust") with its principal
place of business at 1475 Dunwoody Drive, West Chester, Pennsylvania 19380, on
behalf of its series, ING Global Brand Names Fund (the "Acquired Fund").
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a)(1) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of all of the assets of the
Acquired Fund to the Acquiring Fund in exchange solely for Class A, Class B, and
Class C voting shares of beneficial interest (no 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 Pilgrim Trust have determined that the
exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares and
the assumption of all liabilities of the Acquired Fund by the Acquiring Fund is
in the best interests of the Acquiring Fund and its shareholders and that the
interests of the existing shareholders of the Acquiring Fund would not be
diluted as a result of this transaction; and
WHEREAS, the Trustees of the ING Trust have determined that the exchange of
all of the assets of the Acquired Fund for Acquiring Fund Shares and the
assumption of all liabilities of the Acquired Fund by the Acquiring Fund is in
the best interests of the Acquired Fund and its shareholders and that the
interests of the existing shareholders of the Acquired Fund would not be diluted
as a result of this transaction;
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND IN EXCHANGE
FOR THE ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND
LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED FUND
1.1 Subject to the requisite approval of the Acquired Fund shareholders and
the other terms and conditions herein set forth and on the basis of the
representations and warranties contained herein, the Acquired Fund agrees to
transfer all of the Acquired Fund's assets, as set forth in paragraph 1.2, to
the Acquiring Fund, and the Acquiring Fund agrees in exchange therefor: (i) to
deliver to the Acquired Fund the number of full and fractional Class A, Class B,
and Class C Acquiring Fund Shares determined by dividing the value of the
Acquired Fund's net assets with respect to each class, computed in the manner
and as of the time and date set forth in paragraph 2.1, by the net asset value
B-1
<PAGE>
of one Acquiring Fund Share of the same class, computed in the manner and as of
the time and date set forth in paragraph 2.2; and (ii) to assume all liabilities
of the Acquired Fund, as set forth in paragraph 1.3. Such transactions shall
take place at the closing provided for in paragraph 3.1 (the "Closing").
1.2 The assets of the Acquired Fund to be acquired by the Acquiring Fund
shall consist of all assets and property, including, without limitation, all
cash, securities, commodities and futures interests and dividends or interests
receivable, that are owned by the Acquired Fund, and any deferred or prepaid
expenses shown as an asset on 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
with respect to each class of its shares, determined as of immediately after the
close of business on the Closing Date (the "Acquired Fund Shareholders"), on a
pro rata basis within that class, the Acquiring Fund Shares of the same class
received by the Acquired Fund pursuant to paragraph 1.1, and will completely
liquidate. Such distribution and liquidation will be accomplished, with respect
to each class of the Acquired Fund's shares, by the transfer of the Acquiring
Fund Shares then credited to the account of the Acquired Fund on the books of
the Acquiring Fund to open accounts on the share records of the Acquiring Fund
in the names of the Acquired Fund Shareholders. The aggregate net asset value of
Class A, Class B and Class C Acquiring Fund Shares to be so credited to Class A,
Class B, and Class C Acquired Fund Shareholders shall, with respect to each
class, be equal to the aggregate net asset value of the Acquired Fund shares of
that same class owned by such shareholders on the Closing Date. All issued and
outstanding shares of the Acquired Fund will simultaneously be canceled on the
books of the Acquired Fund, although share certificates representing interests
in Class A, Class B and Class C shares of the Acquired Fund will represent a
number of the same class of Acquiring Fund Shares after the Closing Date, as
determined in accordance with Section 2.3. The Acquiring Fund shall not issue
certificates representing the Class A, Class B, and Class C 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 instead
in the then-current prospectus and statement of additional information with
respect to the Acquiring Fund, and valuation procedures established by the
Acquiring Fund's Board of Trustees.
B-2
<PAGE>
2.2 The net asset value of a Class A, Class B, and Class C 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 Trustees.
2.3 The number of the Class A, Class B, and Class C Acquiring Fund Shares
to be issued (including fractional shares, if any) in exchange for the Acquired
Fund's assets shall be determined with respect to each such class by dividing
the value of the net assets with respect to the Class A, Class B, and Class C
shares of the Acquired Fund, as the case may be, determined using the same
valuation procedures referred to in paragraph 2.1, by the net asset value of an
Acquiring Fund Share, determined in accordance with paragraph 2.2.
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
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. 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 State Street Bank and Trust Company, as
custodian for the Acquired Fund (the "Custodian"), to deliver, at the Closing, a
certificate of an authorized officer stating that (i) the Assets shall have been
delivered in proper form to the Acquiring Fund within two business days prior to
or on the Closing Date, and (ii) all necessary taxes in connection with the
delivery of the Assets, including all applicable federal and state stock
transfer stamps, if any, have been paid or provision for payment has been made.
The Acquired Fund's portfolio securities represented by a certificate or other
written instrument shall be presented for examination by the Acquired Fund
Custodian to the custodian for the Acquiring Fund no later than five business
days preceding the Closing Date, and shall be transferred and delivered by the
Acquired Fund as of the Closing Date for the account of the Acquiring Fund duly
endorsed in proper form for transfer in such condition as to constitute good
delivery thereof. The Custodian shall deliver as of the Closing Date by book
entry, in accordance with the customary practices of each securities depository,
as defined in Rule 17f-4 under the Investment Company Act of 1940, as amended
(the "1940 Act") in which the Acquired Fund's Assets are deposited and the
Custodian, the Acquired Fund's Assets deposited with such depositories. The cash
to be transferred by the Acquired Fund shall be delivered by wire transfer of
federal funds on the Closing Date.
3.3 The Acquired Fund shall direct DST Systems, Inc. (the "Transfer
Agent"), on behalf of the Acquired Fund, to deliver at the Closing a certificate
of an authorized officer stating that its records contain the names and
addresses of the Acquired Fund Shareholders and the number and percentage
ownership of outstanding Class A, Class B, and Class C 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
B-3
<PAGE>
the Closing each party shall deliver to the other such bills of sale, checks,
assignments, share certificates, if any, receipts or other documents as such
other party or its counsel may reasonably request.
3.4 In the event that on the Valuation Date (a) the New York Stock Exchange
or another primary trading market for portfolio securities of the Acquiring Fund
or the Acquired Fund shall be closed to trading or trading thereupon shall be
restricted, or (b) trading or the reporting of trading on such Exchange or
elsewhere shall be disrupted so that, in the judgment of the Board of Trustees
of the Acquired Fund or the Board of Trustees of the Acquiring Fund, accurate
appraisal of the value of the net assets of the Acquiring Fund or the Acquired
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 ING Trust, the ING Trust on behalf of
the Acquired Fund represents and warrants to the Pilgrim Trust as follows:
(a) The Acquired Fund is duly organized as a series of ING 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 ING Trust's Declaration of Trust
to own all of its properties and assets and to carry on its business as it is
now being conducted;
(b) ING Trust is a registered investment company classified as a management
company of the open-end type, and its registration with the Commission as an
investment company under the 1940 Act, and the registration of shares of the
Acquired Fund under the Securities Act of 1933, as amended ("1933 Act"), is in
full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired Fund of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act")
and the 1940 Act and such as may be required by state securities laws;
(d) The current prospectus and statement of additional information of the
Acquired Fund and each prospectus and statement of additional information of the
Acquired Fund used during the three years previous to the date of this Agreement
conforms or conformed at the time of its use in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and does not or did not at the time of
its use include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading;
(e) On the Closing Date, the Acquired Fund will have good and marketable
title to the Assets and full right, power, and authority to sell, assign,
transfer and deliver such Assets hereunder free of any liens or other
encumbrances, and upon delivery and payment for such Assets, the Acquiring Fund
will acquire good and marketable title thereto, subject to no restrictions on
the full transfer thereof, including such restrictions as might arise under the
1933 Act, other than as disclosed to the Acquiring Fund;
(f) The Acquired Fund is not engaged currently, and the execution, delivery
and performance of this Agreement will not result, in (i) a material violation
of the ING Trust's Declaration of Trust or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the ING
Trust on behalf of the Acquired Fund is a party or by which it is bound, or (ii)
the acceleration of any obligation, or the imposition of any penalty, under any
agreement, indenture, instrument, contract, lease, judgment or decree to which
the Acquired Fund is a party or by which it is bound;
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<PAGE>
(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 Pilgrim
Trust on behalf of the Acquiring Fund, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or, to its knowledge, threatened against the Acquired Fund or
any of its properties or assets that, if adversely determined, would materially
and adversely affect its financial condition or the conduct of its business. ING
Trust on behalf of the Acquired Fund knows of no facts which might form the
basis for the institution of such proceedings and is not a party to or subject
to the provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its ability to
consummate the transactions herein contemplated;
(i) The Statement of Assets and Liabilities, Statements of Operations and
Changes in Net Assets, and Schedule of Investments of the Acquired Fund at
October 31, 1999 have been audited by Ernst & Young LLP, independent
accountants, 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 October 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 ING Trust and have been offered and sold in every state
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<PAGE>
and the District of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act and state securities laws.
All of the issued and outstanding shares of the Acquired Fund will, at the time
of Closing, be held by the persons and in the amounts set forth in the records
of the Transfer Agent, on behalf of the Acquired Fund, as provided in paragraph
3.3. The Acquired Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the shares of the Acquired Fund, nor
is there outstanding any security convertible into any of the Acquired Fund
shares;
(n) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action, if any,
on the part of the Trustees of 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 Pilgrim Trust, the Pilgrim Trust on
behalf of the Acquiring Fund represents and warrants to the ING Trust as
follows:
(a) The Acquiring Fund is duly organized as a series of Pilgrim 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 Pilgrim 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) Pilgrim Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act and the registration of
the shares of the Acquired Fund under the 1933 Act, is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring Fund of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by state
securities laws;
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<PAGE>
(d) The current prospectus and statement of additional information of the
Acquiring Fund and each prospectus and statement of additional information of
the Acquiring Fund used during the three years previous to the date of this
Agreement conforms or conformed at the time of its use in all material respects
to the applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not or did not at the time
of its use include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading;
(e) On the Closing Date, the Acquiring Fund will have good and marketable
title to the Acquiring Fund's assets, free of any liens of other encumbrances,
except those liens or encumbrances as to which the Acquired Fund has received
notice and necessary documentation at or prior to the Closing;
(f) The Acquiring Fund is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Pilgrim Trust's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Pilgrim 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 Pilgrim 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 ING
Trust on behalf of the Acquired Fund, no litigation or administrative proceeding
or investigation of or before any court or governmental body is presently
pending or, to its knowledge, threatened against the Pilgrim 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. Pilgrim
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 Portfolio of Investments of the Acquiring Fund at June
30, 2000 have been audited by KMPG LLP, independent auditors, and are in
accordance with GAAP consistently applied, and such statements (copies of which
have been furnished to the Acquired Fund) present fairly, in all material
respects, the financial condition of the Acquiring Fund as of such date in
accordance with GAAP, and there are no known contingent liabilities of the
Acquiring Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed therein;
(i) Since June 30, 2000, 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
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<PAGE>
other taxes shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for the payment
thereof, and to the best of the Acquiring Fund's knowledge no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
(k) For each taxable year of its operation (including the taxable year that
includes the Closing Date), the Acquiring Fund has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company has been eligible to and has computed (or will compute) its
federal income tax under Section 852 of the Code, and has distributed all of its
investment company taxable income and net capital gain (as defined in the Code)
for periods ending prior to the Closing Date;
(l) All issued and outstanding Acquiring Fund Shares are, and on the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable by Pilgrim Trust and have been offered and sold in every state
and the District of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act and state securities laws.
The Acquiring Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any Acquiring Fund Shares, nor is there
outstanding any security convertible into any Acquiring Fund Shares;
(m) The execution, delivery and performance of this Agreement will have
been fully authorized prior to the Closing Date by all necessary action, if any,
on the part of the Trustees of the Pilgrim Trust on behalf of the Acquiring Fund
and this Agreement will constitute a valid and binding obligation of the
Acquiring Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(n) The Class A, Class B, and Class C 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
by Pilgrim Trust;
(o) The information to be furnished by the Pilgrim 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;
(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; and
(q) Either the Acquiring Fund or ING Pilgrim Investments, Inc. shall
purchase and maintain a Directors and Officers errors and omissions insurance
policy ("D&O/E&O Policy") for the benefit of Joseph Hankin and Jack Rehm
containing substantially the same form and amount of coverage as each had under
a D&O/E&O Policy of the Acquired Fund, such D&O/E&O Policy to be effective as of
the Closing Date and continuing until the sixth (6th) anniversary of the Closing
Date.
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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.
5.3 The Acquired Fund covenants that the Class A, Class B, and Class C
Acquiring Fund Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof, other than in accordance with the
terms of this Agreement.
5.4 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund shares.
5.5 Subject to the provisions of this Agreement, the Acquiring Fund and the
Acquired Fund will each take, or cause to be taken, all action, and do or cause
to be done, all things reasonably necessary, proper or advisable to consummate
and make effective the transactions contemplated by this Agreement.
5.6 The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus (the "Prospectus")
which will include the Proxy Statement referred to in paragraph 4.1(p), all to
be included in a Registration Statement on Form N-14 of the Acquiring Fund (the
"Registration Statement"), in compliance with the 1933 Act, the 1934 Act and the
1940 Act, in connection with the meeting of the shareholders of the Acquired
Fund to consider approval of this Agreement and the transactions contemplated
herein.
5.7 As soon as is reasonably practicable after the Closing, the Acquired
Fund will make a liquidating distribution to its shareholders consisting of the
Class A, Class B, and Class C Acquiring Fund Shares received at the Closing.
5.8 The Acquiring Fund and the Acquired Fund shall each use its reasonable
best efforts to fulfill or obtain the fulfillment of the conditions precedent to
effect the transactions contemplated by this Agreement as promptly as
practicable.
5.9 ING Trust on behalf of the Acquired Fund covenants that ING Trust will,
from time to time, as and when reasonably requested by the Pilgrim 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 Pilgrim Trust on behalf of the Acquiring
Fund may reasonably deem necessary or desirable in order to vest in and confirm
(a) the ING Trust's on behalf of the Acquired Fund's, title to and possession of
the Acquiring Fund Shares to be delivered hereby, and (b) the Pilgrim Trust's on
behalf of the Acquiring Fund's, title to and possession of all the assets, and
otherwise to carry out the intent and purpose of this Agreement.
5.10 The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state blue sky or securities laws as may be necessary in order to continue
its operations after the Closing Date.
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<PAGE>
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the ING Trust on behalf of the Acquired Fund to
consummate the transactions provided for herein shall be subject, at ING Trust's
election, to the performance by the Pilgrim 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 Pilgrim 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 Pilgrim Trust shall have delivered to the ING Trust 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 ING Trust and
dated as of the Closing Date, to the effect that the representations and
warranties of the Pilgrim 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 ING Trust shall reasonably request;
6.3 The Pilgrim 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 Pilgrim Trust on behalf of the
Acquiring Fund on or before the Closing Date; and
6.4 The Acquired Fund and the Acquiring Fund shall have agreed on the
number of full and fractional Acquiring Fund Shares of each Class to be issued
in connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Pilgrim Trust on behalf of the Acquiring Fund to
complete the transactions provided for herein shall be subject, at the Pilgrim
Trust's election, to the performance by the ING Trust on behalf of the Acquired
Fund of all of the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the ING Trust on behalf of the
Acquired Fund contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date;
7.2 The ING Trust 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 ING Trust;
7.3 The ING Trust 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
Pilgrim Trust and dated as of the Closing Date, to the effect that the
representations and warranties of the ING Trust on behalf of the Acquired Fund,
made in this Agreement are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated by this
Agreement, and as to such other matters as the Pilgrim Trust shall reasonably
request;
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7.4 The ING Trust on behalf of the Acquired Fund, shall have performed all
of the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by the ING Trust on behalf of the
Acquired Fund, on or before the Closing Date;
7.5 The Acquired Fund and the Acquiring Fund shall have agreed on the
number of full and fractional Acquiring Fund Shares of each Class to be issued
in connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1; and
7.6 The Acquired Fund shall have declared and paid a distribution or
distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing; and (ii) any undistributed investment company
taxable income and net realized capital gains from any period to the extent not
otherwise already distributed.
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 ING Trust on behalf of the Acquired
Fund or the Pilgrim Trust on behalf of the Acquiring Fund, the other party to
this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of the
Acquired Fund in accordance with the provisions of ING Trust's Declaration of
Trust, By-Laws, applicable Delaware 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
Pilgrim Trust nor the ING Trust 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 Pilgrim Trust or the ING Trust 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
ING Trust and the Pilgrim Trust 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 Pilgrim Trust and the ING Trust.
Notwithstanding anything herein to the contrary, neither the Pilgrim Trust nor
the ING Trust may waive the condition set forth in this paragraph 8.5.
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9. INDEMNIFICATION
9.1 The Pilgrim Trust, out of the Acquiring Fund's assets, agrees to
indemnify and hold harmless the ING Trust and each of ING Trust's 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 ING
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 Pilgrim Trust of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
9.2 The ING Trust, out of the Acquired Fund's assets, agrees to indemnify
and hold harmless the Pilgrim Trust and each of the Pilgrim Trust's 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
Pilgrim 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 ING Trust of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
10. BROKERAGE FEES AND EXPENSES
10.1 The Pilgrim Trust on behalf of the Acquiring Fund and ING Trust on
behalf of the Acquired Fund represent and warrant to each other that there are
no brokers or finders entitled to receive any payments in connection with the
transactions provided for herein.
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 Pilgrim Trust and the ING Trust 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 and the obligations of each of the
Acquired Fund and Acquiring Fund in Sections 9.1 and 9.2 shall survive the
Closing.
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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 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 ING Trust
and the Pilgrim 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, Class B, and
Class C Acquiring Fund Shares to be issued to the Acquired Fund Shareholders
under this Agreement to the detriment of such shareholders without their further
approval.
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 ING
Trust, 7337 East Doubletree Ranch Road, Scottsdale Arizona 85258, 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;
and to the Pilgrim Trust, 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.
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.
B-13
<PAGE>
15.5 It is expressly agreed that the obligations of the parties hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents, or employees of the Pilgrim Trust or ING Trust personally, but shall
bind only the trust property of the Acquiring Fund or the Acquired Fund, as
provided in the Declaration of Trust of the Pilgrim Trust or ING Trust. The
execution and delivery by such officers shall not be deemed to have been made by
any of them individually or to impose any liability on any of them personally,
but shall bind only the trust property of such party.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its President or Vice President and its seal to be affixed
thereto and attested by its Secretary or Assistant Secretary.
Attest: PILGRIM MUTUAL FUNDS on behalf of
its PILGRIM WORLDWIDE GROWTH FUND
series
----------------------------------- By:
SECRETARY -------------------------------------
Its:
------------------------------------
Attest: ING FUNDS TRUST on behalf of its
ING GLOBAL BRAND NAMES FUND series
----------------------------------- By:
SECRETARY -------------------------------------
Its:
------------------------------------
B-14
<PAGE>
APPENDIX C
ADDITIONAL INFORMATION REGARDING PILGRIM WORLDWIDE GROWTH FUND
(THE "FUND")
SHAREHOLDER GUIDE
PILGRIM PURCHASE OPTIONS(TM)
This Proxy Statement/Prospectus relates to three separate Classes of the
Fund(2): Class A, Class B, and Class C, each of which represents an identical
interest in the Fund's investment portfolio, but are offered with different
sales charges and distribution (Rule 12b-1) and service fee arrangements. As
described below and elsewhere in this Proxy Statement/Prospectus, the contingent
deferred sales load structure and conversion characteristics of the Fund shares
that will be issued to you in the Reorganization will be the same as those that
apply to ING Global Brand Names Fund shares held by you immediately prior to the
Reorganization, and the period that you held shares of ING Global Brand Names
Fund will be included in the holding period of the Fund for purposes of
calculating contingent deferred sales charges and determining conversion rights.
Purchases of the shares of the Fund after the Reorganization will be subject to
the sales load structure and conversion rights discussed below.
The sales charges and fees for each Class of shares of the Fund involved in
the Reorganization are shown and contrasted in the chart below.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
Maximum Initial Sales Charge on Purchases 5.75%(1) None None
Contingent Deferred Sales Charge ("CDSC") None(2) 5.00%(3) 1.00%(4)
Annual Service and Distribution (12b-1) Fees (5) 0.25% 1.00% 1.00%
Maximum Purchase Unlimited $250,000 Unlimited
Automatic Conversion to Class A N/A 8 Years(6) N/A
</TABLE>
----------
(1) Reduced for purchases of $50,000 and over.
(2) For investments of $1 million or more, a CDSC of no more than 1% may be
assessed on redemptions of purchase of shares that were part of the
Nicholas-Applegate Mutual Funds without an initial sales charge. See "Class
A Shares: Initial Sales Charge Alternative" in this Appendix C.
(3) Imposed upon redemption within 6 years from purchase. Fee has scheduled
reductions after the first year. See "Class B Shares: Deferred Sales Charge
Alternative" in this Appendix C.
(4) Imposed upon redemptions within 1 year from purchase.
(5) Annual asset-based distribution charge.
(6) Class B shares of the Fund issued to shareholders of ING Global Brand Names
Fund in the Reorganization will convert to Class A shares in the eighth
year from the original date of purchase of the Class B shares of ING Global
Brand Names Fund.
The relative impact of the initial sales charges and ongoing annual
expenses will depend on the length of time a share is held. Orders for Class B
shares in excess of $250,000 will be accepted as orders for Class A shares or
declined.
----------
(2) Only the share Classes affected by the Reorganization are discussed in the
Shareholder Guide although other share Classes are available.
C-1
<PAGE>
CLASS A SHARES: INITIAL SALES CHARGE ALTERNATIVE. Class A shares of the
Fund are sold at the net asset value ("NAV") per share in effect plus a sales
charge as described in the following table. For waivers or reductions of the
Class A shares sales charges, see "Special Purchases without a Sales Charge" and
"Reduced Sales Charges" below.
AS A % OF THE AS A %
YOUR INVESTMENT OFFERING PRICE OF NAV
--------------- -------------- ------
Less than $50,000 5.75% 6.10%
$50,000 - $99,999 4.50% 4.71%
$100,000 - $249,999 3.50% 3.63%
$250,000 - $499,999 2.50% 2.56%
$500,000 - $1,000,000 2.00% 2.04%
There is no initial sales charge on purchases of $1,000,000 or more.
However, the shares will be subject to a CDSC if they are redeemed within one or
two years of purchase, depending on the amount of the purchase, as follows:
<TABLE>
<CAPTION>
PERIOD DURING
YOUR INVESTMENT CDSC WHICH CDSC APPLIES
--------------- ---- ------------------
<S> <C> <C>
$1,000,000 - $2,499,999 1.00% 2 years
$2,500,000 - $4,999,999 0.50% 1 year
$5,000,000 and over 0.25% 1 year
</TABLE>
Class A shares of the Fund issued in connection with the Reorganization
with respect to Class A shares of ING Global Brand Names Fund that were subject
to a CDSC at the time of the Reorganization, will be subject to a CDSC of up to
1% for a period of 12 months from the date of purchase of the original shares of
ING Global Brand Names Fund.
REDUCED SALES CHARGES. An investor may immediately qualify for a reduced
sales charge on a purchase of Class A shares of the Fund or other open-end funds
in the Pilgrim Funds which offer Class A shares, or shares with front-end sales
charges ("Participating Funds") by completing the Letter of Intent section of an
Application to purchase Fund shares. Executing the Letter of Intent expresses an
intention to invest during the next 13 months a specified amount, which, if made
at one time, would qualify for a reduced sales charge. An amount equal to the
Letter of Intent amount multiplied by the maximum sales charge imposed on
purchases of the Fund and Class will be restricted within your account to cover
additional sales charges that may be due if your actual total investment fails
to qualify for the reduced sales charges. See the Statement of Additional
Information for the Fund for details on the Letter of Intent option or contact
the Shareholder Servicing Agent at 1-800-992-0180 for more information.
A sales charge may also be reduced by taking into account the current value
of your existing holdings in the Fund or any other open-end funds in the Pilgrim
Funds (excluding Pilgrim Money Market Fund) ("Rights of Accumulation"). The
reduced sales charges apply to quantity purchases made at one time or on a
cumulative basis over any period of time. See the Statement of Additional
Information for the Fund for details or contact the Shareholder Servicing Agent
at 1-800-992-0180 for more information.
For the purposes of Rights of Accumulation and the Letter of Intent
Privilege, shares held by investors in the Pilgrim Funds which impose a CDSC may
be combined with Class A shares for a reduced sales charge but will not affect
any CDSC which may be imposed upon the redemption of shares of the Fund which
imposes a CDSC.
C-2
<PAGE>
SPECIAL PURCHASES WITHOUT A SALES CHARGE. Class A shares may be purchased
without a sales charge by certain individuals and institutions. For additional
information, contact the Shareholder Servicing Agent at 1-800-992-0180, or see
the Statement of Additional Information for the Fund.
CLASS B SHARES: DEFERRED SALES CHARGE ALTERNATIVE. Class B shares are
offered at their NAV per share without any initial sales charge. Class B shares
that are redeemed within six years of purchase, however, will be subject to a
CDSC as described in the table that follows. Class B shares of the Fund are
subject to a distribution fee at an annual rate of 1.00% of the average daily
net assets of the Class, which is higher than the distribution fees of Class A
shares. The higher distribution fees mean a higher expense ratio, so Class B
shares pay correspondingly lower dividends and may have a lower NAV than Class A
shares. Orders for Class B shares in excess of $250,000 will be accepted as
orders for Class A shares or declined. The amount of the CDSC is based on the
lesser of the NAV of the Class B shares at the time of purchase or redemption.
There is no CDSC on Class B shares acquired through the reinvestment of
dividends and capital gains distributions. The CDSCs are as follows:
YEAR OF REDEMPTION AFTER PURCHASE CDSC
--------------------------------- ----
First 5%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
After Sixth Year None
Class B shares will automatically convert into Class A shares approximately
eight years after purchase. Class B shares of the Fund issued in connection with
the Reorganization with respect to Class B shares of ING Global Brand Names Fund
will convert to Class A shares eight years after the purchase of the original
shares of ING Global Brand Names Fund. For additional information on the CDSC
and the conversion of Class B, see the Fund's Statement of Additional
Information.
CLASS C SHARES. Class C shares are offered at their NAV per share without
an initial sales charge. Class C shares may be subject to a CDSC of 1% if
redeemed within one year of purchase. The amount of the CDSC is based on the
lesser of the NAV of the Class C shares at the time of purchase or redemption.
There is no CDSC on Class C shares acquired through the reinvestment of
dividends and capital gains distributions.
WAIVERS OF CDSC. The CDSC will be waived in the following cases. In
determining whether a CDSC is applicable, it will be assumed that shares held in
the shareholder's account that are not subject to such charge are redeemed
first.
1) The CDSC will be waived in the case of redemption following the death or
permanent disability of a shareholder if made within one year of death or
initial determination of permanent disability. The waiver is available only for
those shares held at the time of death or initial determination of permanent
disability.
2) The CDSC also may be waived for Class B shares redeemed pursuant to a
Systematic Withdrawal Plan (as described in the Prospectus), up to a maximum of
12% per year of a shareholder's account value based on the value of the account
at the time the plan is established and annually thereafter, provided all
dividends and distributions are reinvested and the total redemptions do not
exceed 12% annually.
3) The CDSC also will be waived in the case of mandatory distributions
from a tax-deferred retirement plan or an IRA.
C-3
<PAGE>
If you think you may be eligible for a CDSC waiver, contact the Shareholder
Servicing Agent at 1-800-992-0180.
REINSTATEMENT PRIVILEGE. Class B and Class C shareholders who have redeemed
their shares in any open-end Pilgrim Fund may reinvest some or all of the
proceeds in the same share Class within 90 days without a sales charge.
Reinstated Class B and Class C shares will retain their original cost and
purchase date for purposes of the CDSC. This privilege can be used only once per
calendar year. See the Statement of Additional Information for the Fund for
details or contact the Shareholder Servicing Agent at 1-800-992-0180 for more
information.
RULE 12b-1 PLAN. The Fund has a distribution plan pursuant to Rule 12b-1
under the Investment Company Act of 1940 applicable to each class of shares of
the Fund ("Rule 12b-1 Plan"). Under the Rule 12b-1 Plan, ING Pilgrim Securities,
Inc. (the "Distributor") may receive from the Fund an annual fee in connection
with the offering, sale and shareholder servicing of the Fund's Class A, Class
B, and Class C shares.
DISTRIBUTION AND SERVICING FEES. As compensation for services rendered and
expenses borne by the Distributor in connection with the distribution of shares
of the Fund and in connection with services rendered to shareholders of the
Fund, the Fund pays the Distributor servicing fees and distribution fees up to
the annual rates set forth below (calculated as a percentage of the Fund's
average daily net assets attributable to that Class):
SERVICING FEE DISTRIBUTION FEE
------------- ----------------
Class A 0.25% 0.10%
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Fees paid under the Rule 12b-1 Plan may be used to cover the expenses of
the Distributor from the sale of Class A, Class B, or Class C shares of the
Fund, including payments to Authorized Dealers, and for shareholder servicing.
Because these fees are paid out of the Fund's assets on an on-going basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.
OTHER EXPENSES. In addition to the management fee and other fees described
previously, the Fund pays other expenses, such as legal, audit, transfer agency
and custodian fees, proxy solicitation costs, and the compensation of Trustees
who are not affiliated with ING Pilgrim Investments, Inc. ("ING Pilgrim
Investments"). Most Fund expenses are allocated proportionately among all of the
outstanding shares of that Fund. However, the Rule 12b-1 Plan fees for each
Class of shares are charged proportionately only to the outstanding shares of
that Class.
PURCHASING SHARES. The Fund reserves the right to liquidate sufficient
shares to recover annual Transfer Agent fees should the investor fail to
maintain his/her account value at a minimum of $1,000.00 ($250.00 for IRA's).
The minimum initial investment in the Fund is $1,000 ($250 for IRAs), and the
minimum for additional investment in the Fund is $100. The minimum initial
investment for a pre-authorized retirement plan is $100, plus monthly
investments of at least $100.
The Fund and the Distributor reserve the right to reject any purchase
order. Please note cash, travelers checks, third party checks, money orders and
checks drawn on non-U.S. banks (even if payment may be effected through a U.S.
bank) will not be accepted. ING Pilgrim Investments reserves the right to waive
minimum investment amounts.
PRICE OF SHARES. When you buy shares, you pay the NAV plus any applicable
sales charge. When you sell shares, you receive the NAV minus any applicable
deferred sales charge. Exchange orders are effected at NAV.
C-4
<PAGE>
DETERMINATION OF NET ASSET VALUE. The NAV of each Class of the Fund's
shares is determined daily as of the close of regular trading on the New York
Stock Exchange (usually at 4:00 p.m. Eastern Time) on each day that it is open
for business. The NAV of each Class represents that Class' pro rata share of
that Fund's net assets as adjusted for any Class specific expenses (such as fees
under a Rule 12b-1 plan), and divided by that Class' outstanding shares. In
general, the value of the Fund's assets is based on actual or estimated market
value, with special provisions for assets not having readily available market
quotations, and short-term debt securities, and for situations where market
quotations are deemed unreliable. The NAV per share of each Class of the Fund
will fluctuate in response to changes in market conditions and other factors.
Portfolio securities for which market quotations are readily available are
stated at market value. Short-term debt securities having a maturity of 60 days'
or less are valued at amortized cost, unless the amortized cost does not
approximate market value. Securities prices may be obtained from automated
pricing services. When market quotations are not readily available or are deemed
unreliable, securities are valued at their fair value as determined in good
faith under the supervision of the Board of Trustees. Valuing securities at fair
value involves greater reliance on judgment than valuing securities that have
readily available market quotations. For information on valuing foreign
securities, see the Fund's Statement of Additional Information.
PRE-AUTHORIZED INVESTMENT PLAN. You may establish a pre-authorized
investment plan to purchase shares with automatic bank account debiting. For
further information on pre-authorized investment plans, contact the Shareholder
Servicing Agent at 1-800-992-0180.
RETIREMENT PLANS. The Fund has available prototype qualified retirement
plans for both corporations and for self-employed individuals. Also available
are prototype IRA, Roth IRA and Simple IRA plans (for both individuals and
employers), Simplified Employee Pension Plans, Pension and Profit Sharing Plans
and Tax Sheltered Retirement Plans for employees of public educational
institutions and certain non-profit, tax-exempt organizations. State Street Bank
and Trust Company ("SSB") acts as the custodian under these plans. For further
information, contact the Shareholder Servicing Agent at 1-800-992-0180. SSB
currently receives a $12 custodian fee annually for the maintenance of such
accounts.
EXECUTION OF REQUESTS. Purchase and sale requests are executed at the next
NAV determined after the order is received in proper form by the Transfer Agent
or Distributor. A purchase order will be deemed to be in proper form when all of
the required steps set forth above under "Purchasing Shares" have been
completed. If you purchase by wire, however, the order will be deemed to be in
proper form after the telephone notification and the federal funds wire have
been received. If you purchase by wire, you must submit an application form in a
timely fashion. If an order or payment by wire is received after the close of
regular trading on the New York Stock Exchange (normally 4:00 p.m. Eastern
Time), the shares will not be credited until the next business day.
You will receive a confirmation of each new transaction in your account,
which also will show you the number of shares of the Fund you own including the
number of shares being held in safekeeping by the Transfer Agent for your
account. You may rely on these confirmations in lieu of certificates as evidence
of your ownership. Certificates representing shares of the Fund will not be
issued unless you request them in writing.
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.
Telephone redemptions may be executed on all accounts other than retirement
accounts.
C-5
<PAGE>
EXCHANGE PRIVILEGES AND RESTRICTIONS
An exchange privilege is available. Exchange requests may be made in
writing to the Transfer Agent or by calling the Shareholder Servicing Agent at
1-800-992-0180. There is no specific limit on exchange frequency; however, the
Fund is intended for long term investment and not as a trading vehicle. ING
Pilgrim Investments reserves the right to prohibit excessive exchanges (more
than four per year). ING Pilgrim Investments reserves the right, upon 60 days'
prior notice, to restrict the frequency of, otherwise modify, or impose charges
of up to $5.00 upon exchanges. The total value of shares being exchanged must at
least equal the minimum investment requirement of the Fund into which they are
being exchanged. The Fund may change or cancel its exchange policies at any
time, upon 60 days' written notice to shareholders.
Shares of one Class of the Fund generally, may be exchanged for shares of
that same Class of any other open-end Pilgrim fund or ING fund without payment
of any additional sales charge. In most instances, if you exchange and
subsequently redeem your shares, any applicable CDSC will be based on the full
period of the share ownership. Shareholders exercising the exchange privilege
with any other open-end Pilgrim fund or ING fund should carefully review the
Prospectus of that Fund. Exchanges of shares are sales and may result in a gain
or loss for federal and state income tax purposes. You will automatically be
assigned the telephone exchange privilege unless you mark the box on the Account
Application that signifies you do not wish to have this privilege. The exchange
privilege is only available in states where shares of the Fund being acquired
may be legally sold.
You will automatically have the ability to request an exchange by calling
the Shareholder Service Agent unless you mark the box on the Account Application
that indicates that you do not wish to have the telephone exchange privilege.
SYSTEMATIC EXCHANGE PRIVILEGE. With an initial account balance of at least
$5,000 and subject to the information and limitations outlined above, you may
elect to have a specified dollar amount of shares systematically exchanged,
monthly, quarterly, semi-annually or annually (on or about the 10th of the
applicable month), from your account to an identically registered account in the
same Class of any other open-end Pilgrim Fund. This exchange privilege may be
modified at any time or terminated upon 60 days' written notice to shareholders.
SMALL ACCOUNTS. Due to the relatively high cost of handling small
investments, the Fund reserves the right upon 30 days' written notice to redeem,
at NAV, the shares of any shareholder whose account (except for IRAs) has a
value of less than $1,000, other than as a result of a decline in the NAV per
share.
HOW TO REDEEM SHARES
Shares of the Fund will be redeemed at the NAV (less any applicable CDSC
and/or federal income tax withholding) next determined after receipt of a
redemption request in good form on any day the New York Stock Exchange is open
for business.
SYSTEMATIC WITHDRAWAL PLAN. You may elect to have monthly, quarterly,
semi-annual or annual payments in any fixed amount of $100 or more made to
yourself, or to anyone else you properly designate, as long as the account has a
current value of at least $10,000. For additional information, contact the
Shareholder Servicing Agent at 1-800-992-0180, or see the Fund's Statement of
Additional Information.
PAYMENTS. Payment to shareholders for shares redeemed or repurchased
ordinarily will be made within three days after receipt by the Transfer Agent of
a written request in good order. The Fund may delay the mailing of a redemption
check until the check used to purchase the shares being redeemed has cleared
which may take up to 15 days' or more. To reduce such delay, all purchases
should be made by bank wire or federal funds. The Fund may suspend the right of
redemption under certain extraordinary circumstances in accordance with the
Rules of the Securities and Exchange Commission. Due to the relatively high cost
C-6
<PAGE>
of handling small investments, the Fund reserves the right upon 30 days' written
notice to redeem, at NAV, the shares of any shareholder whose account (except
for IRAs) has a value of less than $1,000, other than a result of a decline in
the NAV per share. The Fund intends to pay in cash for all shares redeemed, but
under abnormal conditions that make payment in cash harmful to the Fund, the
Fund may make payment wholly or partly in securities at their then current
market value equal to the redemption price. In such case, the Fund could elect
to make payment in securities for redemptions in excess of $250,000 or 1% of its
net assets during any 90-day period for any one shareholder. An investor may
incur brokerage costs in converting such securities to cash.
MANAGEMENT OF THE FUND
INVESTMENT MANAGER. ING Pilgrim Investments has overall responsibility for
the management of the Fund. The Fund and ING Pilgrim Investments have entered
into an agreement that requires ING Pilgrim Investments to provide or oversee
all investment advisory and portfolio management services for the Fund. ING
Pilgrim Investments provides the Fund with office space, equipment and personnel
necessary to administer the Fund. The agreement with ING Pilgrim Investments can
be canceled by the Board of Trustees of the Fund upon 60 days' written notice.
Organized in December 1994, ING Pilgrim Investments is registered as an
investment adviser with the Securities and Exchange Commission. As of September
30, 2000, ING Pilgrim Investments managed over $20.7 billion in assets. ING
Pilgrim Investments bears its expenses of providing the services described
above. Investment management fees are computed and accrued daily and paid
monthly.
PARENT COMPANY AND DISTRIBUTOR. ING Pilgrim Investments and the Distributor
are indirect, wholly-owned subsidiaries of ING Groep N.V. (NYSE: ING) ("ING
Group"). ING Group is a global financial institution active in the field of
insurance, banking and asset management in more than 65 countries, with almost
100,000 employees.
SHAREHOLDER SERVICING AGENT. ING Pilgrim Group, Inc. serves as Shareholder
Servicing Agent for the Fund. The Shareholder Servicing Agent is responsible for
responding to written and telephonic inquiries from shareholders. The Fund pays
the Shareholder Servicing Agent a monthly fee on a per-contact basis, based upon
incoming and outgoing telephonic and written correspondence.
PORTFOLIO TRANSACTIONS. ING Pilgrim Investments will place orders to
execute securities transactions that are designed to implement the Fund's
investment objectives and policies. ING Pilgrim Investments will use its
reasonable efforts to place all purchase and sale transactions with brokers,
dealers and banks ("brokers") that provide "best execution" of these orders. In
placing purchase and sale transactions, ING Pilgrim Investments may consider
brokerage and research services provided by a broker to ING Pilgrim Investments
or its affiliates, and the Fund may pay a commission for effecting a securities
transaction that is in excess of the amount another broker would have charged if
ING Pilgrim Investments determines in good faith that the amount of commission
is reasonable in relation to the value of the brokerage and research services
provided by the broker. In addition, ING Pilgrim Investments may place
securities transactions with brokers that provide certain services to the Fund.
ING Pilgrim Investments also may consider a broker's sale of Fund shares if ING
Pilgrim Investments is satisfied that the Fund would receive best execution of
the transaction from that broker.
DIVIDENDS, DISTRIBUTIONS & TAXES
DIVIDENDS AND DISTRIBUTIONS. The Fund generally distributes most or all of
its net earnings in the form of dividends. The Fund pays dividends and capital
gains, if any, annually. Dividends and distributions will be determined on a
Class basis.
Any dividends and distributions paid by the Fund will be automatically
reinvested in additional shares of the respective Class of that Fund, unless you
elect to receive distributions in cash. When a dividend or distribution is paid,
C-7
<PAGE>
the NAV per share is reduced by the amount of the payment. You may, upon written
request or by completing the appropriate section of the Account Application in
the Pilgrim Prospectus, elect to have all dividends and other distributions paid
on a Class A, B, or C account in the Fund invested into a Pilgrim Fund or ING
Fund which offers Class A, B, or C shares.
FEDERAL TAXES. The following information is meant as a general summary for
U.S. shareholders. Please see the Fund's Statement of Additional Information for
additional information. You should rely on your own tax adviser for advice about
the particular federal, state and local tax consequences to you of investing in
the Fund.
The Fund will distribute most of its net investment income and net capital
gains to its shareholders each year. Although the Fund will not be taxed on
amounts it distributes, most shareholders will be taxed on amounts they receive.
A particular distribution generally will be taxable as either ordinary income or
long-term capital gains. It does not matter how long you have held your Fund
shares or whether you elect to receive your distributions in cash or reinvest
them in additional Fund shares. For example, if the Fund designates a particular
distribution as a long-term capital gains distribution, it will be taxable to
you at your long-term capital gains rate.
Dividends declared by the Fund in October, November or December and paid
during the following January may be treated as having been received by
shareholders in the year the distributions were declared.
You will receive an annual statement summarizing your dividend and capital
gains distributions.
If you invest through a tax-deferred account, such as a retirement plan,
you generally will not have to pay tax on dividends until they are distributed
from the account. These accounts are subject to complex tax rules, and you
should consult your tax adviser about investment through a tax-deferred account.
There may be tax consequences to you if you sell or redeem Fund shares. You
will generally have a capital gain or loss, which will be long-term or
short-term, generally depending on how long you hold those shares. If you
exchange shares, you may be treated as if you sold them. You are responsible for
any tax liabilities generated by your transactions.
As with all mutual funds, the Fund may be required to withhold U.S. federal
income tax at the rate of 31% of all taxable distributions payable to you if you
fail to provide the Fund with your correct taxpayer identification number or to
make required certifications, or if you have been notified by the IRS that you
are subject to backup withholding. Backup withholding is not an additional tax;
rather, it is a way in which the IRS ensures it will collect taxes otherwise
due. Any amounts withheld may be credited against your U.S. federal income tax
liability.
C-8
<PAGE>
FINANCIAL HIGHLIGHTS
For the year ended June 30, 2000 and the three months ended June 30, 1999, the
information in the table below has been audited by KPMG LLP, independent
auditors. For all periods ending prior to June 30, 1999, the financial
information was audited by other independent auditors.
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------
THREE
YEAR MONTHS
ENDED ENDED
JUNE 30, JUNE 30, YEAR ENDED MARCH 31,
2000 1999(1) 1999 1998 1997 1996
---- ------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period $ 23.58 21.39 19.33 16.88 16.57 14.29
Income from investment operations:
Net investment income (loss) $ (0.15) -- (0.02) 0.04 (0.16) (0.07)
Net realized and unrealized gains
(loss) on investments $ 9.62 2.19 5.78 5.33 2.20 2.86
Total from investment operations $ 9.47 2.19 5.76 5.37 2.04 2.79
Less distributions from:
Net investment income $ -- -- 0.06 -- -- 0.12
Net realized gains on investments $ 3.07 -- 3.64 2.92 1.73 0.39
Net asset value, end of period $ 29.98 23.58 21.39 19.33 16.88 16.57
Total Return(3): % 42.43 10.24 33.56 34.55 12.51 19.79
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 235,341 66,245 49,134 38,647 24,022 23,481
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.67 1.75 1.86 1.86 1.85 1.85
Gross expenses prior to expense
reimbursement(4) % 1.67 1.75 2.02 2.21 2.17 2.17
Net investment income (loss) after
expense reimbursement(4)(5) % (0.79) (0.03) (0.62) (0.69) (0.93) (0.35)
Portfolio turnover % 169 57 247 202 182 132
CLASS B
---------------------------------------------------------
THREE
YEAR MONTHS MAY 31,
ENDED ENDED 1995(2) TO
JUNE 30, JUNE 30, YEAR ENDED MARCH 31, MARCH 31,
2000 1999(1) 1999 1998 1997 1996
---- ------- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period $ 26.64 24.21 20.10 16.02 14.34 12.50
Income from investment operations:
Net investment income (loss) $ (0.28) (0.03) (0.08) (0.17) (0.14) (0.05)
Net realized and unrealized gains
(loss) on investments $ 10.76 2.46 6.25 5.44 1.82 1.89
Total from investment operations $ 10.48 2.43 6.17 5.27 1.68 1.84
Less distributions from:
Net investment income $ -- -- 0.01 -- -- --
Net realized gains on investments $ 3.46 -- 2.05 1.19 -- --
Net asset value, end of period $ 33.66 26.64 24.21 20.10 16.02 14.34
Total Return(3): % 41.54 10.04 32.74 34.03 11.72 14.72
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 130,988 27,938 18,556 10,083 5,942 1,972
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.32 2.40 2.51 2.51 2.50 2.50
Gross expenses prior to expense
reimbursement(4) % 2.32 2.40 2.67 2.70 4.81 9.50
Net investment income (loss) after
expense reimbursement(4)(5) % (1.44) (0.68) (1.31) (1.37) (1.62) (1.28)
Portfolio turnover % 169 57 247 202 182 132
CLASS C
--------------------------------------------------------
THREE
YEAR MONTHS
ENDED ENDED
JUNE 30, JUNE 30, YEAR ENDED MARCH 31,
2000 1999(1) 1999 1998 1997 1996
---- ------- ---- ---- ---- ----
Per Share Operating Performance:
Net asset value, beginning of period $ 23.69 21.52 19.05 16.92 16.76 14.44
Income from investment operations:
Net investment income (loss) $ (0.33) (0.04) (0.20) (0.19) (0.28) (0.21)
Net realized and unrealized gains
(loss) on investments $ 9.65 2.21 5.83 5.41 2.23 2.92
Total from investment operations $ 9.32 2.17 5.63 5.22 1.95 2.71
Less distributions from:
Net investment income $ -- -- 0.01 -- -- 0.01
Net realized gains on investments $ 3.09 -- 3.15 3.09 1.79 0.38
Net asset value, end of period $ 29.92 23.69 21.52 19.05 16.92 16.76
Total Return(3): % 41.48 10.08 32.73 33.72 11.81 18.95
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 239,432 111,250 98,470 84,292 70,345 71,155
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.32 2.40 2.51 2.51 2.50 2.50
Gross expenses prior to expense
reimbursement(4) % 2.32 2.40 2.67 2.77 2.61 2.57
Net investment income (loss) after
expense reimbursement(4)(5) % (1.44) (0.68) (1.28) (1.34) (1.57) (0.99)
Portfolio turnover % 169 57 247 202 182 132
</TABLE>
----------
(1) Effective May 24, 1999, Pilgrim Investments Inc., became the Investment
Manager of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its year end to June 30.
(2) Commencement of offering shares.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Manager has agreed to limit expenses, excluding, interest,
taxes, brokerage and extraordinary expenses.
C-9
<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, no persons owned beneficially or of record 5% or
more of the outstanding shares of the specified Class of Pilgrim Worldwide
Growth Fund.
As of December 1, 2000, the following persons owned beneficially or of
record 5% or more of the outstanding shares of the specified Class of ING Global
Brand Names Fund:
<TABLE>
<CAPTION>
CLASS AND % OF CLASS % OF FUND % OF FUND
TYPE OF BEFORE BEFORE AFTER
NAME AND ADDRESS OWNERSHIP REORGANIZATION REORGANIZATION REORGANIZATION
---------------- --------- -------------- -------------- --------------
<S> <C> <C> <C>
ING America Insurance Holdings, Inc. Class A 73.34% 45.23%
Investment Accounts Record Holder
5780 Powers Ferry Road, NW
Atlanta, GA 30327-4347
Tribal Government Class C 91.00% 22.23%
Forest County Potawatomi Children Record Holder
PO Box 340
Crandon, WI 54520
</TABLE>
E-1
<PAGE>
PART B
PILGRIM MUTUAL FUNDS
--------------------------------------------------------------------------------
Statement of Additional Information
________ ___, 2000
--------------------------------------------------------------------------------
Acquisition of the Assets and Liabilities By and in Exchange for Shares of
of ING Global Brand Names Fund Pilgrim Worldwide Growth Fund
(a series of ING Funds Trust) (a series of Pilgrim Mutual Funds)
1475 Dunwoody Drive 7337 East Doubletree Ranch Road
West Chester, Pennsylvania 19380 Scottsdale, Arizona 85258
This Statement of Additional Information is available to the Shareholders of ING
Global Brand Names Fund in connection with a proposed transaction whereby all of
the assets and liabilities of ING Global Brand Names Fund, a series of ING Funds
Trust, will be transferred to Pilgrim Worldwide Growth Fund, a series of Pilgrim
Mutual Funds, in exchange for shares of Pilgrim Worldwide Growth Fund.
This Statement of Additional Information of Pilgrim Mutual Funds 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 Pilgrim Worldwide Growth Fund,
dated November 1, 2000 as filed on November 1, 2000 and ING Funds Trust,
dated November 6, 2000, as filed on November 13, 2000, respectively.
2. The Financial Statements of Pilgrim Worldwide Growth Fund are included in
the Annual Report of Pilgrim Mutual Funds dated June 30, 2000, as filed on
September 7, 2000.
3. The Financial Statements of ING Global Brand Names Fund are included in the
Annual Report of ING Funds Trust dated October 31, 1999, as filed on
December 29, 1999.
4. The Financial Statements of ING Global Brand Names Fund are included in the
Semi-Annual Report of ING Funds Trust dated April 30, 2000, as filed on
July 7, 2000.
This Statement of Additional Information is not a prospectus. A Proxy
Statement/Prospectus dated ________ ___, 2000 relating to the reorganization of
ING Global Brand Names 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>
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>
PILGRIM ING
WORLDWIDE GLOBAL
GROWTH BRAND PRO FORMA PRO FORMA
FUND NAMES ADJUSTMENTS COMBINED
------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities at market value* $ 639,095,933 $ 59,073,328 $ 698,169,261
Repurchase Agreements 27,281,000 1,036,000 28,317,000
Foreign Currency ** 398 -- 398
Cash 23,559 7,115 30,674
Due to affiliate -- 10,763 10,763
Receivables: --
Fund shares sold 4,498,998 59,027 4,558,025
Dividends and interest 622,494 56,880 679,374
Investment securities sold 8,129,229 167,782 8,297,011
Prepaid expenses 92,703 21,498 114,201
------------- ------------ ----------- -------------
Total Assets 679,744,314 60,432,393 740,176,707
------------- ------------ ----------- -------------
LIABILITIES:
Payable for investment securities purchased 15,496,676 -- 15,496,676
Payable for fund shares redeemed 2,898,211 17,224 2,915,435
Payable to affiliate 902,056 -- 902,056
Other accrued expenses and liabilities 268,101 134,034 402,135
------------- ------------ ----------- -------------
Total Liabilities 19,565,044 151,258 19,716,302
------------- ------------ ----------- -------------
NET ASSETS $ 660,179,270 $ 60,281,135 $ 720,460,405
============= ============ =========== =============
NET ASSETS CONSIST OF:
Paid-in capital $ 518,940,603 $ 49,497,742 $ 568,438,345
Accumulated net investment loss -- (343,606) (343,606)
Accumulated net realized gain on investments 16,761,834 3,132,229 19,894,063
Net unrealized appreciation of investments 124,476,833 7,994,770 132,471,603
------------- ------------ ----------- -------------
Net Assets $ 660,179,270 $ 60,281,135 $ -- $ 720,460,405
============= ============ =========== =============
CLASS A:
Net Assets $ 235,341,134 $ 37,991,675 $ 273,332,809
Shares outstanding 7,849,453 2,935,992 (1,668,758)(A) 9,116,687
Net asset value and redemption price per share $ 29.98 $ 12.94 $ 29.98
Maximum offering price per share $ 31.81 $ 13.73 $ 31.81
CLASS B:
Net Assets $130,988,092 $ 5,398,879 $ 2,752,977 (B) $ 139,139,948
Shares outstanding 3,891,880 421,438 (179,256)(B) 4,134,062
Net asset value and redemption price per share $ 33.66 $ 12.81 $ 33.66
Maximum offering price per share $ 33.66 $ 12.81 $ 33.66
CLASS C:
Net Assets $ 239,432,294 $ 14,137,604 $ 253,569,898
Shares outstanding 8,001,360 1,103,034 (630,520)(A) 8,473,874
Net asset value and redemption price per share $ 29.92 $ 12.82 $ 29.92
Maximum offering price per share $29.92 $ 12.82 $ 29.92
CLASS Q:
Net Assets $ 54,417,750 N/A $ 54,417,750
Shares outstanding 1,575,894 N/A 1,575,894
Net asset value and redemption price per share $ 34.53 N/A $ 34.53
Maximum offering price per share $ 34.53 N/A $ 34.53
CLASS X:
Net Assets N/A $ 2,752,977 $(2,752,977)(B) N/A
Shares outstanding N/A 214,788 (214,788)(B) N/A
Net asset value and redemption price per share N/A $ 12.82 N/A
Maximum offering price per share N/A $ 12.82 N/A
* Cost of Securities $ 514,610,089 $ 51,094,260 $ 565,704,349
** Cost of Foreign Currency $ 397 $ -- $ 397
</TABLE>
(A) Reflects new shares issued, net of retired shares of Global Brand Names
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>
PILGRIM ING
WORLDWIDE GLOBAL
GROWTH BRAND PRO FORMA PRO FORMA
FUND NAMES ADJUSTMENTS COMBINED
------------- ----------- ---------- -------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2000 2000 2000 2000
------------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes $ 2,256,981 $ 487,341 $ 2,744,322
Interest 1,470,882 49,309 1,520,191
------------- ----------- ---------- -------------
Total investment income 3,727,863 536,650 4,264,513
------------- ----------- ---------- -------------
EXPENSES:
Investment management fees 4,327,642 531,841 4,859,483
Distribution expenses
Class A 515,322 281,546 (150,158) (A) 646,710
Class B 770,751 35,483 24,664 (C) 830,898
Class C 1,751,460 94,647 1,846,107
Class Q 94,045 94,045
Class X 24,664 (24,664) (C) --
Transfer agent and registrar fees 628,483 230,478 (129,979) (A) 728,982
Shareholder Reporting 160,859 26,038 186,897
Registration and filing fees 43,713 56,485 (45,188) (B) 55,010
Recordkeeping and pricing fees 76,299 46,339 122,638
Professional fees 51,263 31,959 (25,567) (B) 57,655
Custodian fees 271,713 38,819 310,532
Shareholder servicing fees 24,761 24,761
Directors' fees 18,000 336 (336) (B) 18,000
Insurance 2,281 2,281
Miscellaneous 126,776 11,458 138,234
Interest and credit facility fee 4,496 4,496
------------- ----------- ---------- -------------
Total expenses 8,867,864 1,410,093 (351,228) 9,926,729
------------- ----------- ---------- -------------
Less:
Waived and reimbursed fees 509,108 (509,108) (A) --
------------- ----------- ---------- -------------
Net expenses 8,867,864 900,985 157,880 9,926,729
------------- ----------- ---------- -------------
Net investment (loss) (5,140,001) (364,335) (157,880) (5,662,216)
------------- ----------- ---------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) from:
Investments 32,664,018 3,579,295 36,243,313
Foreign currency transactions (1,744,754) (85,548) (1,830,302)
Net change in unrealized appreciation of:
Investments 91,768,013 4,661,152 96,429,165
Translation of other assets, liabilities and
forward contracts denominated in foreign currencies 24,751 13,874 38,625
------------- ----------- ---------- -------------
Net gain from investments 122,712,028 8,168,773 -- 130,880,801
------------- ----------- ---------- -------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 117,572,027 $ 7,804,438 $ (157,880) $ 125,218,585
============= =========== ========== =============
</TABLE>
(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 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>
PILGRIM ING PILGRIM ING
WORLDWIDE GLOBAL WORLDWIDE GLOBAL
GROWTH BRAND NAMES PRO FORMA GROWTH BRAND NAMES PRO FORMA
SHARES SHARES SHARES VALUE VALUE VALUE
----------- -------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCK: 96.67%
AUSTRALIA: 0.51%
497,000 497,000 Foster's Brewing Group Limited $ 1,396,985 $ 1,396,985
41,700 41,700 News Corp., LTD. ADR $ 2,272,650 2,272,650
------------ ----------- ------------
2,272,650 1,396,985 3,669,635
------------ ----------- ------------
BELGIUM: 0.43%
58,900 58,900 Fortis (B) 1,713,946 1,713,946
32,000 32,000 @ Lernout & Hauspie Speech Products 1,410,000 1,410,000
------------ ----------- ------------
3,123,946 -- 3,123,946
------------ ----------- ------------
BRAZIL: 0.70%
65,800 65,800 Petroleo Brasileiro SA ADR 1,987,917 1,987,917
60,211 60,211 Tele Norte Leste Participacoes ADR 1,422,485 1,422,485
17,000 17,000 Telecomunicacoes Brasileiras SA ADR 1,651,125 1,651,125
------------ ----------- ------------
5,061,527 -- 5,061,527
------------ ----------- ------------
CANADA: 5.24%
167,200 167,200 Abitibi-Consolidated, Inc. 1,567,500 1,567,500
138,800 138,800 @ Anderson Exploration, Ltd. 2,522,784 2,522,784
21,000 21,000 @ Ballard Power Systems, Inc. 1,886,062 1,886,062
42,600 42,600 @ Biovail Corp. 2,361,637 2,361,637
68,700 68,700 Bombardier, Inc. 1,866,041 1,866,041
19,400 19,400 @ C-Mac Industries, Inc. 917,568 917,568
33,000 33,000 Magna Int'l, Inc. 1,550,777 1,550,777
278,300 278,300 Nortel Networks Corp. 18,993,975 18,993,975
73,500 73,500 @ Precision Drilling Corp. 2,838,937 2,838,937
42,000 42,000 @ QLT, Inc. 3,247,125 3,247,125
------------ ----------- ------------
37,752,406 -- 37,752,406
------------ ----------- ------------
CHINA: 0.25%
5,000 5,000 @ PetroChina Co., Ltd. ADR 104,687 104,687
8,000,000 8,000,000 @ PetroChina Co., Ltd. 1,662,498 1,662,498
------------ ----------- ------------
1,767,185 -- 1,767,185
------------ ----------- ------------
DENMARK: 0.32%
34,600 34,600 Tele Danmark AS 2,328,595 2,328,595
------------ ----------- ------------
FINLAND: 3.19%
43,200 43,200 Helsingin Puhelin OYJ 4,231,536 4,231,536
283,800 41,000 324,800 Nokia OYJ ADR 14,172,262 2,092,286 16,264,548
55,000 55,000 Sonera Group OYJ 2,507,281 2,507,281
------------ ----------- ------------
20,911,079 2,092,286 23,003,365
------------ ----------- ------------
FRANCE: 6.13%
48,300 48,300 Accor SA 1,979,589 1,979,589
82,600 82,600 Alcatel SA 5,417,560 5,417,560
61,700 61,700 Alstom 1,667,600 1,667,600
44,100 44,100 Aventis SA 3,218,718 3,218,718
16,500 16,500 Axa 2,599,171 2,599,171
3,626 3,626 @ Bouygues SA 2,423,220 2,423,220
17,300 17,300 Groupe Danone 2,295,767 2,295,767
40,000 40,000 Lagardere S.C.A. 3,055,040 3,055,040
3,700 3,700 L'Oreal 3,204,044 3,204,044
3,506 3,506 LVMH Moet-Hennessy Louis Vuitton 1,445,721 1,445,721
83,800 83,800 Rhodia SA 1,408,068 1,408,068
74,000 74,000 Societe Television Francaise 1 5,157,289 5,157,289
63,800 63,800 ST Microelectronics NV 4,095,162 4,095,162
26,770 26,770 Total Fina Elf SA 4,104,505 4,104,505
23,600 23,600 Vivendi (EX-Generale des Eaux) 2,082,984 2,082,984
------------ ----------- ------------
39,504,673 4,649,765 44,154,438
------------ ----------- ------------
GERMANY: 2.42%
8,924 8,924 Adidas-Salomon AG 492,467 492,467
69,900 69,900 Deutsche Lufthansa AG 1,631,635 1,631,635
71,500 71,500 Dresdner Bank AG 2,894,268 2,894,268
45,800 45,800 EM.TV & Merchandising AG 2,710,966 2,710,966
41,700 41,700 @ Infineon Technologies AG 3,399,859 3,399,859
7,400 7,400 @ Intershop Communications AG 3,384,030 3,384,030
13,500 13,500 Siemens AG 2,020,909 2,020,909
24,279 24,279 Volkswagen AG 927,215 927,215
------------ ----------- ------------
16,041,667 1,419,682 17,461,349
------------ ----------- ------------
HONG KONG: 0.42%
107,800 107,800 Hutchison Whampoa 1,355,192 1,355,192
830,000 830,000 @ Pacific Century CyberWorks, Ltd. 1,639,664 1,639,664
------------ ----------- ------------
2,994,856 -- 2,994,856
------------ ----------- ------------
</TABLE>
4
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
As of June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PILGRIM ING PILGRIM ING
WORLDWIDE GLOBAL WORLDWIDE GLOBAL
GROWTH BRAND NAMES PRO FORMA GROWTH BRAND NAMES PRO FORMA
SHARES SHARES SHARES VALUE VALUE VALUE
----------- -------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
ISRAEL: 0.62%
80,500 80,500 Teva Pharmaceutical ADR 4,462,719 4,462,719
------------ ----------- ------------
ITALY: 1.08%
279,600 279,600 Alleanza Assicurazioni SPA 3,723,731 3,723,731
298,400 298,400 ENI SPA 1,723,539 1,723,539
1,706,000 1,706,000 @ Finmeccanica SPA 2,345,354 2,345,354
------------ ----------- ------------
7,792,624 -- 7,792,624
------------ ----------- ------------
JAPAN: 8.48%
15,000 15,000 Canon, Inc 746,501 746,501
90,000 90,000 Daikin Industries, Ltd. 2,090,853 2,090,853
35,000 35,000 Fanuc, Ltd. 3,559,210 3,559,210
14,000 14,000 Fuji Photo Film Company Ltd. 572,694 572,694
118,000 118,000 Fujitsu, Ltd. 4,081,429 4,081,429
32,000 32,000 Honda Motor Co Ltd 1,088,835 1,088,835
518,000 518,000 Japan Airlines Co., Ltd. 1,967,429 1,967,429
7,100 7,100 Kyocera Corp. 1,203,798 1,203,798
371,000 371,000 Mitsubishi Electric Corp. 4,014,024 4,014,024
185,000 185,000 Mitsui Fudosan Co., Ltd. 2,005,089 2,005,089
88,000 88,000 NEC Corp. 2,761,793 2,761,793
185,000 185,000 Nippon Sheet Glass Co., Ltd. 2,570,001 2,570,001
250 250 Nippon Telegraph & Telephone Co., Ltd. 3,322,181 3,322,181
74,000 74,000 Nomura Securities Co., Ltd. 1,809,811 1,809,811
170 170 NTT Docomo, Inc. 4,598,275 4,598,275
104,000 104,000 Pioneer Corp. 4,048,066 4,048,066
19,200 19,200 Promise Co., Ltd. 1,516,385 1,516,385
19,900 19,900 Softbank Corp. 2,700,721 2,700,721
22,500 15,400 37,900 Sony Corp. 2,099,336 1,437,014 3,536,350
376,000 376,000 Toshiba Corp. 4,241,761 4,241,761
38,000 38,000 Toyoda Gosei Co., Ltd. 2,410,254 2,410,254
37,000 13,000 50,000 Toyota Motor Corp. 1,684,275 591,828 2,276,103
11,000 11,000 @ Trend Micro, Inc. 1,814,241 1,814,241
87,000 87,000 Yamato Transport Co., Ltd. 2,160,549 2,160,549
------------ ----------- ------------
56,659,481 4,436,872 61,096,353
------------ ----------- ------------
NETHERLANDS: 4.03%
130,800 130,800 @ ASM Lithography Holding NV 5,771,550 5,771,550
13,560 13,560 Gucci Group NV 1,284,810 1,284,810
48,500 53,000 101,500 Heineken NV 2,951,813 3,225,860 6,177,673
35,800 35,800 Koninklijke Ahold NV 1,053,716 1,053,716
116,200 116,200 Koninklijke Philips Electronics NV 5,519,500 5,519,500
9,200 9,200 @ Qiagen NV 1,624,899 1,624,899
36,500 36,500 Randstad Holdings NV 1,350,304 1,350,304
70,600 70,600 Royal KPN NV 3,157,775 3,157,775
34,620 34,620 Unilever NV - NY Shares 1,588,217 1,588,217
29,200 29,200 VNU NV 1,508,159 1,508,159
------------ ----------- ------------
22,937,716 6,098,887 29,036,603
------------ ----------- ------------
RUSSIA: 0.14%
19,400 19,400 LuKoil-Holding ADR 991,728 991,728
------------ ----------- ------------
SINGAPORE: 0.59%
43,900 43,900 @ Flextronics Int'l, Ltd. 3,015,381 3,015,381
127,000 127,000 Singapore Airlines, Ltd. 1,257,499 1,257,499
------------ ----------- ------------
4,272,880 -- 4,272,880
------------ ----------- ------------
SOUTH KOREA: 0.67%
64,720 64,720 Korea Electric Power Corp. 2,008,307 2,008,307
8,410 8,410 Samsung Electronics 2,783,157 2,783,157
------------ ----------- ------------
4,791,464 -- 4,791,464
------------ ----------- ------------
SPAIN: 1.44%
274,400 274,400 Altadis SA 4,215,092 4,215,092
145,700 145,700 Endesa SA 2,822,335 2,822,335
501 501 @ Telefonica SA ADR 32,095 32,095
154,500 154,500 @ Telefonica SA 3,318,776 3,318,776
------------ ----------- ------------
10,388,298 -- 10,388,298
------------ ----------- ------------
SWEDEN: 3.24%
107,200 107,200 Europolitan Holdings AB 1,330,884 1,330,884
38,200 38,200 @ NetCom AB 2,819,524 2,819,524
303,900 303,900 Nordic Baltic Holding AB 2,291,310 2,291,310
163,400 163,400 Skandia Forsakrings AB 4,316,576 4,316,576
176,000 176,000 Svenska Handelsbanken AB 2,554,195 2,554,195
326,700 64,000 390,700 Telefonaktiebolaget LM Ericsson AB ADR 6,534,000 1,266,357 7,800,357
235,400 235,400 @ Telia AB 2,215,215 2,215,215
------------ ----------- ------------
22,061,704 1,266,357 23,328,061
------------ ----------- ------------
</TABLE>
5
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
As of June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PILGRIM ING PILGRIM ING
WORLDWIDE GLOBAL WORLDWIDE GLOBAL
GROWTH BRAND NAMES PRO FORMA GROWTH BRAND NAMES PRO FORMA
SHARES SHARES SHARES VALUE VALUE VALUE
----------- -------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
SWITZERLAND: 0.90%
800 743 1,543 Nestle SA 1,601,177 1,487,048 3,088,225
23,400 23,400 UBS AG 3,428,309 3,428,309
------------ ----------- ------------
5,029,486 1,487,048 6,516,534
------------ ----------- ------------
UNITED KINGDOM: 7.59%
133,800 133,800 @ ARM Holdings PLC ADR 4,398,675 4,398,675
55,800 55,800 AstraZeneca PLC 2,605,540 2,605,540
395,143 395,143 BAE Systems PLC 2,461,815 2,461,815
422,600 422,600 BG Group PLC 2,723,998 2,723,998
558,500 558,500 Billiton PLC 2,256,327 2,256,327
444,600 444,600 British Airways PLC 2,558,034 2,558,034
144,600 144,600 Cable & Wireless PLC 2,454,872 2,454,872
949,400 949,400 Centrica PLC 3,146,016 3,146,016
60,600 60,600 @ Colt Telecom Group PLC 2,012,680 2,012,680
51,000 51,000 @ Energis PLC 1,901,422 1,901,422
670,200 670,200 Invensys PLC 2,512,382 2,512,382
135,000 135,000 Logica PLC 3,231,528 3,231,528
329,400 329,400 Marconi PLC 4,278,894 4,278,894
58,600 58,600 Pearson PLC 1,839,854 1,839,854
29,700 29,700 Reuters Group PLC ADR 2,968,144 2,968,144
618,171 618,171 Rolls-Royce PLC 2,209,775 2,209,775
148,000 148,000 Royal Bank of Scotland Group PLC 2,467,805 2,467,805
292,600 292,600 Sainsbury (J) PLC 1,323,772 1,323,772
481,600 481,600 Shell Transport & Trading Co. 4,051,622 4,051,622
815,731 815,731 Vodafone AirTouch PLC 3,307,877 3,307,877
------------ ----------- ------------
54,711,032 -- 54,711,032
------------ ----------- ------------
UNITED STATES: 48.28%
55,600 55,600 @ Aether Systems, Inc. 11,398,000 11,398,000
138,400 138,400 Aetna, Inc. 8,883,550 8,883,550
64,300 64,300 @ Amdocs, Ltd. 4,935,025 4,935,025
8,000 8,000 America Online, Inc. 422,000 422,000
34,446 34,446 American Express Company 1,795,498 1,795,498
114,700 114,700 @ Amgen, Inc. 8,057,675 8,057,675
128,000 128,000 @ Applied Materials, Inc. 11,600,000 11,600,000
436,780 436,780 @ AT&T - Liberty Media Group 10,591,915 10,591,915
105,900 105,900 @ Cablevision Systems Corp. 7,187,962 7,187,962
79,200 79,200 @ Ciena Corp. 13,201,650 13,201,650
167,900 12,880 180,780 @ Cisco Systems, Inc. 10,672,144 818,685 11,490,829
185,300 185,300 Citigroup, Inc. 11,164,325 11,164,325
56,000 56,000 Coca-Cola Co. 3,216,500 3,216,500
30,000 30,000 Colgate-Palmolive Co. 1,796,250 1,796,250
29,542 29,542 Compaq Computer Corp. 755,167 755,167
49,800 49,800 Corning, Inc. 13,439,775 13,439,775
187,900 37,000 224,900 @ Dell Computer Corp. 9,265,819 1,824,563 11,090,382
166,000 166,000 Enron Corp. 10,707,000 10,707,000
21,915 21,915 Ford Motor Co. 942,345 942,345
50,200 50,200 @ Genentech, Inc 8,634,400 8,634,400
45,000 45,000 Gillette Co. 1,572,188 1,572,188
106,800 106,800 @ Hughes Electronics Corp. 9,371,700 9,371,700
189,100 189,100 @ Infinity Broadcasting Corp. 6,890,331 6,890,331
102,400 27,000 129,400 Intel Corp. 13,689,600 3,609,563 17,299,163
103,500 103,500 @ JDS Uniphase Corp. 12,407,062 12,407,062
23,000 23,000 Johnson & Johnson 2,343,125 2,343,125
395,300 395,300 MGM Grand, Inc. 12,699,012 12,699,012
63,000 63,000 McDonald's Corp. 2,075,063 2,075,063
46,000 46,000 @ Microsoft Corporation 3,680,000 3,680,000
33,000 33,000 Motorola Inc. 959,063 959,063
178,400 178,400 @ Nextel Communications, Inc. 10,915,850 10,915,850
142,900 142,900 @ Oracle Corp. 12,012,531 12,012,531
45,448 45,448 Pepsico, Inc. 2,019,595 2,019,595
30,038 30,038 Philip Morris Co., Inc. 797,884 797,884
11,362 11,362 Procter & Gamble Company 650,474 650,474
188,400 188,400 @ Qwest Communications Int'l 9,361,125 9,361,125
257,700 257,700 Santa Fe Int'l Corp. 9,461,075 9,461,075
38,700 38,700 Schlumberger, Ltd. 2,887,987 2,887,987
129,300 129,300 @ Sun Microsystems, Inc. 11,758,219 11,758,219
126,600 126,600 Texas Instruments, Inc. 8,695,838 8,695,838
44,000 44,000 The Walt Disney Company 1,707,750 1,707,750
35,880 35,880 Time Warner, Inc. 2,726,880 2,726,880
53,875 53,875 @ VeriSign, Inc. 9,508,938 9,508,938
</TABLE>
6
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
As of June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PILGRIM ING PILGRIM ING
WORLDWIDE GLOBAL WORLDWIDE GLOBAL
GROWTH BRAND NAMES PRO FORMA GROWTH BRAND NAMES PRO FORMA
SHARES SHARES SHARES VALUE VALUE VALUE
----------- -------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
82,200 82,200 @ Veritas Software Corp. 9,289,884 9,289,884
139,500 139,500 @ Viacom, Inc. 9,538,313 9,538,313
2,869 2,869 Visteon Corp. 34,791 34,791
206,500 206,500 Wal-Mart Stores, Inc. 11,899,563 11,899,563
287,000 287,000 @ Weatherford Int'l, Inc. 11,426,188 11,426,188
17,000 17,000 Wrigley (WM) JR Co. 1,363,187 1,363,187
9,000 9,000 Yahoo, Inc. 1,114,875 1,114,875
------------ ----------- ------------
311,552,456 36,225,446 347,777,902
------------ ----------- ------------
TOTAL COMMON STOCKS (COST $513,051,880,
$51,094,260, $564,146,140) 637,410,172 59,073,328 696,483,500
------------ ----------- ------------
PREFERRED STOCKS: 0.23%
BRAZIL: 0.23% --
193,648 193,648 Banco Bradesco SA 1,685,761 1,685,761
------------ ----------- ------------
TOTAL PREFERRED STOCKS (COST $1,558,209,
$0, $1,558,209) 1,685,761 -- 1,685,761
------------ ----------- ------------
TOTAL LONG-TERM INVESTMENTS (COST $514,610,089,
$51,094,260, $565,704,349) 639,095,933 59,073,328 698,169,261
------------ ----------- ------------
PRINCIPAL AMOUNT SHORT-TERM INVESTMENTS
------------------------------------- REPURCHASE AGREEMENTS: 3.93%
$27,281,000 $ 27,281,000 State Street Repurchase Agreement,
6.20% due 07/03/00 27,281,000 27,281,000
State Street Repurchase Agreement,
$1,036,000 1,036,000 6.43% due 07/03/00 1,036,000 1,036,000
------------ ----------- ------------
TOTAL SHORT-TERM INVESTMENTS (COST $27,281,000,
$1,036,000, $28,317,000) 27,281,000 1,036,000 28,317,000
------------ ----------- ------------
TOTAL INVESTMENTS IN SECURITIES
(COST $541,891,089, $52,130,260,
$594,021,349) 100.84% 666,376,933 60,109,328 726,486,261
OTHER ASSETS AND LIABILITIES-NET -0.84% (6,197,663) 171,807 (6,025,856)
------ ------------ ----------- ------------
NET ASSETS 100.00% 660,179,270 60,281,135 720,460,405
====== ============ =========== ============
</TABLE>
@ Non-income producing security
ADR - American Depository Receipt
See Accompanying Notes to Financial Statements
7
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF COMBINATION:
On November 2, 2000, the Board of Pilgrim Worldwide Growth Fund ("Worldwide
Growth Fund") and on November 16, 2000 the Board of ING Global Brand Names Fund
("Global Brand Names Fund"), approved an Agreement and Plan of Reorganization
(the "Plan") whereby, subject to approval by the shareholders of Global Brand
Names Fund, Worldwide Growth Fund will acquire all the assets of Global Brand
Names 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 Worldwide Growth 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 statement of assets and liabilities reflect the financial
position of Worldwide Growth Fund and Global Brand Names Fund at June 30, 2000.
The unaudited pro forma statement of operations reflects the results of
operations of Worldwide Growth Fund and Global Brand Names Fund for the year
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 Worldwide Growth Fund and Global Brand Names 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 Worldwide Growth 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.
8
<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 beneficial interest issued in connection with the proposed acquisition of
Global Brand Names Fund by Worldwide Growth 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 Brand Names Fund by the respective Class net asset value
per share of Worldwide Growth 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 Brand
Names Fund expenses were adjusted assuming Worldwide Growth 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.
9
<PAGE>
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Article 5.2 of the Amended and Restated Declaration of Trust provides for
the indemnification of Registrant's trustees, officers, employees and agents
against liabilities incurred by them in connection with the defense or
disposition of any action or proceeding in which they may be involved or with
which they may be threatened, while in office or thereafter, by reason of being
or having been in such office, except with respect to matters as to which it has
been determined that they acted with willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of their
office ("disabling conduct").
Section 8 of Registrant's Administration Agreement provides for the
indemnification of Registrant's Administrator against all liabilities incurred
by it in performing its obligations under the agreement, except with respect to
matters involving its disabling conduct. Section 9 of Registrant's Distribution
Agreement provides for the indemnification of Registrant's Distributor against
all liabilities incurred by it in performing its obligations under the
Agreement, except with respect to matters involving its disabling conduct.
Section 4 of the Shareholder Service Agreement provides for the indemnification
of Registrant's Distributor against all liabilities incurred by it in performing
its obligations under the Agreement, except with respect to matters involving
its disabling conduct.
Registrant has obtained from a major insurance carrier a trustees' and
officers' liability policy covering certain types of errors and omissions.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the 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 issue.
ITEM 16. EXHIBITS
(1) (A) Form of Certificate of Trust of Registrant - Filed as an exhibit to
Post-Effective Amendment No. 30 to the Registrant's Form N-1A
Registration Statement on June 4, 1996 and incorporated herein by
reference.
1
<PAGE>
(B) Form of Certificate of Amendment of Certificate of Trust - Filed as an
exhibit to Post-Effective Amendment No. 30 to the Registrant's Form
N-1A Registration Statement on June 4, 1996 and incorporated herein by
reference.
(C) Form of Amended and Restated Declaration of Trust - Filed as an
exhibit to Post-Effective Amendment No. 30 to the Registrant's Form
N-1A Registration Statement on June 4, 1996 and incorporated herein by
reference.
(D) Form of Establishment of Additional Series - Filed as an exhibit to
Post-Effective Amendment No. 30 to the Registrant's Form N-1A
Registration Statement on June 4, 1996 and incorporated herein by
reference.
(E) Form of Establishment of Additional Series- Filed as an exhibit to
Post-Effective Amendment No. 30 to the Registrant's Form N-1A
Registration Statement on June 4, 1996 and incorporated herein by
reference.
(F) Form of Amendment No. 2 to Amended and Restated Declaration of Trust -
Filed as an exhibit to Post-Effective Amendment No. 30 to the
Registrant's Form N-1A Registration Statement on June 4, 1996 and
incorporated herein by reference.
(G) Form of Amendment No. 3 to Amended and Restated Declaration of Trust -
Filed as an exhibit to Post-Effective Amendment No. 30 to the
Registrant's Form N-1A Registration Statement on June 4, 1996 and
incorporated herein by reference.
(H) Form of Amendment No. 4 to Amended and Restated Declaration of Trust -
Filed as an exhibit to Post-Effective Amendment No. 30 to the
Registrant's Form N-1A Registration Statement on June 4, 1996 and
incorporated herein by reference.
(I) Form of Amendment No. 5 to Amended and Restated Declaration of Trust -
Filed as an exhibit to Post-Effective Amendment No. 30 to the
Registrant's Form N-1A Registration Statement on June 4, 1996 and
incorporated herein by reference.
(J) Form of Amendment No. 6 to Amended and Restated Declaration of Trust -
Filed as an exhibit to Post-Effective Amendment No. 30 to the
Registrant's Form N-1A Registration Statement on June 4, 1996 and
incorporated herein by reference.
(K) Form of Amendment No. 7 to Amended and Restated Declaration of Trust -
Filed as an exhibit to Post-Effective Amendment No. 30 to the
Registrant's Form N-1A Registration Statement on June 4, 1996 and
incorporated herein by reference.
(L) Form of Amendment No. 8 to Amended and Restated Declaration of Trust -
Filed as an exhibit to Post-Effective Amendment No. 30 to the
Registrant's Form N-1A Registration Statement on June 4, 1996 and
incorporated herein by reference.
(M) Form of Amendment No. 9 to Amended and Restated Declaration of Trust -
Filed as an exhibit to Post-Effective Amendment No. 30 to the
Registrant's Form N-1A Registration Statement on June 4, 1996 and
incorporated herein by reference.
(N) Form of Amendment No. 10 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 29 to
Registrant's Form N-1A Registration Statement on May 3, 1996 and
incorporated herein by reference.
(O) Form of Amendment No. 11 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 38 to
Registrants Form N-1A Registration Statement of January 3, 1997 and
incorporated herein by reference.
2
<PAGE>
(P) Form of Amendment No. 12 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 38 to
Registrants Form N-1A Registration Statement of January 3, 1997 and
incorporated herein by reference.
(Q) Form of Amendment No. 13 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 30 to the
Registrant's Form N-1A Registration Statement on June 4, 1996 and
incorporated herein by reference.
(R) Form of Amendment No. 14 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 40 to
Registrants form N-1A Registration Statement on May 2, 1997 and
incorporated herein by reference.
(S) Form of Amendment No. 15 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 43 to
Registrant's Form N-1A Registration Statement on July 14, 1997 and
incorporated herein by reference.
(T) Form of Amendment No. 16 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 48 to
Registrant's Form N-1A Registration Statement on December 15, 1997 and
incorporated herein by reference.
(U) Form of Amendment No. 17 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 48 to
Registrant's Form N-1A Registration Statement on December 15, 1997 and
incorporated herein by reference.
(V) Form of Amendment No. 18 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 48 to
Registrant's Form N-1A Registration Statement on December 15, 1997 and
incorporated herein by reference.
(W) Form of Amendment No. 19 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 63 to
Registrant's Form N-1A Registration Statement on July 21, 1998 and
incorporated herein by reference.
(X) Form of Amendment No. 20 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 63 to
Registrant's Form N-1A Registration Statement on July 21, 1998 and
incorporated herein by reference.
(Y) Form of Amendment No. 21 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 66 to
Registrant's Form N-1A Registration Statement on August 14, 1998 and
incorporated herein by reference.
(Z) Form of Certificate of Amendment to Certificate of Trust - Filed as an
exhibit to Post-Effective Amendment No. 67 to the Registrant's Form
N-1A Registration Statement on March 25, 1999 and incorporated herein
by reference.
(AA) Form of Amendment No. 22 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 67 to the
Registrant's Form N-1A Registration Statement on March 25, 1999 and
incorporated herein by reference.
(BB) Form of Amendment No. 23 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 68 to the
Registrant's Form N-1A Registration Statement on May 24, 1999 and
incorporated herein by reference.
(CC) Form of Amendment No. 24 to Amended and Restated Declaration of Trust
- Filed as an exhibit to Post-Effective Amendment No. 75 to the
Registrant's Form N-1A Registration Statement on January 4, 2000 and
incorporated herein by reference.
3
<PAGE>
(2) (A) Form of Amended Bylaws of Registrant - Filed as an exhibit to
Post-Effective Amendment No. 30 to the Registrant's Form N-1A
Registration Statement on June 4, 1996 and incorporated herein by
reference.
(B) Form of Amendment to Section 2.5 of Bylaws of Registrant - Filed as an
exhibit to Post-Effective Amendment No. 30 to the Registrant's Form
N-1A Registration Statement on June 4, 1996 and incorporated herein by
reference.
(3) Not Applicable
(4) Form of Agreement and Plan of Reorganization between Pilgrim Mutual Funds
on behalf of Pilgrim Worldwide Growth Fund, and ING Funds Trust on behalf
of ING Global Brand Names Fund.
(5) Not Applicable.
(6) Form of Investment Management Agreement between the Trust and Pilgrim
Investments, Inc.- Filed as an exhibit to Post-Effeective Amendment No. 80
to the Registrant's Form N-1A Registration Statement as filed on November
1, 2000 and incorporated herein by reference.
(7) Form of Underwriting Agreement between the Trust and Pilgrim Securities,
Inc.- Filed as an exhibit to the Registrant's Form N-14 Registration
Statement as filed on November 29, 2000 and incorporated herein by
reference.
(8) Not Applicable.
(9) (A) Form of Custodian Agreement between Registrant and Brown Brothers
Harriman & Co. dated as of June 1, 1998. - Filed as an exhibit to
Post-Effective Amendment No. 66 to Registrant's Form N-1A Registration
Statement on August 14, 1998 and incorporated herein by reference.
(B) Form of Amendment to Custodian Agreement between Registrant and Brown
Brothers Harriman & Co. - Filed as an exhibit to Post-Effective
Amendment No. 66 to Registrant's Form N-1A Registration Statement on
August 14, 1998 and incorporated herein by reference.
(C) Form of Foreign Custody Manager Delegation Agreement between
Registrant and Brown Brothers Harriman & Co. dated as of June 1, 1998
- Filed as an exhibit to Post-Effective Amendment No. 66 to
Registrant's Form N-1A Registration Statement on August 14, 1998 and
incorporated herein by reference.
(D) Form of Novation Agreement to Custody Agreement with Brown Brothers
Harriman & Co. - Filed as an exhibit to Post-Effective Amendment No.
68 to the Registrant's Form N-1A Registration Statement on May 24,
1999 and incorporated herein by reference.
(E) Form of Appendix C to Custody Agreement with Brown Brothers Harriman &
Co. - Filed as an exhibit to Post-Effective Amendment No. 68 to the
Registrant's Form N-1A Registration Statement on May 24, 1999 and
incorporated herein by reference.
(F) Form of Novation Agreement to Foreign Custody Manager Delegation
Agreement with Brown Brothers Harriman & Co. - Filed as an exhibit to
Post-Effective Amendment No. 68 to the Registrant's Form N-1A
Registration Statement on May 24, 1999 and incorporated herein by
reference.
4
<PAGE>
(G) Form of Appendix C to Foreign Custody Manager Delegation Agreement
with Brown Brothers Harriman & Co. - Filed as an exhibit to
Post-Effective Amendment No. 68 to the Registrant's Form N-1A
Registration Statement on May 24, 1999 and incorporated herein by
reference.
(H) Form of Custodian Agreement with Investors Fiduciary Trust Company -
Filed as an exhibit to Post-Effective Amendment No. 68 to the
Registrant's Form N-1A Registration Statement on May 24, 1999 and
incorporated herein by reference.
(10) (A) Form of Amended and Restated Service and Distribution Plan for Class A
- Filed as an exhibit to Post-Effective Amendment No. 67 to the
Registrant's Form N-1A Registration Statement on March 25, 1999 and
incorporated herein by reference.
(B) Form of Amended and Restated Service and Distribution Plan for Class B
- Filed as an exhibit to Post-Effective Amendment No. 67 to the
Registrant's Form N-1A Registration Statement on March 25, 1999 and
incorporated herein by reference.
(C) Form of Amended and Restated Service and Distribution Plan for Class C
- Filed as an exhibit to Post-Effective Amendment No. 67 to the
Registrant's Form N-1A Registration Statement on March 25, 1999 and
incorporated herein by reference.
(D) Form of Amended and Restated Service Plan for Class Q - Filed as an
exhibit to Post-Effective Amendment No. 67 to the Registrant's Form
N-1A Registration Statement on March 25, 1999 and incorporated herein
by reference.
(E) Form of Amendment to Amended and Restated Service and Distribution
Plan for Class B - Filed as an exhibit to Post-Effective Amendment No.
68 to the Registrant's Form N-1A Registration Statement on May 24,
1999 and incorporated herein by reference.
(F) Form of Amendment to Amended and Restated Service and Distribution
Plan for Class C - Filed as an exhibit to Post-Effective Amendment No.
68 to the Registrant's Form N-1A Registration Statement on May 24,
1999 and incorporated herein by reference.
(G) Form of Amendment to Amended and Restated Service and Distribution
Plan for Class A - Filed as an exhibit to Post-Effective Amendment No.
73 to the Registrant's Form N-1A Registration Statement on October 29,
1999 and incorporated herein by reference.
(H) Form of Amendment to Amended and Restated Service and Distribution
Plan for Class T - Filed as an exhibit to Post-Effective Amendment No.
74 to the Registrant's Form N-1A Registration Statement on November 5,
1999 and incorporated herein by reference.
(I) Form of Multiple Class Plan Pursuant to Rule 18f-3 - Filed as an
exhibit to Post-Effective Amendment No. 74 to the Registrant's Form
N-1A Registration Statement on November 5, 1999 and incorporated
herein by reference.
(11) Form of Opinion and Consent of Counsel
(12) Form of Opinion and Consent of Counsel supporting tax matters and
consequences
(13) (A) Form of Administration Agreement - Filed as an exhibit to
Post-Effective Amendment No. 68 to the Registrant's Form N-1A
Registration Statement on May 24, 1999 and incorporated herein by
reference.
(B) Form of Agency Agreement - Filed as an exhibit to Post-Effective
Amendment No. 68 to the Registrant's Form N-1A Registration Statement
on May 24, 1999 and incorporated herein by reference.
5
<PAGE>
(C) Form of Shareholder Service Agreement - Filed as an exhibit to
Post-Effective Amendment No. 68 to the Registrant's Form N-1A
Registration Statement on May 24, 1999 and incorporated herein by
reference.
(D) Form of Expense Limitation Agreement - Filed as an exhibit to
Post-Effective Amendment No. 68 to the Registrant's Form N-1A
Registration Statement on May 24, 1999 and incorporated herein by
reference.
(E) Form of Recordkeeping Agreement - Filed as an exhibit to
Post-Effective Amendment No. 68 to the Registrant's Form N-1A
Registration Statement on May 24, 1999 and incorporated herein by
reference.
(F) Form of Expense Limitation Agreement pertaining to Money Market Fund -
Filed as an exhibit to Post-Effective Amendment No. 71 to the
Registrant's Form N-1A Registration Statement on July 1, 1999 and
incorporated herein by reference.
(G) Form of Agreement among Reserve Institutional Trust; Reserve
Management Company, Inc.; Reserve Partners, Inc.; Pilgrim Mutual
Funds; Pilgrim Investments, Inc. with Pilgrim Securities, Inc. - Filed
as an exhibit to Post-Effective Amendment No. 71 to the Registrant's
Form N-1A Registration Statement on July 1, 1999 and incorporated
herein by reference.
(H) Form of Amended and Restated Expense Limitation Agreement - Filed as
an exhibit to Post-Effective Amendment No. 75 to the Registrant's Form
N-1A Registration Statement on January 4, 2000 and incorporated herein
by reference.
(14) Consents of Independent Auditors
(15) Not Applicable.
(16) Powers of Attorney
(17) Not Applicable
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.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement on Form N-14 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Scottsdale and State of Arizona on the 18th day of December, 2000.
PILGRIM MUTUAL FUNDS
By: /s/ James M. Hennessy
------------------------------------
James M. Hennessy
Senior Executive Vice President &
Secretary
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ John G. Turner Trustee and Chairman December 18, 2000
-----------------------------
John G. Turner*
/s/ Robert W. Stallings Trustee and President December 18, 2000
----------------------------- (Chief Executive Officer)
Robert W. Stallings*
/s/ Al Burton Trustee December 18, 2000
-----------------------------
Al Burton*
/s/ Paul S. Doherty Trustee December 18, 2000
-----------------------------
Paul S. Doherty*
/s/ Robert B. Goode Trustee December 18, 2000
-----------------------------
Robert B. Goode*
/s/ Alan L. Gosule Trustee December 18, 2000
-----------------------------
Alan L. Gosule*
7
<PAGE>
/s/ Walter H. May Trustee December 18, 2000
-----------------------------
Walter H. May*
/s/ Jock Patton Trustee December 18, 2000
-----------------------------
Jock Patton*
/s/ David W.C. Putnam Trustee December 18, 2000
-----------------------------
David W.C. Putnam
/s/ John R. Smith Trustee December 18, 2000
-----------------------------
John R. Smith*
/s/ David W. Wallace Trustee December 18, 2000
-----------------------------
David W. Wallace*
/s/ Michael J. Roland Senior Vice President December 18, 2000
----------------------------- and Principal Financial
Michael J. Roland* Officer
* By: /s/ James M. Hennessy
-------------------------
James M. Hennessy
Attorney-in-Fact**
** Executed pursuant to powers of attorney filed herewith.
8
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Robert W. Stallings, James M. Hennessy, Jeffrey S. Puretz and Karen L.
Anderberg, and each of them his true and lawful attorney-in-fact as agent with
full power of substitution and resubstitution of him in his name, place, and
stead, to sign any and all registration statements on Form N-14 applicable to
Pilgrim Mutual Funds and any amendment or supplement thereto, and to file the
same with all exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.
Dated: November 10, 2000
/s/ John G. Turner /s/ Alan L. Gosule
----------------------------------- ----------------------------------------
John G. Turner Alan L. Gosule
/s/ Robert W. Stallings /s/ Walter H. May
----------------------------------- ----------------------------------------
Robert W. Stallings Walter H. May
/s/ Al Burton /s/ Jock Patton
----------------------------------- ----------------------------------------
Al Burton Jock Patton
/s/ Paul S. Doherty /s/ David W.C. Putnam
----------------------------------- ----------------------------------------
Paul S. Doherty David W.C. Putnam
/s/ Robert B. Goode, Jr. /s/ John R. Smith
----------------------------------- ----------------------------------------
Robert B. Goode, Jr. John R. Smith
/s/ David W. Wallace
-----------------------------------
David W. Wallace
10
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Robert W. Stallings, James M. Hennessy, Jeffrey S. Puretz and Karen L.
Anderberg, and each of them his true and lawful attorney-in-fact as agent with
full power of substitution and resubstitution of him in his name, place, and
stead, to sign any and all registration statements on Form N-14 applicable to
the Pilgrim Mutual Funds and any amendment or supplement thereto, and to file
the same with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.
Dated: November 14, 2000 /s/ Michael J. Roland
----------------------------------------
Michael J. Roland
11
<PAGE>
EXHIBIT INDEX
(4) Form of Agreement and Plan of Reorganization between Pilgrim Mutual Funds
on behalf of Pilgrim Worldwide Growth Fund, and ING Funds Trust on behalf
of ING Global Brand Names Fund.
(11) Form of Opinion and Consent of Counsel
(12) Form of Opinion and Consent of Counsel supporting tax matters and
consequences
(14) Consents of Independent Auditors
12
<PAGE>
ING GLOBAL BRAND NAMES FUND
(a series of ING Funds Trust)
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS ON ________ ___, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoint(s) [_________________] and [_______________] or
any one or more of them, proxies, with full power of substitution, to vote all
shares of the ING Global Brand Names 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 February ___, 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 TRUSTEES 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 Class A, Class B, and Class C shares of ING
Global Brand Names Fund by Pilgrim Worldwide Growth Fund in exchange for Class
A, Class B, and Class C shares of beneficial interest of Pilgrim Worldwide
Growth Fund, respectively, and the assumption by Pilgrim Worldwide Growth Fund
of all of the liabilities of ING Global Brand Names 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
-------------------------------- --------------
Signature (if held jointly) Date
