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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
ING PRIME RATE TRUST
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
ING PRIME RATE TRUST
7337 E. DOUBLETREE RANCH ROAD
SCOTTSDALE, ARIZONA 85258-2034
(800) 992-0180
April 26, 2004
Dear Shareholder:
On behalf of the Board of Trustees of ING Prime Rate Trust (the "Trust"),
we are pleased to invite you to the annual meeting of shareholders (the "Annual
Meeting"), to be held at 10:00 a.m., local time, on June 15, 2004 at 7337 E.
Doubletree Ranch Road, Scottsdale, Arizona 85258-2034. Formal notice of the
Annual Meeting appears on the next page, followed by the Proxy Statement. Please
take the time to read the Proxy Statement and cast your vote, since it covers
matters that are important to the Trust and to you as a shareholder.
At the Annual Meeting, you will be asked to consider and vote on the following
matters:
1. To elect nine members of the Board of Trustees to represent the
interests of the holders of Common Shares of the Trust until the
election and qualification of their successors.
2. To elect two members of the Board of Trustees to represent the
interests of the holders of Auction Rate Cumulative Preferred Shares
- Series M, T, W, TH and F of the Trust - until the election and
qualification of their successors.
Each proposal is discussed in detail in the enclosed Proxy Statement,
which you should read carefully. The Board of Trustees has concluded that the
proposals are in the best interests of the Trust and its shareholders and
recommend that you vote "FOR" each of the proposals. We are asking you to
consider them carefully and express your vote on the enclosed Proxy Ballot or at
the Annual Meeting.
We look forward to your attendance at the Annual Meeting or to receiving
your Proxy Ballot so that your shares may be voted at the Annual Meeting. If you
have any questions, please do not hesitate to call us at 1-800-992-0180.
Sincerely,
/s/ James M. Hennessy
James M. Hennessy
President and Chief Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
ING PRIME RATE TRUST
To Shareholders:
PLEASE TAKE NOTE THAT the annual meeting of shareholders (the "Annual Meeting")
of ING Prime Rate Trust (the "Trust") will be held at 10:00 a.m., local time, on
June 15, 2004, at 7337 E. Doubletree Ranch Road, Scottsdale, Arizona 85258-2034,
for the following purposes:
1. To elect nine members of the Board of Trustees to represent the
interests of the holders of Common Shares of the Trust until the
election and qualification of their successors.
2. To elect two members of the Board of Trustees to represent the
interests of the holders of Auction Rate Cumulative Preferred Shares
- Series M, T, W, TH and F of the Trust - until the election and
qualification of their successors.
3. To transact such other business, not currently contemplated, that
may properly come before the Annual Meeting or any adjournment(s) or
postponement(s) thereof in the discretion of the proxies or their
substitutes.
Please read the enclosed Proxy Statement carefully for information concerning
the proposals to be placed before the Annual Meeting.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN
FAVOR OF THE PROPOSALS.
Shareholders of record as of the close of business on March 24, 2004 are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment(s)
or postponement(s) thereof.
By Order of the Board of Trustees,
/s/ Huey P. Falgout, Jr.
Huey P. Falgout, Jr.
Secretary
April 26, 2004
YOUR VOTE IS IMPORTANT REGARDLESS OF
THE NUMBER OF SHARES YOU OWN.
PLEASE VOTE VIA THE INTERNET, BY TELEPHONE OR BY
RETURNING YOUR PROXY BALLOT TODAY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
YOU MAY ALSO VOTE IN PERSON AT THE ANNUAL MEETING.
PROXY STATEMENT
ING PRIME RATE TRUST
APRIL 26, 2004
TOLL-FREE: (800) 992-0180
7337 E. DOUBLETREE RANCH ROAD
SCOTTSDALE, ARIZONA 85258-2034
------------------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 15, 2004
------------------------------------------------------------------------------
WHO IS ASKING FOR MY VOTE?
The Board of Trustees (the "Board") of ING Prime Rate Trust (the "Trust")
is sending this Proxy Statement, the attached Notice of Annual Meeting, and the
enclosed Proxy Ballot on or about April 26, 2004 to you and all other
shareholders. The Board is soliciting your vote for the annual meeting of
shareholders of the Trust (the "Annual Meeting").
WHAT ARE THE PROPOSALS AND WHO CAN VOTE ON EACH PROPOSAL?
The following table gives a brief description of each Proposal and indicates
which class of shares is being solicited with respect to each Proposal to be
considered at the Annual Meeting.
HOLDERS OF HOLDERS OF
PROPOSAL COMMON SHARES PREFERRED SHARES
-------- ------------- ----------------
1. To elect nine members of the Board to represent the Yes No
interests of the holders of Common Shares of the
Trust until the election and qualification of their
successors.
2. To elect two members of the Board to represent the No Yes
interests of the holders of the Auction Rate
Cumulative Preferred Shares - Series M, T, W, TH
and F of the Trust - until the election and
qualification of their successors.
WHY DID YOU SEND ME THIS BOOKLET?
This booklet is a Proxy Statement. It provides you with information you
should review before voting on the matters listed above and in the Notice of
Annual Meeting for the Trust.
1
You are receiving these proxy materials -- a booklet that includes the Proxy
Statement and one Proxy Ballot -- because you have the right to vote on the
important Proposals concerning your investment in the Trust.
WHO IS ELIGIBLE TO VOTE?
Shareholders who owned shares in the Trust at the close of business on
March 24, 2004 (the "Record Date") are eligible to vote. As of the Record Date,
the Trust had 156,427,661.235 Common Shares outstanding. As of the Record Date,
the Trust had the following Auction Rate Cumulative Preferred Shares ("Preferred
Shares") outstanding: 3,600 shares of Series M; 3,600 shares of Series T; 3,600
shares of Series W; 3,600 shares of Series TH and 3,600 shares of Series F. Each
Common Share is entitled to one vote on Proposal 1. Each Preferred Share is
entitled to one vote on Proposal 2. To the best of the Trust's knowledge, as of
April 5, 2004, no person owned beneficially more than 5% of any class of shares
of the Trust.
The word "you" is used in this Proxy Statement to refer to the person or
entity who owns the shares and who accordingly has voting rights in connection
with the shares.
HOW DO I VOTE?
Shareholders can vote by completing, signing and returning the enclosed
Proxy Ballot promptly in the enclosed envelope, through telephone touch-tone
voting, via Internet voting, or by attending the Special Meeting in person and
voting. To vote by phone or Internet, follow the voting instructions outlined on
your Proxy Ballot. In addition to solicitation by mail, certain officers and
representatives of the Trust, officers and employees of ING Investments LLC
("Adviser") (Address: 7337 E. Doubletree Ranch Rd., Scottsdale, Arizona
85258-2160), the investment adviser to the Trust, or its affiliates and certain
financial services firms and their representatives, who will receive no extra
compensation for their services, may solicit proxies by telephone, telegram,
facsimile, or oral communication. Shareholders of the Trust whose shares are
held by nominees, such as brokers, can vote their proxies by contacting their
respective nominee. If a shareholder wishes to participate in the Annual
Meeting, but does not wish to give a proxy by telephone, the shareholder may
still submit the Proxy Ballot(s) originally sent with the Proxy Statement or
attend in person.
WHEN AND WHERE WILL THE ANNUAL MEETING BE HELD?
The Annual Meeting will be held at 7337 E. Doubletree Ranch Road,
Scottsdale, Arizona 85258-2034, on June 15, 2004, at 10:00 a.m., local time,
and, if the Annual Meeting is adjourned or postponed, at any adjournment or
postponement of that Meeting. If you expect to attend the Annual Meeting in
person, please notify the Trust by calling 1-800-992-0180.
CAN I REVOKE MY PROXY AFTER I VOTE IT?
A shareholder may revoke the accompanying proxy at any time prior to its
use by filing with the Trust a written revocation or duly executed Proxy Ballot
bearing a later date. In addition, any shareholder who attends the Annual
Meeting in person may vote by ballot at the Annual Meeting, thereby canceling
any proxy previously given. The persons named in the accompanying proxy will
vote as directed by the proxy, but in the absence of voting directions in
2
any proxy that is signed and returned, they intend to vote "FOR" each of the
Proposals and may vote in their discretion with respect to other matters not now
known to the Board that may be presented at the Annual Meeting.
WHO PAYS FOR THIS PROXY SOLICITATION?
The Trust will pay the expenses incurred in connection with the Notice of
Annual Meeting, Proxy Statement and the Annual Meeting, including printing,
mailing, solicitation and vote tabulation expenses, legal fees, and out of
pocket expenses.
HOW CAN I OBTAIN MORE INFORMATION ABOUT THE TRUST?
COPIES OF THE TRUST'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED FEBRUARY 29,
2004 AND THE TRUST'S SEMI-ANNUAL REPORT FOR THE PERIOD ENDED AUGUST 31, 2003 ARE
AVAILABLE UPON REQUEST, WITHOUT CHARGE, BY WRITING TO: THE ING FUNDS, 7337 E.
DOUBLETREE RANCH ROAD, SCOTTSDALE, ARIZONA, 85258-2034, ATTENTION: LITERATURE
FULFILLMENT, OR BY CALLING 1-800-992-0180. THIS PROXY STATEMENT SHOULD BE READ
IN CONJUNCTION WITH THE ANNUAL AND SEMI-ANNUAL REPORTS.
HOW DOES THE BOARD RECOMMEND THAT I VOTE?
The Board recommends that shareholders vote "FOR" each of the Proposals
described in this Proxy Statement.
3
PROPOSAL 1
ELECTION OF TRUSTEES -- COMMON SHARES
WHAT IS THE PROPOSAL?
The Board has nominated nine individuals for election to the Board as
Trustees of the Common Shares (the "Common Nominees"). Holders of Common Shares
are asked to elect the Common Nominees to serve as Trustees, each to serve until
his or her successor is duly elected and qualified. Information about each
Common Nominee is set forth below. All of the Common Nominees are currently
Trustees of the Trust and each has consented to continue to serve as a Trustee
if reelected by holders of Common Shares.
WHAT FACTORS DID THE BOARD CONSIDER IN SELECTING THE COMMON NOMINEES?
The Board nominated all of the individuals who currently serve as Trustees
of the Common Shares of the Trust. The Board met to discuss Board candidates
and, after due consideration, recommend to shareholders the Common Nominees
indicated below. In making such recommendation, the Board took into
consideration the knowledge, background, and experience of the Common Nominees.
WHAT IS THE REQUIRED VOTE?
The affirmative vote of a plurality of the Common Shares of the Trust
present in person or by proxy at the Annual Meeting is required to approve the
election of each Common Nominee to the Board.
WHO ARE THE COMMON NOMINEES?
For election of Trustees at the Annual Meeting, the Board has approved the
nomination of:
Paul S. Doherty
J. Michael Earley
R. Barbara Gitenstein
Thomas J. McInerney
David W.C. Putnam
Blaine E. Rieke
John G. Turner
Roger B. Vincent
Richard A. Wedemeyer
The persons named as proxies will vote for election of each of these
Common Nominees unless you withhold authority to vote for any or all of them on
the enclosed Proxy Ballot. If any or all of the Common Nominees should become
unavailable for election due to events not now known or anticipated, the persons
named as proxies will vote for such other nominee or nominees as the current
Trustees may recommend or the Board may reduce the number of
4
Trustees as provided for in the Trust's Agreement and Declaration of Trust dated
December 2, 1987, as amended (the "Declaration").
No Common Nominee is a party adverse to the Trust or any of its affiliates
in any material pending legal proceeding, nor does any Common Nominee have an
interest materially adverse to the Trust.
The following table sets forth information concerning the Common Nominees.
The address for each Common Nominee is 7337 E. Doubletree Ranch Road,
Scottsdale, Arizona 85258-2034.
NUMBER OF
TERM OF PORTFOLIOS
OFFICE AND IN FUND
POSITION(S) LENGTH OF COMPLEX
NAME AND HELD WITH TIME PRINCIPAL OCCUPATION(S) - OVERSEEN OTHER DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED(1) DURING THE PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
------------- ----- --------- ----------------------- ---------- ---------------
INDEPENDENT TRUSTEES
PAUL S. DOHERTY Trustee October President and Partner, Doherty, 122
Date of Birth: 1999 - Wallace, Pillsbury and Murphy,
04/28/1934 Present P.C., Attorneys (1996 - Present);
and Trustee of each of the funds
managed by Northstar Investment
Management Corporation (1993 -
1999).
J. MICHAEL EARLEY Trustee February President and Chief Executive 122
Date of Birth: 2002 - Officer, Bankers Trust Company,
05/02/1945 Present N.A. (1992 - Present).
R. BARBARA GITENSTEIN Trustee February President, College of New Jersey 122
Date of Birth: 2002 - (1999 - Present).
02/18/1948 Present
DAVID W.C. PUTNAM Trustee October President and Director, F.L. 122 Anchor International Bond
Date of Birth: 1999 - Putnam Securities Company, Inc. Trust (December 2000 -
10/08/1939 Present and its affiliates (1978 - Present); F.L. Putnam
Present); President, Secretary Foundation (December 2000
and Trustee, The Principled - 2002); Progressive
Equity Market Fund (1999 - Capital Accumulation Trust
Present). (August 1998 - Present);
Principled Equity Market
Fund (November 1996 -
Present), Mercy Endowment
Foundation (1995 -
Present); Director, F.L.
Putnam Investment
Management Company
(December 2001 - Present);
Asian American Bank and
Trust Company (June 1992 -
Present); and Notre Dame
Health Care Center (1991 -
Present) F.L. Putnam
Securities Company, Inc.
(June 1978 - Present); and
an Honorary Trustee, Mercy
Hospital (1973 - Present).
5
NUMBER OF
TERM OF PORTFOLIOS
OFFICE AND IN FUND
POSITION(S) LENGTH OF COMPLEX
NAME AND HELD WITH TIME PRINCIPAL OCCUPATION(S) - OVERSEEN OTHER DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED(1) DURING THE PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
------------- ----- --------- ----------------------- ---------- ---------------
BLAINE E. RIEKE Trustee February General Partner, Huntington 122
Date of Birth: 2001 - Partners (January 1997 -
09/10/1933 Present Present). Chairman of the Board
and Trustee of each of the funds
managed by ING Investment
Management Co. LLC (November 1998
- February 2001).
ROGER B. VINCENT Trustee February President, Springwell Corporation 122 Director, AmeriGas
Date of Birth: 2002 - (1989 - Present). Formerly, Propane, Inc. (1998 -
08/26/1945 Present Director, Tatham Offshore, Inc. Present).
(1996 - 2000).
RICHARD A. WEDEMEYER Trustee February Retired. Formerly Vice President 122 Trustee Touchstone
Date of Birth: 2001 - - Finance and Administration, Consulting Group (1997 -
03/23/1936 Present Channel Corporation (June 1996 - Present).
April 2002). Trustee, First
Choice Funds (1997 - 2001); and
of each of the funds managed by
ING Investment Management Co. LLC
(1998 - 2001).
TRUSTEES WHO ARE "INTERESTED PERSONS"
THOMAS J. MCINERNEY(2) Trustee February Chief Executive Officer, ING U.S. 175 Director, Hemisphere, Inc.
Date of Birth: 2001 - Financial Services (September (May 2003 - Present);
05/05/1956 Present 2001 - Present); General Manager Director/Trustee Equitable
and Chief Executive Officer, ING Life Insurance Co., Golden
U.S. Worksite Financial Services American Life Insurance
(December 2000 - Present); Co., Life Insurance
Member, ING Americas Executive Company of Georgia,
Committee (2001 - Present); Midwestern United Life
President, Chief Executive Insurance Co., ReliaStar
Officer and Director of Northern Life Insurance Co.,
Life Insurance Company (March Security Life of Denver,
2001 - October 2002), ING Aeltus Security Connecticut Life
Holding Company, Inc. (2000 - Insurance Co., Southland
Present), ING Retail Holding Life Insurance Co., USG
Company (1998 - Present), ING Annuity and Life Company,
Life Insurance and Annuity and United Life and
Company (September 1997 - Annuity Insurance Co. Inc
November 2002) and ING Retirement (March 2001 - Present);
Holdings, Inc. (1997 - Present). Director, Ameribest Life
Formerly, General Manager and Insurance Co., (March 2001
Chief Executive Officer, ING - January 2003); Director,
Worksite Division (December 2000 First Columbine Life
- October 2001), President, Insurance Co. (March 2001
ING-SCI, Inc. (August 1997 - - December 2002); Member
December 2000); President, Aetna of the Board, National
Financial Services (August 1997 - Commission on Retirement
December 2000). Policy, Governor's Council
on Economic
Competitiveness and
Technology of Connecticut,
Connecticut Business and
Industry Association,
Bushnell; Connecticut
Forum; Metro Hartford
Chamber of Commerce; and
is Chairman, Concerned
Citizens for Effective
Government.
6
NUMBER OF
TERM OF PORTFOLIOS
OFFICE AND IN FUND
POSITION(S) LENGTH OF COMPLEX
NAME AND HELD WITH TIME PRINCIPAL OCCUPATION(S) - OVERSEEN OTHER DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED(1) DURING THE PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
------------- ----- --------- ----------------------- ---------- ---------------
JOHN G. TURNER(3) Trustee September Chairman, Hillcrest Capital 122 Hormel Foods Corporation
Date of Birth: 2000 - Partners (May 2002 - Present); (March 2000 - Present);
10/03/1939 Present President, Turner Investment Shopko Stores, Inc.
Company (January 2002 - Present). (August 1999 - Present);
Mr. Turner was formerly Vice and M.A. Mortenson Company
Chairman of ING Americas (2000 - (March 2002 - Present).
2002); Chairman and Chief
Executive Officer of ReliaStar
Financial Corp. and ReliaStar
Life Insurance Company (1993 -
2000); Chairman of ReliaStar Life
Insurance Company of New York
(1995 - 2001); Chairman of
Northern Life Insurance Company
(1992 - 2001); Chairman and
Trustee of the Northstar
affiliated investment companies
(1993 - 2001) and Director,
Northstar Investment Management
Corporation and its affiliates
(1993 - 1999).
(1) Trustees serve until their successors are duly elected and qualified
(2) Mr. McInerney is an "interested person," as defined by the 1940 Act,
because of his affiliation with ING Groep N.V., the parent corporation of
the Investment Adviser, ING Investments LLC and the Distributor, ING Funds
Distibutor LLC.
(3) Mr. Turner is an "interested person," as defined by the 1940 Act, because
of his affiliation with ING Groep N.V., the parent corporation of the
Investment Adviser, ING Investments LLC and the Distributor, ING Funds
Distibutor LLC.
Please read the section "Further Information About the Trustees and Officers"
starting on page 10 of this Proxy Statement before voting on this Proposal 1.
WHAT IS THE BOARD'S RECOMMENDATION ON PROPOSAL 1?
The Board recommends that shareholders vote "FOR" the election of each of
the Common Nominees to the Board subject to their terms commencing and
continuing as described above. If any of the Common Nominees are not elected by
shareholders, the current Trustees may consider other courses of action.
7
PROPOSAL 2
ELECTION OF TRUSTEES -- PREFERRED SHARES
WHAT IS THE PROPOSAL?
The Board has nominated two individuals for election to the Board as
Trustees of the Preferred Shares (the "Preferred Nominees"). Holders of
Preferred Shares are asked to elect the Preferred Nominees to serve as Trustees,
each to serve until his or her successor is duly elected and qualified.
Information about each Preferred Nominee is set forth below. Both Preferred
Nominees are currently Trustees of the Trust and both have consented to continue
to serve as a Trustee if reelected by holders of Preferred Shares.
WHAT FACTORS DID THE BOARD CONSIDER IN SELECTING THE PREFERRED NOMINEES?
The Board nominated both of the individuals who currently serve as
Trustees of the preferred shareholders of the Trust. The Board met to discuss
Board candidates and, after due consideration, recommend to shareholders the
Preferred Nominees indicated below. In making such recommendation, the Board
took into consideration the knowledge, background, and experience of the
Preferred Nominees.
WHAT IS THE REQUIRED VOTE?
The affirmative vote of a plurality of the Preferred Shares of the Trust
present in person or by proxy at the Annual Meeting is required to approve the
election of each Preferred Nominee to the Board.
WHO ARE THE PREFERRED NOMINEES?
For election of Trustees at the Annual Meeting, the Board has approved the
nomination of:
Walter H. May
Jock Patton
The persons named as proxies will vote for election of each of these
Preferred Nominees unless you withhold authority to vote for either or both of
them on the enclosed Proxy Ballot. If any or both of the Preferred Nominees
should become unavailable for election due to events not now known or
anticipated, the persons named as proxies will vote for such other nominee or
nominees as the current Trustees may recommend or the Board may reduce the
number of Trustees as provided for in the Declaration.
Neither Preferred Nominee is a party adverse to the Trust or any of its
affiliates in any material pending legal proceeding, nor does either Preferred
Nominee have an interest materially adverse to the Trust.
8
The following table sets forth information concerning the Preferred
Nominees. The address for each Preferred Nominee is 7337 E. Doubletree
Ranch Road, Scottsdale, Arizona 85258-2034.
NUMBER OF
TERM OF PORTFOLIOS IN
POSITION(S) OFFICE AND FUND COMPLEX
NAME AND HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) - OVERSEEN BY OTHER DIRECTORSHIPS
DATE OF BIRTH TRUST TIME SERVED(1) DURING THE PAST 5 YEARS TRUSTEE HELD BY TRUSTEE
------------- ----- -------------- ----------------------- ------- ---------------
INDEPENDENT TRUSTEES
WALTER H. MAY Trustee October 1999 - Retired. Trustee of each of the 122 Best Prep Charity (1991 -
Present funds managed by Northstar Present).
Date of Birth: Investment Management
12/12/1936 Corporation (1996 -
1999).
JOCK PATTON Trustee August 1995 - Private Investor (June 1997 - 122 Director, Hypercom Corp.
Present Present). Formerly, Director and (January 1999 - Present);
Date of Birth: Chief Executive Officer, Rainbow JDA Software Group, Inc.
12/11/1945 Multimedia Group, Inc. (January (January 1999 - Present); Titan
1999 - December 2001). Motorcycle Co. of America,
Inc. (January 2001 - March
2001); Stuart Entertainment,
Inc. (January 1999 - August
2000); Swift Transportation
Co. (March 2004 - Present).
(1) Trustees serve until their successors are duly elected and
qualified.
Please read the section "Further Information About the Trustees and
Officers" starting on page 10 of this Proxy Statement before voting on this
Proposal 2.
WHAT IS THE BOARD'S RECOMMENDATION ON PROPOSAL 2?
The Board recommends that shareholders vote "FOR" the election of each of
the Preferred Nominees to the Board subject to their terms commencing and
continuing as described above. If shareholders do not elect either of the
Preferred Nominees, the current Trustees may consider other courses of action.
9
FURTHER INFORMATION ABOUT THE TRUSTEES AND OFFICERS
HOW LONG WILL THE TRUSTEES SERVE ON THE BOARD?
Trustees generally hold office until their successors are elected and
qualified. A Trustee may, at any time, resign or be removed by a vote of the
holders of a majority of the outstanding shares of the applicable class of the
Trust. In addition, pursuant to a retirement policy adopted by the Board, each
duly elected or appointed Trustee who is not an "interested person" of the
Trust, as defined in the Investment Company Act of 1940 ("1940 Act")
("Independent Trustees"), shall retire from service as a Trustee at the first
regularly scheduled quarterly meeting of the Board that is held after the
Trustee reaches the age of 70. A unanimous vote of the Board may extend the
retirement date of a Trustee for up to one year. A further extension may be
permitted if the retirement would trigger a requirement to hold a meeting of
shareholders of the Trust under applicable law, whether for purposes of
appointing a successor to the Trustee or if otherwise necessary under applicable
law, in which event the extension would apply until such time as the shareholder
meeting can be held or is no longer needed.
DO THE TRUSTEES OWN SHARES OF THE TRUST OR CERTAIN AFFILIATED ENTITIES?
To the best of the Trust's knowledge, as of April 5, 2004 no Trustee owned
1% or more of the outstanding shares of any class of shares of the Trust, and
the Trustees owned, as a group, less than 1% of the shares of each class of the
Trust.
The following table sets forth information regarding the dollar range of
equity securities of the Trust and other investment companies within the ING
family of investment companies beneficially owned by each Trustee as of February
29, 2004.
Aggregate Dollar Range of Equity
Securities in all Registered
Investment Companies Overseen by
Dollar Range of Equity Securities in Trustee in Family of Investment
Name of Trustee the Trust Companies
--------------- --------- ---------
INDEPENDENT TRUSTEES
Paul S. Doherty $0 Over $100,000
J. Michael Earley $0 $10,001 - $50,000
R. Barbara Gitenstein $0 $10,001 - $50,000
Walter H. May $0 Over $100,000
Jock Patton $10,001 - $50,000 Over $100,000
David W. C. Putnam Over $100,000 Over $100,000
Blaine E. Rieke $0 $50,001 - $100,000
Roger B. Vincent $0 $50,001 - $100,000
Richard A. Wedemeyer $0 $10,001 - $50,000
TRUSTEES WHO ARE "INTERESTED PERSONS"
Thomas J. McInerney $0 $50,000 - $100,000
John G. Turner Over $100,000 Over $100,000
10
As of February 29, 2004, none of the Independent Trustees or their
immediate family members owned any shares of the Trust's investment adviser or
principal underwriter or of any entity controlling, controlled by or under
common control with the investment adviser or principal underwriter of the Trust
(not including registered investment companies).
WHAT ARE THE COMMITTEES OF THE BOARD?
AUDIT COMMITTEE. The Audit Committee operates pursuant to a charter
approved by the Board. The charter was appended to the 2003 Annual Meeting
Notice. The charter sets forth the responsibilities of the Audit Committee. The
primary function of the Audit Committee is to serve as an independent and
objective party to assist the Board in fulfilling its oversight responsibilities
for the Trust's accounting and reporting processes and the audits of the Trust's
financial statements through oversight and monitoring. Other functions include
meeting with the independent auditor of the Trust to review the scope of the
Trust's audit, the Trust's financial statements and interim accounting controls,
and meeting with management concerning these matters, among other things. The
Committee currently consists of four Trustees: Messrs. Earley, Putnam, Rieke,
and Vincent, all of whom are considered independent under the rules promulgated
by the New York Stock Exchange and, in addition, are not "interested persons" of
the Trust as defined in Section 2(a)(19) of the Investment Company Act of 1940.
Mr. Earley serves as Chairman of the Committee. During the fiscal year ended
February 29, 2004, the Committee held four meetings.
AUDIT COMMITTEE REPORT: As part of its oversight of the Trust's financial
statements, the Audit Committee reviewed and discussed with the Adviser and KPMG
LLP ("KPMG") the Trust's financial statements for the fiscal year ended February
29, 2004. The Audit Committee also discussed with KPMG the matters required to
be discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants. The Audit Committee received and
reviewed the written disclosures from KPMG required by Independence Standard No.
1, Independence Discussions with Audit Committees, as amended, by the
Independence Standards Board, and have discussed KPMG's independence with KPMG.
The Audit Committee has reviewed the audit fees of KPMG and has also reviewed
non-audit services and fees to assure compliance with the Trust's and the Audit
Committee's policies restricting KPMG from performing services that might impair
their independence.
Based on the reviews and discussions referred to above, the Audit
Committee recommended to the Board that the financial statements as of and for
the fiscal year ended February 29, 2004, be included in the Trust's Annual
Report to shareholders. The Audit Committee also recommended the selection of
KPMG to serve as independent auditor for the fiscal year ending February 28,
2005.
2004 AUDIT COMMITTEE MEMBERS
J. Michael Earley
David W.C. Putnam
Blaine E. Rieke
Roger B. Vincent
11
VALUATION AND PROXY VOTING COMMITTEE. The Board has a Valuation and Proxy
Voting Committee whose function is to review the determination of the value of
securities held by the Trust for which market quotations are not readily
available or are deemed unreliable. The Committee also oversees management's
administration of proxy voting. The Committee currently consists of five
Independent Trustees: Messrs. May, Doherty, Patton, and Wedemeyer and Dr.
Gitenstein. Mr. Patton serves as Chairman of the Committee. During the fiscal
year ended February 29, 2004, the Committee held four meetings.
EXECUTIVE COMMITTEE. The Board has an Executive Committee whose function
is to act for the full Board if necessary in the event that Board action is
needed between regularly scheduled Board meetings. The Committee currently
consists of two Independent Trustees and two Trustees who are "interested
persons," as defined in the 1940 Act: Messrs. May, McInerney, Patton and Turner.
Mr. Turner serves as Chairman of the Committee. During the fiscal year ended
February 29, 2004, the Committee held two meetings.
NOMINATING COMMITTEE. The Board has a Nominating Committee for the purpose
of considering and presenting to the Board candidates it proposes for nomination
to fill Independent Trustee vacancies on the Board. The Committee currently
consists of four Independent Trustees: Messrs. Doherty, May and Wedemeyer and
Dr. Gitenstein. Mr. May serves as Chairman of the Committee. The Committee does
not currently have a charter nor does it currently have a policy regarding
whether it will consider nominees recommended by shareholders. However, the
Board expects to have the Committee consider these matters fully during the
upcoming year with a view towards adopting and publishing a charter and policies
regarding shareholder recommendations for Trustee nominees. As part of its
consideration, the Committee will also consider minimum qualifications for
Trustee positions as well as a process for the Trust to identify and evaluate
potential nominees. During the fiscal year ended February 29, 2004, the
Committee did not hold a meeting.
INVESTMENT REVIEW COMMITTEE. The Board has an Investment Review Committee
whose function is to monitor the investment performance of the Trust and to make
recommendations to the Board with respect to the Trust. The Committee currently
consists of five Independent Trustees and one Trustee who is an "interested
person," as defined in the 1940 Act: Messrs. Doherty, May, McInerney, Patton,
and Wedemeyer and Dr. Gitenstein. Mr. Wedemeyer serves as Chairman of the
Committee. During the fiscal year ended February 29, 2004, the Committee held
four meetings.
COMPLIANCE AND COORDINATION COMMITTEE. The Board has established a
Compliance and Coordination Committee for the purpose of facilitating
information flow among Board members and with management between Board meetings,
developing agendas for executive sessions of independent Board members,
evaluating potential improvements in the allocation of work load among the Board
members and Board committees, and evaluating other opportunities to enhance the
efficient operations of the Board. The Committee currently consists of the
co-lead independent Board members and the Chairmen of various other established
Committees. Currently, these persons are Messrs. Earley, May, Patton, Vincent,
and Wedemeyer. During the fiscal year ended February 29, 2004, the Committee
held one meeting.
12
HOW OFTEN DOES THE BOARD MEET?
The Board currently conducts regular meetings four times a year. The
Audit, Valuation and Proxy Voting, and Investment Review Committees also meet
regularly four times per year and the remaining Committees meet as needed. In
addition, the Board or the Committees may hold special meetings by telephone or
in person to discuss specific matters that may require action prior to the next
regular meeting. During the fiscal year ended February 29, 2004, the Board held
eight meetings, including regularly scheduled and special meetings. No Trustee
attended less than 75% of the Trust's Board meetings or meetings of Committees
on which a Trustee served.
WHAT ARE THE TRUSTEES PAID FOR THEIR SERVICES?
Each Independent Trustee receives a fee, allocated among the ING Funds for
which he or she serves as a Director/Trustee, which consists of an annual
retainer component and a per meeting fee component. Each Independent Trustee is
reimbursed for expenses incurred in connection with each meeting of the Board or
any Committee meeting attended.
The Trust currently pays each Independent Trustee a pro rata share, as
described below, of: (i) an annual retainer of $40,000 (Messrs. May and Patton,
as lead trustees, receive an annual retainer of $55,000); (ii) $7,000 for each
in person meeting of the Board; (iii) $2,000 for attendance at any Committee
meeting; (iv) $1,000 for meeting attendance as a chairperson; (v) $2,000 per
telephonic meeting; (vi) out-of-pocket expenses. The pro rata share paid by the
Trust is based on the Trust's average net assets as a percentage of the average
net assets of all the funds managed by the Adviser for which the Trustees serve
in common as Directors/Trustees.
The Trustees who are "interested persons" of the Trust receive no
compensation from the Trust.
The following table has been provided to the Trust by the Adviser and sets
forth information regarding the compensation paid to the Trustees for the
Trust's fiscal year ended February 29, 2004 for service on the Boards of the ING
Funds complex.
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS ESTIMATED FROM TRUST AND
AGGREGATE ACCRUED AS ANNUAL FUND COMPLEX
COMPENSATION PART OF TRUST BENEFITS UPON PAID TO
NAME OF TRUSTEE FROM TRUST EXPENSES RETIREMENT(4) TRUSTEES(5)
--------------- ---------- -------- ------------- -----------
Paul S. Doherty $ 5,982 N/A N/A $104,000
J. Michael Earley $ 6,098 N/A N/A $106,000
R. Barbara Gitenstein $ 5,524 N/A N/A $ 97,000
R. Glenn Hilliard(1) $ 0 N/A N/A $ 0
Walter H. May $ 7,114 N/A N/A $123,000
Thomas J. McInerney(2) $ 0 N/A N/A $ 0
Jock Patton $ 7,513 N/A N/A $129,000
David W.C. Putnam $ 5,216 N/A N/A $ 92,000
Blaine E. Rieke $ 5,751 N/A N/A $100,000
John G. Turner(3) $ 0 N/A N/A $ 0
13
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS ESTIMATED FROM TRUST AND
AGGREGATE ACCRUED AS ANNUAL FUND COMPLEX
COMPENSATION PART OF TRUST BENEFITS UPON PAID TO
NAME OF TRUSTEE FROM TRUST EXPENSES RETIREMENT(4) TRUSTEES(5)
--------------- ---------- -------- ------------- -----------
Roger B. Vincent(6) $ 6,836 N/A N/A $118,000
Richard A. Wedemeyer(6) $ 6,836 N/A N/A $118,000
(1) An "interested person," as defined in the 1940 Act, because of his
relationship with ING Groep N.V., the parent corporation of the Investment
Adviser, ING Investments, LLC and the Distributor, ING Funds Distributor,
LLC. Mr. Hilliard resigned as of April 30, 2003.
(2) An "interested person," as defined in the 1940 Act, because of his
affiliation with ING Groep N.V., the parent corporation of the Investment
Adviser, ING Investments, LLC and the Distributor, ING Funds Distributor,
LLC.
(3) An "interested person," as defined in the 1940 Act, because of his
affiliation with ING Groep N.V., the parent corporation of the Investment
Adviser, ING Investments, LLC and the Distributor, ING Funds Distributor,
LLC.
(4) The ING Funds have adopted a retirement policy under which a
director/trustee who has served as an Independent Director/Trustee for
five years or more will be paid by the ING Funds at the time of his or her
retirement an amount equal to twice the compensation normally paid to the
Independent Director/Trustee for one year of service.
(5) Represents compensation from 122 funds.
(6) Mr. Wedemeyer and Mr. Vincent were paid $10,000 each in recognition of an
extensive time commitment to format a methodology for presenting valuation
information to the Board.
WHO ARE THE OFFICERS OF THE TRUST?
The Trust's officers are elected annually by the Board and hold office
until they resign, are removed or are otherwise disqualified to serve. The chart
below lists the officers of the Trust. The address for the officers of the Trust
is 7337 E. Doubletree Ranch Road, Scottsdale, Arizona 85258-2034.
NAME AND POSITIONS HELD WITH TERM OF OFFICE AND PRINCIPAL OCCUPATION(S)
DATE OF BIRTH THE TRUST LENGTH OF TIME SERVED (1) DURING THE LAST FIVE YEARS
------------- --------- ------------------------- --------------------------
JAMES M. HENNESSY President and Chief February 2001 - Present President and Chief Executive Officer, ING
Executive Officer Investments, LLC(2) and certain of its
Date of Birth: Chief Operating July 2000 - Present affiliates (December 2001 - Present). Formerly,
04/09/1949 Officer Senior Executive Vice President and Chief
Operating Officer, ING Investments, LLC(2) and
certain of its affiliates (June 2000 -
December 2000); Executive Vice President, ING
Investments, LLC(2) and certain of its
affiliates (April 1998 - June 2000); and
Senior Vice President, ING Investments, LLC(2)
and certain of its affiliates (April 1995 -
April 1998).
MICHAEL J. ROLAND Executive Vice February 2002 - Present Executive Vice President, Chief Financial
President and Officer and Treasurer, ING Investments,
Date of Birth: Assistant LLC(2) and certain of its affiliates (December
05/30/1958 Secretary August 1998 - Present 2001 - Present). Formerly, Senior Vice President,
Chief Financial ING Investments, LLC(2) and certain of its
Officer affiliates (June 1998 - December 2001).
14
NAME AND POSITIONS HELD WITH TERM OF OFFICE AND PRINCIPAL OCCUPATION(S)
DATE OF BIRTH THE TRUST LENGTH OF TIME SERVED (1) DURING THE LAST FIVE YEARS
------------- --------- ------------------------- --------------------------
ROBERT S. NAKA Senior Vice November 1999 - Present Senior Vice President and Assistant Secretary,
President ING Investments, LLC(2) and certain of its
affiliates (October 2001 - Present). Formerly,
Date of Birth: Assistant Secretary July 1996 - Present Vice President and Assistant Secretary, ING Funds
06/17/1963 Services, LLC(3) (February 1997 - August 1999).
DANIEL NORMAN Senior Vice April 1995 - Present Senior Vice President and Co-Senior Portfolio
President Manager, ING Investments, LLC(2) June 1997 -
Present and certain of its affiliates (November
Date of Birth: Treasurer 1999 - Present). Formerly, Senior Vice
12/29/1957 President and Portfolio Manager, ING Investments,
LLC(2) and certain of its affiliates (April
1995- November 1999).
JEFFREY A. BAKALAR Senior Vice President November 1999 - Present Senior Vice President and Co-Senior Portfolio
Manager, ING Investments, LLC(2) (November 1999 -
Date of Birth: Present). Formerly, Vice President and Portfolio
12/15/1959 Manager, ING Investments, LLC(2) (February 1998 -
November 1999).
ELLIOT ROSEN Senior Vice President May 2002 - Present Senior Vice President, ING Investments,
LLC(2) (February 1999 - Present).
Date of Birth:
05/07/1953
WILLIAM H. RIVOIR III Senior Vice February 2001 - Present Vice President of ING Investment Management Co.
President and (January 2004 - Present). Formerly, Counsel, ING
Date of Birth: Assistant Secretary USFS Law Department (January 2003 - December
01/19/1951 2003); and Senior Vice President, ING
Investments, LLC(2) and certain of its affiliates
(June 1998 - December 2002).
CURTIS F. LEE Senior Vice February 2001 - Present Senior Vice President and Chief Credit
President and Chief Officer of Senior Loans, ING Investments,
Date of Birth: Credit Officer LLC(2) (August 1999 - Present).
06/05/1954
KIMBERLY A. ANDERSON Senior Vice November 2003 - Present Senior Vice President, ING Investments, LLC(2)
President and certain of its affiliates (October 2003 -
Date of Birth: Present). Formerly, Vice President, ING
07/25/1964 Investments, LLC(2) and certain of its affiliates
(October 2001 - October 2003); Secretary, ING
Investments, LLC(2) and certain of its affiliates
(October 2001 - August 2003); Assistant Vice
President, ING Funds Services, LLC(3) (November
1999 - January 2001); and has held various other
positions with ING Funds Services, LLC(3) for
more than the last five years.
ROBYN L. ICHILOV Vice President November 1997 - Present Vice President, ING Funds Services, LLC(3)
(October 2001 - Present) and ING
Date of Birth: Investments, LLC(2) (August 1997 - Present).
09/25/1967
15
NAME AND POSITIONS HELD WITH TERM OF OFFICE AND PRINCIPAL OCCUPATION(S)
DATE OF BIRTH THE TRUST LENGTH OF TIME SERVED (1) DURING THE LAST FIVE YEARS
------------- --------- ------------------------- --------------------------
J. DAVID GREENWALD Vice President August 2003 - Present Vice President of Mutual Fund Compliance,
ING Funds Services, LLC(3) (May 2003 -
Date of Birth: Present). Formerly, Assistant Treasurer
09/24/1957 and Director of Mutual Fund Compliance and
Operations, American Skandia, a Prudential
Financial Company (October 1996 - May 2003).
HUEY P. FALGOUT, JR. Secretary August 2003 - Present Chief Counsel, ING U.S. Financial Services
(November 2003 - Present). Formerly, Counsel, ING
Date of Birth: U.S. Financial Services (November 2002 - November
11/15/1963 2003); Associate General Counsel, AIG American
General (January 1999 - November 2002).
TODD MODIC Vice President August 2003 - Present Vice President of Financial Reporting - Fund
Accounting of ING Fund Services, LLC(3)
Date of Birth: (September 2002 - Present). Formerly, Director of
11/03/1967 Financial Reporting, ING Investments, LLC(2)
(March 2001 - September 2002); Director of
Financial Reporting, Axient Communications, Inc.
(May 2000 - January 2001); and Director of
Finance, Rural/Metro Corporation (March 1995 -
May 2000).
LAUREN D. BENSINGER Vice President August 2003 - Present Vice President and Chief Compliance Officer, ING
Funds Distributor, LLC(4) (July 1995 - Present);
Date of Birth: Vice President (February 1996 - Present) and
02/06/1954 Chief Compliance Officer (October 2001 -
Present), ING Investments, LLC(2).
STANLEY D. VYNER Executive Vice August 2003 - Present Executive Vice President, ING Investments, LLC(2)
President and certain of its affiliates (July 2000 -
Date of Birth: Present); and Chief Investment Officer of the
05/14/1950 International Portfolios, ING Investments, LLC(2)
(July 1996 - Present). Formerly, President and
Chief Executive Officer, ING Investments, LLC(2)
(August 1996 - August 2000).
(1) The officers hold office until the next annual meeting of the Trustees and
until their successors shall have been elected and qualified.
(2) ING Investments, LLC was previously named ING Pilgrim Investments, LLC.
ING Pilgrim Investments, LLC is the sucessor in interest to ING Pilgirm
Investments, Inc., which was previously known as Pilgrim Investments, Inc.
and before that was known as Pilgrim America Investments, Inc.
(3) ING Funds Services, LLC was previously named ING Pilgrim Group, LLC. ING
Pilgrim Group, LLC is the sucessor in interest to ING Pilgirm Group, Inc.,
which was previously known as Pilgrim Group, Inc. and before that was
known as Pilgrim America Group, Inc.
(4) ING Funds Distributor, LLC is the sucessor in interest to ING Funds
Distributor, Inc., which was previously known as ING Pilgrim Securities,
Inc., and before that was known as Pilgrim Securities, Inc., and before
that was known as Pilgrim America Securities, Inc.
WHAT ARE OFFICERS PAID FOR THEIR SERVICES?
The Trust does not pay its officers for the services they provide to the
Trust. Instead, the officers, who are also officers or employees of the Adviser
or its affiliates, are compensated by the Adviser or its affiliates.
16
WHO ARE THE TRUST'S ADVISERS, DISTRIBUTOR AND ADMINISTRATOR?
ING Investments, LLC serves as the investment adviser to the Trust, ING
Funds Distributor, LLC serves as the Trust's distributor and ING Funds Services,
LLC serves as the Trust's administrator. The principal office of the investment
adviser, the distributor and the administrator is 7337 E. Doubletree Ranch Road,
Scottsdale, Arizona 85258-2034. ING Investment Management Co. (formerly Aeltus
Investment Management, Inc.) serves as sub-adviser to the Trust. The principal
office of the sub-adviser is 10 State House Square, Hartford, Connecticut 06103.
The investment adviser, the sub-adviser, the distributor and the administrator
are all indirect, wholly-owned subsidiaries of ING Groep N.V. and the
sub-adviser, the distributor and the administrator are affiliates of ING
Investments, LLC.
WHO ARE THE TRUST'S INDEPENDENT PUBLIC ACCOUNTANTS?
The accounting firm of KPMG currently serves as the independent auditor
for the Trust. The Board has selected KPMG as the independent auditor to examine
and report on the financial statements of the Trust for the fiscal year ending
February 28, 2005.
The following table shows fees paid to KPMG for professional audit
services during the Trust's most recent fiscal years ended February 29, 2004 and
February 28, 2003, as well as, fees billed for other services rendered by KPMG
to the Trust.
2004 2003
---- ----
Audit Fees (1) $72,207 $108,100
Audit-Related Fees (2) $28,100 $ 33,500
Tax Fees (3) $ 4,000 $ 12,898
All Other Fees (4) $ 2,500 $ 5,000
(1) Audit fees consist of fees billed for professional services rendered for
the audit of the Trust's year-end financial statements and services that
are normally provided by KPMG in connection with statutory and regulatory
filings.
(2) Audit-related fees consist principally of fees billed for assurance and
related services that are reasonably related to the performance of the
audit or review of the Trust's consolidated financial statements and are
not reported under "Audit Fees." These services include attest services
that are not required by statute or regulation and consultations
concerning financial accounting and reporting standards.
(3) Tax fees consist of fees billed for professional services for tax
compliance. These services include assistance regarding federal, state,
and local tax compliance.
(4) All other fees would include fees for products and services other than the
services reported above, including those related to the review and
issuance of consents on various SEC filings.
The aggregate non-audit fees billed by KPMG for services rendered to the
Trust, the Adviser, and any entity controlling, controlled by, or under common
control with the Adviser that provides ongoing services to the Trust for the
fiscal years ended February 29, 2004 and February 28, 2003 were $340,873 and
$370,768, respectively.
All of the services described in the table above were approved by the
Audit Committee pursuant to pre-approval policies and procedures adopted by the
Committee. Pursuant to such policies and procedures, the Audit Committee
pre-approves: (i) all audit and non-audit services
17
to be rendered to the Trust by KPMG; and (ii) all non-audit services impacting
the operations and financial reporting of the Trust provided by KPMG to the
Adviser or any affiliate thereof that provides ongoing services to the Trust
(collectively, "Covered Services"). The Audit Committee has adopted pre-approval
procedures authorizing one or more members of the Audit Committee to pre-approve
from time to time, on behalf of the Audit Committee, all Covered Services to be
provided by KPMG which are not otherwise pre-approved at a meeting of the Audit
Committee, provided that such delegate reports to the full Audit Committee at
its next meeting. The pre-approval procedures do not include delegation of the
Audit Committee's responsibilities to management. Pre-approval has not been
waived with respect to any of the services described above since the date on
which the Audit Committee adopted its current pre-approval procedures.
The Audit Committee of the Board will periodically consider whether KPMG's
receipt of non-audit fees from the Trust, the Adviser and all entities
controlling, controlled by, or under common control with the Adviser that
provide services to the Trust is compatible with maintaining the independence of
KPMG.
KPMG has advised the Trust that neither KPMG nor any of its partners has
any direct or material indirect financial interest in the Trust. Representatives
of KPMG are not expected to be at the Annual Meeting but have been given the
opportunity to make a statement if they wish, and will be available
telephonically should any matter arise requiring their participation.
GENERAL INFORMATION
WHAT HAPPENS TO MY PROXY ONCE I VOTE IT?
The Board has named Robert S. Naka, Huey P. Falgout, Jr. and Jeffrey A.
Bakalar as proxies of the Trust. If you follow the instructions when you vote,
your proxies will vote your shares as you have directed. If you submit your
Proxy Ballot but do not vote on any Proposal, your proxies will vote on that
Proposal as recommended by the Board.
WHAT IF A PROPOSAL THAT IS NOT IN THE PROXY STATEMENT COMES UP AT THE ANNUAL
MEETING?
If any other matter is properly presented, your proxies will vote in
accordance with their best judgment. At the time this Proxy Statement was
printed, the Board knew of no matter that needed to be acted on at the Annual
Meeting other than those discussed in this Proxy Statement.
I WANT TO ATTEND THE ANNUAL MEETING AND VOTE IN PERSON. HOW DO I DO THIS?
The Annual Meeting will be held at 7337 E. Doubletree Ranch Road, Scottsdale,
Arizona 85258-2034. If you attend the Annual Meeting and wish to vote in person,
you will be given a ballot at the meeting. However, if your shares are held in
the name of your broker, bank or other nominee, you must bring a letter from the
nominee indicating that you are the beneficial owner of the shares on the Record
Date and authorizing you to vote. If you expect to attend the Annual Meeting in
person, please notify the Trust by calling 1-800-992-0180.
18
WHAT ARE MY VOTING RIGHTS AND THE QUORUM REQUIREMENTS?
Each share of each class of the Trust is entitled to one vote.
Shareholders of the Trust at the close of business on the Record Date will be
entitled to be present and to give voting instructions for the Trust at the
Annual Meeting and any adjournments thereof with respect to their shares owned
as of the Record Date. A majority of the outstanding shares of the Trust on the
Record Date entitled to vote for each Proposal, present in person or represented
by proxy, must be present to constitute a quorum.
If a quorum is not present at the Annual Meeting, or if a quorum is
present but sufficient votes to approve any or all of the Proposals are not
received, the persons named as proxies may propose one or more adjournments of
the Annual Meeting to permit further solicitation of proxies. A shareholder vote
may be taken on one or more of the Proposals in this Proxy Statement prior to
any adjournment if sufficient votes have been received with respect to a
Proposal. Any adjournment will require the affirmative vote of a majority of
those shares represented at the Annual Meeting in person or by proxy. The
persons named as proxies will vote in favor of such adjournment those proxies
which they are entitled to vote in favor of any Proposal that has not been
adopted, will vote against any adjournments those proxies required to be voted
against any Proposal that has not been adopted, and will not vote any proxies
that direct them to abstain from voting on such Proposals.
The Trust expects that, before the Annual Meeting, broker-dealer firms
holding shares of the Trust 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 Trust understands that the broker-dealers that
are members of the New York Stock Exchange may vote on the items to be
considered at the Annual Meeting on behalf of their customers and beneficial
owners under the rules of the New York Stock Exchange.
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,
then the shares represented by such abstention or non-vote will be considered to
be present at the Annual Meeting for purposes of determining the existence of a
quorum. A plurality of the votes duly cast is required for the election of a
Trustee (i.e., the nominee receiving the greatest number of votes will be
elected). Abstentions and broker non-votes therefore will not have an effect on
the election of a Trustee.
19
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16(a) of the Securities Exchange Act of 1934, as amended, and
Section 30(h) of the 1940 Act, as applied to the Trust, require the Trust's
officers, Trustees, investment adviser, affiliates of the investment adviser,
and persons who beneficially own more than 10% of a registered class of the
Trust's outstanding securities ("Reporting Persons"), to file reports of
ownership of the Trust's securities and changes in such ownership with the SEC
and the New York Stock Exchange. Such persons are required by SEC regulations to
furnish the Trust with copies of all such filings.
Based solely on its review of the copies of such forms received by it
and written representations from certain Reporting Persons, the Trust believes
that during the fiscal year ended February 29, 2004, its Reporting Persons
complied with all applicable filing requirements. However, Mr. Elliot Rosen
filed a Form 4, which included one transaction that was reported subsequent to
the required date. ING Fund Services, LLC filed a Form 5, reporting one
transaction subsequent to the required date, and a Form 5A reporting one
transaction subsequent to the required date. ING Capital Corporation, LLC filed
one Form 4, reporting four transactions as well as a Form 4A, reporting one
transaction subsequent to the required date.
SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF TRUSTEES.
The Board does not currently have a formal policy regarding the manner
in which shareholders may communicate with Board members. The absence of such a
policy does not mean, however, that appropriate communications from shareholders
will not be forwarded to the Board for their review. The Board also does not
currently have a policy regarding Trustee attendance at the Annual Shareholder
Meeting. The 2003 Annual Shareholders Meeting was not attended by any of the
Trustees of the Trust.
The Board expects to consider these matters fully during the upcoming
year with a view towards adopting and publishing a policy regarding shareholder
communications with the Board as well as a policy regarding Trustee attendance
at the Annual Shareholder Meeting.
WHAT IS THE DEADLINE FOR SUBMITTING A SHAREHOLDER PROPOSAL FOR THE TRUST'S 2005
ANNUAL MEETING?
It is anticipated that the next annual meeting of the Trust will be
held in June 2005 but the exact date, time and location of such meeting have yet
to be determined. Any proposals of shareholders that are intended to be
presented at the Trust's next annual meeting must be in writing and received at
the Trust's principal executive offices, in order for the proposal to be
considered for inclusion in the Trust's proxy statement for that meeting. The
submission of a proposal does not guarantee its inclusion in the Trust's proxy
statement or presentation at the meeting.
In addition, pursuant to relevant SEC proxy rules, a company may use
discretionary voting authority to vote on matters coming before an annual
meeting of shareholders if the company does not have notice of the matter at
least 45 days before the date corresponding to the date on which the company
first mailed its proxy materials for the prior year's annual meeting of
stockholders or the date specified by an overriding advance notice provision in
the company's bylaws. As the Trust's bylaws do not contain such an advance
notice provision, for the Trust's 2005 Annual
20
Meeting of shareholders, shareholders must submit to the Trust written notice of
a shareholder proposal within a reasonable time before the Trust begins to print
and mail the proxy materials and must comply with all other legal requirements
in order to be included in the Trust's Proxy Statement and form of proxy for the
meeting.
PLEASE VOTE VIA THE INTERNET, BY TELEPHONE OR BY RETURNING YOUR PROXY
BALLOT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
/s/ Huey P. Falgout, Jr.
Huey P. Falgout, Jr.
Secretary
April 26, 2004
21
ING PRIME RATE TRUST- COMMON SHARES
ANNUAL MEETING OF SHAREHOLDERS SCHEDULED FOR JUNE 15, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby instructs Robert S. Naka, Huey P. Falgout, Jr. or Jeffrey
A. Bakalar (Proxies), or any of them, with full power of substitution in each of
them, to vote the shares held by him or her at the Annual Meeting of
shareholders (the "Annual Meeting") of the ING Prime Rate Trust (the "Trust") to
be held at: 7337 E. Doubletree Ranch Road, Scottsdale, Arizona 85258-2034, on
June 15, 2004, at 10:00 a.m., local time and at any adjournment thereof, in the
manner directed below with respect to the matters referred to in the Proxy
Statement for the Annual Meeting, receipt of which is hereby acknowledged, and
in the Proxies' discretion, upon such other matters as may properly come before
the meeting or any adjournment(s) thereof.
Please vote, sign and date this Proxy Ballot and return it in the enclosed
envelope.
These voting instructions will be voted as specified. IF NO SPECIFICATION IS
MADE, THIS VOTING INSTRUCTION WILL BE VOTED "FOR" ALL PROPOSALS.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE STRONGLY
URGE YOU TO REVIEW, COMPLETE AND RETURN YOUR PROXY BALLOT AS SOON AS POSSIBLE.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and have the Proxy Ballot at hand
2) Call the phone number located on the Proxy Ballot
3) Follow the recorded instructions
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy Ballot at hand
2) Go to Website located on the Proxy Ballot
3) Follow the on-line instructions
TO VOTE BY MAIL
1) Read the Proxy Statement
2) Check the appropriate boxes on the Proxy Ballot
3) Sign and date the Proxy Ballot
4) Return the Proxy Ballot in the envelope provided
IF YOU VOTE BY TELEPHONE OR INTERNET, YOU DO NOT NEED TO MAIL YOUR PROXY BALLOT.
Please indicate your vote by an "X" in the appropriate box below.
THIS PROXY BALLOT IS VALID ONLY WHEN SIGNED AND DATED
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS.
22
VOTE ON TRUSTEES FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
To withhold
1. To elect nine members of the Board of Trustees to authority to vote,
represent the interests of the holders of Common mark "For All
Shares of the Trust until the election and Except" and write
qualification of their successors. the nominee's
number on the
01) Paul S. Doherty, 02) J. Michael Earley, 03) R. line below.
Barbara Gitenstein, 04) Thomas J. McInerney,
05) David W.C. Putnam, 06) Blaine E. Rieke, 07)
John G. Turner, 08) Roger B. Vincent, and 09)
Richard A. Wedemeyer. [ ] [ ] [ ] ---------------------
2. Not Applicable
The undersigned authorizes the Proxies to vote and otherwise represent the
undersigned on any other matter that may properly come before the meeting or any
adjournment or postponement thereof in the discretion of the Proxies.
This Proxy Ballot 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 (Joint Owners) Date
23
ING PRIME RATE TRUST- AUCTION RATE CUMULATIVE PREFERRED SHARES
SERIES M, T, W, TH AND F
ANNUAL MEETING OF SHAREHOLDERS SCHEDULED FOR JUNE 15, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby instructs Robert S. Naka, Huey P. Falgout, Jr. or Jeffrey
A. Bakalar (Proxies), or any of them, with full power of substitution in each of
them, to vote the shares held by him or her at the Annual Meeting of
shareholders (the "Annual Meeting") of the ING Prime Rate Trust (the "Trust") to
be held at: 7337 E. Doubletree Ranch Road, Scottsdale, Arizona 85258-2034, on
June 15, 2004, at 10:00 a.m., local time and at any adjournment thereof, in the
manner directed below with respect to the matters referred to in the Proxy
Statement for the Annual Meeting, receipt of which is hereby acknowledged, and
in the Proxies' discretion, upon such other matters as may properly come before
the meeting or any adjournment(s) thereof.
Please vote, sign and date this Proxy Ballot and return it in the enclosed
envelope.
These voting instructions will be voted as specified. IF NO SPECIFICATION IS
MADE, THIS VOTING INSTRUCTION WILL BE VOTED "FOR" ALL PROPOSALS.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE STRONGLY
URGE YOU TO REVIEW, COMPLETE AND RETURN YOUR PROXY BALLOT AS SOON AS POSSIBLE.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and have the Proxy Ballot at hand
2) Call the phone number located on the Proxy Ballot
3) Follow the recorded instructions
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy Ballot at hand
2) Go to Website located on the Proxy Ballot
3) Follow the on-line instructions
TO VOTE BY MAIL
1) Read the Proxy Statement
2) Check the appropriate boxes on the Proxy Ballot
3) Sign and date the Proxy Ballot
4) Return the Proxy Ballot in the envelope provided
IF YOU VOTE BY TELEPHONE OR INTERNET, YOU DO NOT NEED TO MAIL YOUR PROXY BALLOT.
Please indicate your vote by an "X" in the appropriate box below.
THIS PROXY BALLOT IS VALID ONLY WHEN SIGNED AND DATED
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS.
24
VOTE ON TRUSTEES FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
1. Not Applicable
2. To elect two members of the Board of Trustees to To withhold
represent the interests of the holders of Auction authority to vote,
Rate Cumulative Preferred Shares - Series M, T, mark "For All
W, TH and F of the Trust - until the election and Except" and write
qualification of their successors. the nominee's
number on the
(1) Walter H. May and (2) Jock Patton [ ] [ ] [ ] line below.
--------------------
The undersigned authorizes the Proxies to vote and otherwise represent the
undersigned on any other matter that may properly come before the meeting or any
adjournment or postponement thereof in the discretion of the Proxies.
This Proxy Ballot 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 (Joint Owners) Date
25