UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.     )
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Filed by a Party other than the Registrant  o
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x	Preliminary Proxy Statement
o	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o	Definitive Proxy Statement
o	Definitive Additional Materials
o	Soliciting Material under §240.14a-12
[REGISTRANT] ING Variable Portfolios, Inc. ING Strategic Allocation Portfolios, Inc. ING Balanced Portfolio, Inc. ING Intermediate Bond Portfolio ING Money Market Portfolio ING Variable Funds
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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ING BALANCED PORTFOLIO, INC.

ING INTERMEDIATE BOND PORTFOLIO

ING MONEY MARKET PORTFOLIO

ING STRATEGIC ALLOCATION PORTFOLIOS, INC.

ING VARIABLE FUNDS

ING VARIABLE PORTFOLIOS, INC.

7337 East Doubletree Ranch Road, Suite 100

Scottsdale, Arizona 85258-2034

(800) 992-0180

 

[March 18, 2013]

 

Dear Shareholder:

 

On behalf of the Boards of Directors/Trustees (the “Board”), we are pleased to invite you to a meeting of shareholders (the “Shareholder Meeting”) of ING Balanced Portfolio, Inc., ING Intermediate Bond Portfolio, ING Money Market Portfolio, ING Strategic Allocation Portfolios, Inc., ING Variable Funds, and ING Variable Portfolios, Inc. (each a “Registrant,” and collectively, the “Registrants”) and each portfolio organized as a series of the Registrants (each a “Portfolio,” and collectively, the “Portfolios”). The Shareholder Meeting is scheduled for [10:00 A.M.], Local time, on [April 22, 2013], at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258-2034.

 

At the Shareholder Meeting shareholders will be asked to approve new investment advisory agreements for each Portfolio with ING Investments, LLC (“ING Investments”). Shareholders will also be asked to approve new investment sub-advisory agreements with ING Investment Management Co. LLC (“ING IM,” and together with ING Investments, the “ING U.S. Advisers”). These new advisory and sub-advisory agreements arise in connection with a plan for the U.S. parent company of the ING U.S. Advisers to separate from its ultimate parent, ING Groep, N.V. At this Shareholder Meeting, shareholders will also be asked to approve a number of other proposals including the election of 13 nominees to the Board. Shareholders of each Portfolio will be asked to approve a modification to the current “manager-of-managers” policy. Finally, shareholders of ING Money Market Portfolio will be asked to approve changes to its fundamental investment policy governing concentration.

 

Formal notice of the Shareholder Meeting appears on the next page, followed by the Proxy Statement. The Proposals are discussed in detail in the enclosed Proxy Statement, which you should read carefully. The Board recommends that you vote “FOR” each of the Proposals.

 

Your vote is important regardless of the number of shares you own. To avoid the added cost of follow-up solicitations and possible adjournments, please read the Proxy Statement carefully and cast your vote. It is important that your vote be received no later than [April 21, 2013].

 

We appreciate your participation and prompt response in this matter and thank you for your continued support.

 

	Sincerely,
	Shaun P. Mathews
	President and Chief Executive Officer

 

 

 

(This page intentionally left blank)

 

 

 

NOTICE OF A MEETING OF SHAREHOLDERS

 

OF

 

ING BALANCED PORTFOLIO, INC.

ING INTERMEDIATE BOND PORTFOLIO

ING MONEY MARKET PORTFOLIO

ING STRATEGIC ALLOCATION PORTFOLIOS, INC.

ING VARIABLE FUNDS

ING VARIABLE PORTFOLIOS, INC.

7337 East Doubletree Ranch Road, Suite 100

Scottsdale, Arizona 85258-2034

(800) 992-0180

 

Scheduled for [April 22, 2013]

 

To the Shareholders:

 

NOTICE IS HEREBY GIVEN that a meeting of the shareholders (the “Shareholder Meeting”) of ING Balanced Portfolio, Inc., ING Intermediate Bond Portfolio, ING Money Market Portfolio, ING Strategic Allocation Portfolios, Inc., ING Variable Funds, and ING Variable Portfolios, Inc. (each a “Registrant,” and collectively, the “Registrants”) and each portfolio organized as a series of the Registrants (each a “Portfolio,” and collectively, the “Portfolios”) is scheduled for [10:00 A.M.], Local time on [April 22, 2013] at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258-2034. With respect to ING Balanced Portfolio, Inc., ING Strategic Allocation Portfolio, Inc., and ING Variable Portfolios, Inc., this meeting is designated as the annual meeting of shareholders. With respect to each other Registrant, this meeting is designated as a special meeting of shareholders.

 

Pursuant to an agreement with the European Commission, ING Groep, N.V. (“ING Groep”) has announced its intention to divest ING U.S., Inc. (“ING U.S.”), a wholly owned, indirect subsidiary of ING Groep and the parent company of ING Investments, LLC (“ING Investments”) and ING Investment Management Co. LLC (“ING IM”), each an investment adviser or sub-adviser to one or more of the Portfolios (such divestment, the “Separation Plan”). ING Groep’s base case to achieve the Separation Plan is through an initial public offering of ING U.S. (the “IPO”) followed by the divestment of ING Groep’s remaining ownership interest over time through one or more additional public offerings of ING U.S. stock, or, possibly, through one or more privately negotiated sales of the stock. (While the Separation Plan is the base case, it is possible that the Separation Plan may be achieved by means of a sale to a single buyer or group of buyers.)

 

The Portfolios are subject to the Investment Company Act of 1940, as amended (the “1940 Act”), which provides that any investment advisory agreement, including any sub-advisory agreement, must terminate automatically upon its “assignment.” As used in the 1940 Act, the term assignment includes any transfer of a controlling block of outstanding voting securities in an adviser or the parent company of an adviser. Such a transfer is often referred to as a “Change of Control Event.” It is anticipated that one or more of the transactions contemplated by the Separation Plan would be deemed a Change of Control Event. To ensure that ING Investments and ING IM may continue to provide advisory and sub-advisory services to the Portfolios without interruption, the Shareholder Meeting was called to, among other things, approve new advisory and sub-advisory agreements.

 

At the Shareholder Meeting, shareholders will be asked:

 

1.              To approve a new investment advisory agreement for each Portfolio with ING Investments prompted by the IPO, and to approve, under certain circumstances, any future advisory agreements prompted by Change of Control Events that occur as part of the Separation Plan;

 

2.              To approve a new investment sub-advisory agreement between ING Investments and ING IM prompted by the IPO, and to approve, under certain circumstances, any future advisory agreements prompted by Change of Control Events that occur as part of the Separation Plan;

 

3.              To elect 13 nominees to the Boards of Directors/Trustees (the “Board”) of the Registrants;

 

4.              To approve a modification to the current manager-of-managers policy to permit ING Investments, subject to prior approval by the Board, to enter into and materially amend agreements with wholly owned sub-advisers without obtaining the approval of the Portfolio’s shareholders;

 

5.              To approve a change in the fundamental investment policy governing concentration with respect to ING Money Market Portfolio; and

 

6.              To transact such other business, not currently contemplated, that may properly come before the Shareholder Meeting, or any adjournments or postponements 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 Shareholder Meeting. The Board recommends that you vote “FOR” the Proposals.

 

 

Shareholders of record as of the close of business on [February 1, 2013], are entitled to notice of, and to vote at, the Shareholder Meeting, and are also entitled to vote at any adjournments or postponements thereof. Your attention is called to the accompanying Proxy Statement. Regardless of whether you plan to attend the Shareholder Meeting, please complete, sign, and return promptly, but in no event later than [April 21, 2013], the enclosed Proxy Ballot or Voting Instruction Card so that a maximum number of shares may be voted. Proxies or voting instructions may be revoked at any time before they are exercised by submitting a revised Proxy Ballot or Voting Instruction Card, by giving written notice of revocation to the Portfolios or by voting in person at the Shareholder Meeting.

 

	By Order of the Board of Directors/Trustees
	Theresa K. Kelety
	Secretary

[March 18, 2013]

 

 

PROXY STATEMENT

[March 18, 2013]

 

 

Meeting of Shareholders

Scheduled for [April 22, 2013]

 

 

ING Balanced Portfolio, Inc.

ING Balanced Portfolio

 

ING Intermediate Bond Portfolio

ING Intermediate Bond Portfolio

 

ING Money Market Portfolio

ING Money Market Portfolio

 

ING Strategic Allocation Portfolios, Inc.

 

ING Variable Funds

ING Growth and Income Portfolio

 

ING Variable Portfolios, Inc.

 

7337 East Doubletree Ranch Road, Suite 100

Scottsdale, Arizona 85258-2034

(800) 992-0180

 

Important Notice Regarding the Availability of Proxy Materials

For the Shareholder Meeting to be Held on [April 22, 2013]

This Proxy Statement and Notice of Shareholder Meeting are available at www.proxyvote.com/ing

 

 

 

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TABLE OF CONTENTS

 

Introduction		10
What is happening?		10
Why did you send me this booklet?		10
What Proposals are being considered at the Shareholder Meeting		11
Who is eligible to vote?		11
How do I vote?		11
When and where will the Shareholder Meeting be held?		12
How can I obtain more information about a Portfolio?		12
Impact of the Separation Plan		13
What is the Separation Plan?		13
Why do the investment advisory and sub-advisory agreements terminate?		13
Will the Separation Plan change how the Portfolios are managed?		14
How will the Separation Plan impact the service providers to the Portfolios?		14
Proposal One — Approval of the Proposed Advisory Agreement		16
What is Proposal One?		16
Who is the Portfolios’ investment adviser?		16
What are the terms of the Proposed Advisory Agreement?		16
What is the recommendation of the Board?		17
What is the required vote?		18
What happens if shareholders do not approve the Proposal?		18
Proposal Two — Approval of the Proposed Sub-Advisory Agreement		19
What is Proposal Two?		19
Who is the ING IM Portfolios’ Sub-Adviser?		19
What are the terms of the Proposed Sub-Advisory Agreement?		19
What is the recommendation of the Board?		20
What is the required vote?		20
What happens if shareholders do not approve the Proposal?		20
Separation Plan — Factors Considered by the Board		21
Proposal Three — Election of the Directors/Trustees		23
What is Proposal Three?		23
Who are the Nominees and what are their qualifications?		24
How long will the Directors/Trustees serve on the Board?		26
Do the Independent Directors/Trustees and Nominees own shares of the Portfolios or certain affiliate entities?		26
How is the Board Structured?		26
How will the committee structure change upon the creation of the Consolidated Board?		28
What are the Directors/Trustees paid for their services?		29
How often does the Board meet?		29
Who are the officers of the Registrants?		29
What are the officers paid for their services?		29
What is the Board’s Recommendation		29
What is the required vote?		29
Proposal Four — Approval of a Modified Manager-of-Managers Policy		30
What is Proposal Four?		30
Why is the Modified Manager-of-Managers Policy proposed?		30
What are the proposed conditions of the Amended Relief?		30
What is the recommendation of the Board?		30
What factors were considered by the Board?		30
What is the required vote?		31
What happens if shareholders do not approve Proposal Four?		31
Proposal Five — Approval of a Change in a Fundamental Investment Policy on Concentration		32
What is Proposal Five?		32
What is the proposed change to the fundamental investment policy on concentration?		32
Why is a change to the fundamental investment policy on concentration proposed?		32
What is the recommendation of the Board?		32
What is the required vote?		32
What happens if shareholders do not approve Proposal Five?		33
General Information about the Proxy Statement		34
Who is asking for my vote?		34
How is my proxy being solicited?		34
What happens to my proxy once I submit it?		34
Can I revoke my proxy after I submit it?		34
What are the voting rights and quorum requirements		34

 

 

Who are the Portfolio’s independent public accountants?		35
Can shareholders submit proposals for consideration in a Proxy Statement?		35
How can shareholders send communications to the Board?		36
What if a proposal that is not in the Proxy Statement comes up at the Shareholder Meeting?		36
Who pays for this Proxy Solicitation?		36
Appendix A: Portfolio Managers		37
Appendix B: Principal Executive Officers		38
Appendix C: Fees Paid to Affiliates of the Adviser		39
Appendix D: Form of Proposed Advisory Agreement		40
Appendix E: Advisory Agreement Information		45
Appendix F: Compensation Paid to the Adviser by Investment Companies with Similar Investment Objectives		47
Appendix G: Form of Proposed ING IM Sub-Advisory Agreement		51
Appendix H: Sub-Advisory Agreement Information		58
Appendix I: Compensation Paid to ING IM by Investment Companies with Similar Investment Objectives		60
Appendix J: Board Considerations in Approving Continuation of the Current Advisory and Sub-Advisory Agreements		62
Overview of the Review Process		62
Nature, Extent and Quality of Services		63
Portfolio Performance		64
Management Fees, Sub-Advisory Fees and Expenses		64
Profitability		64
Economies of Scale		65
Appendix K: Nominees		66
Appendix L: Director/Trustee and Nominee Ownership of Portfolio Securities		68
Appendix M: Anticipated Structure of the Consolidated Board and its Committees		69
APPENDIX N: DIRECTOR/TRUSTEE COMPENSATION		71
Appendix O: Officer Information		72
Appendix P: Shares Outstanding as of the Record Date		74
Appendix Q: Beneficial Ownership as of the Record Date		75
Appendix R: Fees Paid to the Independent Registered Public Accountants		76

 

 

INTRODUCTION

 

ING Australia Index Portfolio		ING Money Market Portfolio
ING Balanced Portfolio		ING RussellTM Large Cap Growth Index Portfolio
ING BlackRock Science and Technology Opportunities Portfolio		ING RussellTM Large Cap Index Portfolio
ING Emerging Markets Index Portfolio		ING RussellTM Large Cap Value Index Portfolio
ING Euro STOXX 50® Index Portfolio		ING RussellTM Mid Cap Growth Index Portfolio
ING FTSE 100 Index® Portfolio		ING RussellTM Mid Cap Index Portfolio
ING Growth and Income Portfolio		ING RussellTM Small Cap Index Portfolio
ING Hang Seng Index Portfolio		ING Small Company Portfolio
ING Index Plus LargeCap Portfolio		ING Strategic Allocation Conservative Portfolio
ING Index Plus MidCap Portfolio		ING Strategic Allocation Growth Portfolio
ING Index Plus SmallCap Portfolio		ING Strategic Allocation Moderate Portfolio
ING Intermediate Bond Portfolio		ING U.S. Bond Index Portfolio
ING International Index Portfolio		ING Wisdom TreeSM Global High-Yielding Equity Index Portfolio
ING Japan TOPIX Index® Portfolio

(each a “Portfolio,” and collectively, the “Portfolios”)

 

What is happening?

 

Pursuant to an agreement with the European Commission, ING Groep N.V. (“ING Groep”) has announced its intention to divest ING U.S., Inc. (“ING U.S.”), a wholly owned, indirect subsidiary of ING Groep and the parent company of ING Investments, LLC (“ING Investments” or the “Adviser”) and ING Investment Management Co. LLC (“ING IM”), each an investment adviser or sub-adviser to the Portfolios, except that ING IM is not a sub-adviser to ING Blackrock Science and Technology Opportunities Portfolio, (such divestment, the “Separation Plan”). ING Groep’s base case to achieve the Separation Plan is through an initial public offering of ING U.S. (the “IPO”) followed by the divestment of ING Groep’s remaining ownership interest over time through one or more additional public offerings of ING U.S. stock, or, possibly, through one or more privately negotiated sales of the stock. (While the Separation Plan is the base case, it is possible that the Separation Plan may be achieved by means of a sale to a single buyer or group of buyers.)

 

The Portfolios are subject to Section 15 the Investment Company Act of 1940, as amended (the “1940 Act”), which provides that any investment advisory agreement including any sub-advisory agreement must terminate automatically upon its “assignment,” which includes any transfer of a controlling block of outstanding voting securities in an adviser or the parent company of an adviser. Such a transfer is often referred to as a “Change of Control Event.” It is anticipated that one or more of the transactions contemplated by the Separation Plan would be deemed a Change of Control Event. At any such Change of Control Event the advisory and sub-advisory agreements for each Portfolio will automatically terminate. For more information on the Separation Plan and its effect on the Portfolios, please see the section entitled “Impact of the Separation Plan.”

 

In order to ensure that the existing advisory and sub-advisory services provided to the Portfolios can continue uninterrupted, shareholders are asked to approve the advisory agreement between the adviser, ING Investments, and the Portfolios as well as sub-advisory agreements for each Portfolio between ING Investments and ING IM. Shareholders are asked to approve these agreements effective upon shareholder approval or the close of the IPO, whichever is later. As part of the same proposals, shareholders are voting to approve, under certain circumstances, any future agreements required to be approved as a result of subsequent Change of Control Events that occur in connection with the Separation Plan.

 

In addition to approving the agreements required in connection with the Separation Plan, shareholders are asked to approve a number of additional proposals which are discussed in more detail in Proposals Three through Five. As discussed in Proposal Three, shareholders are asked to elect 13 nominees to the Boards of Directors/Trustees (the “Board”) of ING Balanced Portfolio, Inc., ING Intermediate Bond Portfolio, ING Money Market Portfolio, ING Strategic Allocation Portfolios, Inc., ING Variable Funds, and ING Variable Portfolios, Inc. (each a “Registrant,” and collectively, the “Registrants”) and each portfolio organized as a series of the Registrants (each a “Portfolio,” and collectively, the “Portfolios”). In Proposal Four shareholders of each Portfolio are asked to approve a modification to the current “manager-of-managers” policy. Finally, as discussed in Proposal Five, shareholders of ING Money Market Portfolio are asked to approve changes to its fundamental investment policy governing concentration.

 

Why did you send me this booklet?

 

Shares of one or more of the Portfolios have been purchased by you or at your direction through your qualified pension or retirement plan (“Qualified Plans”) or, at your direction, by your insurance company (a “Participating Insurance Company”) through its separate accounts (“Separate Accounts”) to serve as investment options under your variable annuity or variable life contract (“Variable Contracts”). This booklet includes a proxy statement (“Proxy Statement”) and a proxy ballot (“Proxy Ballot”) or voting instruction card (“Voting Instruction Card”) for each Portfolio in which you have an interest. It provides you with information you should review before providing voting instructions on the matters listed below and in the Notice of Shareholder Meeting.

 

10

 

The Participating Insurance Company and Qualified Plans or their trustees, as record owners of each Portfolio’s shares are, in most cases, the true “shareholders” of the Portfolio however, participants in Qualified Plans (“Plan Participants”) or holders of Variable Contracts (“Variable Contract Holders”) may be asked to instruct their Qualified Plan trustee or Participating Insurance Company, as applicable, as to how they would like the shares attributed to their Qualified Plan or Variable Contract to be voted. For clarity and ease of reading, references to “shareholder” or “you” throughout this Proxy Statement do not only refer to the technical shareholder but also to the persons who are asked to provide voting instructions on the Proposals, unless the context indicates otherwise. Similarly, for ease of reading, references to “voting” or “vote” do not only refer to the technical vote but also to the voting instructions provided by Variable Contract Holders or Plan Participants.

 

What Proposals are being considered at the Shareholder Meeting

 

The table below describes each proposal and indicates which proposals shareholders of each Portfolio are asked to approve at the meeting of shareholders (the “Shareholder Meeting”). At the Shareholder Meeting, shareholders are asked:

 

1.              To approve a new investment advisory agreement with ING Investments for each Portfolio prompted by the IPO, and to approve, under certain circumstances, any future advisory agreements prompted by Change of Control Events that occur as part of the Separation Plan;

 

All Portfolio

 

2.              To approve a new investment sub-advisory agreement between ING Investments and ING IM on behalf of the following Portfolios prompted by the IPO, and to approve, under certain circumstances, any future sub-advisory agreements prompted by Change of Control Events that occur as part of the Separation Plan;

 

ING Australia Index Portfolio		ING Money Market Portfolio
ING Balanced Portfolio		ING RussellTM Large Cap Growth Index Portfolio
ING Emerging Markets Index Portfolio		ING RussellTM Large Cap Index Portfolio
ING Euro STOXX 50® Index Portfolio		ING RussellTM Large Cap Value Index Portfolio
ING FTSE 100 Index® Portfolio		ING RussellTM Mid Cap Growth Index Portfolio
ING Growth and Income Portfolio		ING RussellTM Mid Cap Index Portfolio
ING Hang Seng Index Portfolio		ING RussellTM Small Cap Index Portfolio
ING Index Plus LargeCap Portfolio		ING Small Company Portfolio
ING Index Plus MidCap Portfolio		ING Strategic Allocation Conservative Portfolio
ING Index Plus SmallCap Portfolio		ING Strategic Allocation Growth Portfolio
ING Intermediate Bond Portfolio		ING Strategic Allocation Moderate Portfolio
ING International Index Portfolio		ING U.S. Bond Index Portfolio
ING Japan TOPIX Index® Portfolio		ING Wisdom TreeSM Global High-Yielding Equity Index Portfolio

(each an “ING IM Portfolio,” and collectively, the “ING IM Portfolios”)

 

3.              To approve the election of 13 nominees to the Board;

 

All Portfolios

 

4.              To approve a modified manager-of-managers policy to permit ING Investments, subject to prior approval by the Board to enter into and materially amend agreements with wholly owned sub-advisers in addition to unaffiliated sub-advisers without obtaining the approval of such Portfolio’s shareholders;

 

All Portfolios

 

5.              To approve a change in the fundamental investment policy on concentration for ING Money Market Portfolio;

 

ING Money Market Portfolio

 

6.              To transact such other business, not currently contemplated, that may properly come before the Shareholder Meeting, or any adjournments or postponements thereof, in the discretion of the proxies or their substitutes.

 

All Portfolios

 

Who is eligible to vote?

 

Shareholders holding an investment in shares of a Portfolio as of the close of business on [February 1, 2013] (the “Record Date”) are eligible to vote or instruct their insurance company or plan trustee as to how to vote their shares. (See “General Information” for a more detailed discussion of voting procedures.)

 

How do I vote?

 

You may submit your Proxy Ballot or Voting Instruction Card in one of four ways:

 

11

 

·                  By Internet. The web address and instructions for voting can be found on the enclosed Proxy Ballot or Voting Instruction Card. You will be required to provide your control number located on the Proxy Ballot or Voting Instruction Card.

 

·                  By Telephone. The toll-free number for telephone voting can be found on the enclosed Proxy Ballot or Voting Instruction Card. You will be required to provide your control number located on the Proxy Ballot or Voting Instruction Card.

 

·                  By Mail. Mark the enclosed Proxy Ballot or Voting Instruction Card, sign and date it, and return it in the postage-paid envelope we provided. Joint owners must each sign the Proxy Ballot or Voting Instruction Card.

 

·                  In Person at the Shareholder Meeting. You can vote your shares in person at the Shareholder Meeting. If you expect to attend the Shareholder Meeting in person, please call Shareholder Services toll-free at (800) 992-0180.

 

If you require additional information regarding the Shareholder Meeting, you may contact the Proxy Solicitor toll-free at []. (See “General Information” for more information on the Proxy Solicitor.)

 

When and where will the Shareholder Meeting be held?

 

The Shareholder Meeting is scheduled to be held at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258-2034, on [April 22, 2013], at [10:00 A.M.], Local time, and, if the Shareholder Meeting is adjourned or postponed, any adjournments or postponements of the Shareholder Meeting will also be held at the above location. If you expect to attend the Shareholder Meeting in person, please call Shareholder Services toll-free at (800) 992-0180.

 

How can I obtain more information about a Portfolio?

 

Should you have any questions about a Portfolio, please do not hesitate to contact Shareholder Services toll free at (800) 992-0180. A copy of the current prospectus, statement of additional information, annual report, and semi-annual report for each Portfolio is available, without charge on the Internet at http://www.ingfunds.com/vp/lit or by contacting the Portfolios at:

 

ING Funds

7337 East Doubletree Ranch Road, Suite 100

Scottsdale, Arizona 85258-2034

(800) 992-0180

 

Only one copy of this Proxy Statement may be mailed to each household, even if more than one person in the household is a Portfolio shareholder of record, unless the Portfolios have received contrary instructions from one or more of the household’s shareholders. If a shareholder needs an additional copy of this Proxy Statement, please contact Shareholder Services. If in the future, any shareholder does not wish to combine or wishes to recombine the mailing of a proxy statement with household members, please contact the Portfolio at the address or phone number listed above.

 

12

 

IMPACT OF THE SEPARATION PLAN

 

What is the Separation Plan?

 

ING Groep is a global financial institution of Dutch origin offering banking, investments, life insurance, and retirement services to over 85 million private, corporate, and institutional clients in more than 40 countries. The principal office of ING Groep is located at Amstelveensesweg 500, 1081 KL P.O. Box 810, 1000 AV Amsterdam, The Netherlands. ING U.S. constitutes the U.S.-based retirement, investment, and insurance operations of Netherlands-based ING Groep. In the U.S., the ING family of companies offers a comprehensive array of financial services to retail and institutional clients, including retirement plans, IRA rollovers and transfers, stable value, institutional investment management, mutual funds, alternative investments, life insurance, employee benefits, fixed and indexed annuities and financial planning. ING U.S. serves approximately 13 million customers across the nation. The principal office of ING U.S. is 230 Park Avenue, New York, New York 10169.

 

In October 2009, ING Groep submitted a restructuring plan (the “Restructuring Plan”) to the European Commission in order to receive approval for state aid granted to ING Groep by the Kingdom of the Netherlands in November 2008 and March 2009. To receive approval for this state aid, ING Groep was required to divest its insurance and investment management businesses, including ING U.S. before the end of 2013. In November 2012, the Restructuring Plan was amended to permit ING Groep additional time to complete the divestment. Pursuant to the amended Restructuring Plan, ING Groep must divest at least 25% of ING U.S. by the end of 2013, more than 50% by the end of 2014, and the remaining interest by the end of 2016.

 

On November 9, 2012, ING U.S. filed a Registration Statement on Form S-1 (the “Form S-1”) with the U.S. Securities and Exchange Commission (“SEC”) to register an initial public offering of ING U.S. common stock. Following an IPO, ING Groep would likely continue to own a majority of the common stock of ING U.S. Subsequent to an IPO, ING Groep would likely sell its controlling ownership interest in ING U.S. through one or more additional public offerings of ING U.S. stock, or possibly, through one or more privately negotiated sales of stock. Although the base case of the Separation Plan is one or more offerings of stock, it is possible that ING Groep’s divestment of ING U.S. may take place by means of a sale to a single buyer or group of buyers.

 

The Separation Plan, whether implemented through public offerings or other means, may be disruptive to the businesses of ING U.S. and its subsidiaries, including the Adviser, ING IM, and affiliated entities that provide services to the Portfolios, and may cause, among other things, interruption of business operations or services, diversion of management’s attention from day-to-day operations, reduced access to capital, and loss of key employees or customers. The completion of the Separation Plan is expected to result in the Adviser’s and ING IM’s loss of access to the resources of ING Groep, which could adversely affect their businesses. ING U.S., as a stand-alone entity, may be a publicly-held U.S. company subject to the reporting requirements of the Securities Exchange Act of 1934 as well as other United States government and state regulations, and subject to the risk of changing regulation.

 

The Separation Plan may be implemented in phases. During the time that ING Groep retains a majority interest in ING U.S., circumstances affecting ING Groep, including restrictions or requirements imposed on ING Groep by European and other authorities, may also affect ING U.S. A failure to complete the Separation Plan could create uncertainty about the nature of the relationship between ING U.S. and ING Groep, and could adversely affect ING U.S. and the Adviser. Currently, the Adviser and its affiliates do not anticipate that the Separation Plan will have a material adverse impact on its operations or the Portfolios and their operations.

 

Why do the investment advisory and sub-advisory agreements terminate?

 

As discussed previously, pursuant to Section 15 of the 1940 Act, any investment advisory agreement on behalf of a registered investment company including any sub-advisory agreement must terminate automatically upon its “assignment.” As used in the 1940 Act, the term assignment includes any transfer of a controlling interest in an investment adviser or the parent company of an investment adviser. Such a transfer is often referred to as a “Change of Control Event.”

 

Whether or not a public offering of ING U.S. stock results in a Change of Control Event depends on the facts and circumstances of the offering.  Indeed, the IPO is not expected to constitute a Change of Control Event, and a Change of Control Event may not occur if ING Groep continues to hold at least 25% of the outstanding stock of ING U.S. and not more than 25% of the outstanding shares of ING U.S. is conveyed to a single person.

 

It is anticipated that one or more of the transactions contemplated by the Separation Plan would be deemed a Change of Control Event resulting in the automatic termination of the existing advisory and sub-advisory agreements for each Portfolio. In order to ensure that the existing investment advisory and sub-advisory services can continue uninterrupted, the Board has approved new advisory and sub-advisory agreements for each Portfolio in connection with the IPO. Shareholders of each Portfolio are asked to approve these new agreements for each Portfolio. These agreements are described in Proposals One and Two of this Proxy Statement.

 

As part of Proposal One and Two, shareholders are also voting to approve any future advisory and sub-advisory agreements if, as a result of future Change of Control Events that occur in connection with the Separation Plan, the advisory and sub-advisory agreements terminate. Shareholder approval will be deemed to apply to these future advisory and sub-

 

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advisory agreements only if: (1) the sale of common stock of ING U.S. is broadly distributed with no single person acquiring more than 25% of ING U.S.’s outstanding voting securities; (2) the Board approves the future advisory and sub-advisory agreements, and (3) the future advisory and sub-advisory agreements would not be materially different from the agreements that are described in this Proxy Statement. These future agreements would be deemed to be effective upon the closing of the transaction that constitutes a Change of Control Event.

 

Shareholders are asked to vote on approval of these future advisory and sub-advisory agreements as part of the same vote on new advisory and sub-advisory agreements that have been approved by the Board, which are described later in this proxy statement.  This is because the IPO and subsequent Change of Control Events will be incremental related steps that are part of the same Separation Plan that would lead to the full divestiture of ING U.S. by ING Groep.  Under the circumstances described above, seeking a single shareholder vote for the new agreements and future agreements will allow the Portfolios to maintain the uninterrupted services of the Adviser and its sub-advisers without the need for additional shareholder approval and additional proxy statements, which would describe the same or substantially similar facts as this Proxy Statement.  Seeking shareholder approval at this time provides shareholders the opportunity to vote when the first significant change in ownership of ING U.S. is expected to occur under the Separation Plan, and when ING U.S. is expected to first become a U.S. publicly traded company.  The Adviser and certain of its affiliates have submitted a letter to the staff of the SEC seeking the agreement of the staff that it would not object if the Portfolios and other investment companies in the complex of investment companies managed by the Adviser or its affiliates (the “ING Fund Complex”) seek shareholder approval for the new and future agreements under the Separation Plan as described in this proxy statement, although there can be no assurance that the SEC staff will agree to this request.

 

If there is a change from the facts described in this Proxy Statement that is material to shareholders of the Portfolios in the context of a vote on an advisory agreement, any shareholder approval received at the Shareholder Meeting may no longer be valid to approve future advisory and sub-advisory agreements that would otherwise be approved in the event of subsequent Change of Control Events. This judgment will be made by ING Investments and reviewed by the Board. If the advisory and sub-advisory agreements were to terminate without valid shareholder approval, the Board and the shareholders of each Portfolio may be asked to approve new advisory and sub-advisory agreements to permit ING Investments and ING IM to continue to provide services to the Portfolios.

 

The Adviser anticipates complying with the requirements of Section 15(f) of the 1940 Act with respect to any offering of the shares of ING U.S. under the Separation Plan that causes an assignment of the then-effective advisory or sub-advisory agreement for a Portfolio. Section 15(f) provides, in pertinent part, that affiliated persons of an adviser may receive any amount or benefit in connection with a sale of securities of, or a sale of any other interest in, such an adviser which results in an assignment of the investment advisory or sub-advisory agreement if, for a period of three years after the time of such a transaction, at least 75 percent of the members of the board of any investment company which it oversees are not “interested persons” (as defined in the 1940 Act) (“Independent Directors/Trustees”) of the new or old investment adviser; and for a two-year period there is no “unfair burden” imposed on any such investment company as a result of the transaction. The Board currently satisfies the 75 percent requirement of Section 15(f) and the Adviser has represented to the Board its intent not to impose an unfair burden on the Portfolios for so long as the requirements of Section 15(f) apply.

 

Will the Separation Plan change how the Portfolios are managed?

 

The Separation Plan is not anticipated to result in any changes to the management of the Portfolios. If shareholders approve the advisory and sub-advisory agreements in Proposals One and Two, the portfolio managers to each Portfolio, as listed in Appendix A, are expected to continue to provide for the day-to-day management of the Portfolios. In addition, the personnel responsible for the management operations of the Portfolios including the Portfolios’ officers are not expected to change as a result of the Separation Plan.

 

The Separation Plan will not result in any change to the investment objective or the investment strategies of any Portfolio; however, the names of the Portfolios may change to reflect a change in name of ING Investments or ING IM. The brand or company name under which ING U.S. and its subsidiaries will operate is currently being evaluated and will be announced at a later date. Shareholders will be notified of any change in the portfolio managers, the investment objective, the investment strategies, or the name of a Portfolio.

 

How will the Separation Plan impact the service providers to the Portfolios?

 

ING Investments, LLC

 

ING Investments, an Arizona limited liability company, serves as the investment adviser to each Portfolio. ING Investments is registered with the SEC as an investment adviser. ING Investments became an investment management firm in April 1995. As of September 28, 2012, ING Investments oversees approximately $45.2 billion in assets. ING Investments’ principal office is located at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258-2034.

 

Currently, ING Investments is an indirect, wholly owned subsidiary of ING U.S. and ING Groep. After the close of the IPO, ING Investments will no longer be wholly owned by ING Groep, but will continue to be an indirect, wholly owned subsidiary of ING U.S. Following the completion of the Separation Plan it is anticipated that ING Groep will no longer have a

 

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controlling interest in ING Investments. See Appendix B for a list of the names, addresses, directors, and principal executive officers of ING Investments.

 

ING Investment Management Co. LLC

 

ING IM, a Delaware limited liability company, was founded in 1972 and is registered with the SEC as an investment adviser. ING IM serves as a sub-adviser to each of the ING IM Portfolios. ING IM has acted as adviser or sub-adviser to mutual funds since 1994 and has managed institutional accounts since 1972. The principal office of ING IM is located at 230 Park Avenue, New York, New York 10169. As of September 28, 2012, ING IM managed approximately $65.8 billion in assets.

 

Currently, ING IM is an indirect, wholly owned subsidiary of ING U.S. and ING Groep. After the close of the IPO, ING IM will no longer be wholly owned by ING Groep, but will continue to be an indirect, wholly owned subsidiary of ING U.S. Following the completion of the Separation Plan it is anticipated that ING Groep will no longer have a controlling interest in ING IM. See Appendix B for a list of the names, addresses, directors, and principal executive officers of ING IM.

 

Other affiliated service providers

 

ING Funds Services, LLC (the “Administrator”) serves as the administrator to each Portfolio. See Appendix C for the amounts paid by each Portfolio to the Administrator over each Portfolio’s most recently completed fiscal year.

 

ING Investments Distributor, LLC (the “Distributor”) serves as the distributor to the Portfolios. See Appendix C for the fees paid by each Portfolio to the Distributor over each Portfolio’s most recently completed fiscal year and any commissions paid to affiliated broker-dealers over that same period.

 

Currently, the Administrator and Distributor are indirect, wholly owned subsidiaries of ING U.S. and ING Groep. After the close of the IPO, the Administrator and Distributor will no longer be wholly owned by ING Groep, but will continue to be indirect, wholly owned subsidiaries of ING U.S. Following the completion of the Separation Plan it is anticipated that ING Groep will no longer have a controlling interest in the Administrator or Distributor. The principal offices for the Administrator and Distributor are located at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258-2034.

 

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PROPOSAL ONE – APPROVAL OF THE PROPOSED ADVISORY AGREEMENT

 

What is Proposal One?

 

Shareholders of the Portfolios are asked to approve a new investment advisory agreement for the Portfolios with ING Investments (the “Proposed Advisory Agreement”) to ensure that existing investment advisory services can continue uninterrupted through the implementation of the Separation Plan. The Proposed Advisory Agreement would be effective upon shareholder approval or the close of the IPO, whichever is later.

 

As discussed in the section entitled “Impact of the Separation Plan,” the Separation Plan is likely to result in one or more Change of Control Events each of which will result in the automatic termination of the advisory agreement between each Portfolio and ING Investments. Therefore, shareholders are also asked to approve any future advisory agreement if, as a result of future Change of Control Events that occur in connection with the Separation Plan, the advisory agreement terminates. Shareholder approval will be deemed to apply to future advisory agreements only if: (1) the sale of common stock of ING U.S. is broadly distributed with no single person acquiring more than 25% of ING U.S.’s outstanding voting securities; (2) the Board approves the future advisory agreements; and (3) the future advisory agreements would not be materially different from the agreements that are described in this Proxy Statement. These future agreements would be deemed to be effective upon the closing of a transaction that constitutes a Change of Control Event.

 

Who is the Portfolios’ investment adviser?

 

ING Investments serves as the investment adviser to the Portfolios pursuant to an advisory agreement each Portfolio and ING Investments (the “Current Advisory Agreement”). If shareholders approve Proposal One, ING Investments will continue to serve as investment adviser to the Portfolios. For more information on ING Investments and how it will be affected by the Separation Plan, please see the section entitled “Impact of the Separation Plan.”

 

What are the terms of the Proposed Advisory Agreement?

 

The description of the Proposed Advisory Agreement that follows is qualified in its entirety by reference to the copy of the form of the Proposed Advisory Agreement included in Appendix D. The Proposed Advisory Agreement is substantially similar to the Current Advisory Agreement. As part of a larger effort to update and achieve more consistent investment advisory agreements across the ING Fund Complex, the Proposed Advisory Agreement contains changes to the specific language used to discuss certain non-material terms. The material terms of the Current and Proposed Advisory Agreements are discussed in more detail below.

 

Fees. No changes to the fee schedules for the Portfolios are anticipated in connection with Proposal One. Appendix E includes the fee schedules for each Portfolio. Appendix F provides information on the compensation paid to ING Investments by investment companies with similar investment objectives.

 

Services. No changes to the services provided by ING Investments as specified under the Current and Proposed Advisory Agreements are anticipated in connection with Proposal One.

 

Both the Current and Proposed Advisory Agreements appoint ING Investments to provide advisory, management, and other services to each Portfolio. Specifically, in accordance with each Portfolio’s investment objective(s) and policies, ING Investments shall provide general, investment advice and guidance and oversee the management of the investments of each Portfolio and the composition of its portfolio of securities and investments, including cash, and the purchase, retention and disposition thereof. Additionally, both the Current and Proposed Advisory Agreements provide that ING Investments shall provide advice and guidance to the Board and render such periodic reports as the Board may reasonably request.

 

Both the Current and Proposed Advisory Agreements provide that ING Investments shall make its officers and employees available for consultation and discussions regarding the administration and management of the Portfolios and its services to the Board and officers the Portfolios.

 

Appointment of Sub-Advisers. No changes to the authority of ING Investments to appoint other investment advisory firms (each a “Sub-Adviser”) are anticipated in connection with Proposal One. Both the Current and Proposed Advisory Agreements for the Portfolios permit ING Investments to delegate certain advisory and management services to Sub-Advisers.

 

Both the Current and Proposed Advisory Agreements provide that, in the event that ING Investments wishes to select others to render investment management services, ING Investments shall analyze, select and recommend for consideration and approval by the Board, Sub-Advisers to provide investment advice to a Portfolio and to engage such Sub-Adviser, at the expense of ING Investments. Both the Current and Proposed Advisory Agreements provide that ING Investments shall: periodically monitor and evaluate the performance of the Sub-Adviser with respect to the investment objectives and policies of the applicable Portfolio; monitor the Sub-Adviser for compliance with the investment objective(s), policies and restrictions of the applicable Portfolio, the 1940 Act, the Internal Revenue Code of 1986, as amended (the “Code”), and other applicable law; and supervise Sub-Advisers with respect to the services that such Sub-Adviser provides under its portfolio management agreements on behalf of a Portfolio. Furthermore, ING Investments shall, if appropriate, analyze and recommend for consideration by the Board the termination of a contract with a Sub-Adviser under both the Current and Proposed Advisory Agreement.

 

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The Proposed Advisory Agreement identifies additional services that ING Investments provides with respect to Sub-Advisers. Specifically, ING Investments shall: (1) prepare and present periodic reports to the Board regarding the investment performance and other information regarding the Sub-Adviser; (2) review and consider any changes in the personnel, ownership or senior management of the Sub-Adviser; (3) perform periodic in-person or telephonic diligence meetings with representatives of the Sub-Adviser; (4) assist the Board in developing and reviewing information with respect to the initial approval and annual consideration of the Sub-Adviser Agreement; and (5) identify potential successors to or replacements of the Sub-Adviser or potential additional Sub-Advisers, perform appropriate due diligence, and develop and present to the Board such recommendations. Furthermore, the Proposed Advisory Agreement provides that ING Investments shall designate and compensate from its own resources such personnel as it may consider necessary or appropriate to the performance of its services and perform such other review and reporting functions as the Board shall reasonably request. The Current Advisory Agreement does not contain similar specific terms.

 

The Portfolios and ING Investments have received exemptive relief from the SEC to permit ING Investments, with the approval of the Board, to appoint an additional unaffiliated Sub-Adviser or to replace an existing Sub-Adviser with an unaffiliated Sub-Adviser, as well as change the terms of a contract with an unaffiliated Sub-Adviser, without submitting the contract to a vote of the Portfolio’s shareholders (the “Existing Relief”). The Portfolios will notify shareholders of any change in the identity of a Sub-Adviser of the Portfolios, the addition of a Sub-Adviser to the Portfolios, or any change in the terms of a contract with an unaffiliated Sub-Adviser. In this event, the names of the Portfolios and their investment strategies may also change.

 

In January 2013, the Portfolios and ING Investments and certain of their affiliates filed an application for exemptive relief that would extend the Existing Relief to permit ING Investments, with the approval of the Board, to enter into or materially amend sub-advisory agreements with wholly owned Sub-Advisers, without shareholder approval.  In Proposal Four, shareholders are asked to approve Portfolios’ reliance on this amended exemptive relief in the event it is ultimately granted by the SEC. For more information, please see Proposal Four.

 

Limitation of Liability. No changes to the limitation of liabilities as specified under the Current and Proposed Advisory Agreements are anticipated in connection with Proposal One.

 

Both the Current and Proposed Advisory Agreements provide that neither ING Investments, nor its stockholders, officers, directors, employees, or agents shall be subject to any liability for, or any damages, expenses, or losses incurred in connection with, any act or omission connected with or arising out of any services rendered, except by reason of willful misfeasance, bad faith, or negligence in the performance of ING Investments’ duties, or by reason of reckless disregard of ING Investments obligations and duties. Furthermore, neither ING Investments, nor its stockholders, officers, directors, employees, or agents shall be subject to any liability for, or any damages, expenses, or losses incurred in connection with, any act or omission by a Sub-Adviser or any of the Sub-Advisers’ stockholders or partners, officers, directors, employees, or agents connected with or arising out of any services rendered, except by reason of willful misfeasance, bad faith, or negligence in the performance of ING Investments’ duties, or by reason of reckless disregard of ING Investments’ obligations and duties.

 

Term and Continuance. After an initial two-year term, the Proposed Advisory Agreement continues in effect from year-to-year so long as such continuance is specifically approved at least annually by: (1) the Board; or (2) the vote of a “majority” (as defined in the 1940 Act) of the Portfolio’s outstanding shares voting as a single class; provided that, in either event, the continuance is also approved by at least a majority of those Directors/Trustees who are neither parties to the Proposed Advisory Agreement nor “interested persons” (as defined in the 1940 Act) of any such party nor have any interest in the Proposed Advisory Agreement, by vote cast in person at a meeting called for the purpose of voting on such approval. The Current Advisory Agreement provides for the same terms with respect to term and continuation as the Proposed Advisory Agreement.

 

Termination. The Proposed Advisory Agreement may be terminated at any time, without the payment of any penalty, by the Board or by vote of a majority of outstanding voting securities of a Portfolio on sixty days’ written notice to ING Investments, or by ING Investments on sixty days’ written notice to a Portfolio. The Current Advisory Agreement provides for the same terms with respect to termination as the Proposed Advisory Agreement. Notwithstanding the initial two-year term, the Board has indicated its current intent is to conduct annual contract reviews in 2013 and 2014 consistent with its current review and approval process and cycle.

 

For more information on when the Current Advisory Agreement was last approved by shareholders, please see Appendix E.

 

What is the recommendation of the Board?

 

Based upon its review and after consideration of such factors and information it considered relevant, the Board, including a majority of the Independent Directors/Trustees present at its January 9, 2013 meeting, approved the Proposal Advisory Agreement and voted to recommend to shareholders that they approve the Proposal. The Board is therefore recommending that the Portfolios’ shareholders vote “FOR” Proposal One. For more information on the factors considered by the Board, please see the section entitled “Separation Plan — Factors Considered by the Board.”

 

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What is the required vote?

 

Approval of the Proposed Advisory Agreement by shareholders of a Portfolio requires the affirmative vote of a “majority of the outstanding voting securities,” which is defined by the 1940 Act to mean the affirmative vote of the lesser of: (1) 67% or more of the voting securities present at the Shareholder Meeting if more than 50% of the outstanding shares are present or represented by proxy; or (2) more than 50% of the outstanding voting securities. Shareholders of each Portfolio will vote separately on Proposal One and all shareholders of all classes of shares of a Portfolio will vote together as a single class on the Proposal.

 

What happens if shareholders do not approve the Proposal?

 

If the shareholders of a Portfolio do not approve the Proposed Advisory Agreement, and if no Change of Control Event occurs, ING Investments would continue to serve as adviser to a Portfolio under the Current Advisory Agreement and any existing sub-adviser would continue to be able to serve as sub-adviser to a Portfolio under the current sub-advisory agreement.

 

If shareholders do not approve the Proposal and a Change of Control Event occurs, the Current Advisory Agreement and current sub-advisory agreement would terminate. Consequently ING Investments would not be able to serve as adviser or enter into any sub-advisory agreement for a Portfolio to provide for continuity of service. In that event, the Board would need to consider appropriate action, which could include, among other things, seeking approval of new advisory and sub-advisory agreements, liquidation of the Portfolio, or the reorganization of the Portfolio with and into another investment company in the ING Fund Complex.

 

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PROPOSAL TWO – APPROVAL OF THE PROPOSED SUB-ADVISORY AGREEMENT

 

ING Australia Index Portfolio		ING Money Market Portfolio
ING Balanced Portfolio		ING RussellTM Large Cap Growth Index Portfolio
ING BlackRock Science and Technology Opportunities Portfolio		ING RussellTM Large Cap Index Portfolio
ING Emerging Markets Index Portfolio		ING RussellTM Large Cap Value Index Portfolio
ING Euro STOXX 50® Index Portfolio		ING RussellTM Mid Cap Growth Index Portfolio
ING FTSE 100 Index® Portfolio		ING RussellTM Mid Cap Index Portfolio
ING Growth and Income Portfolio		ING RussellTM Small Cap Index Portfolio
ING Hang Seng Index Portfolio		ING Small Company Portfolio
ING Index Plus LargeCap Portfolio		ING Strategic Allocation Conservative Portfolio
ING Index Plus MidCap Portfolio		ING Strategic Allocation Growth Portfolio
ING Index Plus SmallCap Portfolio		ING Strategic Allocation Moderate Portfolio
ING Intermediate Bond Portfolio		ING U.S. Bond Index Portfolio
ING International Index Portfolio		ING Wisdom TreeSM Global High-Yielding Equity Index Portfolio
ING Japan TOPIX Index® Portfolio

(each an “ING IM Portfolio,” and collectively, the “ING IM Portfolios”)

 

What is Proposal Two?

 

Shareholders of the ING IM Portfolios are asked to approve a new investment sub-advisory agreement between ING Investments and ING IM (the “Proposed Sub-Advisory Agreement”) to ensure that existing sub-advisory services can continue uninterrupted through implementation of the Separation Plan. The Proposed Sub-Advisory Agreement would be effective upon shareholder approval or the close of the IPO, whichever is later.

 

As discussed in the section entitled “Impact of the Separation Plan,” the Separation is likely to result in one or more Change of Control Events each of which will result in the automatic termination of the sub-advisory agreement between ING IM and ING Investments. Therefore, shareholders are also asked to approve any future sub-advisory agreement if, as a result of future Change of Control Events that occur in connection with the Separation Plan, the sub-advisory agreement terminates. Shareholder approval will be deemed to apply to future sub-advisory agreements only if: (1) the sale of common stock of ING U.S. is broadly distributed with no single person acquiring more than 25% of ING U.S.’s outstanding voting securities; (2) the Board approves the future sub-advisory agreements, and (3) the future sub-advisory agreements are not materially different from the agreements that are described in this Proxy Statement. These future agreements will be deemed to be effective upon the closing of a transaction that constitutes a Change of Control Event.

 

Who is the ING IM Portfolios’ Sub-Adviser?

 

ING IM serves as the investment sub-adviser to each ING IM Portfolio pursuant to an advisory agreement between the ING IM Portfolio and ING IM (the “Current Sub-Advisory Agreement”). If shareholders approve Proposal Two, ING IM will continue to serve as investment sub-adviser to the ING IM Portfolio. For more information on ING IM and how it will be affected by the Separation Plan, please see the section entitled “Impact of the Separation Plan.”

 

What are the terms of the Proposed Sub-Advisory Agreement?

 

The description of the Proposed Sub-Advisory Agreement that follows is qualified in its entirety by reference to the copy of the form of the Proposed Sub-Advisory Agreement included in Appendix G. The Proposed Sub-Advisory Agreement is substantially similar to the Current Sub-Advisory Agreement. As part of a larger effort to update and achieve more consistent investment advisory agreements across the ING Fund Complex, the Proposed Sub-Advisory Agreement contains changes to the specific language used to discuss certain non-material terms. The material terms of the Current and Proposed Sub-Advisory Agreements are discussed in more detail below.

 

Fees. No changes to the sub-advisory fee schedules for the ING IM Portfolios are anticipated in connection with Proposal Two. ING Investments and not the ING IM Portfolios is responsible for paying any fees due under the Proposed Sub-Advisory Agreement. Appendix H includes the sub-advisory fee schedules for each ING IM Portfolio. Appendix I provides information on the compensation paid to ING IM with respect to advisory services provided to investment companies with similar investment objectives.

 

Services. No changes to the services provided by ING IM as specified under the Current and Proposed Sub-Advisory Agreements are anticipated in connection with Proposal Two.

 

Both the Current and Proposed Sub-Advisory Agreements appoint ING IM to act as the investment adviser and manager to each ING IM Portfolio and provide its services in accordance with each ING IM Portfolio’s investment objective(s), policies, and restrictions. Specifically, subject to the supervision of the Board, ING IM will provide a continuous investment program for each ING IM Portfolio and determine in its discretion the composition of the assets of each ING IM Portfolio, including determination of the purchase, retention, or sale of the securities, cash, and other investments contained in the ING IM Portfolio. ING IM will provide investment research and conduct a continuous program of evaluation, investment, sales, and reinvestment of each ING IM Portfolio’s assets by determining the securities and other investments that shall be

 

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purchased, entered into, sold, closed, or exchanged for the ING IM Portfolio, when these transactions should be executed, and what portion of the assets of the ING IM Portfolio should be held in the various securities and other investments in which it may invest. To the extent permitted by the investment policies of each ING IM Portfolio, ING IM shall make decisions for the ING IM Portfolios as to foreign currency matters.

 

Limitation of Liability. No changes to the limitation of liabilities as specified under the Current and Proposed Sub-Advisory Agreements are anticipated in connection with Proposal Two. Both the Current and Proposed Sub-Advisory Agreements provide that ING IM, any affiliated person of ING IM, and each person, if any, who, controls ING IM shall not be liable for, or subject to any damages, expenses, or losses in connection with, any act or omission connected with or arising out of any services rendered under the Proposed Sub-Advisory Agreement except by reason of willful misfeasance, bad faith, or negligence in the performance of ING IM’s duties, or by reason of reckless disregard of ING IM’s obligations and duties.

 

Term and Continuance. After an initial two-year term, the Proposed Sub-Advisory Agreement continues in effect from year-to-year so long as such continuance is specifically approved at least annually by: (1) the Board; or (2) the vote of a “majority” (as defined in the 1940 Act) of the ING IM Portfolio’s outstanding voting shares; provided that, in either event, the continuance is also approved by at least a majority of those Directors/Trustees who are neither parties to the Proposed Sub-Advisory Agreement nor “interested persons” (as defined in the 1940 Act) of any such party nor have any interest in the Proposed Sub-Advisory Agreement, by vote cast in person at a meeting called for the purpose of voting on such approval. The Current Sub-Advisory Agreement provides for the same terms with respect to term and continuation as the Proposed Sub-Advisory Agreement.

 

Termination. The Proposed Sub-Advisory Agreement may be terminated at any time, without the payment of any penalty upon sixty days’ written notice to ING IM, by (1) the Board, (2) vote of a majority of outstanding voting securities of an ING IM Portfolio; or (3) ING Investments. ING IM may terminate the Proposed Sub-Advisory Agreement at any time, without the payment of any penalty upon three months written notice unless the ING IM Portfolio or ING Investments’ requests additional time to find a replacement for ING IM, in which case ING IM shall allow the additional time, not to exceed three additional months beyond the initial three-month notice period. ING IM may also terminate the Proposed Sub-Advisory Agreement at any time, without payment of penalty, in the event either ING IM (acting in good faith) or ING Investments ceases to be registered as an investment adviser under the Investment Advisers Act of 1940 or otherwise becomes legally incapable of providing investment management services, or in the event ING Investments becomes bankrupt or otherwise incapable of carrying out its obligations, or in the event that ING IM does not receive compensation for its services as required by the terms of the Proposed Sub-Advisory Agreement. The Current Sub-Advisory Agreement provides for the same terms with respect to termination as the Proposed Sub-Advisory Agreement.

 

For more information on when the Current Sub-Advisory Agreement was last approved by shareholders, please see Appendix H.

 

What is the recommendation of the Board?

 

Based upon its review and after consideration of such factors and information it considered relevant, the Board, including all of the Independent Directors/Trustees present at its January 9, 2013 meeting, approved the Proposal and voted to recommend to shareholders that they approve Proposal Two. The Board is therefore recommending that each ING IM Portfolio’s shareholders vote “FOR” Proposal Two to appoint ING IM as Sub-Adviser to the ING IM Portfolios and implement the Proposed Sub-Advisory Agreement, as discussed in this Proxy Statement. For more information on the factors considered by the Board, please see the section entitled “Separation Plan — Factors Considered by the Board.”

 

What is the required vote?

 

Approval of the Proposed Sub-Advisory Agreement by shareholders of an ING IM Portfolio requires the affirmative vote of a “majority of the outstanding voting securities,” which is defined by the 1940 Act to mean the affirmative vote of the lesser of: (1) 67% or more of the voting securities present at the Shareholder Meeting if more than 50% of the outstanding shares are present or represented by proxy; or (2) more than 50% of the outstanding voting securities. Shareholders of each ING IM Portfolio will vote separately on Proposal Two and all shareholders of all classes of shares of an ING IM Portfolio will vote together as a single class on the Proposal.

 

What happens if shareholders do not approve the Proposal?

 

If shareholders of an ING IM Portfolio do not approve the Proposed Sub-Advisory Agreement and if no Change of Control Event occurs, ING IM would continue to serve as sub-adviser under the Current Sub-Advisory Agreement. If the shareholders of an ING IM Portfolio do not approve the Proposal, and if a Change of Control Event occurs, the Current Sub-Advisory Agreement would terminate. In that event, ING IM would not be able to serve that ING IM Portfolio as a Sub-Adviser under the Proposed Sub-Advisory Agreement and the Board would need to consider appropriate action, which could include, among other things, appointment of a different Sub-Adviser, or direct management by ING Investments.

 

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SEPARATION PLAN – FACTORS CONSIDERED BY THE BOARD

 

As described above, the Separation Plan contemplates one or more transactions commencing with the IPO that are expected to result in a direct or indirect “Change of Control Event” for ING Investments and ING IM, which in turn will result in the automatic termination of each of the Current Advisory Agreements and Current Sub-Advisory Agreements (collectively, the “Current Agreements”). The decision by the Board, including a majority of the Independent Directors/Trustees, to approve the Proposed Advisory Agreements and the Proposed Sub-Advisory Agreements (collectively, the “Proposed Agreements”) and to recommend approval of the Proposed Agreements by shareholders of the Funds was based on a determination by the Board that it would be consistent with the interests of the shareholders of each Fund for ING Investments and ING IM to continue providing investment advisory, sub-advisory and related services for the Funds, without interruption, as consummation of the Separation Plan proceeds.

 

Prior to taking any action to approve the Proposed Agreements, the Board, acting primarily through its Contracts Committee, conducted a thorough review of the quality, extent and nature of the services currently being provided by ING Investments and ING IM under the Current Agreements and to be provided under the Proposed Agreements. The Contracts Committee is a committee comprised of all of the Independent Directors/Trustees and exclusively of the Independent Directors/Trustees. A substantial portion of this review was conducted as part of, and in conjunction with, the Contracts Committee’s annual review of the Current Agreements, which were most recently approved for continuation at a meeting of the Board held on December 12, 2012. A description of the process followed by the Contracts Committee and the Board in approving continuation of the Current Agreements, including the information reviewed, material factors considered and related conclusions reached in approving continuation of the Current Agreements, is set forth in Appendix J to this Proxy Statement.

 

Each of the material factors considered and related conclusions reached by the Board in connection with the decision to approve continuation of the Current Agreements was also a material factor considered and related conclusion reached by the Board in connection with the decision to approve the Proposed Agreements. As described in greater detail in Appendix      , these factors and conclusions related to, among other things: (i) the nature, extent and quality of the services to be provided under the Proposed Agreements; (ii) the performance of the Funds; (iii) the management fees, sub-advisory fees and other expenses of the Funds; (iv) the profits realized by ING Investments and its affiliates from operating the Funds; and (v) the extent to which benefits from economies of scale can be expected to be realized by the Funds, ING Investments and its affiliates as assets of the Funds grow.

 

In addition to the information identified in Appendix J, the Contracts Committee requested and evaluated other information relating to the potential impact of implementation of the Separation Plan on the operations, personnel, organizational structure, capitalization, and financial and other resources of ING Investments and ING IM. Among other things, the Contracts Committee, acting through its independent legal counsel (“Independent Counsel”), prepared and delivered to ING Investments written inquiries regarding the IPO, the Separation Plan, and the potential impact of the IPO and the Separation Plan on the Funds, if any, and on the business and operations of ING U.S. and its affiliated entities, including ING Investments and ING IM. Written and oral responses to these inquiries were received and considered by the Contracts Committee prior to making its recommendations to the Board.

 

In connection with its consideration of the Proposed Agreements, the Contracts Committee reviewed the preliminary registration statement on Form S-1 of ING U.S. filed with the SEC on November 9, 2012 (the “S-1 Registration”) relating to the proposed IPO and participated in meetings with senior management of ING U.S., ING Investments and ING IM regarding the information presented in the S-1 Registration and related matters. Among other things, the Contracts Committee considered the arrangements anticipated to be in place between ING Groep and ING U.S. during the course of the Separation Plan, the anticipated use of the potential proceeds that may be realized from the IPO and potential capital structure of ING U.S. following the IPO, as well as the potential short-term and long-term financial consequences to ING U.S. of the closed book of variable annuity business that would be maintained by subsidiary insurance companies of ING U.S. To assist them in their review and consideration of the S-1 Registration and related matters, the Independent Directors/Trustees retained the services of special independent counsel (“Special Counsel”), which had retained the services of an independent investment banking firm with extensive experience relating to business operations of the type to be conducted by ING U.S. The Independent Directors/Trustees met with Independent Counsel, Special Counsel and the investment banking firm retained by Special Counsel to discuss and consider ING U.S.’s anticipated business plan and capitalization (as presented in the S-1 Registration and related information provided by ING Investments and its affiliates), including the potential implications to ING Investments and its non-insurance affiliates of insurance regulations and related capitalization requirements.

 

During the course of their consideration of the Current Agreements and the Proposed Agreements, the Independent Directors/Trustees met with senior management representatives of ING U.S. and received information regarding (i) the anticipated management and organizational structure of ING U.S. and its affiliates, (ii) the anticipated capital structure of ING U.S. following the IPO and during the implementation of other components of the Separation Plan, (iii) the lines of business in which ING U.S. is expected to operate following the IPO, and (iv) the actions being taken to retain and promote continuity of key investment management and other professional personnel of ING Investments and ING IM. In addition, beginning in 2011 and periodically throughout 2012, the Independent Directors/Trustees met with and received reports from senior management of ING Investments and its affiliates regarding, among other things, the financial condition and results of

 

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operations of ING U.S. and its investment management line of business, organizational and personnel changes within ING U.S. and actions being taken by ING U.S. in preparation for the proposed IPO and implementation of the Separation Plan. The Independent Directors/Trustees also received and reviewed copies of financial statements of ING U.S. as and when such statements became publicly available, including most recently the financial statements of ING U.S. for the quarter ended September 30, 2012.

 

The Contracts Committee received and reviewed copies of the Proposed Agreements and determined that the terms of the Proposed Agreements, including the fees payable thereunder, are materially the same as, and in any event, are no less favorable to the Funds than, the terms of the corresponding Current Agreements. In this regard, the Contracts Committee received assurances from ING Investments and its affiliates that additional contractual undertakings relating to the waiver of fees, the reimbursement of expenses and the maintenance of limitations on the total expense of certain Funds, as previously provided by ING Investments and its affiliates in connection with the approval of the Current Agreements, would continue upon the effectiveness of the Proposed Agreements. The Contracts Committee also concluded that differences between the initial term of the Proposed Agreements (two years) and the term of the Current Agreements (one year) are immaterial to the Funds because, among other reasons, under the Proposed Agreements the Board will continue to have the authority to terminate any Proposed Agreement without penalty upon 60 days’ notice, should the need arise.

 

In reliance upon advice of Independent Counsel, the Contracts Committee concluded that a Change of Control Event of the type contemplated by the Separation Plan would result in a termination of the Current Agreements and that approval of the Proposed Agreements by the Board (including a majority of the Independent Directors/Trustees) and shareholders would be appropriate for the Funds to continue receiving investment management services from ING Investments and ING IM after such a Change of Control Event. The Board was aware that the IPO may not result immediately in a Change of Control Event but also recognized that the Separation Plan contemplates a series of transactions that are expected to result in one or more Change of Control Events in the future. The Board concluded that approval by shareholders at this time of both the Proposed Agreements and future agreements that may become effective upon certain Change of Control Events in the future will permit the Funds to benefit from the continuation of services by ING Investments and its affiliates throughout the Separation Plan without the need for multiple shareholder meetings. The Board was informed by ING Investments and its counsel that ING Investments is seeking to obtain regulatory assurances that the staff of the SEC would not object to approval of future agreements by shareholders at this time.

 

Based upon information provided by ING Investments and its affiliates and related representations regarding the immediate and long-term business plans of ING U.S., the Contracts Committee concluded that (i) ING Investments and ING IM can be expected to provide services of the same nature, extent and quality under the Proposed Agreements as are provided thereby under the Current Agreements and (ii) the Separation Plan is not expected to result in any changes to (A) the management of the Funds, including the continuity of the Funds’ portfolio managers and other personnel responsible for the management operations of the Funds, or (B) the investment objective of, or the principal investment strategies used to manage, any of the Funds. Consistent with these expectations, the Board received assurances from ING U.S. that it is committed to maintaining appropriate levels of overall staffing and ongoing resources and service quality for ING Investments, ING IM and other affiliates providing services for the Funds and that ING U.S. will not take any action during implementation of the Separation Plan to significantly reduce the levels of these resources (including reductions to the number of people assigned to various functional units) prior to reviewing the anticipated action with the Board. In addition, the Board noted that ING U.S. will have an incentive to allocate appropriate resources to support these businesses in light of the importance of the asset management operations to the overall success of ING U.S., as described in the S-1 Registration, and that ING U.S. has already taken steps to retain key investment and other management personnel, including the establishment of incentive compensation arrangements that vest over time.

 

Throughout the review process, the Independent Directors/Trustees, each of whom serves as a member of the Contracts Committee and all other committees of the Board, were assisted by Independent Counsel and relied upon the advice of Independent Counsel and their own business judgment in determining the material factors to be considered in evaluating the Proposed Agreements and the weight to be given to each such factor.

 

Based on the foregoing and other relevant considerations, at a meeting of the Board held on January 9, 2013, the Board, including all of the Independent Directors/Trustees, acting on the recommendation of the Contracts Committee, voted to approve the Proposed Agreements and to recommend approval of the Proposed Agreements by shareholders of the Funds. The conclusions reached by the Contracts Committee and the Board were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Director/Trustee may have afforded a different weight to the various factors in reaching conclusions with respect to each of the Proposed Agreements.

 

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PROPOSAL THREE – ELECTION OF THE DIRECTORS/TRUSTEES

 

What is Proposal Three?

 

The Board has nominated 13 individuals (each a “Nominee,” and collectively, the “Nominees”) for election as directors or trustees of the Registrants. Shareholders are asked to elect the Nominees as Directors/Trustees, effective on or about [May 21, 2013] (the “Election Effective Date”), each to serve until their death, resignation or retirement or until their successor is duly elected and qualified.

 

The Nominees are Albert E. DePrince, Jr., Martin J. Gavin, Russell H. Jones, Joseph E. Obermeyer and Shaun P. Mathews, each of whom currently serves as a member of the Board, and Colleen D. Baldwin, John V. Boyer, Patricia W. Chadwick, Peter S. Drotch, J. Michael Earley, Patrick W. Kenny, Sheryl K. Pressler and Roger B. Vincent, each of whom currently serves as a director or trustee of other boards (collectively, the “Other Board”) in the ING Fund Complex. Each Nominee, other than Mr. Mathews, is an Independent Director/Trustee of the Registrants. Additional information regarding each Nominee is set forth below.

 

Proposal Three is part of an effort by the members of the Board and the members of the Other Board to consolidate the membership of all boards of directors and trustees with oversight responsibility the ING Funds. As part of this effort, meetings of the shareholders of all investment companies in the ING Fund Complex (the “ING Funds”) have been called to act upon similar proposals to elect the same individuals as directors or trustees of their respective boards. If Proposal Three and these other similar proposals are approved by shareholders, upon the Election Effective Date, all ING Funds will be governed by boards comprised of the same individuals (the “Consolidated Board”).

 

The proposal to establish the Consolidated Board for all ING Funds is the culmination of more than 18 months of discussions among the members of the Board and the members of the Other Board, during which these directors and trustees evaluated best practices for governance of the ING Fund Complex. Ultimately, the Board determined that the Portfolios will benefit from the establishment of the Consolidated Board to oversee the operations the Portfolios (and other ING Funds). Among other things, the Board concluded that the establishment of the Consolidated Board can be expected to: (i) promote transparency and effective communications across all boards in the ING Fund Complex, consistent with preserving the quality of the decision-making processes of the Board; (ii) further strengthen the bargaining position of the Board when interfacing with management and other service providers of the Portfolios; (iii) result in a more efficient use of resources by management, which will enhance management’s productivity and potentially lead to a reduction in the cost of such services to the Portfolios over time; and (iv) improve the long-term prospects for attracting and retaining qualified individuals to serve as Independent Directors of the Registrants. In addition, the Board determined that the Portfolios will benefit from the particular skill sets and other attributes of those Nominees who currently serve as members of the Other Board, which individuals are knowledgeable of the role performed by Independent Directors of a mutual fund and are familiar with the specific entities and individuals responsible for managing the day-to-day operations of the Portfolios.

 

Prior to taking action to nominate each of the Nominees, members of the Board and members of the Other Board discussed the committee structure that would be best suited to oversee the operations of the Portfolios and other ING Funds under the Consolidated Board. Among other things, they discussed the manner in which responsibilities would be allocated among committees and the identity of the individuals who would serve initially as members of each committee and as chairpersons of the Consolidated Board and the committees. In considering these matters, the Board recognized that, as of December 31, 2012, the ING Fund Complex is comprised of approximately [174] funds with aggregate assets of approximately $[] billion that are managed by approximately [40] investment advisers and sub-advisers. The Board concluded that, by expanding the size of the Board to include 12 Independent Directors/Trustees, the Board will have increased flexibility to operate with committees of fewer than all of the Independent Directors/Trustees, consistent with the existing committee structure of the Other Board, and that the current committee structure of the Other Board is well-suited for use by the Board in overseeing the operations of the Portfolios for the foreseeable future. Additional information regarding the current committee structure of the Consolidated Board and proposed committee structure of the Consolidate Board is set forth below.

 

The members of the Board and the Other Board also discussed and agreed upon a common retirement policy for the Consolidated Board to be effective upon the Election Effective Date, the structure and amount of the compensation to be paid to members of the Consolidated Board and a variety of related governance matters. Consistent with the adoption of the governance structure of the Other Board, the Board and the Other Board also discussed and agreed upon a common compensation structure, which will be the same as the current compensation structure of the Other Board. Additional information regarding these matters is set forth below.

 

The members of the Board also considered the benefit to the Portfolios and other ING Funds of calling a meeting of shareholders to elect the Nominees at this time, when all ING Funds are otherwise required to hold shareholder meetings in connection with the Separation Plan. In that regard, the Board noted that ING U.S. has agreed to pay all costs associated with holding these shareholder meetings, including the costs associated with taking action on Proposal Three (and similar proposals by other ING Funds).

 

Prior to taking action to nominate each of the Nominees, the Nominating Committee of the Board reviewed the qualifications, experience and background of each of the Nominees. Neither the Nominating Committee nor the Board has

 

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established any specific qualifications that must be met to be considered for nomination as an Independent Director/Trustee; however, the Nominating Committee has identified certain factors to consider. Such factors include: (i) the candidates’ knowledge in matters relating to the mutual fund industry; (2) any experience possessed by the candidate as a director or senior officer of other public companies; (3) the candidate’s educational background, reputation for high ethical standards, and professional integrity; (4) any specific financial, technical, or other expertise possessed by the candidate and the extent to which such expertise would complement the Board’s existing mix of skills, core competencies, and qualifications; (5) the candidate’s perceived ability to contribute to the ongoing functions of the Board, including the candidate’s ability and commitment to attend meetings regularly and work collaboratively with other members of the Board; (6) the candidate’s ability to qualify as an Independent Director/Trustee for purposes of the 1940 Act; and (7) such other factors as the Nominating Committee determines to be relevant in light of the existing composition of the Board and any anticipated vacancies.

 

Neither the Nominating Committee nor the Board has a formal policy with regard to consideration of diversity in identifying nominees to serve as Independent Directors/Trustees. Rather, as a matter of practice, the Nominating Committee considers the overall diversity of the Board’s composition when identifying candidates. Specifically, the Nominating Committee considers how a particular candidate could be expected to contribute to overall diversity in the backgrounds, race, gender, perspectives, skills and experiences of the Board’s members and thereby enhance the effectiveness of the Board.

 

Based upon all of the foregoing considerations, the Nominating Committee recommended each of the Nominees to the Board as a candidate for election as a Director/Trustee. At a meeting of the Board held on January 9, 2013, after discussion and further consideration of these matters, the Board voted to nominate each of the Nominees for election by shareholders. Each Nominee has consented to be named in the Proxy Statement and to serve as a Director/Trustee if elected.

 

Who are the Nominees and what are their qualifications?

 

Set forth below is pertinent information about each of the Nominees. The Nominees have varied experiences, attributes and skills that may be utilized in overseeing the activities of the Registrants, reviewing contractual arrangements with companies that provide services to the Portfolios, and review Portfolio performance. Among the attributes or skills common to all Nominees are their ability to (1) review critically, evaluate, question, and discuss information provided to them; (2) interact effectively with the other Directors/Trustees, the Adviser, other service providers, counsel, and independent registered public accounting firm; and (3) exercise effective and independent business judgment in the performance of their duties as Director/Trustee. Each Nominee’s ability to perform his or her duties effectively also has been enhanced by his or her educational background, professional training, and/or other life experiences.

 

Independent Nominees

 

Colleen D. Baldwin has been a board member of other ING Funds since 2007. Ms. Baldwin has been President of Glantuam Partners, LLC, a business consulting firm, since 2009. Prior to that, she served in senior positions at the following financial services firms: Chief Operating Officer for Ivy Asset Management, Inc. (2002-2004), a hedge fund manager; Chief Operating Officer and Head of Global Business and Product Development for AIG Global Investment Group (1995-2002), a global investment management firm; Senior Vice President at Bankers Trust Company (1994-1995); and Senior Managing Director at J.P. Morgan & Company (1987-1994). Ms. Baldwin holds a B.S. from Fordham University and an M.B.A. from Pace University.

 

John V. Boyer has been a board member of other ING Funds since 2005. Since 2008, Mr. Boyer has been President of the Bechtler Arts Foundation for which, among his other duties, Mr. Boyer oversees all fiduciary aspects of the Foundation and assists in the oversight of the Foundation’s endowment portfolio. Previously, he served as President and Chief Executive Officer of the Franklin and Eleanor Roosevelt Institute (2006-2007) and as Executive Director of The Mark Twain House & Museum (1989-2006) where he was responsible for overseeing business operations, including endowment portfolios. He also served as a board member of certain predecessor mutual funds of the ING Fund Complex (1997-2005). Mr. Boyer holds a B.A. from University of California, Santa Barbara and an M.F.A. degree from Princeton University.

 

Patricia W. Chadwick has been a board member of other ING Funds since 2006. Since 2000, Ms. Chadwick has been the Founder and President of Ravengate Partners LLC, a consulting firm that provides advice regarding financial markets and the global economy. She also is a director of Wisconsin Energy Corp. (since 2006), AMICA Mutual Insurance Company (since 1992), and The Royce Funds (since 2009). Previously, she served in senior roles at several major financial services firms where her duties included the management of corporate pension funds, endowments and foundations, as well as management responsibilities for an asset management business. Ms. Chadwick holds a [  ].

 

Dr. Albert E. DePrince, Jr. has been a Director/Trustee of the Registrants and other ING Funds since 1998, and has been the Independent Chairperson of the Board and the Chairman of the Contracts Committee since 2009. Dr. DePrince has been a professor of Economics and Finance at Middle Tennessee State University since 1991. Prior to joining the faculty at Middle Tennessee State University, Dr. DePrince served in various business positions, including twelve years at Marine Midland Bank in New York City, where he held the positions of Chief Economist and Senior Vice President, and nine years as an economist with the Federal Reserve Bank of New York. Dr. DePrince holds a B.A. in Economics from Bucknell University, an M.A. in Economics from the University of Michigan, and a Ph.D. in Economics from New York University. Dr.

 

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DePrince also served as Director at the Business and Economic Research Center at Middle Tennessee State University from 1999 to 2002 and has published numerous scholarly papers and journal articles in the areas of financial markets, financial institutions, mutual fund performance and monetary policy.

 

Peter S. Drotch has been a board member of other ING Funds since 2007. Prior to his retirement in 2000, he was a partner at the accounting firm of PricewaterhouseCoopers LLP, where he was the leader of the firm’s U.S. Investment Management practice group and a member of its global leadership team where he acquired extensive experience with respect to audits and other financial matters relating to registered investment companies. Since his retirement, he also has served on the boards of registered investment companies in other fund complexes (the State Street Research Funds and BlackRock Funds) from 2005 to 2007 and as a consultant with respect to investment company regulatory compliance matters. Mr. Drotch also is a Director of First Marblehead Corporation (student loans) and Tufts Health Plan (health insurance), a Trustee of the University of Connecticut, and a member of the General Council of the Investment Company Institute’s Independent Directors Council. Mr. Drotch holds a B.S. from the University of Connecticut and is a retired Certified Public Accountant.

 

J. Michael Earley has been a board member of other ING Funds since 2002. Mr. Earley retired in 2008 as President and Chief Executive Officer of Bankers Trust Company, N.A. (Des Moines, Iowa), where he had worked since 1992. He also has served on the boards of directors of that company (1992-2009) and of Midamerica Financial Corporation (2002-2009), and as a board member of certain predecessor mutual funds of the ING Fund Complex (1997-2002). Mr. Earley holds a B.B.A. and J.D. from the University of Iowa.

 

Martin J. Gavin has been a Director/Trustee of the Registrants and other ING Funds since 2011, and previously served as a Director/Trustee of the Registrants and other ING Funds from 2009 until 2010. Mr. Gavin is currently the President and Chief Executive Officer of the Connecticut Children’s Medical Center. Prior to his position at Connecticut Children’s Medical Center, Mr. Gavin worked in the insurance and investment industries for more than 27 years. Mr. Gavin served in several senior executive positions with The Phoenix Companies during a 16 year period, including as President of Phoenix Trust Operations, Executive Vice President and Chief Financial Officer of Phoenix Duff & Phelps, a publicly-traded investment management company, and Senior Vice President of Investment Operations at Phoenix Home Life. Mr. Gavin holds a B.A. from the University of Connecticut.

 

Russell H. Jones has been a Director/Trustee of the Registrants and other ING Funds, and is currently the Chairperson of the Compliance Committee. From 1973 until his retirement in 2008, Mr. Jones served in various positions at Kaman Corporation, an aerospace and industrial distribution manufacturer, including Senior Vice President, Chief Investment Officer and Treasurer, Principal Investor Relations Officer, Principal Public Relations Officer and Corporate Parent Treasurer. Mr. Jones served as an Independent Director and Chair of the Contracts Committee for CIGNA Mutual Funds from 1995 until 2005. Mr. Jones also served as President of the Hartford Area Business Economists from 1986 until 1987. Mr. Jones holds a B.A. from the University of Connecticut and an M.A. from the Hartford Seminary.

 

Patrick W. Kenny has been a board member of other ING Funds since 2005. He previously served as President and Chief Executive Officer (2001-2009) of the International Insurance Society (insurance trade association), Executive Vice President (1998-2001) of Frontier Insurance Group (property and casualty insurance company), Senior Vice President (1995-1998) of SS&C Technologies (software and technology company), Chief Financial Officer (1988-1994) of Aetna Life & Casualty Company (multi-line insurance company), and as Partner (until 1988) of KPMG (accounting firm). Mr. Kenny currently serves (since 2004) on the board of directors of Assured Guaranty Ltd. (provider of financial guaranty insurance) and previously served on the boards of Odyssey Re Holdings Corporation (multi-line reinsurance company) (2006-2009) and of certain predecessor mutual funds of the ING Fund Complex (2002-2005). Mr. Kenny holds a B.B.A. from the University of Notre Dame and an M.S. degree from the University of Missouri and is a Certified Public Accountant.

 

Joseph E. Obermeyer has been a Director/Trustee of the Registrants and other ING Funds since 2003, and is currently the Chairperson of the Audit Committee and Vice-Chairperson of the Contracts Committee. Mr. Obermeyer is the founder and President of Obermeyer & Associates, Inc., a provider of financial and economic consulting services since 1999. Prior to founding Obermeyer & Associates, Mr. Obermeyer had more than 15 years of experience in accounting, including serving as a Senior Manager at Arthur Andersen LLP from 1995 until 1999. Previously, Mr. Obermeyer served as a Senior Manager at Coopers & Lybrand LLP from 1993 until 1995, as a Manager at Price Waterhouse from 1988 until 1993, and a Second Vice President from 1985 until 1988 at Smith Barney, and as a consultant with Arthur Andersen & Co. from 1984 until 1985. Mr. Obermeyer holds a B.A. in Business Administration from the University of Cincinnati, an M.B.A. from Indiana University and postgraduate certificates from the University of Tilburg and INSEAD.

 

Sheryl K. Pressler has been a board member of other ING Funds since 2006. Ms. Pressler has served as a consultant on financial matters since 2001. Previously, she held various senior positions involving financial services, including as Chief Executive Officer (2000-2001) of Lend Lease Real Estate Investments, Inc. (real estate investment management and mortgage servicing firm), Chief Investment Officer (1994-2000) of California Public Employees’ Retirement System (state pension fund), and Director of Retirement Funds Management (1981-1994) of McDonnell Douglas Corporation (aircraft manufacturer). Ms. Pressler holds a B.A. from Webster University and an M.B.A. degree from Washington University.

 

Roger B. Vincent has been a board member of other investment companies in the ING Fund Complex since 2002. Mr. Vincent is a Director of UGI Corporation and UGI Utilities, Inc. (since 2006), and in 2011, retired as President of Springwell

 

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Corporation (corporate finance firm). He previously worked for 20 years at Bankers Trust Company where he was a Managing Director and a member of the bank’s senior executive committee. He also previously served as a Director of AmeriGas Partners, L.P. (1998-2006), Tatham Offshore, Inc. (1996-2000) and Petrolane, Inc. (1993-1995), and as a board member of certain predecessor funds of the ING Fund Complex (1993-2002). Mr. Vincent is a past board member of the National Association of Corporate Directors and currently serves as a board member of the Mutual Funds Directors Forum. Mr. Vincent holds a B.S. from Yale University and an M.B.A. from Harvard University.

 

Interested Nominees

 

Shaun P. Mathews has been a Director/Trustee of the Registrants and a board member of other ING Funds since 2007. He also is President and Chief Executive Officer of ING Investments, LLC (2006 to present). Mr. Mathews previously served as President of ING Mutual Funds and Investment Products (2004-2006) and several other senior management positions in various aspects of the financial services business.

 

Additional information about each Nominee can be found in Appendix K.

 

How long will the Directors/Trustees serve on the Board?

 

If elected, each Nominee will serve as a Director/Trustee until such individual’s death, resignation or retirement or until the election and qualification of a successor. If a Director/Trustee sooner dies, resigns or retires the Board may, in its discretion and subject to the 1940 Act, select another person to fill the vacant position. The Independent Directors/Trustees have adopted a policy which is currently in effect requiring each Independent Director/Trustee to retire from the Board as of the latter of: (1) the March 31 next occurring after the Independent Director/Trustee attains the age of 72; and (2) the date his or her successor is elected or appointed to the Board, provided that each Independent Director/Trustee under the age of 72 as of March 31, 2002 who held office as of that date may, upon the vote of the other Independent Directors/Trustees, be granted up to three one-year extensions commencing as of the March 31 next occurring after he or she attains the age of 72. The retirement policy may, at any time, be suspended by vote of a majority of the Independent Directors/Trustees, which suspension occurred effective April 22, 2010.

 

The current retirement policy will expire upon the Election Effective Date. The Independent Directors/Trustees have adopted a new retirement policy to be effective on the Election Effective Date requiring each Independent Directors/Trustee to retire, without further action on the part of the Independent Director/Trustee or the Board as of the close of business on December 31 of the calendar year in which such Independent Director/Trustee attains the age of 73 (the “Retirement Date”); provided, however, by vote of a majority of the other Independent Directors/Trustees, the Retirement Date for an Independent Director/Trustee may be extended to a later date if, as a result of such retirement, the Registrant would be required to hold a meeting of shareholders to appoint a successor or otherwise comply with applicable law, in which case the Independent Director/Trustee shall continue to be a member of the Board until the date of the shareholder meeting or until such time as the shareholder meeting is no longer required (as determined by vote of a majority of the other Independent Directors/Trustees).

 

Do the Independent Directors/Trustees and Nominees own shares of the Portfolios or certain affiliate entities?

 

The Board has adopted a policy (the “Investment Policy”) whereby each Independent Director/Trustee is required to invest, directly or indirectly, at least $100,000 (at cost) in one or more ING Funds under the purview of the Board within a three-year time period after becoming an Independent Director/Trustee. The Board believes that the Investment Policy further aligns the interests of the Independent Directors/Trustees with those of shareholders and, therefore, enhances the ability of the Independent Directors/Trustees to represent the interests of shareholders.

 

Appendix L provides the dollar value of all shares of each Portfolio and of all ING Funds held directly or indirectly by each Independent Director/Trustee and each Nominee as of a recent date. [To the best of the Portfolios’ knowledge, as of [February 1, 2013], no Independent Director/Trustee or Nominee owned 1% or more of the outstanding shares of any class of a Portfolio, and the Independent Directors/Trustees, Nominees, and Officers of the Portfolios owned, as a group, less than 1% of the shares of each class of each Portfolio.] [As of [February 1, 2013], none of the Independent Directors/Trustees, Nominees, or their immediate family members owned any shares of ING Investments or principal underwriter or of any entity controlling, controlled by or under common control with ING Investments or principal underwriter of the Portfolios (not including registered investment companies).]

 

How is the Board Structured?

 

Overall responsibility for oversight of the Registrants and the Portfolios rests with the Board. The Board has engaged ING Investments to manage the Portfolios on a day-to-day basis. The Board is responsible for overseeing ING Investments and other service providers in the operation of the Registrants in accordance with the provisions of the 1940 Act, the applicable provisions of state law, other applicable laws and the Registrants’ charters and By-laws. The Board is currently composed of six members, five of whom are Independent Directors/Trustees, who have varied experiences, attributes and skills. The Board currently conducts regular meetings four (4) times a year. In addition, the Board holds special in-person or telephonic meetings or informal conference calls, as necessary, to discuss specific matters that may arise or require action between regular meetings. The Independent Directors/Trustees have engaged independent legal counsel to assist them in

 

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performing their oversight responsibilities. As discussed below, the Board has established four committees to assist the Board in performing its oversight responsibilities.

 

Under the terms of the charter of the Contracts Committee, the Independent Director/Trustee selected to serve as the Chairperson of the Contracts Committee also serves as the chairperson of the Board (the “Independent Chairman”). The Independent Chairman serves as an advocate for the other Independent Directors/Trustees in communications with management on a broad range of matters and as a liaison with service providers, officers, attorneys, and other Directors/Trustees generally between meetings of the Board. The Independent Chairman may perform such other functions as may be provided by the Board from time to time, including participation in the preparation of the agenda for meetings of the Board and the identification of information to be presented to the Board with respect to matters to be acted upon by the Board. The designation of an individual as the Independent Chairman does not impose on such Independent Director/Trustee any duties, obligations or liabilities greater than the duties, obligations or liabilities imposed on such person as a member of the Board, generally.

 

The Board believes that the current leadership structure of the Board is appropriate because it allows the Board to exercise informed and independent judgment over matters under its purview, and it allocates areas of responsibility among committees of Directors/Trustees and the full Board in a manner reasonably designed to enhance effective oversight by the Board. The leadership structure of the Board may be changed, at any time and in the discretion of the Board, including in response to changes in circumstances or the characteristics of the Registrants and the Portfolios.

 

The Registrants and the Portfolios are subject to a number of risks, including investment, compliance, operational, and valuation risks. Day-to-day risk management functions are subsumed within the responsibilities of the ING Investments, the Sub-Advisers and other service providers (depending on the nature of the risk), who carry out the Portfolios’ investment management and business affairs. ING Investments, the Sub-Advisers and other service providers each have their own independent interest in risk management, and their policies and methods of carrying out risk management functions will depend, in part, on their individual priorities, resources and controls. Risk oversight forms part of the Board’s general oversight of the Registrants and the Portfolios and is addressed as part of various Board and Committee activities. The Board recognizes that it is not possible to identify all of the risks that may affect a Portfolio or to develop processes and controls to eliminate or mitigate their occurrence or effects. As part of its regular oversight of the Registrants and the Portfolios, the Board, directly or through a Committee, interacts with and reviews reports from, among others, ING Investments, the Sub-Advisers, the Chief Compliance Officer (“CCO”) of the Portfolios, the independent registered public accounting firm for the Portfolios, ING Investments’ Chief Risk Officer, and internal auditors for ING Investments and its affiliates, as appropriate, regarding risks faced by the Portfolios and relevant risk functions. The Board, with the assistance of its Contracts Committee, reviews investment policies and risks in connection with its review of the Portfolios’ performance. The Board has appointed a CCO who oversees the testing of the Portfolios’ compliance program and reports to the Board regarding compliance matters for the Portfolios and their principal service providers. In addition, as part of the Board’s periodic review of the Portfolios’ advisory, sub-advisory and other service provider agreements, the Board may consider risk management aspects of their operations and the functions for which they are responsible. With respect to valuation, the Board oversees a management valuation team comprised of officers of ING Investments, has approved and periodically reviews valuation policies applicable to valuing Portfolio shares and has established a valuation committee of Directors/Trustees. The Board may, at any time and in its discretion, change the manner in which it conducts its risk oversight role.

 

Board Committees

 

As noted above, the Board has established a standing Contracts Committee, a standing Audit Committee, a standing Compliance Committee, and a standing Nominating Committee to assist the Board in the oversight and direction of the business and affairs of the Registrants and the Portfolios. Each such Committee operates pursuant to a charter approved by the Board and is chaired by an Independent Director/Trustee. Each of the Committees is comprised solely of all the Independent Directors/Trustees.

 

Audit Committee. The Board has established an Audit Committee whose function includes, among other things, meeting with the independent registered public accounting firm of the Registrants to review the scope of the Registrants’ audit, the Registrants’ financial statements and interim accounting controls, and to meet with management concerning these matters. The Audit Committee currently consists of five Independent Directors/Trustees. The following Directors/Trustees serve as members of the Audit Committee: Dr. DePrince, Mr. Gavin, Mr. Jones, Mr. Koch, and Mr. Obermeyer. Mr. Obermeyer currently serves as Chairperson and Mr. Gavin currently serves as Vice Chairperson of the Audit Committee. The Audit Committee meets regularly four times per year and may hold special meetings by telephone or in person to discuss specific matters that may require action prior to the next regular meeting. The Audit Committee held four meetings during the fiscal year ended December 31, 2012.

 

Contracts Committee. The Board has established a Contracts Committee whose function is to provide a forum for the members to consider, evaluate and make recommendations to the full Board concerning: (1) contractual arrangements with service providers to the Portfolios; (2) matters in which ING Investments or any affiliated entity has an actual or potential conflict of interest with the Portfolios or their shareholders; (3) the performance of the Portfolios and investment strategies used in managing the portfolios of the Portfolios; and (4) a variety of governance related matters. Annually, the Contracts

 

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Committee conducts an evaluation of the performance of the Board and its Committees, including the effectiveness of the Board’s Committee structure and the effectiveness of the Board in overseeing the number of Portfolios under its purview. As part of the annual self-evaluation, the Contracts Committee reviews the mix of experience, attributes and skills of the Directors/Trustees. The Contracts Committee currently consists of five Independent Directors/Trustees. The following Directors/Trustees serve as members of the Contracts Committee: Dr. DePrince, Mr. Gavin, Mr. Jones, Mr. Koch, and Mr. Obermeyer. Dr. DePrince currently serves as Chairperson and Mr. Obermeyer currently serves as Vice Chairperson of the Contracts Committee. The Contracts Committee meets regularly six times per year and may hold special meetings by telephone or in person to discuss specific matters that may require action prior to the next regular meeting. The Contracts Committee held seven meetings during the fiscal year ended December 31, 2012.

 

Nominating Committee. The Board has established a Nominating Committee for the purpose of considering and presenting to the Board candidates it proposes for nomination to fill Independent Director/Trustee vacancies on the Board. The Nominating Committee currently consists of five Independent Directors/Trustees. The following Directors/Trustees serve as members of the Nominating Committee: Dr. DePrince, Mr. Gavin, Mr. Jones, Mr. Koch, and Mr. Obermeyer. Mr. Obermeyer serves as Chairperson of the Nominating Committee. When considering potential nominees to fill vacancies on the Board, the Nominating Committee reviews the mix of experience, attributes and skills of the Directors/Trustees. The Nominating Committee is willing to consider nominations for vacancies received from shareholders in the same manner as it reviews its own nominees. Shareholders wishing to submit a nomination for Director/Trustee at an annual or special meeting of shareholders must provide such recommendation in a sufficiently timely manner (and in any event no later than the date specified for receipt of shareholder proposals in any applicable proxy statement with respect to the Portfolios) in writing to the Nominating Committee, c/o the Secretary of the Portfolios, 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258. Any such recommendation made by such shareholder must contain information for the Nominating Committee to make an assessment of the candidate’s suitability for the position of Independent Director/Trustee. The Nominating Committee holds meetings as necessary by telephone or in person to discuss specific matters that are within the scope of the Committee’s charter. The Nominating Committee held no meetings during the fiscal year ended December 31, 2012.

 

Compliance Committee. The Board has established a Compliance Committee for the purposes of: (1) providing oversight with respect to compliance by the Portfolios and their service providers with applicable laws, regulations and internal policies and procedures affecting the operations of the Portfolios; and (2) to serve as a committee, and in such capacity to receive, retain and act upon reports of evidence of possible material violations of applicable U.S. federal or state securities laws and breaches of fiduciary duty arising under U.S. federal or state laws. The Compliance Committee currently consists of five Independent Directors/Trustees. The following Directors/Trustees serve as members of the Compliance Committee: Dr. DePrince, Mr. Gavin, Mr. Jones, Mr. Koch, and Mr. Obermeyer. Mr. Jones currently serves as Chairperson and Mr. Koch currently serves as Vice Chairperson of the Compliance Committee. The Compliance Committee meets regularly four times per year and may hold special meetings by telephone or in person to discuss specific matters that may require action prior to the next regular meeting. The Compliance Committee held four meetings during the fiscal year ended December 31, 2012.

 

Indemnification of Directors/Trustees

 

Each Director/Trustee is entitled to be indemnified and held harmless by the Registrants from and against liabilities and expenses (“Liabilities”) the Director/Trustee may incur by reason of serving as a Director/Trustee, other than Liabilities the Director/Trustee would otherwise be subject to by reason of his or her willful misfeasance, bad faith, gross negligence or reckless disregard of duties (referred to as “Disabling Conduct”). The Registrants maintain errors and omissions and officers and directors liability insurance for the benefit of the Registrants and their officers and each Director/Trustee (“D&O Insurance”).  Under the terms of the D&O Insurance, the Registrants are entitled to recover amounts paid by the Registrants to indemnify each Director/Trustee for Liabilities, subject to a deductible applicable to each claim (the “Deductible”) and limitations on the aggregate amount of coverage.  In circumstances in which the Registrants are unable to indemnify a Director/Trustee for Liabilities (e.g., if the Registrant has no assets), the Director/Trustee is entitled to make a claim directly under the D&O Insurance, which claim is not subject to the Deductible.  An affiliate of ING Investments has undertaken to indemnify the Registrants and the Independent Directors/Trustees with respect to Liabilities to the extent a party cannot recover amounts under the D&O Insurance because of the Deductible.  In addition, ING Investments has provided assurances to the Independent Directors/Trustees that ING Investments or an affiliate will enter into an agreement to indemnify and hold harmless each Independent Director/Trustee from and against Liabilities that may arise in connection with a civil claim brought against the Independent Director/Trustee arising from disclosure in the Registrants’ registration statements. The indemnification would apply only if (1) protection for the Liabilities is not available to the Independent Director/Trustee from the Registrants or under the D&O Insurance, (2) the Independent Director/Trustee has not engaged in Disabling Conduct, and (3) such indemnification is otherwise allowable under applicable law.

 

How will the committee structure change upon the creation of the Consolidated Board?

 

As noted above, the Board has determined that the committee structure currently utilized by the Other Board is well suited for oversight of the operations of the Portfolios and other funds in the ING Fund Complex. Accordingly, it is anticipated that, on or after the Election Effective Date, the Consolidated Board will take action to establish the same committee structure with respect to the Portfolios (the “New Committee Structure”). As part of the New Committee Structure,

 

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the Consolidated Board is expected to establish the following Committees: an Audit Committee, a Compliance Committee, a Contracts Committee, an Investment Review Committee for Domestic Equity Funds, an Investment Review Committee for International/Balanced/Fixed Income Funds, and a Nominating and Governance Committee. A description of each committee (and the anticipated membership of such committees) is set forth in Appendix M to this Proxy Statement.

 

What are the Directors/Trustees paid for their services?

 

Each Portfolio pays each Independent Director/Trustee a pro rata share: (1) an annual retainer of $66,000; (2) $7,500 for each in person meeting of the Board; (3) $7,500 for each Contracts Committee attended in person; (4) $3,500 per attendance of any Committee meeting (except Contracts Committee) held in conjunction with a meeting of the Board and $5,000 for meetings (except Contracts Committee) not held in conjunction with a meeting of the Board; (5) $2,500 per telephonic meeting; (6) $50,000 annual fee to the Chairperson of the Contracts Committee (who also serves as the Independent Chairman), $15,000 annual fee to the Chairpersons of the Audit and Compliance Committees, $5,000 annual fee to the Chairperson of the Nominating Committee (for periods in which the Committee has operated); and (7) $25,000 annual fee to the Vice Chairperson of the Contracts Committee and $7,500 annual fee to the Vice Chairperson of both the Audit and Compliance Committees. The pro rata share paid by each Portfolio is based on the Portfolio’s average net assets as a percentage of the average net assets of all the ING Funds for which the Directors/Trustees serve in common as Directors/Trustees.

 

Beginning on or about the Election Effective Date, it is anticipated that each Portfolio will pay a pro rata share (as described below) of the following compensation: (1) an annual retainer of $200,000; (2) an additional annual retainer of $80,000 to the Chairperson of the Board; (3) an additional annual retainer of $25,000, $30,000, $65,000, $25,000, $30,000 and $25,000 to the chairpersons of the Nominating and Governance Committee, Investment Review Committee for Domestic Equity Funds, Contracts Committee, Audit Committee, Investment Review Committee for International/Balanced/Fixed Income Funds, and Compliance Committee (each as described in Appendix M), respectively; (4) $10,000 per attendance at any of the regularly scheduled meetings (four quarterly meetings, two auxiliary meetings, and two annual contract review meetings); and (5) out-of-pocket expenses. The Board at its discretion may from time to time designate other special meetings as subject to an attendance fee in the amount of $5,000 for special in person meetings and $2,500 for special telephonic meetings. The pro rata share paid by each Portfolio will be based on the Portfolio’s average net assets as a percentage of the average net assets of all the funds in the ING Fund Complex.

 

Appendix N details the compensation paid to the Directors/Trustees by each Portfolio and by the all the funds in the ING Fund Complex.

 

How often does the Board meet?

 

The Board currently conducts regular meetings four times a year. In addition, the Board holds special in-person or telephonic meetings or informal conference calls, as necessary, to discuss specific matters that may arise or require action between regular meetings.

 

Consistent with current practices of the Other Board, the Consolidated Board is expected to meet eight times a year. It is anticipated that six of these regular meetings will consist of sessions held over a two-day period and two of these meetings will consist of one-day sessions. In addition, during the course of the year, the Consolidated Board and many of its committees may hold special meetings by telephone or in person to discuss specific matters that require action prior to the next regular meetings.

 

Who are the officers of the Registrants?

 

The Registrants’ officers are elected by the Board and hold office until they resign, are removed, or are otherwise disqualified to serve. The executive officers of the Registrants, together with such person’s position with the Registrants and principal occupation for the last five years, are listed in Appendix O.

 

What are the officers paid for their services?

 

The Portfolios do not pay their officers for the services they provide to the Portfolios. Instead, the officers who are also officers or employees of ING Investments or its affiliates are compensated by ING Investments or its affiliates.

 

What is the Board’s Recommendation

 

After consideration of the above factors and other information it considered relevant, the Board, including all of the Independent Directors/Trustees, approved the nomination of each of the Nominees. The Board is recommending that the Shareholders vote “FOR” each of the Nominees.

 

What is the required vote?

 

Shareholders of each series of a Registrant will vote collectively as a single class on the election of each Nominee. The election of each Nominee must be approved by the affirmative vote of a plurality of the shares of each Registrant voting at the Shareholder Meeting at which a quorum is present. Shareholders who vote “FOR” Proposal Three will vote “FOR” each Nominee. Those shareholders who wish to withhold their vote on any specific Nominee(s) may do so on the Proxy Ballot or Voting Instruction Card.

 

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PROPOSAL FOUR – APPROVAL OF A MODIFIED MANAGER-OF-MANAGERS POLICY

 

What is Proposal Four?

 

The Portfolios and ING Investments have received an exemptive order from the SEC to permit ING Investments, with the approval of the Board, to enter into or materially amend sub-advisory agreements with unaffiliated sub-advisers, without submitting the agreement to a vote of shareholders (the “Existing Relief”). A fund operating in this manner is commonly referred to as a “Manager-of-Managers Portfolio.” Shareholders of the Portfolios have previously voted to permit the Portfolios to operate as a Manager-of-Managers Portfolios.

 

In January 2013, the Portfolios and ING Investments filed an application for exemptive relief requesting a modification of the Existing Relief to permit ING Investments, with the approval of the Board, to enter into or materially amend sub-advisory agreements with wholly owned sub-advisers, without submitting the sub-advisory agreement to a vote of shareholders (the “Amended Relief”). Together, the Existing and Amended Relief would permit ING Investments to enter into and materially amend sub-advisory agreements with: (1) wholly owned sub-advisers, meaning sub-advisers that are wholly owned subsidiaries (as defined in the 1940 Act) of the adviser or a parent of the adviser; or (2) sub-advisers that are not an “affiliated person” (as defined in the 1940 Act) of the Portfolio, other than by reason of serving as a sub-adviser to the Portfolio (collectively, “Eligible Sub-Advisers”). A few other mutual fund complexes have obtained exemptive relief similar to the Amended Relief; however there can be no assurance that the SEC will issue an order based on the Portfolio’s exemptive application.

 

Pursuant to the conditions proposed in the Amended Relief, the Portfolios would not be permitted to rely on the Amended Relief unless, among other things, shareholders have approved a policy permitting ING Investments to enter into and materially amend any sub-advisory agreements with wholly owned sub-advisers without shareholder approval (the “Modified Manager-of-Managers Policy”). Shareholders are therefore being asked to approve operation of the Portfolios in accordance with the Modified Manager-of-Managers Policy. If Proposal Four were approved by shareholders, the Portfolio would continue to seek shareholder approval of new or amended sub-advisory agreements with wholly owned sub-advisers until the exemptive order requested by the Amended Relief is issued by the SEC.

 

At its [September 12, 2012] meeting, the Board approved the Modified Manager-of-Managers Policy and voted to recommend its approval to shareholders.

 

Why is the Modified Manager-of-Managers Policy proposed?

 

The Portfolios and ING Investments anticipate that the Amended Relief would give ING Investments greater flexibility to select, supervise and evaluate wholly owned sub-advisers without incurring the expense and potential delay of seeking specific shareholder approval to utilize its investment management expertise. Under current applicable law, while a change in investment management arrangements involving one or more wholly owned sub-advisers may be put into place promptly on a temporary basis, a Portfolio must still call and hold a meeting of the Portfolio’s shareholders, create and distribute proxy materials, and arrange for the solicitation of voting instructions from shareholders. This process is time-intensive, slow, and costly. Under the Amended Relief, the Board would be able to act more quickly and with less expense to appoint a wholly owned sub-adviser or materially amend an agreement with a wholly owned sub-adviser.

 

What are the proposed conditions of the Amended Relief?

 

Under the terms of the Amended Relief, the Portfolios and ING Investments are, and would continue to be, subject to several conditions imposed by the SEC. The Portfolios would continue to obtain shareholder approval to approve or materially modify a sub-advisory agreement with any sub-adviser other than an Eligible Sub-Adviser. In addition, as is the case with the Existing Relief, under the conditions of the Amended Relief, within 90 days of a change to a sub-advisory arrangement shareholders must be provided with an information statement that contains information about the sub-adviser and sub-advisory agreement.

 

As with the Existing Relief, in order to rely on the Amended Relief, a majority of the Board must consist of Independent Directors/Trustees and the nomination of new or additional Independent Directors/Trustees must be at the discretion of the then existing Independent Directors/Trustees. The Portfolios’ prospectus must prominently discuss the Modified Manager-of-Managers Policy, including the fact that ING Investments has ultimate responsibility (subject to oversight by the Board) to oversee the sub-advisers and recommend their hiring, termination and replacement. If a sub-adviser is hired or terminated, ING Investments must provide the Board with information showing the expected impact on its profitability.

 

What is the recommendation of the Board?

 

Based upon its review, the Board, including a majority of the Independent Directors/Trustees present at its September 12, 2012 meeting, approved the Modified Managers-of-Managers Policy and voted to recommend to shareholders that they approve the Proposal. The Board is therefore recommending that the Portfolios’ shareholders vote “FOR” the proposed Modified Manager-of-Managers Policy for the Portfolios, as discussed in this Proxy Statement.

 

What factors were considered by the Board?

 

In determining whether or not it was appropriate to approve the Modified Manager-of-Managers Policy and to recommend approval of the Modified Manager-of-Managers Policy to shareholders, the Board, including the Independent

 

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Directors/Trustees, considered certain information and representations provided by ING Investments. Further, the Independent Directors/Trustees were advised by independent legal counsel with respect to these matters.

 

After carefully considering the Portfolios’ contractual arrangement under which ING Investments has been engaged as an investment adviser, and ING Investments’ experience in recommending and monitoring sub-advisers, the Board believes that it is appropriate to allow the recommendation, supervision and evaluation of wholly owned sub-advisers to be conducted by ING Investments. The Board also believes that this approach would be consistent with shareholders’ expectations that ING Investments will use its expertise to recommend to the Board qualified candidates to serve as sub-advisers regardless of whether they are wholly owned or unaffiliated.

 

The Board will continue to provide oversight of the sub-adviser selection and engagement process. The Board, including a majority of the Independent Directors/Trustees, will continue to evaluate and consider for approval of all new or amended sub-advisory agreements for wholly owned sub-advisers. In addition, under the 1940 Act and the terms of the sub-advisory agreements, the Board, including a majority of the Independent Directors/Trustees, are required to annually review and consider for renewal of any such agreement after the initial term. Upon entering into, renewing or amending a sub-advisory agreement, ING Investments and the sub-adviser have a legal duty to provide to the Board information on pertinent factors.

 

The Board also considered that shareholder approval of Proposal Four will not result in an increase or decrease in the total amount of investment advisory fees paid by the Portfolios to ING Investments. When engaging sub-advisers and entering into sub-advisory agreements, ING Investments has negotiated and will continue to negotiate fees with sub-advisers. These fees are paid directly by ING Investments and not by the Portfolios. Therefore, any fee reduction or increase negotiated by ING Investments may be either beneficial or detrimental to ING Investments. The fees paid by the Portfolios to ING Investments and the fees paid by ING Investments to the sub-adviser are considered by the Board in approving and renewing the investment management and sub-advisory agreements. Any increase in the investment management fee paid to ING Investments by the Portfolios would continue to require shareholder approval. If shareholders approve Proposal Four, ING Investments, pursuant to the Current and Proposed Advisory Agreements and other agreements, will continue to provide the same level of management and administrative services to the Portfolios as it is currently providing.

 

The Board concluded that it is appropriate to provide ING Investments and the Board with maximum flexibility to recommend, supervise and evaluate sub-advisers, including wholly owned sub-advisers, without incurring the unnecessary delay or expense of obtaining shareholder approval. This process will allow the Portfolios to operate more efficiently. Currently, to appoint a wholly owned sub-adviser to a Portfolio or to materially amend a sub-advisory agreement with a wholly owned sub-adviser, the Portfolio must call and hold a shareholder meeting, create and distribute proxy materials, and solicit proxy votes from the Portfolio’s shareholders. In addition, if a wholly owned sub-adviser to a Portfolio is acquired or there is a change of control of the wholly owned sub-adviser that results in the “assignment” of the sub-advisory agreement with ING Investments, the Registrants currently must seek approval of a new sub-advisory agreement from shareholders of each Portfolio, even when there will be no change in the persons managing the Portfolio. This process is time-consuming and costly, and some of the costs may be borne by each Portfolio. Without the delay inherent in holding a shareholder meeting, ING Investments and the Portfolios would be able to act more quickly to appoint a wholly owned sub-adviser with less expense when the Board and ING Investments believe that the appointment would benefit the Portfolios.

 

What is the required vote?

 

Approval of Proposal Four by shareholders of a Portfolio requires the affirmative vote of a “majority of the outstanding voting securities,” which is defined by the 1940 Act to mean the affirmative vote of the lesser of: (1) 67% or more of the voting securities present at the Shareholder Meeting if more than 50% of the outstanding shares are present or represented by proxy; or (2) more than 50% of the outstanding voting securities. Shareholders of each Portfolio will vote separately on Proposal Four and all shareholders of all classes of shares of a Portfolio will vote together as a single class on the Proposal.

 

What happens if shareholders do not approve Proposal Four?

 

If shareholders of a Portfolio do not approve the Modified Manager-of-Managers Policy, it will not be implemented and the Portfolios will continue to obtain shareholder approval to enter into or materially amend sub-advisory agreements with wholly owned sub-advisers, unless otherwise permitted under the 1940 Act. The Portfolios and ING Investments would continue to rely on the Existing Relief with respect to unaffiliated sub-advisers regardless of whether the SEC issues the Amended Relief.

 

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PROPOSAL FIVE – APPROVAL OF A CHANGE IN A FUNDAMENTAL INVESTMENT POLICY ON CONCENTRATION

 

ING Money Market Portfolio (the “Money Market Portfolio”)

 

What is Proposal Five?

 

The 1940 Act requires a mutual fund to establish and disclose a fundamental policy regarding concentration. At a meeting on December 12, 2012, the Board authorized a change in the Money Market Portfolio’s fundamental investment policy regarding concentration. The Money Market Portfolio’s investment restriction regarding concentration is fundamental and can only be changed with the approval of its shareholders. At the Shareholder Meeting shareholders will be asked to vote to approve modifying this investment restriction to clarify that certificates of deposit, fixed-time deposits, bankers acceptances, and certain other instruments issued by banks will not be treated as investments by the Money Market Portfolio in the banking industry for purposes of the fundamental investment policy on concentration.

 

What is the proposed change to the fundamental investment policy on concentration?

 

The Money Market Portfolio’s current investment policy regarding concentration, states that the Portfolio may not:

 

purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in securities of one or more issuers conducting their principal business activities in the same industry, provided that: (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. government, or tax exempt securities issued by any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions; and (b) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more registered management investment companies to the extent permitted by the 1940 Act, the rules and regulations there under and any exemptive relief obtained by the Fund/Portfolio.

 

If approved by the Money Market Portfolio’s shareholders, the Portfolio’s investment policy regarding concentration will be changed in the manner marked below to state that the Portfolio may not:

 

purchase any securities which would cause 25% or more of the value of its total assets at the time of purchase to be invested in securities of one or more issuers conducting their principal business activities in the same industry, provided that: (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. government, or tax exempt securities issued by any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions;  (b) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more registered management investment companies to the extent permitted by the 1940 Act, the rules and regulations there under and any exemptive relief obtained by the Fund/Portfolio; and (c) investments by the Portfolio in certificates of deposit, fixed-time deposits, bankers acceptances and certain other instruments issued by banks will not be treated as investments by the Portfolio in the banking industry.

 

Why is a change to the fundamental investment policy on concentration proposed?

 

As mentioned above, the 1940 Act requires a fund to describe, and designate as fundamental, its policy with respect to whether a fund concentrates in a particular industry or sector. The Money Market Portfolio’s current investment policy on concentration specifies that the Portfolio will not concentrate. The proposed investment policy clarifies that investments in certain types of instruments issued by banks will not be considered investments in the banking industry. If investments in certificates of deposit, fixed-time deposits, bankers’ acceptances, and certain other instruments issued by banks were deemed to be investments in the banking industry, the current fundamental investment policy may restrict the ability of the portfolio managers to invest the Money Market Portfolio’s assets in accordance with the Portfolio’s principal investment strategy. The proposed investment policy on concentration would ensure that such instruments are not considered investments in the banking industry for purposes of determining whether the Money Market Portfolio is concentrated.

 

What is the recommendation of the Board?

 

Based upon its review, the Board, including a majority of the Independent Directors/Trustees present at its December 12, 2012 meeting, approved the proposed change to the Money Market Portfolios’ fundamental investment policy on concentration and voted to recommend to shareholders that they approve the Proposal. The Board is therefore recommending that the Money Market Portfolio’s shareholders vote “FOR” the proposed change to the fundamental investment policy, as discussed in this Proxy Statement.

 

What is the required vote?

 

Approval of the Proposal Five by shareholders of the Money Market Portfolio requires the affirmative vote of a “majority of the outstanding voting securities,” which is defined by the 1940 Act to mean the affirmative vote of the lesser of: (1) 67%

 

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or more of the voting securities present at the Shareholder Meeting if more than 50% of the outstanding shares are present or represented by proxy; or (2) more than 50% of the outstanding voting securities. Shareholders of the Money Market Portfolio will vote separately on Proposal Five and all shareholders of all classes of shares of the Money Market Portfolio will vote together as a single class on the Proposal.

 

What happens if shareholders do not approve Proposal Five?

 

If the Money Market Portfolio’s shareholders do not approve Proposal Five, the Money Market Portfolio will continue to operate subject to the current fundamental investment policy on concentration, and the Board will determine what action, if any, should be taken.

 

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GENERAL INFORMATION ABOUT THE PROXY STATEMENT

 

Who is asking for my vote?

 

The Board is soliciting your vote. With respect to ING Balanced Portfolio, Inc., ING Strategic Allocation Portfolio, Inc., and ING Variable Portfolios, Inc., this meeting is designated as the annual meeting of shareholders. With respect to each other Registrant, this meeting is designated as a special meeting of shareholders.

 

How is my proxy being solicited?

 

The Portfolios have retained [Proxy Solicitor] (the “Solicitor”) to assist in the solicitation of proxies, at an estimated cost of $[] which will be paid by ING Investments or an affiliate. As the date of the Shareholder Meeting approaches, certain shareholders may receive a telephone call from a representative of the Solicitor if their votes have not yet been received. Authorization to permit the Solicitor to execute proxies may be obtained by telephonic instructions from shareholders of the Portfolios. Proxies that are obtained telephonically will be recorded in accordance with certain procedures, as explained further below. The Board believes that these procedures are reasonably designed to ensure that both the identity of the shareholder casting the vote and the voting instructions of the shareholder are accurately determined and recorded.

 

In situations where a telephonic proxy is solicited, the Solicitor’s representative is required to ask for each shareholder’s full name, address, social security or employer identification number, title (if the shareholder is authorized to act on behalf of an entity, such as a corporation), the number of shares owned, and to confirm that the shareholder has received the proxy materials in the mail. The Solicitor’s representative will explain the process, read the Proposals on the Proxy Ballot or Voting Instruction Card, and ask for the shareholder’s instructions on each applicable Proposal. Although the Solicitor’s representative is permitted to answer questions about the process, he or she is not permitted to recommend to the shareholder how to vote, other than reading any recommendation set forth in the Proxy Statement. The Solicitor’s representative will record the shareholder’s instructions on the Proxy Ballot or Voting Instruction Card. Within approximately 72 hours of soliciting telephonic voting instructions, the shareholder will be sent a letter or mailgram to confirm his or her vote and asking the shareholder to call the Solicitor immediately if his or her instructions are not correctly reflected in the confirmation.

 

Should you require additional information regarding the Shareholder Meeting, you may contact the Solicitor toll-free at []. In addition to solicitation by mail, certain officers and representatives of the Portfolios, officers and employees of ING Investments or its affiliates and certain financial services firms and their representatives, who will receive no extra compensation for their services, may solicit votes by telephone, telegram, facsimile, or other communication.

 

What happens to my proxy once I submit it?

 

The Board has named Theresa K. Kelety, Secretary, Huey P. Falgout, Jr., Assistant Secretary, and Todd Modic, Assistant Secretary, or one or more substitutes designated by them, as proxies who are authorized to vote Portfolio shares as directed by shareholders. Please complete and execute your Proxy Ballot or Voting Instruction Card. If you follow the voting instructions, your proxies will vote your shares as you have directed. If you submitted your Proxy Ballot or Voting Instruction Card but did not vote on the Proposals, your proxies will vote on the Proposals as recommended by the Board, except as described under “What are the voting rights and the quorum requirements?”

 

Can I revoke my proxy after I submit it?

 

A shareholder may revoke the accompanying proxy at any time prior to its use by filing with the Registrant a written revocation or a duly executed proxy bearing a later date. In addition, any shareholder who attends the Shareholder Meeting in person may vote by ballot at the Shareholder Meeting, thereby canceling any proxy or voting instruction previously given. The persons named in the accompanying proxy will vote as directed by the shareholder under the proxy.

 

What are the voting rights and quorum requirements

 

Each shareholder of each Portfolio is entitled to one vote for each share held as to any matter on which such shareholder is entitled to vote and for each fractional share that is owned, the shareholder shall be entitled to a proportionate fractional vote. With respect to each Portfolio except the Money Market Portfolio, a majority of shares entitled to vote shall constitute a quorum at any meeting of the shareholders. With respect to the Money Market Portfolio, one fourth of the shares entitled to vote shall constitute a quorum. Shares have no preemptive or subscription rights.

 

Only shareholders of the Portfolios at the close of business on the Record Date will be entitled to be present and give voting instructions for the Portfolios at the Shareholder Meeting with respect to their shares owned as of that Record Date. To be counted, the properly executed Proxy Ballot or Voting Instruction Card must be received no later than 5:00 P.M. on [April 21, 2013]. Appendix P sets forth the number of shares of each Portfolio issued and outstanding as of the Record Date.

 

If there are insufficient votes to approve any Proposal or for any other reason deemed appropriate by the persons named as proxies, the persons named as proxies may propose one or more adjournments of the Shareholder Meeting to permit additional time for the solicitation of proxies, in accordance with the organizational documents of the Registrant and applicable law. Solicitation of votes may continue to be made without any obligation to provide any additional notice of the adjournment. The persons named as proxies will vote in favor of such adjournments in their discretion.

 

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With respect to Variable Contract Holders, your Separate Account is the record owner of shares of the Portfolios; however, as a Variable Contract Holder you are permitted to instruct your Participating Insurance Company as to how to vote on the matters listed in the Notice of Shareholder Meeting. Where Variable Contract Holders fail to give instructions as to how to vote their shares, the Participating Insurance Companies will use proportional voting, as explained in the following paragraph. With respect to Plan Participants, your Qualified Plan is the record owner of shares of the Portfolios; however, as a Plan Participant you may be asked to provide instructions to your Qualified Plan trustee as to how to vote on the matters listed in the Notice of Shareholder Meeting. Where Plan Participants are asked, but fail to give instructions as to how to vote their shares, the Qualified Plan trustee may use proportional voting.

 

Proportional voting means that a Participating Insurance Company or Qualified Plan trustee may vote the shares in proportion to the instructions provided to them by other Variable Insurance Holders or Plan Participants. Under proportional voting, if a large number of Variable Contract Holders or Plan Participants fail to give voting instructions, a small number of Variable Contract Holders or Plan Participants may determine the outcome of a vote. The Portfolios do not impose a minimum percentage of voting instructions be received before counting the Separate Accounts and Qualified Plans as shareholders of a Portfolio.

 

Because a significant percentage of each Portfolio’s shares are held by Separate Accounts, the presence of such Participating Insurance Companies at the Shareholder Meeting shall be sufficient to constitute quorum for the transaction of business at the Shareholder Meeting.

 

Appendix Q hereto lists the persons that, as of [February 1, 2013] owned beneficially or of record 5% or more of the outstanding shares of any class of the Portfolios.

 

Who are the Portfolios’ independent public accountants?

 

The accounting firm of KPMG LLP (“KPMG”) currently serves as the independent public accountants for the Portfolios. The Board has selected KPMG as the independent public accountant to examine and report on the financial statements of each Portfolio for fiscal years ended December 31, 2011 and December 31, 2012.

 

As part of its oversight of each Portfolio’s financial statements, the Audit Committee reviewed and discussed with ING Investments and KPMG each Portfolio’s financial statements for the fiscal year ended December 31, 2012. The Audit Committee has reviewed the audit fees of KPMG and has also reviewed non-audit services to assure compliance with the Portfolios’ 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 the selection of KPMG to serve as independent public accounting firm for each Portfolio for the fiscal year ending December 31, 2012.

 

The fees paid to KPMG for professional audit services during the Portfolios’ fiscal years ended December 31, 2011 and December 31, 2012, amounts billed for other services rendered by KPMG to the Portfolios, and the aggregate non-audit fees billed by KPMG for services rendered to the Portfolio, ING Investments, and any entity controlling, controlled by, or under common control with ING Investments that provides ongoing services to the Portfolios for the fiscal years ended December 31, 2011 and December 31, 2012 are described in Appendix R.

 

All of the services provided by the Portfolios’ independent public accountants 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 approves: (1) all audit and non-audit services to be rendered to the Portfolios by KPMG; and (2) all non-audit services impacting the operations and financial reporting of the Portfolio provided by KPMG to ING Investments or any affiliate thereof that provides ongoing services to the Portfolios (collectively, “Covered Services”). The Audit Committee has adopted pre-approval procedures authorizing one or more members of the Audit Committee to approve from time to time, on behalf of the Audit Committee, all Covered Services to be provided by KPMG which are not otherwise approved at a meeting of the Audit Committee, provided that such delegate reports to the full Audit Committee at its next regularly scheduled 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 has considered and will periodically consider whether KPMG’s receipt of non-audit fees from the Portfolios, ING Investments and all entities controlling, controlled by, or under common control with ING Investments that provide services to the Portfolios is compatible with maintaining the independence of KPMG.

 

KPMG has advised the Portfolios that neither KPMG nor any of its partners has any direct or material indirect financial interest in the Portfolios. Representatives of KPMG are not expected to be at the Shareholder 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.

 

Can shareholders submit proposals for consideration in a Proxy Statement?

 

The Portfolios are not required to hold annual meetings and currently do not intend to hold such meetings unless shareholder action is required in accordance with the 1940 Act or other applicable law. A shareholder proposal to be considered for inclusion in a proxy statement at any subsequent meeting of shareholders must be submitted in a reasonable

 

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time before a proxy statement for that meeting is printed and mailed. Whether a proposal is submitted in a proxy statement will be determined in accordance with applicable federal and state laws.

 

How can shareholders send communications to the Board?

 

Shareholders may send other communications to the Board, a Committee thereof, or an individual Director/Trustee. Such communications should be sent to the Portfolios’ Secretary at the address on the front of this Proxy Statement.

 

What if a proposal that is not in the Proxy Statement comes up at the Shareholder Meeting?

 

If any other matter is properly presented, your proxies will vote in their discretion in accordance with their best judgment, including any proposal to adjourn the meeting. At the time this Proxy Statement was printed, the Board knew of no matter that needed to be acted upon at the Shareholder Meeting other than the Proposals discussed in this Proxy Statement.

 

Who pays for this Proxy Solicitation?

 

The Portfolios will not pay the expenses in connection with the Notice and this Proxy Statement or the Shareholder Meeting. ING Investments or an affiliate will pay expenses, including the printing, mailing, solicitation and vote tabulation expenses, legal fees, and out-of-pocket expenses. These expenses are estimated to be [].

 

In order that the presence of a quorum at the Shareholder Meeting may be assured, prompt execution and return of the enclosed Proxy Ballot is requested. A self-addressed postage paid envelope is enclosed for your convenience. You also may vote via telephone or via the Internet. Please follow the voting instructions as outlined on your Proxy Ballot or Voting Instruction Card.

 

	Theresa K. Kelety
	Secretary

 

[March 18, 2013]

7337 East Doubletree Ranch Road, Suite 100

Scottsdale, Arizona 85258-2034

 

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APPENDIX A: PORTFOLIO MANAGERS

 

The following table sets forth the portfolio managers responsible for the day-to-day management of the Portfolios.

 

Portfolio		Portfolio Managers
ING Australia Index Portfolio		Vincent Costa, Portfolio Manager (since 04/12) Steve Wetter, Portfolio Manager (since 04/12)
ING Balanced Portfolio		Christopher F. Corapi, Portfolio Manager (since 04/10) Christine Hurtsellers, CFA, Portfolio Manager (since 01/09) Heather Hackett, CFA, Portfolio Manager (since 04/10) Paul Zemsky, CFA, Portfolio Manager (since 04/07)
ING BlackRock Science and Technology Opportunities Portfolio		Thomas P. Callan, Portfolio Manager (since 03/04) Erin Xie, Portfolio Manager (since 03/05) Jean M. Rosenbaum, Portfolio Manager (since 12/05)
ING Emerging Markets Index Portfolio		Vincent Costa, Portfolio Manager (since 04/12) Steve Wetter, Portfolio Manager (since 04/12)
ING Euro STOXX 50® Index Portfolio		Vincent Costa, Portfolio Manager (since 04/12) Steve Wetter, Portfolio Manager (since 04/12)
ING FTSE 100 Index® Portfolio		Vincent Costa, Portfolio Manager (since 04/12) Steve Wetter, Portfolio Manager (since 04/12)
ING Growth and Income Portfolio		Christopher F. Corapi, Portfolio Manager (since 02/04) Michael Pytosh, Portfolio Manager (since 05/09)
ING Hang Seng Index Portfolio		Vincent Costa, Portfolio Manager (since 04/12) Steve Wetter, Portfolio Manager (since 04/12)
ING Index Plus LargeCap Portfolio ING Index Plus MidCap Portfolio ING Index Plus SmallCap Portfolio		Vincent Costa, Portfolio Manager (since 05/06) Christopher Corapi, Portfolio Manager (since 04/12)
ING Intermediate Bond Portfolio		Christine Hurtsellers, CFA, Portfolio Manager (since 01/09) Matthew Toms, CFA, Portfolio Manager (since 08/10) Michael Mata, Portfolio Manager (since 08/10)
ING International Index Portfolio		Vincent Costa, Portfolio Manager (since 04/12) Steve Wetter, Portfolio Manager (since 04/12)
ING Japan TOPIX Index® Portfolio		Vincent Costa, Portfolio Manager (since 04/12) Steve Wetter, Portfolio Manager (since 04/12)
ING Money Market Portfolio		David S. Yealy, Portfolio Manager (since 11/04)
ING RussellTM Large Cap Growth Index Portfolio ING RussellTM Large Cap Index Portfolio ING RussellTM Large Cap Value Index Portfolio ING RussellTM Mid Cap Growth Index Portfolio ING RussellTM Mid Cap Index Portfolio ING RussellTM Small Cap Index Portfolio		Vincent Costa, Portfolio Manager (since 04/12) Steve Wetter, Portfolio Manager (since 04/12)
ING Small Company Portfolio		Steve Salopek, Portfolio Manager (since 07/05) Joseph Basset, Portfolio Manager (since 05/06) James Hasso, Portfolio Manager (since 04/12)
ING Strategic Allocation Conservative Portfolio ING Strategic Allocation Growth Portfolio ING Strategic Allocation Moderate Portfolio		Paul Zemsky, CFA, Portfolio Manager (since 04/07) Heather Hackett, CFA, Portfolio Manager (since 01/09)
ING U.S. Bond Index Portfolio		Bob Kase, Portfolio Manager (since 02/12) Matthew Toms, Portfolio Manager (since 02/12) Michael Mata, Portfolio Manager (since 02/12)
ING Wisdom TreeSM Global High-Yielding Equity Index Portfolio		Vincent Costa, Portfolio Manager (since 04/12) Steve Wetter, Portfolio Manager (since 04/12)

 

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APPENDIX B: PRINCIPAL EXECUTIVE OFFICERS

 

EXECUTIVE OFFICERS OF ING INVESTMENTS, LLC

7337 East Doubletree Ranch Road, Suite 100

Scottsdale, AZ 85258-2034

 

Name and Title

Shaun P. Mathews – President and Chief Executive Officer

Michael J. Roland – Executive Vice President and Chief Compliance Officer

Stanley D. Vyner – Executive Vice President and Chief Investment Risk Officer

Kimberly A. Anderson – Senior Vice President and Assistant Secretary

Lydia L. Homer – Senior Vice President, Chief Financial Officer and Treasurer

Todd Modic – Senior Vice President

Huey P. Falgout, Jr. – Secretary

 

DIRECTORS AND EXECUTIVE OFFICERS OF ING INVESTMENT MANAGEMENT CO. LLC

230 Park Avenue

New York, NY 10169

 

Name and Title

Jeffrey T. Becker – Director, Chairman and Chief Executive Officer

Michael J. Gioffre – Chief Compliance Officer

Mark D. Weber – Director and Executive Vice President

Shaun P. Mathews – Director and Executive Vice President

Christine L. Hurtsellers – Director and Chief Investment Officer of fixed income and proprietary investments

Paul Zemsky – Executive Vice President

Daniel L. Wilcox – Chief Financial Officer, Senior Vice President and Treasurer

Gerald T. Lins – General Counsel

 

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APPENDIX C: FEES PAID TO AFFILIATES OF THE ADVISER

 

The following table sets forth the fees paid to the Administrator and Distributor as well as any affiliated brokerage commissions paid for the fiscal year ended December 31, 2012.

 

Portfolio		Administrative Services Fees ($)		Fees Paid to the Distributor ($)		Affiliated Brokerage Commissions ($)
ING Australia Index Portfolio						[None
ING Balanced Portfolio						None
ING BlackRock Science and Technology Opportunities Portfolio
ING Emerging Markets Index Portfolio						None
ING Euro STOXX 50® Index Portfolio						None
ING FTSE 100 Index® Portfolio						None
ING Growth and Income Portfolio						None
ING Hang Seng Index Portfolio						None
ING Index Plus LargeCap Portfolio						None
ING Index Plus MidCap Portfolio						None
ING Index Plus SmallCap Portfolio						None
ING Intermediate Bond Portfolio						None
ING International Index Portfolio						None
ING Japan TOPIX Index® Portfolio						None
ING Money Market Portfolio						None
ING RussellTM Large Cap Growth Index Portfolio						None
ING RussellTM Large Cap Index Portfolio						None
ING RussellTM Large Cap Value Index Portfolio						None
ING RussellTM Mid Cap Growth Index Portfolio						None
ING RussellTM Mid Cap Index Portfolio						None
ING RussellTM Small Cap Index Portfolio						None
ING Small Company Portfolio						None
ING Strategic Allocation Conservative Portfolio						None
ING Strategic Allocation Growth Portfolio						None
ING Strategic Allocation Moderate Portfolio						None
ING U.S. Bond Index Portfolio						None
ING Wisdom TreeSM Global High-Yielding Equity Index Portfolio						None]

 

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APPENDIX D: FORM OF PROPOSED ADVISORY AGREEMENT

 

Agreement dated [Date], between [Trust/Company] (the “[Trust/Company]”), a [State/Form of organization], and [Investment Adviser] (the “Adviser”), a [State/Form of organization] (the “Agreement”).

 

WHEREAS, the [Trust/Company] is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”);

 

WHEREAS, the [Trust/Company] is authorized to issue shares of common stock in separate series with each such series representing interests in a separate portfolio of securities and other assets;

 

WHEREAS, the [Trust/Company] may offer shares of additional series in the future;

 

WHEREAS, the [Trust/Company] desires to avail itself of the services of the Adviser for the provision of advisory and management services for the [Trust/Company]; and

 

WHEREAS, the Adviser is willing to render such services to the [Trust/Company];

 

NOW, THEREFORE, in consideration of the premises, the promises and mutual covenants herein contained, it is agreed between the parties as follows:

 

1.              Appointment. The [Trust/Company] hereby appoints the Adviser, subject to the direction of the Board of [Trustee/Director]s, for the period and on the terms set forth in this Agreement, to provide advisory, management, and other services, as described herein, with respect to each series of the [Trust/Company] (individually and collectively referred to herein as “Series”). The Adviser accepts such appointment and agrees to render the services herein set forth for the compensation herein provided.

 

In the event the [Trust/Company] establishes and designates additional series with respect to which it desires to retain the Adviser to render advisory services hereunder, it shall notify the Adviser in writing. If the Adviser is willing to render such services, it shall notify the [Trust/Company] in writing, whereupon such additional series shall become a Series hereunder.

 

With respect to those Series that have obtained shareholder approval, subject to the approval of the Board of [Trustee/Director]s of the [Trust/Company], the Adviser is authorized to enter into sub-advisory agreements with other registered investment advisers to serve as investment sub-advisers, whether or not affiliated with the Adviser (each a “Sub-Adviser”). The Adviser will continue to have responsibility for all services furnished pursuant to any sub-advisory agreement (each a “Sub-Advisory Agreement”). The [Trust/Company] and Adviser understand and agree that the Adviser may manage each Series in a “manager-of-managers” style with either a single or multiple sub-advisers, which contemplates that the Adviser will, among other things and pursuant to an order issued by the U.S. Securities and Exchange Commission (the “SEC”): (1) continually evaluate the performance of any Sub-Adviser to the [Trust/Company]; and (2) periodically make recommendations to the [Trust/Company]’s Board of [Trustee/Director]s regarding the results of its evaluation and monitoring functions. The [Trust/Company] recognizes that, subject to the approval of the Board of [Trustee/Director]s of the [Trust/Company], a Sub-Adviser’s services may be terminated or modified and that the Adviser may appoint a new Sub-Adviser for a Series, subject to the applicable SEC order.

 

2.              Services of the Adviser. The Adviser represents and warrants that it is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (“Advisers Act”) and will maintain such registration for so long as required by applicable law. Subject to the general supervision of the Board of [Trustee/Director]s of the [Trust/Company], the Adviser shall provide the following advisory, management, and other services with respect to the Series:

 

(a)         Provide general investment advice and guidance with respect to the Series and provide advice and guidance to the [Trust/Company]’s [Trustee/Director]s, and oversee the management of the investments of the Series and the composition of each Series’ portfolio of securities and investments, including cash, and the purchase, retention and disposition thereof, in accordance with each Series’ investment objective or objectives and policies as stated in the [Trust/Company]’s registration statement, as may be supplemented or amended from time to time (the “Registration Statement”), which management may be provided by others selected by the Adviser and approved by the Board of [Trustee/Director]s as provided below or directly by the Adviser as provided in Section 3 of this Agreement;

 

(b)         Render to the Board of [Trustee/Director]s of the [Trust/Company] such periodic and special reports as the Board of [Trustee/Director]s may reasonably request; and

 

(c)          Make available its officers and employees to the Board of [Trustee/Director]s and officers of the [Trust/Company] for consultation and discussions regarding the administration and management of the Series and services provided to the [Trust/Company] under this Agreement.

 

3.              Services of Adviser with respect to Sub-Advisers. In the event that the Adviser wishes to select others to render investment management services, the Adviser shall analyze, select and recommend for consideration and approval by the [Trust/Company]’s Board of [Trustee/Director]s investment advisory firms (however organized) to provide investment advice to one or more of the Series, and, at the expense of the Adviser, engage (which engagement may also be by the [Trust/Company]) any such investment advisory firm to render investment advice and manage the investments of each such Series and the composition of each such Series’ portfolio of securities and investments, including cash, and the purchase,

 

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retention and disposition thereof, or any offering thereof, in accordance with the Series’ investment objective or objectives and policies as stated in the [Trust/Company]’s Registration Statement. The Adviser shall take the following actions in respect of the performance by the Sub-Adviser of its obligations in respect of the Fund:

 

(a)         Periodically monitor and evaluate the performance of the Sub-Advisers with respect to the investment objectives and policies of the Series, including without limitation, perform periodic detailed analysis and review of the Sub-Adviser’s investment performance in respect of the Series and in respect of other accounts managed by the Sub-Adviser with similar investment strategies;;

 

(b)         prepare and present periodic reports to the Board of [Trustee/Director]s regarding the investment performance of the Sub-Adviser and other information regarding the Sub-Adviser, at such times and in such forms as the Board of [Trustee/Director]s may reasonably request;

 

(c)          review and consider any changes in the personnel of the Sub-Adviser responsible for performing the Sub-Adviser’s obligations and make appropriate reports to the Board of [Trustee/Director]s;

 

(d)         review and consider any changes in the ownership or senior management of the Sub-Adviser and make appropriate reports to the Board of [Trustee/Director]s;

 

(e)          perform periodic in-person or telephonic diligence meetings with representatives of the Sub-Adviser;

 

(f)           supervise Sub-Advisers with respect to the services that each such Sub-Adviser provides under each Sub-Adviser’s respective portfolio management agreement (each, a “Sub-Adviser Agreement”);

 

(g)          assist the Board of [Trustee/Director]s and management of the Trust in developing and reviewing information with respect to the initial approval of the Sub-Adviser Agreement with the Sub-Adviser and annual consideration of the agreement thereafter;

 

(h)         monitor the Sub-Advisers for compliance with the investment objective or objectives, policies and restrictions of each Series, the 1940 Act, Subchapter M of the Internal Revenue Code, and if applicable, regulations under such provisions, and other applicable laws;

 

(i)             If appropriate, analyze and recommend for consideration by the [Trust/Company]’s Board of [Trustee/Director]s termination of a Sub-Adviser Agreement under which the Sub-Adviser provides investment advisory services to one or more of the Series;

 

(j)            identify potential successors to or replacements of the Sub-Adviser or potential additional Sub-Advisers, perform appropriate due diligence, and develop and present to the Board of [Trustee/Director]s a recommendation as to any such successor, replacement, or additional Sub-Adviser;

 

(k)         designate and compensate from its own resources such personnel as the Adviser may consider necessary or appropriate to the performance of its services hereunder; and

 

(l)             perform such other review and reporting functions as the Board of [Trustee/Director]s shall reasonably request consistent with this Agreement and applicable law.

 

4.              Investment Management Authority. In the event the Adviser wishes to render investment management services directly to a Series, then with respect to any such Series, the Adviser, subject to the supervision of the [Trust/Company]’s Board of [Trustee/Director]s, will provide a continuous investment program for the Series’ portfolio and determine the composition of the assets of the Series’ portfolio, including determination of the purchase, retention, or sale, or any offering, of the securities, cash, and other investments contained in the portfolio. The Adviser will provide investment research and conduct a continuous program of evaluation, investment, sales, and reinvestment of the Series’ assets by determining the securities and other investments that shall be purchased, entered into, sold, closed, offered to the public, or exchanged for the Series, when these transactions should be executed, and what portion of the assets of the Series should be held in the various securities and other investments in which it may invest, and the Adviser is hereby authorized to execute and perform such services on behalf of the Series. To the extent permitted by the investment policies of the Series, the Adviser shall make decisions for the Series as to foreign currency matters and make determinations as to, and execute and perform, foreign currency exchange contracts on behalf of the Series. The Adviser will provide the services under this Agreement in accordance with the Series’ investment objective or objectives, policies, and restrictions as stated in the [Trust/Company]’s Registration Statement filed with the SEC, as amended. Furthermore:

 

(a)         The Adviser will manage the Series so that each will qualify as a regulated investment company under Subchapter M of the Internal Revenue Code. In managing the Series in accordance with these requirements, the Adviser shall be entitled to receive and act upon advice of counsel to the [Trust/Company] or counsel to the Adviser.

 

(b)         The Adviser will conform with the 1940 Act and all rules and regulations thereunder, all other applicable federal and state laws and regulations, with any applicable procedures adopted by the [Trust/Company]’s Board of [Trustee/Director]s, and the provisions of the Registration Statement.

 

(c)          On occasions when the Adviser deems the purchase or sale of a security to be in the interest of the Series as well as any other investment advisory clients, the Adviser may, to the extent permitted by applicable laws and regulations and

 

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any applicable procedures adopted by the [Trust/Company]’s Board of [Trustee/Director]s, but shall not be obligated to, aggregate the securities to be so sold or purchased with those of its other clients where such aggregation is not inconsistent with the policies set forth in the Registration Statement. In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Adviser in a manner that is fair and equitable in the judgment of the Adviser in the exercise of its fiduciary obligations to the [Trust/Company] and to such other clients.

 

(d)         In connection with the purchase and sale of securities of the Series, the Adviser will arrange for the transmission to the custodian for the [Trust/Company] on a daily basis, of such confirmation, trade tickets, and other documents and information, including, but not limited to, Cusip, Cedel, or other numbers that identify securities to be purchased or sold on behalf of the Series, as may be reasonably necessary to enable the custodian to perform its administrative and recordkeeping responsibilities with respect to the Series. With respect to portfolio securities to be purchased or sold through the Depository Trust Company, the Adviser will arrange for the prompt transmission of the confirmation of such trades to the [Trust/Company]’s custodian.

 

(e)          The Adviser will assist the custodian or portfolio accounting agent for the [Trust/Company] in determining, consistent with the procedures and policies stated in the Registration Statement for the [Trust/Company] and any applicable procedures adopted by the [Trust/Company]’s Board of [Trustee/Director]s, the value of any portfolio securities or other assets of the Series for which the custodian or portfolio accounting agent seeks assistance or review from the Adviser.

 

(f)           The Adviser will make available to the [Trust/Company], promptly upon request, any of the Series’ or the Adviser’s investment records and ledgers as are necessary to assist the [Trust/Company] in complying with the requirements of the 1940 Act, as well as other applicable laws. The Adviser will furnish to regulatory authorities having the requisite authority any information or reports in connection with its services which may be requested in order to ascertain whether the operations of the [Trust/Company] are being conducted in a manner consistent with applicable laws and regulations.

 

(g)          The Adviser will regularly report to the [Trust/Company]’s Board of [Trustee/Director]s on the investment program for the Series and the issuers and securities represented in the Series’ portfolio, and will furnish the [Trust/Company]’s Board of [Trustee/Director]s with respect to the Series such periodic and special reports as the [Trustee/Director]s may reasonably request.

 

(h)         In connection with its responsibilities under this Section 3, the Adviser is responsible for decisions to buy and sell securities and other investments for the Series’ portfolio, broker-dealer selection, and negotiation of commission rates. The Adviser’s primary consideration in effecting a security transaction will be to obtain the best execution for the Series, taking into account the factors specified in the Prospectus and/or Statement of Additional Information for the [Trust/Company], which include price (including the applicable brokerage commission or dollar spread), the size of the order, the nature of the market for the security, the timing of the transaction, the reputation, experience and financial stability of the broker-dealer involved, the quality of the service, the difficulty of execution, execution capabilities and operational facilities of the firms involved, and the firm’s risk in positioning a block of securities. Accordingly, the price to the Series in any transaction may be less favorable than that available from another broker-dealer if the difference is reasonably justified, in the judgment of the Adviser in the exercise of its fiduciary obligations to the [Trust/Company], by other aspects of the portfolio execution services offered. Subject to such policies as the Board of [Trustee/Director]s may determine and consistent with Section 28(e) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), the Adviser shall not be deemed to have acted unlawfully or to have breached any duty created by this Agreement or otherwise solely by reason of its having caused the Series to pay a broker-dealer for effecting a portfolio investment transaction in excess of the amount of commission another broker-dealer would have charged for effecting that transaction, if the Adviser determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker-dealer, viewed in terms of either that particular transaction or the Adviser’s overall responsibilities with respect to the Series and to its other clients as to which it exercises investment discretion. To the extent consistent with these standards and in accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder, the Adviser is further authorized to allocate the orders placed by it on behalf of the Series to the Adviser if it is registered as a broker-dealer with the SEC, to an affiliated broker-dealer, or to such brokers and dealers who also provide research or statistical material or other services to the Series, the Adviser or an affiliate of the Adviser. Such allocation shall be in such amounts and proportions as the Adviser shall determine consistent with the above standards, and the Adviser will report on said allocation regularly to the Board of [Trustee/Director]s of the [Trust/Company] indicating the broker-dealers to which such allocations have been made and the basis therefor.

 

5.              Conformity with Applicable Law. The Adviser, in the performance of its duties and obligations under this Agreement, shall act in conformity with the Registration Statement of the [Trust/Company] and with the instructions and directions of the Board of [Trustee/Director]s of the [Trust/Company] and will conform to, and comply with, the requirements of the 1940 Act and all other applicable federal and state laws and regulations.

 

6.              Exclusivity. The services of the Adviser to the [Trust/Company] under this Agreement are not to be deemed exclusive, and the Adviser, or any affiliate thereof, shall be free to render similar services to other investment companies and other clients (whether or not their investment objectives and policies are similar to those of any of the Series) and to engage in other activities, so long as its services hereunder are not impaired thereby.

 

42

 

7.              Records. The [Trust/Company] agrees to maintain and to preserve for the periods prescribed under the 1940 Act any such records as are required to be maintained by the [Trust/Company] with respect to the Series by the 1940 Act. The Adviser further agrees that all records of the Series are the property of the [Trust/Company] and, to the extent held by the Adviser, it will promptly surrender any of such records upon request.

 

8.              Expenses. During the term of this Agreement, the Adviser will pay all expenses incurred by it in connection with its activities under this Agreement, except such expenses as are assumed by the [Trust/Company] under this Agreement and such expenses as are assumed by a Sub-Adviser under its Sub-Adviser Agreement. The Adviser further agrees to pay all fees payable to the Sub-Advisers, executive salaries and expenses of the [Trustee/Director]s of the [Trust/Company] who are employees of the Adviser or its affiliates, and office rent of the [Trust/Company]. The [Trust/Company] shall be responsible for all of the other expenses of its operations, including, without limitation, the management fee payable hereunder; brokerage commissions; interest; legal fees and expenses of attorneys; fees of auditors, transfer agents and dividend disbursing agents, custodians and shareholder servicing agents; the expense of obtaining quotations for calculating each [Trust/Company]’s net asset value; taxes, if any, and the preparation of the [Trust/Company]’s tax returns; cost of stock certificates and any other expenses (including clerical expenses) of issue, sale, repurchase or redemption of shares; expenses of registering and qualifying shares of the [Trust/Company] under federal and state laws and regulations (including the salary of employees of the Adviser engaged in the registering and qualifying of shares of the [Trust/Company] under federal and state laws and regulations or a pro-rata portion of the salary of employees to the extent so engaged); expenses of disposition or offering any of the portfolio securities held by a Series; expenses of printing and distributing reports, notices and proxy materials to existing shareholders; expenses of printing and filing reports and other documents filed with governmental agencies; expenses in connection with shareholder and [Trustee/Director] meetings; expenses of printing and distributing prospectuses and statements of additional information to existing shareholders; fees and expenses of [Trustee/Director]s of the [Trust/Company] who are not employees of the Adviser or any Sub-Adviser, or their affiliates; trade association dues; insurance premiums; extraordinary expenses such as litigation expenses. To the extent the Adviser incurs any costs or performs any services which are an obligation of the [Trust/Company], as set forth herein, the [Trust/Company] shall promptly reimburse the Adviser for such costs and expenses. To the extent the services for which the [Trust/Company] is obligated to pay are performed by the Adviser, the Adviser shall be entitled to recover from the [Trust/Company] only to the extent of its costs for such services.

 

9.              Compensation. For the services provided by the Adviser to each Series pursuant to this Agreement, the [Trust/Company] will pay to the Adviser an annual fee equal to the amount specified for such Series in Schedule A hereto, payable monthly in arrears. Payment of the above fees shall be in addition to any amount paid to the Adviser for the salary of its employees for performing services which are an obligation of the [Trust/Company] as provided in Section 7. The fee will be appropriately pro-rated to reflect any portion of a calendar month that this Agreement is not in effect between the [Trust/Company] and the Adviser.

 

10.       Liability of the Adviser. The Adviser may rely on information reasonably believed by it to be accurate and reliable. Except as may otherwise be required by the 1940 Act or the rules thereunder, neither the Adviser nor its stockholders, officers, directors, employees, or agents shall be subject to any liability for, or any damages, expenses, or losses incurred in connection with, any act or omission connected with or arising out of any services rendered under this Agreement, except by reason of willful misfeasance, bad faith, or negligence in the performance of the Adviser’s duties, or by reason of reckless disregard of the Adviser’s obligations and duties under this Agreement. Except as may otherwise be required by the 1940 Act or the rules thereunder, neither the Adviser nor its stockholders, officers, directors, employees, or agents shall be subject to any liability for, or any damages, expenses, or losses incurred in connection with, any act or omission by a Sub-Adviser or any of the Sub-Adviser’s stockholders or partners, officers, directors, employees, or agents connected with or arising out of any services rendered under a Sub-Adviser Agreement, except by reason of willful misfeasance, bad faith, or negligence in the performance of the Adviser’s duties under this Agreement, or by reason of reckless disregard of the Adviser’s obligations and duties under this Agreement. The debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a Series shall be enforceable against the assets and property of that Series only, and not against the assets or property of any other series of the [Trust/Company].

 

11.       Continuation and Termination. With respect to each Series identified as a Series on Schedule A hereto on the date of this Agreement, unless earlier terminated as provided herein with respect to any such Series, this Agreement shall continue in full force and effect through two years from the effective date of this Agreement. Thereafter, unless earlier terminated with respect to such a Series, the Agreement shall continue in full force and effect with respect to each such Series for periods of one year, provided that such continuance is specifically approved at least annually by: (1) the vote of a majority of the Board of [Trustee/Director]s of the [Trust/Company]; or (2) the vote of a majority of the outstanding voting shares of the Series (as defined in the 1940 Act), and provided that such continuance is also approved by the vote of a majority of the Board of [Trustee/Director]s of the [Trust/Company] who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of the [Trust/Company] or the Adviser, cast in person at a meeting called for the purpose of voting on such approval.

 

With respect to any Series added to Schedule A hereto as a Series after the date of this Agreement, this Agreement shall become effective on the later of: (1) the date Schedule A is amended to reflect the addition of such Series as a Series under the Agreement; or (2) the date upon which the shares of the Series are first sold to the public, subject to the condition

 

43

 

that the [Trust/Company]’s Board of [Trustee/Director]s, including a majority of those [Trustee/Director]s who are not interested persons (as such term is defined in the 1940 Act) of the [Trust/Company] or the Adviser, and the shareholders of such Series, shall have approved this Agreement. Unless earlier terminated as provided herein with respect to any such Series, the Agreement shall continue in full force and effect for a period of two years from the date of its effectiveness (as identified above) with respect to that Series. Thereafter, unless earlier terminated with respect to a Series, the Agreement shall continue in full force and effect with respect to each such Series for periods of one year, provided that such continuance is specifically approved at least annually by: (1) the vote of a majority of the Board of [Trustee/Director]s of the [Trust/Company]; or (2) the vote of a majority of the outstanding voting shares of the Series (as defined in the 1940 Act), and provided that such continuance is also approved by the vote of a majority of the Board of [Trustee/Director]s of the [Trust/Company] who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of the [Trust/Company] or the Adviser, cast in person at a meeting called for the purpose of voting on such approval.

 

However, any approval of this Agreement by the holders of a majority of the outstanding shares (as defined in the 1940 Act) of a Series shall be effective to approve or continue this Agreement with respect to such Series notwithstanding: (1) that this Agreement has not been approved by the holders of a majority of the outstanding shares of any other Series; or (2) that this Agreement has not been approved by the vote of a majority of the outstanding shares of the [Trust/Company], unless such approval shall be required by any other applicable law or otherwise. This Agreement may be terminated by the [Trust/Company] at any time, in its entirety or with respect to a Series, without the payment of any penalty, by vote of a majority of the Board of [Trustee/Director]s of the [Trust/Company] or by a vote of a majority of the outstanding voting shares of the [Trust/Company], or with respect to a Series, by vote of a majority of the outstanding voting shares of such Series, on sixty (60) days’ written notice to the Adviser, or by the Adviser at any time, without the payment of any penalty, on sixty (60) days’ written notice to the [Trust/Company]. This Agreement will automatically and immediately terminate in the event of its “assignment” as defined in the 1940 Act.

 

12.       Amendments. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. If shareholder approval of an amendment is required under the 1940 Act, no such amendment shall become effective until approved by a vote of the majority of the outstanding shares (as defined in the 1940 Act) of the [Trust/Company]. Otherwise, a written amendment of this Agreement is effective upon the approval of the Board of [Trustee/Director]s and the Adviser.

 

13.       Use of Names. It is understood that the names “ING” and “ING Investments, LLC” or any derivatives thereof or logos associated with those names is the valuable property of the Adviser and its affiliates, and that the [Trust/Company] and/or the Series have the right to use such names (or derivatives or logos) only so long as this Agreement shall continue with respect to such [Trust/Company] and/or Series. Upon termination of this Agreement, the [Trust/Company] (or Series) shall forthwith cease to use such names (or derivatives or logos) and, in the case of the [Trust/Company], shall promptly amend its Articles of Incorporation to change its name (if such names are included therein).

 

14.       Miscellaneous.

 

(a)         This Agreement is made for the benefit of the [Trust/Company] and the Advisers, and is not intended to benefit any third party or be enforceable by any third party.

 

(b)         This Agreement shall be governed by the laws of the State of New York, provided that nothing herein shall be construed in a manner inconsistent with the 1940 Act, the Advisers Act, or any rules or order of the SEC thereunder.

 

(c)          If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby and, to this extent, the provisions of this Agreement shall be deemed to be severable.

 

(d)         This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original.

 

(e)          The captions of this Agreement are included for convenience only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.

 

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APPENDIX E: ADVISORY AGREEMENT INFORMATION

 

The following table sets forth the date the Current Advisory Agreement was last approved by each Portfolio’s shareholders, the advisory fee schedule, any contractual limits on expenses that the Adviser has entered into with respect to the Portfolios, and the amount of the advisory fees paid to the Adviser for the Portfolios’ fiscal year ended December 31, 2012.

 

Portfolio		Date Approved by Shareholders		Advisory Fee Schedule (as a % of average daily net assets)		Contractual Limits on Expenses (%)		Advisory Fees Paid ($)
ING Australia Index Portfolio(1)		02/28/11		0.60%		N/A
ING Balanced Portfolio		03/31/89		0.50%		N/A
ING BlackRock Science and Technology Opportunities Portfolio		04/28/00
ING Emerging Markets Index Portfolio(2)		11/30/11		0.55%		N/A
ING Euro STOXX 50® Index Portfolio(3)		08/04/09		0.60%		N/A
ING FTSE 100 Index® Portfolio(3)		08/04/09		0.60%		N/A
ING Growth and Income Portfolio		02/20/02		0.50% on first $10 billion; 0.45% on next $5 billion; and 0.425% in excess of $15 billion.		N/A
ING Hang Seng Index Portfolio(4)		04/22/09		0.60% on first $250 million; 0.50% on the next $250 million; and 0.45% thereafter.		N/A
ING Index Plus LargeCap Portfolio(5)		9/13/96		0.35%		Class I: 0.55 Class S: 0.80
ING Index Plus MidCap Portfolio(5)		12/15/97		0.40%		Class I: 0.60 Class S: 0.85
ING Index Plus SmallCap Portfolio(5)		12/18/97		0.40%		Class I: 0.60 Class S: 0.85
ING Intermediate Bond Portfolio		05/22/73		0.40%		N/A
ING International Index Portfolio(5)		03/07/08		0.38% on first $500 million; 0.36% on next $500 million; and 0.34% thereafter.		Class ADV: 1.00 Class I: 0.50 Class S: 0.75 Class S2: 0.90
ING Japan TOPIX Index® Portfolio(3)		08/04/09		0.60%		N/A
ING Money Market Portfolio		12/31/79		0.25%		Other(6)
ING RussellTM Large Cap Growth Index Portfolio(7)		04/22/09		0.45% on first $500 million; 0.43% on next $500 million; and 0.41% thereafter.		Class ADV: 1.00 Class I: 0.50 Class S: 0.75
ING RussellTM Large Cap Index Portfolio(5)		03/07/08		0.25% on first $1 billion; 0.23% on next $1 billion; and 0.21% thereafter.		Class ADV: 0.87 Class I: 0.37 Class S: 0.62 Class S2: 0.77
ING RussellTM Large Cap Value Index Portfolio(7)		04/22/09		0.45% on first $250 million; 0.35% on the next $250 million; and 0.30% thereafter.		Class ADV: 1.00 Class I: 0.50 Class S: 0.75
ING RussellTM Mid Cap Growth Index Portfolio(4)		04/22/09		0.45% on first $500 million; 0.43% on the next $500 million; and 0.41% thereafter.		N/A
ING RussellTM Mid Cap Index Portfolio(5)		03/07/08		0.31% on first $2 billion; 0.24% on next $2 billion; and 0.18% thereafter.		Class ADV: 0.93 Class I: 0.43 Class S: 0.68 Class S2: 0.83
ING RussellTM Small Cap Index Portfolio(5)		03/07/08		0.33% on first $1 billion; 0.31% on next $1 billion; and 0.29% thereafter.		Class ADV: 0.95 Class I: 0.45 Class S: 0.70 Class S2: 0.85

 

45

 

Portfolio		Date Approved by Shareholders		Advisory Fee Schedule (as a % of average daily net assets)		Contractual Limits on Expenses (%)		Advisory Fees Paid ($)
ING Small Company Portfolio(5)		12/26/96		0.75%		Class ADV: 1.45 Class I: 0.95 Class S: 1.20 Class S2: 1.35
ING Strategic Allocation Conservative Portfolio(8)		12/17/07		0.08% invested in Underlying Funds(9) 0.60% held in direct investments(10)		Class I: 0.65 Class S: 0.90
ING Strategic Allocation Growth Portfolio(11)		12/17/07		0.08% invested in Underlying Funds(9) 0.60% held in direct investments(10)		Class I: 0.71 Class S: 0.96
ING Strategic Allocation Moderate Portfolio(8)		12/17/07		0.08% invested in Underlying Funds(9) 0.60% held in direct investments(10)		Class I: 0.70 Class S: 0.95
ING U.S. Bond Index Portfolio(5)		03/07/08		0.32% on first $500 million; 0.30% on next $500 million; 0.28% on next $1 billion; 0.26% on next $2 billion; and 0.24% in excess of $4 billion.		Class ADV: 0.95 Class I: 0.45 Class S: 0.70 Class S2: 0.85
ING Wisdom TreeSM Global High-Yielding Equity Index Portfolio(5)		01/27/08		0.46% on all first $500 million; 0.43% on the next $500 million; and 0.41% in excess of $1 billion.		Class ADV: 1.34 Class S: 1.09 Class S2: 1.24

 

(1)         ING Investments is contractually obligated to waive 0.25% of the advisory fee through May 1, 2014. There is no guarantee that the advisory fee waiver will continue after May 1, 2014. The advisory fee waiver is not eligible for recoupment.  The advisory fee waiver may only be terminated with the prior approval of the Board.

 

(2)         ING Investments is contractually obligated to waive 0.15% of the management fee through May 1, 2014. There is no guarantee that the advisory fee waiver will continue after May 1, 2014. The advisory fee waiver is not eligible for recoupment.   The advisory fee waiver may only be terminated with the prior approval of the Board

 

(3)         ING Investments is contractually obligated to waive 0.25% of the management fee through August 5, 2013. There is no guarantee that the advisory fee waiver will continue after August 5, 2013. The advisory fee waiver is not eligible for recoupment.   The advisory fee waiver may only be terminated with the prior approval of the Board

 

(4)         ING Investments is contractually obligated to waive 0.10% of the management fee through May 1, 2014. There is no guarantee that the advisory fee waiver will continue after May 1, 2013. The advisory fee waiver will only renew if the adviser elects to renew it and it is not eligible for recoupment.  The advisory fee waiver may only be terminated with the prior approval of the Board

 

(5)         ING Investments is contractually obligated to limit expenses to the above stated rate(s) through May 1, 2014; the obligation does not extend to interest, taxes, brokerage commissions, Acquired Fund Fees and Expenses, and extraordinary expenses. The obligation will automatically renew for one-year terms unless it is terminated by the Portfolio or ING Investments upon written notice within 90 days of the end of the current term or upon termination of the advisory agreement and is subject to possible recoupment by the adviser within three years.

 

(6)         ING Investments and the distributor are contractually obligated to waive a portion of their advisory fees and distribution and/or shareholder services fees, as applicable, and to reimburse certain expenses of ING Money Market Portfolio in order to maintain a net yield of not less than zero through May 1, 2014.

 

(7)         ING Investments is contractually obligated to limit expenses to the above stated rate(s) through May 1, 2014. There is no guarantee the obligation will continue after May 1, 2014. The obligation will only renew if ING Investments elects to renew it. Also ING Investments is contractually obligated to waive 0.10% of the advisory fee through May 1, 2014. There is no guarantee that the advisory fee waiver will continue after May 1, 2014. These obligations are not eligible for recoupment. The advisory fee waiver may only be terminated with the prior approval of the Board.

 

(8)         ING Investments is contractually obligated to limit expenses to the above stated rate(s) through May 1, 2014; the obligation does not extend to interest, taxes, brokerage commissions and extraordinary expenses. The obligation will automatically renew for one-year terms unless it is terminated by the Portfolio or ING Investments upon written notice within 90 days of the end of the current term or upon termination of the advisory agreement and is subject to possible recoupment by ING Investments within three years.  The advisory fee waiver may only be terminated with the prior approval of the Board.

 

(9)        “Underlying Funds” shall mean open-end investment companies registered under the 1940 Act within the ING Fund Complex. The term “Fund Complex” shall have the same meaning as defined in Item 17 of Form N-1A, as it was in effect on April 4, 2008.

 

(10)  “Direct Investments” shall mean assets which are not Underlying Funds.

 

(11)  ING Investments is contractually obligated to limit expenses to 0.75% and 1.00% for Class I and Class S shares, respectively, through May 1, 2014. The obligation will automatically renew for one-year terms unless it is terminated by the Portfolio or the adviser upon written notice within 90 days of the end of the current term or upon termination of the management agreement and is subject to possible recoupment by the adviser within three years. In addition, the adviser is contractually obligated to further limit expenses to 0.71% and 0.96% for Class I and Class S shares, respectively, through May 1, 2014. This obligation is subject to possible recoupment by the adviser within three years. There is no guarantee this obligation will continue after May 1, 2014 and the obligation will only renew if the adviser elects to renew it. These obligations do not extend to interest, taxes, brokerage commissions and extraordinary expenses.

 

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APPENDIX F: COMPENSATION PAID TO THE ADVISER BY INVESTMENT COMPANIES WITH SIMILAR INVESTMENT OBJECTIVES

 

The following table sets forth the advisory fee rate paid to ING Investments and assets under management of each registered investment company with an investment objective similar to the investment objectives of any of the Portfolios. The information is as of each registered investment company’s most recently completed fiscal year for which such information is publicly available.

 

Growth or Capital Appreciation

 

Fund/Portfolio		Advisory fee rate (as a % of average daily net assets)		Net Assets ($)
ING American Funds International Portfolio		0.49	%	1,013,278,747
ING American Funds World Allocation Portfolio		0.10	%	186,555,737
ING Baron Growth Portfolio		0.85	%	735,421,654
ING BlackRock Health Sciences Opportunities Portfolio		0.75	%	206,144,771
ING BlackRock Inflation Protected Bond Portfolio		0.42	%	989,014,027
ING BlackRock Large Cap Growth Portfolio		0.80	%	324,483,560
ING BlackRock Science and Technology Opportunities Portfolio		0.95	%	322,115,645
ING Columbia Small Cap Value II Portfolio		0.75	%	161,213,109
ING Corporate Leaders 100 Fund		0.40	%	10,933,890
ING Davis New York Venture Portfolio		0.80	%	390,035,931
ING DFA World Equity Portfolio		0.25	%	161,667,253
ING Diversified International Fund		0.00	%	127,363,072
ING Emerging Markets Equity Fund		1.00	%	91,659,812
ING Fidelity® VIP Contrafund® Portfolio		0.56	%	317,201,183
ING Fidelity® VIP Mid Cap Portfolio		0.56	%	51,028,499
ING FMRSM Diversified Mid Cap Portfolio		0.63	%	1,093,848,216
ING Global Natural Resources Fund		0.85	%	113,060,338
ING Global Opportunities Fund		0.90	%	66,130,188
ING Global Resources Portfolio		0.64	%	904,746,753
ING Global Target Payment Fund		0.08	%	81,593,802
ING Growth Opportunities Fund		0.75	%	78,252,231
ING International Core Fund		0.75	%	354,694,943
ING International Growth Fund		0.75	%	153,207,303
ING International SmallCap Fund		1.00	%	308,099,617
ING International Value Choice Fund		1.00	%	29,935,422
ING International Value Equity Fund		0.88	%	640,267,086
ING International Value Fund		1.00	%	726,771,787
ING International Value Portfolio		0.81	%	145,063,786
ING JPMorgan Emerging Markets Equity Portfolio		1.25	%	855,827,619
ING JPMorgan Mid Cap Value Portfolio		0.75	%	334,591,930
ING JPMorgan Small Cap Core Equity Portfolio		0.88	%	393,505,827
ING Large Cap Growth Fund		0.70	%	36,101,902
ING Large Cap Growth Portfolio		0.55	%	1,050,338,501
ING Marsico Growth Portfolio		0.81	%	636,035,778
ING Mid Cap Value Fund		0.46	%	221,475,491
ING MidCap Opportunities Fund		0.75	%	751,108,601
ING MidCap Opportunities Portfolio		0.70	%	907,247,926
ING Morgan Stanley Global Franchise Portfolio		0.96	%	407,835,394
ING Oppenheimer Global Portfolio		0.60	%	1,472,587,064
ING Pioneer Mid Cap Value Portfolio		0.64	%	647,615,056
ING Russia Fund		1.25	%	328,558,548
ING Small Company Fund		0.83	%	344,448,542
ING Small Company Portfolio		0.75	%	599,296,728
ING SmallCap Opportunities Fund		0.90	%	176,082,950
ING SmallCap Opportunities Portfolio		0.75	%	188,468,403
ING SMID Cap Equity Fund		0.45	%	113,924,250
ING Solution Aggressive Growth Portfolio		0.10	%	14,568,927
ING Solution Growth Portfolio		0.10	%	27,249,878
ING Strategic Allocation Growth Portfolio		0.08	%	139,145,580

 

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Growth or Capital Appreciation

 

Fund/Portfolio		Advisory fee rate (as a % of average daily net assets)		Net Assets ($)
ING T. Rowe Price Diversified Mid Cap Growth Portfolio		0.64	%	705,497,560
ING T. Rowe Price International Stock Portfolio		0.54	%	213,155,783
ING Templeton Foreign Equity Portfolio		0.79	%	519,566,774
ING Templeton Global Growth Portfolio		0.89	%	500,728,447

 

Income

 

Fund/Portfolio		Advisory fee rate (as a % of average daily net assets)		Net Assets ($)
ING Fidelity® VIP Equity-Income Portfolio		0.46	%	18,161,810
ING Floating Rate Fund		0.55	%	258,532,246
ING Global Advantage and Premium Opportunity Fund		0.75	%	232,035,620
ING Global Equity Dividend and Premium Opportunity Fund		1.00	%	976,610,401
ING GNMA Income Fund		0.47	%	982,358,538
ING Liquid Assets Portfolio		0.27	%	1,413,321,418
ING Senior Income Fund		0.80	%	768,394,035

 

Money Market

 

Fund/Portfolio		Advisory fee rate (as a % of average daily net assets)		Net Assets ($)
ING Money Market Fund		0.40	%	274,278,923
ING Money Market Portfolio		0.25	%	1,179,984,712

 

Total Return

 

Fund/Portfolio		Advisory fee rate (as a % of average daily net assets)		Net Assets ($)
ING American Century Small-Mid Cap Value Portfolio		1.00	%	201,496,542
ING American Funds Asset Allocation Portfolio		0.30	%	351,272,764
ING American Funds Global Growth and Income Portfolio		0.59	%	7,135,786
ING American Funds International Growth and Income Portfolio		0.69	%	4,641,101
ING Asia Pacific High Dividend Equity Income Fund		1.15	%	207,418,552
ING Australia Index Portfolio		0.60	%	189,741,339
ING Balanced Portfolio		0.50	%	530,900,543
ING Bond Portfolio		0.36	%	480,096,504
ING Capital Allocation Fund		0.08	%	190,262,450
ING Clarion Global Real Estate Portfolio		0.79	%	377,096,249
ING Clarion Real Estate Portfolio		0.68	%	569,208,374
ING Core Equity Research Fund		0.68	%	364,942,265
ING DFA Global Allocation Portfolio		0.25	%	10,293,150
ING Emerging Markets Equity Dividend Fund		1.15	%	33,913,988
ING Emerging Markets High Dividend Equity Fund		1.15	%	319,564,644
ING Emerging Markets Index Portfolio		0.55	%	62,115,336
ING Euro STOXX 50® Index Portfolio		0.60	%	675,924,345
ING Franklin Income Portfolio		0.63	%	781,406,905
ING Franklin Mutual Shares Portfolio		0.78	%	448,943,568
ING Franklin Templeton Founding Strategy Portfolio		0.00	%	766,436,352
ING FTSE 100 Index® Portfolio		0.60	%	537,592,960
ING GET U.S. Core Portfolio - Series 10		0.60	%	6,088,417
ING GET U.S. Core Portfolio - Series 11		0.60	%	8,139,679
ING GET U.S. Core Portfolio - Series 12		0.60	%	11,479,317
ING GET U.S. Core Portfolio - Series 13		0.60	%	19,832,443

 

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