INFORMATION
STATEMENT
April 2, 2014
ING Mid
Cap Value Fund
(A series of ING Equity Trust)
7337 East Doubletree Ranch Road, Suite 100
Scottsdale, Arizona 85258-2034
(800) 992-0180
ING
Mid Cap Value Fund IS NOT ASKING YOU FOR A PROXY REGARDING THE SUB-ADVISORY AGREEMENT FOR THE Fund AND YOU ARE REQUESTED NOT TO
SEND A PROXY WITH RESPECT TO THE SUB-ADVISORY AGREEMENT DISCUSSED IN THIS INFORMATION STATEMENT.
Introduction
Why did you send me this booklet?
This booklet includes
an information statement (“Information Statement”) for ING Mid Cap Value Fund (the “Fund”) in which you
have an interest. This Information Statement is furnished in connection with the approval by the Board of Trustees (the “Board”)
of a new sub-adviser to the Fund, LSV Asset Management (“LSV”).
The Fund is a separate
series of ING Equity Trust. This Information Statement will be provided on or about April 2, 2014 to shareholders of record as
of the close of business on February 10, 2014 (the “Record Date”).
How can I obtain more information about the Fund?
Should you have any
questions about the Fund, please do not hesitate to contact Shareholder Services toll free at (800) 992-0180. A copy of the current
prospectus, Statement of Additional Information (“SAI”), annual report, and semi-annual report is available, without
charge, on the Internet at http://www.ingfunds.com/literature or by contacting the Fund at:
ING Funds
7337 East Doubletree Ranch Road, Suite 100
Scottsdale, Arizona 85258-2034
(800) 992-0180
Who are the affiliated service providers to the Fund?
ING Investments, LLC
ING Investments, LLC
(“ING Investments” or the “Adviser”) an Arizona limited liability company, serves as the investment adviser
to the Fund. ING Investments has overall responsibility for the management of the Fund. ING Investments oversees all investment
advisory and portfolio management services for the Fund. ING Investments is registered with the SEC as an investment adviser. The
Adviser is an indirect, wholly-owned subsidiary of ING U.S., Inc. (“ING U.S.”). ING U.S. is a U.S.-based financial
institution whose subsidiaries operate in the retirement, investment, and insurance industries. As of the date of this Information
Statement, ING U.S. is a subsidiary of ING Groep N.V. (“ING Groep”). ING Groep is a global financial
institution of Dutch origin, with operations in more than 40 countries. ING Investments’ principal office is located at 7337
East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258. As of December 31, 2013, ING Investments managed approximately
$51.6 billion in assets.
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 (such divestment, the “Separation Plan”).
In May 2013, ING
U.S. conducted an initial public offering of ING U.S. common stock (the “IPO”). In October 2013, ING Groep divested
additional shares in a secondary offering of common stock of ING U.S. ING March 2014, ING Groep divested additional shares, reducing
its ownership interest ING U.S. below 50%. ING U.S. did not receive any proceeds from these offerings.
ING Groep has stated that it intends to sell its remaining
interest in ING U.S. over time. While the base case for the remainder of the Separation Plan is the divestment of ING Groep’s
remaining interest in one or more broadly distributed offerings, all options remain open and it is possible that ING Groep’s
divestment of its remaining interest in ING U.S. may take place by means of a sale to a single buyer or group of buyers.
It is anticipated
that one or more of the transactions contemplated by the Separation Plan would result in the automatic termination of the existing
advisory and sub-advisory agreements under which the Adviser and sub-advisers provide services to the Fund. In order to ensure
that the existing investment advisory and sub-advisory services can continue uninterrupted, the Board approved new advisory and
sub-advisory agreements for the Fund in connection with the IPO. In addition, shareholders of the Fund approved a new investment
advisory agreement prompted by the IPO, as well as any future advisory agreements prompted by the Separation Plan that are approved
by the Board and whose terms are not materially different from the current agreements. This means that shareholders may not have
another opportunity to vote on a new agreement with the Adviser even if it undergoes a change of control, as long as no single
person or group of persons acting together gains “control” (as defined in the 1940 Act) of ING U.S.
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 and affiliated entities that provide services to the Fund, 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 loss
of access to the resources of ING Groep, which could adversely affect its business. Since a portion of the shares of ING U.S.,
as a standalone entity, are publicly held, it is subject to the reporting requirements of the Securities Exchange Act of 1934 as
well as other U.S. government and state regulations, and subject to the risk of changing regulation.
During the time that
ING Groep retains a significant 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 Advisers, and their affiliates. Currently, the Adviser and its affiliates do not anticipate that the Separation Plan will
have a material adverse impact on their operations or the Fund and its operations. The Adviser may engage one or more sub-advisers
to provide the day-to-day management of the Fund’s portfolio.
Please see
Appendix
A
for a listing of the names, addresses, and the principal occupations of the principal executive officers of the Adviser.
For services provided under the investment advisory agreement, the Fund paid $1,894,587 in advisory fees to the Adviser for the
fiscal year ended May 31, 2013.
ING Funds Services, LLC
ING Funds Services,
LLC (“Administrator”) serves as administrator to the Fund.
Subject to the supervision
of the Board, the Administrator provides all administrative services reasonably necessary for the ordinary operation of the Fund
other than the investment advisory services performed by the Adviser or the sub-advisers including, but not limited to, acting
as a liaison among the various service providers to the Fund, including the custodian, transfer agent, and such other service providers
as may be retained by the Fund. The Administrator provides the Fund, at the Administrator’s expense, with adequate personnel,
office space, communications facilities, and other facilities necessary for operation of the Fund.
For services provided
under the administrative services agreement, the Fund paid $270,652 to the Administrator for the fiscal year ended May 31, 2013.
ING Investments Distributor, LLC
ING Investments Distributor,
LLC (“Distributor”) is the principal underwriter and distributor of the Fund. It is a Delaware limited liability company
with its principal offices at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258.
The Distributor is
a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). To obtain information about FINRA member firms
and their associated persons, you may contact FINRA at www.finra.org or the Public Disclosure Hotline at 800-289-9999.
For services provided
under the distribution agreement, the Fund paid no fees to the Distributor for the fiscal year ended May 31, 2013. For the fiscal
year ended May 31, 2013, the Fund paid no brokerage fees to an affiliate.
ING MID CAP VALUE
FUND IS NOT ASKING YOU FOR A PROXY REGARDING THE SUB-ADVISORY AGREEMENT FOR THE FUND AND YOU ARE REQUESTED NOT TO SEND A PROXY
WITH RESPECT TO THE SUB-ADVISORY AGREEMENT DISCUSSED IN THIS INFORMATION STATEMENT.
Notice of
a New Sub-Advisory Agreement
What is happening?
On November 21, 2013,
the Board approved the addition of a new sub-adviser, LSV, along with a change in the Fund’s principal investment strategies.
RBC Global Asset Management (U.S.) Inc. (“RBC GAM (US)”) and Wellington Management Company, LLP (“Wellington”)
also serve as sub-advisers to the Fund and will continue to serve as sub-advisers. On February 10, 2013, LSV began managing a portion
of the Fund’s assets pursuant to a new sub-advisory agreement (the “New Sub-Advisory Agreement”).
The Fund and the
Adviser have obtained an exemptive order (the “Order”) from the SEC that permits the Adviser, with the approval of
the Fund’s Board but without obtaining shareholder approval, to enter into or materially amend a sub-advisory agreement
with sub-advisers that are not affiliated with the Adviser (“non-affiliated sub-advisers”) as well as sub-advisers
that are indirect or direct, wholly-owned subsidiaries of the adviser or of another company that, indirectly or directly wholly
owns the Adviser (“wholly-owned sub-advisers”). The Order is subject to certain conditions, including that the Adviser
furnishes shareholders of an affected fund with certain information about the new sub-advisory agreement or agreements.
This Information Statement is intended to comply with that condition.
Who are the current Sub-Advisers
Effective February
10, 2014, LSV serves as sub-adviser with respect to a portion of the Fund’s assets. RBC GAM (US) and Wellington each continue
to serve as sub-adviser for a portion of the Fund’s assets. LSV manages approximately 50% of the Fund’s assets, RBC
GAM (US) manages approximately 10% of the Fund’s assets, and Wellington manages approximately 40% of the Fund’s assets.
Each sub-adviser makes investment decisions for the assets it has been allocated to manage. The Adviser may change the allocation
of the Fund’s asset between the sub-advisers as it determines necessary to pursue the Fund’s investment objective.
The Adviser will determine
what it believes to be the optimal allocation of the assets under management among the three sub-advisers. Subsequent inflows and
outflows will be allocated among the three sub-advisers to maintain this allocation.
LSV
LSV was established
in 1994 and specializes in value equity management for institutional investors around the world. LSV is a partnership between LSV’s
employees and management team, owners of a majority position, and SEI Funds, Inc., a wholly-owned subsidiary of SEI Investments
Company and the owner of a minority position. The principal address of LSV is 155 N. Wacker Drive, Suite 4600, Chicago,
IL 60606. As of December 31, 2013, LSV managed approximately $82 billion in assets.
The following individuals
are jointly responsible for the day-to-day management of the Fund’s assets allocated to LSV.
Josef Lakonishok,
Ph.D., Portfolio Manager, is also the Chief Executive Officer, Chief Investment Officer, and a Founding Partner of LSV and has
been with LSV since its inception in 1994.
Menno Vermeulen, CFA
and Portfolio Manager, is also a Partner of LSV and has been with LSV since 1998.
Puneet Mansharamani,
CFA and Portfolio Manager, is also a Partner of LSV and has been with LSV since 2000.
RBC GAM (US)
RBC GAM (US) is a
wholly-owned subsidiary of RBC USA Holdco Corporation, which is an indirect wholly-owned subsidiary of Royal Bank of Canada (“RBC”).
RBC is one of North America’s leading diversified financial services companies and provides personal and commercial banking,
wealth management services, insurance, corporation and investment banking, and transaction processing services on a global basis.
RBC employs approximately 74,000 full and part time employees who serve close to 15 million personal, business, public sector,
and institutional clients through offices in Canada, the United States, and 51 other countries. RBC GAM (US) is a federally registered
investment adviser headquartered in Minneapolis, Minnesota. Founded in 1983, RBC GAM (US) offers a number of investment specialties
to institutions in both separate accounts and RBC funds.
The principal address
of RBC GAM (US) is 100 South Fifth St., Suite 2300, Minneapolis, Minnesota 55402. As of June 30, 2013 RBC GAM (US) managed approximately
$42.7 billion in assets.
The following individuals
are jointly responsible for the day-to-day management of ING Mid Cap Value Fund’s assets allocated to RBC GAM (US).
Lance F. James, managing
director and senior portfolio manager, joined RBC GAM (US) as an investment professional in 2006.
Stephen E. Kylander,
vice president and senior portfolio manager, joined RBC GAM (US) as an investment professional in 2006.
Wellington
Wellington is a Massachusetts
limited liability partnership. Wellington Management is a professional investment counseling firm which provides investment services
to investment companies, employee benefit plans, endowments, foundations, and other institutions. Wellington Management and its
predecessor organizations have provided investment advisory services for over 70 years. The principal address of Wellington Management
is 280 Congress Street, Boston, Massachusetts 02210.
As of June 30, 2013,
Wellington Management had investment management authority with respect to approximately $774 billion in assets.
The following individual
is responsible for the day-to-day management of ING Mid Cap Value Fund’s assets allocated to Wellington Management.
James N. Mordy, Senior
Vice President and Equity Portfolio Manager, joined Wellington Management as an investment professional in 1985.
How did this change affect the management of the Fund?
In conjunction with
the addition of LSV as sub-adviser to the Fund, Josef Lakonishok, Menno Vermeulen, and Puneet Mansharamani were added as portfolio
managers for the portion of the Fund’s assets allocated to LSV.
Were there changes to the name of the Fund, its investment
objective, or principal investment strategies?
As described in the
supplement to the Fund’s prospectus dated January 31, 2014, changes have been made to the principal investment strategies
in connection with appointment of LSV as sub-adviser to the Fund. No changes were made to the name of the Fund or its investment
objective.
The following chart
compares the prior principal investment strategy to the current principal investment strategy. These changes to the principal investment
strategy were effective February 10, 2014.
|
Prior
Strategy
|
Current
Strategy
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Investment Strategies
|
Under normal market conditions, the Fund invests at least 80% of its net assets (plus borrowings for investment purposes) in common stocks of mid-capitalization companies. The Fund will provide shareholders with at least 60 days’ prior notice of any change in this investment policy.
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Under normal market conditions, the Fund invests at least 80% of its net assets (plus borrowings for investment purposes) in common stocks of mid-capitalization companies. The Fund will provide shareholders with at least 60 days’ prior notice of any change in this investment policy.
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|
|
|
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The sub-advisers define mid-capitalization companies as those companies with market capitalizations that fall within the collective range of companies within the Russell Midcap® Index and the S&P MidCap 400 Index at the time of purchase. Capitalization of companies in these indices will change with market conditions. As of June 28, 2013, this range was approximately $527.9 million to $21.5 billion.
|
The sub-advisers define mid-capitalization companies as those companies with market capitalizations that fall within the collective range of companies within the Russell Midcap® Index and the S&P MidCap 400 Index at the time of purchase. Capitalization of companies in these indices will change with market conditions. As of June 28, 2013, this range was approximately $527.9 million to $21.5 billion.
|
|
|
|
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The Fund focuses on securities that the sub-advisers believe are undervalued in the marketplace.
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The Fund focuses on securities that the sub-advisers believe are undervalued in the marketplace.
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|
|
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The Fund expects to invest primarily in securities of U.S.-based companies, but may also invest in securities of non-U.S. companies, including companies located in countries with emerging securities markets.
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The Fund expects to invest primarily in securities of U.S.-based companies, but may also invest in securities of non-U.S. companies, including companies located in countries with emerging securities markets.
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The Fund may also invest up to 20% of its net assets in real estate investment trusts (“REITs”).
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The Fund may also invest up to 20% of its net assets in real estate investment trusts (“REITs”).
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The Fund may invest in other investment companies, including exchange-traded funds, to the extent permitted under the Investment Company Act of 1940, as amended, and the rules, regulations, and exemptive orders thereunder (“1940 Act”).
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The Fund may invest in other investment companies, including exchange-traded funds, to the extent permitted under the Investment Company Act of 1940, as amended, and the rules, regulations, and exemptive orders thereunder (“1940 Act”).
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|
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RBC Global Asset Management (U.S.) Inc. (“RBC GAM (US)”) and Wellington Management Company, LLP
|
LSV
Asset Management (“LSV”),
RBC Global Asset Management (U.S.) Inc. (“RBC GAM (US)”), and
|
|
Prior
Strategy
|
Current
Strategy
|
|
(“Wellington
Management”) (each a “Sub-Adviser” and collectively “Sub-Advisers”) provide the day-to-day management
of the Fund. The Sub-Advisers act independently of each other and use their own methodology for selecting investments. The Fund’s
investment adviser will determine the amount of Fund assets allocated to each Sub-Adviser.
RBC GAM (US)
RBC GAM (US) uses a disciplined, bottom-up
approach to select stocks for the Fund's portfolio with a focus on fundamental research and qualitative analysis. This analysis
considers factors such as attractive and sustainable business fundamentals, financial strength, management strength, and low valuation.
Wellington Management
Wellington Management employs a contrarian
approach to stock selection. The approach demands an emphasis on extensive research to identify stocks of companies that Wellington
Management believes possess fundamentals that are not adequately reflected in the market price of their securities. Valuation techniques
are a key component of the Wellington Management's investment approach. Wellington Management’s determination of a stock’s
value is based on three primary criteria: its issuer's earnings power, growth potential, and price-to-earnings ratio. Wellington
Management then selects the stocks whose issuers, in its opinion, have the most compelling blend of attractive valuation, a strong
management team, and strong industry position.
Each Sub-Adviser may sell securities
for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into opportunities believed to be more promising,
among others.
The Fund may lend portfolio securities
on a short-term or long-term basis, up to 33
1∕3% of
its total assets.
|
Wellington Management Company,
LLP (“Wellington Management”) (each a “Sub-Adviser” and collectively “Sub-Advisers”) provide
the day-to-day management of the Fund. The Sub-Advisers act independently of each other and use their own methodology for selecting
investments. The Fund’s investment adviser will determine the amount of Fund assets allocated to each Sub-Adviser.
LSV Asset Management
LSV’s active
investment strategy uses a quantitative investment model to evaluate and recommend investment decisions for the Fund in
a bottom-up, contrarian value approach. The primary components of LSV’s quantitative model are:
•indicators
of fundamental undervaluation, such as low price-to-cash flow ratio or low price-to-earnings ratio,
•indicators
of past negative market sentiment, such as poor past stock price performance,
•indicators
of recent momentum, such as high recent stock price performance, and
•control
of incremental risk relative to the benchmark index.
All such indicators
are measured relative to the overall universe of mid-cap companies.
RBC GAM (US)
RBC GAM (US) uses a disciplined,
bottom-up approach to select stocks for the Fund’s portfolio with a focus on fundamental research and qualitative analysis.
This analysis considers factors such as attractive and sustainable business fundamentals, financial strength, management strength,
and low valuation.
Wellington Management
Wellington Management employs
a contrarian approach to stock selection. The approach demands an emphasis on extensive research to identify stocks of companies
that Wellington Management believes possess fundamentals that are not adequately reflected in the market price of their securities.
Valuation techniques are a key component of the Wellington Management’s investment approach. Wellington Management’s
determination of a stock’s value is based on three primary criteria: its issuer’s earnings power, growth potential,
and price-to-earnings ratio. Wellington Management then selects the stocks whose issuers, in its opinion, have the most compelling
blend of attractive valuation, a strong management team, and strong industry position.
Each Sub-Adviser may sell securities
for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into opportunities believed to be more promising,
among others.
|
|
Prior
Strategy
|
Current
Strategy
|
|
|
The Fund may lend portfolio securities on a short-term or long-term basis, up to 33 1⁄3% of its total assets.
|
No changes were made
to the principal investment risks in connection with the addition of LSV as a sub-adviser to the Fund.
What are the terms of the New Sub-Advisory Agreement?
The description of
the New Sub-Advisory Agreement that follows is qualified in its entirety by reference to the copy of the form of the New Sub-Advisory
Agreement included in
Appendix B
.
Fees.
The Adviser
and not the Fund is responsible for any fees due under the New Sub-Advisory Agreement. The following table shows the fees under
the New Sub-Advisory Agreement.
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LSV
|
Sub-Advisory Fees
(as a percentage of average daily net assets)
|
0.375% on all assets
|
In connection with
the appointment of LSV, the Adviser has agreed to waive a portion of its advisory fee equal to 50% of the savings to the Adviser
resulting from the lower aggregate blended sub-advisory fee rates for the period from February 10, 2014 through October 1, 2015.
Sub-Advisory Services.
The New Sub-Advisory Agreement obligates LSV to provide a continuous investment program, including investment research and management
with respect to all securities, investments, cash and cash equivalents in the Fund and may vote, exercise consents and exercise
all other rights pertaining to such securities and other assets on behalf of the Fund.
Limitation of Liability.
The New Sub-Advisory Agreement provides that the sub-adviser, any affiliated person of the sub-adviser, and each person, if
any, who controls the sub-adviser 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 agreement except by reason of willful misfeasance,
bad faith, or gross negligence in the performance of the sub-adviser’s duties, or by reason of reckless disregard of the
sub-adviser’s obligations and duties.
Term and Continuance.
After an initial two-year term, the New 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 Fund’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 Trustees who are neither parties to the New Sub-Advisory Agreement nor “interested persons”
(as defined in the 1940 Act) of any such party nor have any interest in the Agreement, by vote cast in person at a meeting called
for the purpose of voting on such approval.
Termination.
The
New Sub-Advisory Agreement may be terminated at any time, without the payment of any penalty upon 60 days’ written notice
to LSV, by: (1) the Board; (2) vote of a majority of outstanding voting securities of the Fund; or (3) the Adviser. LSV may terminate
the New Sub-Advisory Agreement at any time, without the payment of any penalty upon three months’ written notice unless the
Fund or the Adviser requests additional time to find a replacement, in which case LSV shall allow the additional time, not to exceed
three additional months beyond the initial three-month notice period. LSV may also terminate the New Sub-Advisory Agreement at
any time, without payment of penalty, in the event either LSV (acting in good faith) or the Adviser 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 the applicable Adviser becomes bankrupt or otherwise incapable of carrying out its obligations,
or in the event that LSV does not receive compensation for its services as required by the terms of the New Sub-Advisory Agreement.
What factors did the Board consider?
At a meeting of the
Board held on November 21, 2013, the Board, including a majority of the Independent Trustees, determined to (1) appoint LSV as
sub-adviser to the Fund; and (2) approve the New Sub-advisory Agreement with LSV under which LSV would serve as an additional sub-adviser
to the Fund along with Wellington and RBC. The Fund has been sub-advised by Wellington and RBC GAM (US) since October
of 2011.
In determining whether
to approve the New Sub-Advisory Agreement with LSV with respect to the Fund, the Board received and evaluated such information
as it deemed necessary for an informed determination of whether the New Sub-Advisory Agreement should be approved for the Fund. The
materials provided to the Board to inform its consideration of whether to approve the New Sub-Advisory Agreement included the following:
(1) LSV’s presentation before the Domestic Equity Funds Investment Review Committee at its November 20, 2013 meeting; (2)
memoranda and related materials provided to the Board
in advance of its November
21, 2013 meeting discussing: (a) ING Investment’s rationale for concluding that appointing LSV as a sub-adviser to the Fund
could provide superior performance results for shareholders of the Fund, (b) the performance of LSV in managing its
mid cap value investment strategy, which is managed in an investment style that is similar to its proposed management of the Fund
(with such performance being compared against relevant benchmark indices and Morningstar Category averages), and (c) LSV’s
considerable firm-wide resources, investment philosophy, and the firm’s overall investment process; (3) Fund Analysis and
Comparison Tables for the Fund that provide information about the performance and projected net expense ratio of the Fund as compared
with a representative group of variable products mutual funds with similar investment programs to the investment program of the
Fund as modified in connection with the appointment of LSV, this representative group of variable products mutual funds was selected
based upon the performance of the Fund’s proposed Selected Peer Group; (4) LSV’s responses to inquiries from K&L
Gates LLP, counsel to the Independent Trustees; (5) supporting documentation, including copies of the form of the New Sub-Advisory
Agreement; and (6) other information relevant to the Board’s evaluation.
In reaching its decision
to engage LSV, the Board, including a majority of the Independent Trustees, considered a number of factors including, but not limited
to, the following: (1) ING Investments, LLC’s (“IIL”) view with respect to the reputation of LSV in managing
the investment strategy proposed for the Fund; (2) the strength and reputation of LSV in the industry; (3) the nature and quality
of the services to be provided by of LSV under the New Sub-Advisory Agreement; (4) the personnel, operations, financial condition,
and investment management capabilities, methodologies, and resources of LSV and its fit among the stable of managers in the ING
Funds line-up; (5) the fairness of the compensation under the New Sub-Advisory Agreement in light of the services to be provided
by LSV; (6) the costs for the services to be provided by LSV; (7) the sub-advisory fee rates payable by IIL to LSV; (8) the 50/50
waiver arrangement whereby a portion of the benefit of lower aggregate sub-advisory fees resulting from the addition of LSV are
shared with Fund shareholders; (9) LSV’s operations and compliance programs, including the policies and procedures
intended to assure compliance with the Federal securities laws; (10) the appropriateness of the selection of LSV in light of the
Fund’s proposed investment objective and investor base; and (11) LSV’s Code of Ethics, and related procedures for complying
with that Code.
After its deliberation,
the Board reached the following conclusions: (1) LSV should be appointed to serve as a sub-adviser to the Fund under the New Sub-Advisory
Agreement; (2) the sub-advisory fee rate payable by IIL to LSV is reasonable in the context of all factors considered by the Board;
and (3) LSV maintains appropriate compliance programs, with this conclusion based upon, among other things, a representation from
the Fund’s Chief Compliance Officer that LSV’s compliance policies and procedures are reasonably designed to assure
compliance with the federal securities laws. Based on these conclusions and other factors, the Board voted to approve
the New Sub-Advisory Agreement for the Fund. During their deliberations, different Board members may have given different
weight to different individual factors and related conclusions.
General
Information about the Information Statement
Can shareholders submit proposals for consideration in
a future Proxy Statement?
The Fund is not required
to hold annual meetings and currently does not intend to hold such meetings unless shareholder action is required in accordance
with the 1940 Act. A shareholder proposal to be considered for inclusion in a proxy statement at any subsequent meeting of shareholders
must be submitted in a reasonable 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.
Why did my household only receive one copy of this Information
Statement?
Only one copy of this
Information Statement may be mailed to each household, even if more than one person in the household is a Fund shareholder of record,
unless the Fund has received contrary instructions from one or more of the household’s shareholders. If a shareholder needs
an additional copy of this Information Statement, please contact Shareholder Services at (800) 992-0180. If in the future, any
shareholder does not wish to combine or wishes to recombine the mailing of an information statement with household members, please
inform the Fund in writing at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona, 85258-2034 or via telephone
at (800) 992-0180.
Who pays for this Information Statement?
The Fund is paying
the expenses in connection with this Information Statement, including the printing, mailing, legal, and out-of-pocket expenses.
These expenses are estimated to be $42,000.
How many shares were outstanding as of the Record Date?
As of February 10,
2014, the following shares of beneficial interest of the Fund were outstanding: 23,096,977.415
Appendix C
lists the persons that, as of February 10, 2014, owned beneficially or of record 5% or more of the outstanding shares of any class
of the Fund. To the best of the Fund’s knowledge, as of February 10, 2014, no Independent Trustee owned 1% or more of the
outstanding shares of any class of the Fund. As of February 10, 2014, none of the Independent Trustees or their immediate family
members owned any shares of the Adviser or principal underwriter or of any entity controlling, controlled by, or under common control
with the Adviser or principal underwriter of the Fund (not including registered investment companies).
Appendix
A: Principal Executive Officers
Executive Officers of the Adviser
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
Appendix
B: Form of Sub-Advisory Agreement
This AGREEMENT is
made as of this 10th day of February, 2014 between ING Investments, LLC, an Arizona limited liability company (the “Manager”),
and LSV Asset Management, a Delaware general partnership (the “Sub-Adviser”).
WHEREAS, ING Equity
Trust (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”),
as an open-end, management investment company; and
WHEREAS, the Fund
is authorized to issue separate series, each series having its own investment objective or objectives, policies, and limitations;
and
WHEREAS, the Fund
may offer shares of additional series in the future; and
WHEREAS, pursuant
to an Investment Management Agreement, dated May 13, 2013 (the “Management Agreement”), a copy of which has been provided
to the Sub-Adviser, the Fund has retained the Manager to render advisory and management services with respect to certain of the
Fund’s series; and
WHEREAS, pursuant
to authority granted to the Manager in the Management Agreement, the Manager wishes to retain the Sub-Adviser to furnish investment
advisory services to one or more of the series of the Fund, and the Sub-Adviser is willing to furnish such services to the Fund
and the Manager.
NOW, THEREFORE, in
consideration of the premises and the promises and mutual covenants herein contained, it is agreed between the Manager and the
Sub-Adviser as follows:
1. Appointment. The
Manager hereby appoints the Sub-Adviser to act as the investment adviser and manager to the series of the Fund set forth on Schedule
A hereto (the “Series”) for the periods and on the terms set forth in this Agreement. The Sub-Adviser accepts
such appointment and agrees to furnish the services herein set forth for the compensation herein provided. To the extent
that the Sub-Adviser is not the only person providing investment advisory services to a Series, the term “Series” shall
be interpreted for purposes of this Agreement to only include those assets of the Series over which the Sub-Adviser is directed
by the Manager to provide investment advisory services.
In the event the Fund
designates one or more series (other than the Series) with respect to which the Manager wishes to retain the Sub-Adviser to render
investment advisory services hereunder, it shall notify the Sub-Adviser in writing. If the Sub-Adviser is willing to
render such services, it shall notify the Manager in writing, whereupon such series shall become a Series hereunder, and be subject
to this Agreement.
2. Sub-Adviser
Duties. Subject to the supervision of the Fund’s Board of Trustees and the Manager, the Sub-Adviser will provide
a continuous investment program for each Series’ portfolio and determine in its discretion the composition of the assets
of each Series’ portfolio, including determination of the purchase, retention, or sale of the securities, cash, and other
investments contained in the portfolio. The Sub-Adviser will provide investment research and conduct a continuous program
of evaluation, investment, sales, and reinvestment of each Series’ assets by determining the securities and other investments
that shall be purchased, entered into, sold, closed, 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. To
the extent permitted by the investment policies of each Series, the Sub-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
Sub-Adviser will provide the services under this Agreement in accordance with each Series’ investment objective or objectives,
policies, and restrictions as stated in the Fund’s Registration Statement filed with the Securities and Exchange Commission
(“SEC”), as amended, copies of which shall be sent to the Sub-Adviser by the Manager prior to the commencement of this
Agreement and promptly following any such amendment. The Sub-Adviser further agrees as follows:
(a) The
Sub-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 Fund’s Board of Trustees of which the Sub-Adviser has been
sent a copy, and the provisions of the Registration Statement of the Fund filed under the Securities Act of 1933 (the “1933
Act”) and the 1940 Act, as supplemented or amended, of which the Sub-Adviser has received a copy, and with the Manager’s
portfolio manager operating policies and procedures as in effect on the date hereof, as such policies and procedures may be revised
or amended by the Manager and agreed to by the Sub-Adviser. In carrying out its duties under the Sub-Advisory Agreement,
the Sub-Adviser will comply with the following policies and procedures:
(i) The
Sub-Adviser will (1) manage each Series so that it meets the income and asset diversification requirements of Section 851 of the
Internal Revenue Code of 1986, as amended (the “Code”), and (2) manage each Series so that no action or omission on
the part of the Sub-Adviser shall cause a Series to fail to comply with the diversification requirements of Section 817(h) of the
Code, and the regulations issued thereunder.
(ii) The
Sub-Adviser will have no duty to vote any proxy solicited by or with respect to the issuers of securities in which assets of the
Series are invested in connection with annual and special meetings of equity stockholders, provided however, that the Sub-Adviser
retains responsibility to vote or abstain from voting all solicitations with respect to non-equity portfolio securities and all
portfolio securities for matters with regard to bankruptcy or related plans of reorganization, unless the
Manager gives the Sub-Adviser
written instructions to the contrary. The Sub-Adviser will immediately forward any proxy solicited by or with respect
to the issuers of securities in which assets of the Series are invested to the Manager or to any agent of the Manager designated
by the Manager in writing.
The Sub-Adviser will
make appropriate personnel available for consultation for the purpose of reviewing with representatives of the Manager and/or the
Board any proxy solicited by or with respect to the issuers of securities in which assets of the Series are invested. Upon
request, the Sub-Adviser will submit a written voting recommendation to the Manager for such proxies. In making such
recommendations, the Sub-Adviser shall use its good faith judgment to act in the best interests of the Series. The Sub-Adviser
shall disclose to the best of its knowledge any conflict of interest with the issuers of securities that are the subject of such
recommendation including whether such issuers are clients or are being solicited as clients of the Sub-Adviser or of its affiliates.
(iii) In
connection with the purchase and sale of securities for each Series, the Sub-Adviser will arrange for the transmission to the custodian
and portfolio accounting agent for the Series on a daily basis, such confirmation, trade tickets, and other documents and information,
including, but not limited to, Cusip, Sedol, 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 and portfolio accounting agent to perform its administrative and
record keeping responsibilities with respect to the Series. With respect to portfolio securities to be settled through
the Depository Trust Company, the Sub-Adviser will arrange for the prompt transmission of the confirmation of such trades to the
Fund’s custodian and portfolio accounting agent.
(iv) The
Sub-Adviser will assist the custodian and portfolio accounting agent for the Fund in determining or confirming, consistent with
the procedures and policies stated in the Registration Statement for the Fund or adopted by the Board of Trustees, the value of
any portfolio securities or other assets of the Series for which the custodian and portfolio accounting agent seeks assistance
from or identifies for review by the Sub-Adviser. The parties acknowledge that the Sub-Adviser is not a custodian of
the Series’ assets and will not take possession or custody of such assets.
(v) The
Sub-Adviser will provide the Manager, no later than the 10th business day following the end of each Series’ semi-annual period
and fiscal year, a letter to shareholders (to be subject to review and editing by the Manager) containing a discussion of those
factors referred to in Item 27(b)(7) of 1940 Act Form N-1A in respect of both the prior quarter and the fiscal year to date.
(vi) The
Sub-Adviser will complete and deliver to the Manager a written compliance checklist in a form provided by the Manager for each
month by the 10th business day of the following month.
(b) The
Sub-Adviser will complete and deliver to the Manager by the 10th business day of each month a written report on each Series of
the Fund that contains the following information as of the immediately previous month’s end.
(i) A performance
comparison to the Series benchmark listed in the prospectus as well as a comparison to other mutual funds as listed in the rankings
prepared by Lipper Analytical Services, Inc., Morningstar, Inc., or similar independent services that monitor the performance of
mutual funds or with other appropriate indexes of investment securities;
(ii) Composition
of the assets of each Series’ portfolio and the impact of key portfolio holdings and sector concentrations on the Series;
and
(iii) Confirmation
of each Series’ current investment objective and Sub-Adviser’s projected plan to realize the Series’ investment
objectives.
(c) The
Sub-Adviser will contact Morningstar to clarify any style box conflicts with each Series’ style and the anticipated timeframe
in which Morningstar will remedy such conflicts, if any.
(d) The
Sub-Adviser will make available to the Fund and the Manager, promptly upon request, any of the Series’ investment records
and ledgers maintained by the Sub-Adviser (which shall not include the records and ledgers maintained by the custodian or portfolio
accounting agent for the Fund) as are necessary to assist the Fund and the Manager to comply with requirements of the 1940 Act
and the Investment Advisers Act of 1940 (the “Advisers Act”), as well as other applicable laws. The Sub-Adviser
will furnish to regulatory authorities having the requisite authority any information or reports in connection with such services
in respect to the Series which may be requested in order to ascertain whether the operations of the Fund are being conducted in
a manner consistent with applicable laws and regulations.
(e) The
Sub-Adviser will provide reports to the Fund’s Board of Trustees for consideration at meetings of the Board of Trustees on
the investment program for each Series and the issuers and securities represented in each Series’ portfolio, and will furnish
the Fund’s Board of Trustees with respect to each Series such periodic and special reports as the Trustees and the Manager
may reasonably request.
3. Broker-Dealer
Selection. The Sub-Adviser is authorized to make decisions to buy and sell securities and other investments for each
Series’ portfolio, broker-dealer selection, and negotiation of brokerage commission rates in effecting a security transaction. The
Sub-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 Fund, and determined
in consultation with the Manager, 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, the experience
and financial stability of the broker-dealer involved, the quality of the service, the difficulty of execution, and the execution
capabilities and operational facilities of the firm involved, and the firm’s risk in positioning a block of securities. Accordingly,
the price to a 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 Sub-Adviser in the exercise of its fiduciary obligations to the Fund, by other
aspects of the portfolio execution services offered. Subject to such policies as the Fund’s Board of Trustees
or Manager may determine and consistent with Section 28(e) of the Securities Exchange Act of 1934, the Sub-Adviser shall not be
deemed to have acted unlawfully or to have breached any duty created by this Agreement or otherwise solely by reason of its having
caused a 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 Sub-Adviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research services provided by such broker-dealer, viewed
in terms of either that particular transaction or the Sub-Adviser’s or the Manager’s overall responsibilities with
respect to the Series and to their respective other clients as to which they exercise investment discretion. The Sub-Adviser
will consult with the Manager to the end that portfolio transactions on behalf of a Series are directed to broker-dealers on the
basis of criteria reasonably considered appropriate by the Manager. To the extent consistent with these standards, the
Sub-Adviser is further authorized to allocate the orders placed by it on behalf of a Series to the Sub-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 Sub-Adviser, or an affiliate of the Sub-Adviser. Such allocation shall
be in such amounts and proportions as the Sub-Adviser shall determine consistent with the above standards, and the Sub-Adviser
will report on said allocation regularly to the Fund’s Board of Trustees indicating the broker-dealers to which such allocations
have been made and the basis therefor.
4. Disclosure
about Sub-Adviser. The Sub-Adviser has reviewed the most recent Post-Effective Amendment to the Registration Statement
for the Fund filed with the SEC that contains disclosure about the Sub-Adviser, and represents and warrants that, with respect
to the disclosure about the Sub-Adviser or information relating, directly or indirectly, to the Sub-Adviser, such Registration
Statement contains, as of the date hereof, no untrue statement of any material fact and does not omit any statement of a material
fact which was required to be stated therein or necessary to make the statements contained therein, in light of the circumstances
under which they were made, not misleading. The Sub-Adviser further represents and warrants that it is a duly registered
investment adviser under the Advisers Act and will maintain such registration so long as this Agreement remains in effect. The
Sub-Adviser will provide the Manager with a copy of the Sub-Adviser’s Form ADV, Part II at the time the Form ADV is filed
with the SEC.
5. Expenses. During
the term of this Agreement, the Sub-Adviser will pay all expenses incurred by it and its staff and for their activities in connection
with its portfolio management duties under this Agreement. The Manager or the Fund shall be responsible for all the
expenses of the Fund’s operations. In addition, if the Fund is required, under applicable law, to supplement the
Registration Statement because of a change requested by the Sub-Adviser, the Sub-Adviser will reimburse the Fund and/or the Manager
for the cost of preparing, printing and distributing such supplement, unless the Sub-Adviser is requesting the change in order
to comply with an applicable law, rule or regulation.
6. Compensation. For
the services provided to each Series, the Manager will pay the Sub-Adviser an annual fee equal to the amount specified for such
Series in Schedule A hereto, payable monthly in arrears. The fee will be appropriately prorated to reflect any portion
of a calendar month that this Agreement is not in effect among the parties. In accordance with the provisions of the
Management Agreement, the Manager is solely responsible for the payment of fees to the Sub-Adviser, and the Sub-Adviser agrees
to seek payment of its fees solely from the Manager; provided, however, that if the Fund fails to pay the Manager all or a portion
of the management fee under said Management Agreement when due, and the amount that was paid is insufficient to cover the Sub-Adviser’s
fee under this Agreement for the period in question, then the Sub-Adviser may enforce against the Fund any rights it may have as
a third-party beneficiary under the Management Agreement and the Manager will take all steps appropriate under the circumstances
to collect the amount due from the Fund.
7. Marketing
Materials.
(a) During
the term of this Agreement, the Sub-Adviser agrees to furnish the Manager at its principal office for prior review
and approval by the Manager all written and/or printed materials, including but not limited to, PowerPoint
¨
or slide presentations, news releases, advertisements, brochures, fact sheets and other promotional, informational
or marketing materials (the “Marketing Materials”) for internal use or public dissemination, that are produced
or are for use or reference by the Sub-Adviser, its affiliates or other designees, broker-dealers or the public in
connection with the Series, and Sub-Adviser shall not use any such materials if the Manager reasonably objects in writing
within five business days (or such other period as may be mutually agreed) after receipt thereof. Marketing
Materials may be furnished to the Manager by first class or overnight mail, facsimile transmission equipment, electronic
delivery or hand delivery.
(b) During
the term of this Agreement, the Manager agrees to furnish the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, or Marketing Materials prepared for distribution to shareholders of each Series, or the public that refer
to the Sub-Adviser in any way, prior to the use thereof, and the Manager shall not use any such materials if the Sub-Adviser reasonably
objects in writing within five business days (or such other period as may be mutually agreed) after receipt thereof. The
Sub-Adviser’s right to object to such materials is limited to the portions of such
materials that expressly
relate to the Sub-Adviser, its services and its clients. The Manager agrees to use its reasonable best efforts to ensure
that materials prepared by its employees or agents or its affiliates that refer to the Sub-Adviser or its clients in any way are
consistent with those materials previously approved by the Sub-Adviser as referenced in the first sentence of this paragraph. Marketing
Materials may be furnished to the Sub-Adviser by first class or overnight mail, facsimile transmission equipment, electronic delivery
or hand delivery.
8. Compliance.
(a) The
Sub-Adviser agrees to use reasonable compliance techniques as the Manager or the Board of Trustees may adopt, including any written
compliance procedures.
(b) The
Sub-Adviser agrees that it shall promptly notify the Manager and the Fund (i) in the event that the SEC has censured the Sub-Adviser;
placed limitations upon its activities, functions or operations; suspended or revoked its registration as an investment adviser;
or has commenced proceedings or an investigation that may result in any of these actions, or (ii) upon having a reasonable basis
for believing that the Series has ceased to qualify or might not qualify as a regulated investment company under Subchapter M of
the Internal Revenue Code. The Sub-Adviser further agrees to notify the Manager and the Fund promptly of any material
fact known to the Sub-Adviser respecting or relating to the Sub-Adviser that is not contained in the Registration Statement or
prospectus for the Fund (which describes the Series), or any amendment or supplement thereto, or if any statement contained therein
that becomes untrue in any material respect.
(c) The
Manager agrees that it shall promptly notify the Sub-Adviser (i) in the event that the SEC has censured the Manager or the Fund;
placed limitations upon either of their activities, functions, or operations; suspended or revoked the Manager’s registration
as an investment adviser; or has commenced proceedings or an investigation that may result in any of these actions, or (ii) upon
having a reasonable basis for believing that the Series has ceased to qualify or might not qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code.
9. Books
and Records. The Sub-Adviser hereby agrees that all records which it maintains for the Series are the property of the
Fund and further agrees to surrender promptly to the Fund any of such records upon the Fund’s or the Manager’s request
in compliance with the requirements of Rule 31a-3 under the 1940 Act, although the Sub-Adviser may, at its own expense, make and
retain a copy of such records. The Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act the records required to be maintained by Rule 31a-l under the 1940 Act.
10. Cooperation;
Confidentiality. Each party to this Agreement agrees to cooperate with the other party and with all appropriate governmental
authorities having the requisite jurisdiction (including, but not limited to, the SEC) in connection with any investigation or
inquiry relating to this Agreement or the Fund. Subject to the foregoing, the Sub-Adviser shall treat as confidential
all information pertaining to the Fund and actions of the Fund, the Manager and the Sub-Adviser, and the Manager shall treat as
confidential and use only in connection with the Series all information furnished to the Fund or the Manager by the Sub-Adviser,
in connection with its duties under the Agreement except that the aforesaid information need not be treated as confidential if
required to be disclosed under applicable law, if generally available to the public through means other than by disclosure by the
Sub-Adviser or the Manager, or if available from a source other than the Manager, Sub-Adviser or the Fund.
11. Non-Exclusivity. The
services of the Sub-Adviser to the Series and the Fund are not to be deemed to be exclusive, and the Sub-Adviser shall be free
to render investment advisory or other services to others (including other investment companies) and to engage in other activities.
12. Prohibited
Conduct. The Sub-Adviser may not consult with any other sub-adviser of the Fund concerning transactions in securities
or other assets for any investment portfolio of the Fund, including the Series, except that such consultations are permitted between
the current and successor sub-advisers of the Series in order to effect an orderly transition of sub-advisory duties so long as
such consultations are not concerning transactions prohibited by Section 17(a) of the 1940 Act.
13. Representations
Respecting Sub-Adviser. The Manager agrees that neither the Manager, nor affiliated persons of the Manager, shall give
any information or make any representations or statements in connection with the sale of shares of the Series concerning the Sub-Adviser
or the Series other than the information or representations contained in the Registration Statement, prospectus, or statement of
additional information for the Fund’s shares, as they may be amended or supplemented from time to time, or in reports or
proxy statements for the Fund, or in sales literature or other promotional material approved in advance by the Sub-Adviser, except
with the prior permission of the Sub-Adviser.
14. Control. Notwithstanding
any other provision of the Agreement, it is understood and agreed that the Fund shall at all times retain the ultimate responsibility
for and control of all functions performed pursuant to this Agreement and has reserved the right to reasonably direct any action
hereunder taken on its behalf by the Sub-Adviser.
15. Liability. Except
as may otherwise be required by the 1940 Act or the rules thereunder or other applicable law, the Manager agrees that the Sub-Adviser,
any affiliated person of the Sub-Adviser, and each person, if any, who, within the meaning of Section 15 of the 1933 Act controls
the Sub-Adviser (a) shall bear no responsibility and shall not be subject to any liability for any act or omission respecting any
series of the Fund that is not a Series hereunder, and (b) 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 this Agreement, except by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of the Sub-Adviser’s
duties, or by reason of reckless disregard of the Sub-Adviser’s obligations and duties under this Agreement.
16. Indemnification.
(a) The
Manager agrees to indemnify and hold harmless the Sub-Adviser, any affiliated person of the Sub-Adviser, and each person, if any,
who, within the meaning of Section 15 of the 1933 Act controls (“controlling person”) the Sub-Adviser (all of such
persons being referred to as “Sub-Adviser Indemnified Persons”) against any and all losses, claims, damages, liabilities,
or litigation (including legal and other expenses) to which a Sub-Adviser Indemnified Person may become subject under the 1933
Act, the 1940 Act, the Advisers Act, under any other statute, at common law or otherwise, arising out of the Manager’s responsibilities
to the Fund which (1) may be based upon the Manager’s negligence, willful misfeasance, or bad faith in the performance of
its duties (which could include a negligent action or a negligent omission to act), or by reason of the Manager’s reckless
disregard of its obligations and duties under this Agreement, or (2) may be based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or prospectus covering shares of the Fund or any Series, or any amendment
thereof or any supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, unless such statement or omission was made in reliance upon information
furnished to the Manager or the Fund or to any affiliated person of the Manager by a Sub-Adviser Indemnified Person; provided however,
that in no case shall the indemnity in favor of the Sub-Adviser Indemnified Person be deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of its duties, or by reason of its reckless disregard of obligations and duties under this Agreement.
(b) Notwithstanding
Section 15 of this Agreement, the Sub-Adviser agrees to indemnify and hold harmless the Manager, any affiliated person of the Manager,
and any controlling person of the Manager (all of such persons being referred to as “Manager Indemnified Persons”)
against any and all losses, claims, damages, liabilities, or litigation (including legal and other expenses) to which a Manager
Indemnified Person may become subject under the 1933 Act, 1940 Act, the Advisers Act, under any other statute, at common law or
otherwise, arising out of the Sub-Adviser’s responsibilities as Sub-Adviser of the Series which (1) may be based upon the
Sub-Adviser’s negligence, willful misfeasance, or bad faith in the performance of its duties (which could include a negligent
action or a negligent omission to act), or by reason of the Sub-Adviser’s reckless disregard of its obligations and duties
under this Agreement, or (2) may be based upon any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or prospectus covering the shares of the Fund or any Series, or any amendment or supplement thereto,
or the omission or alleged omission to state therein a material fact known or which should have been known to the Sub-Adviser and
was required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was
made in reliance upon information furnished to the Manager, the Fund, or any affiliated person of the Manager or Fund by the Sub-Adviser
or any affiliated person of the Sub-Adviser; provided, however, that in no case shall the indemnity in favor of a Manager Indemnified
Person be deemed to protect such person against any liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence in the performance of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(c) The
Manager shall not be liable under Paragraph (a) of this Section 16 with respect to any claim made against a Sub-Adviser Indemnified
Person unless such Sub-Adviser Indemnified Person shall have notified the Manager in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the claim shall have been served upon such Sub-Adviser
Indemnified Person (or after such Sub-Adviser Indemnified Person shall have received notice of such service on any designated agent),
but failure to notify the Manager of any such claim shall not relieve the Manager from any liability which it may have to the Sub-Adviser
Indemnified Person against whom such action is brought except to the extent the Manager is prejudiced by the failure or delay in
giving such notice. In case any such action is brought against the Sub-Adviser Indemnified Person, the Manager will
be entitled to participate, at its own expense, in the defense thereof or, after notice to the Sub-Adviser Indemnified Person,
to assume the defense thereof, with counsel satisfactory to the Sub-Adviser Indemnified Person. If the Manager assumes
the defense of any such action and the selection of counsel by the Manager to represent the Manager and the Sub-Adviser Indemnified
Person would result in a conflict of interests and therefore, would not, in the reasonable judgment of the Sub-Adviser Indemnified
Person, adequately represent the interests of the Sub-Adviser Indemnified Person, the Manager will, at its own expense, assume
the defense with counsel to the Manager and, also at its own expense, with separate counsel to the Sub-Adviser Indemnified Person,
which counsel shall be satisfactory to the Manager and to the Sub-Adviser Indemnified Person. The Sub-Adviser Indemnified
Person shall bear the fees and expenses of any additional counsel retained by it, and the Manager shall not be liable to the Sub-Adviser
Indemnified Person under this Agreement for any legal or other expenses subsequently incurred by the Sub-Adviser Indemnified Person
independently in connection with the defense thereof other than reasonable costs of investigation. The Manager shall
not have the right to compromise on or settle the litigation without the prior written consent of the Sub-Adviser Indemnified Person
if the compromise or settlement results, or may result, in a finding of wrongdoing on the part of the Sub-Adviser Indemnified Person.
(d) The
Sub-Adviser shall not be liable under Paragraph (b) of this Section 16 with respect to any claim made against a Manager Indemnified
Person unless such Manager Indemnified Person shall have notified the Sub-Adviser in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the claim shall have been served upon such Manager Indemnified
Person (or after such Manager Indemnified Person shall have received notice of such
service on any designated
agent), but failure to notify the Sub-Adviser of any such claim shall not relieve the Sub-Adviser from any liability which it may
have to the Manager Indemnified Person against whom such action is brought except to the extent the Sub-Adviser is prejudiced by
the failure or delay in giving such notice. In case any such action is brought against the Manager Indemnified Person,
the Sub-Adviser will be entitled to participate, at its own expense, in the defense thereof or, after notice to the Manager Indemnified
Person, to assume the defense thereof, with counsel satisfactory to the Manager Indemnified Person. If the Sub-Adviser
assumes the defense of any such action and the selection of counsel by the Sub-Adviser to represent both the Sub-Adviser and the
Manager Indemnified Person would result in a conflict of interests and therefore, would not, in the reasonable judgment of the
Manager Indemnified Person, adequately represent the interests of the Manager Indemnified Person, the Sub-Adviser will, at its
own expense, assume the defense with counsel to the Sub-Adviser and, also at its own expense, with separate counsel to the Manager
Indemnified Person, which counsel shall be satisfactory to the Sub-Adviser and to the Manager Indemnified Person. The
Manager Indemnified Person shall bear the fees and expenses of any additional counsel retained by it, and the Sub-Adviser shall
not be liable to the Manager Indemnified Person under this Agreement for any legal or other expenses subsequently incurred by the
Manager Indemnified Person independently in connection with the defense thereof other than reasonable costs of investigation. The
Sub-Adviser shall not have the right to compromise on or settle the litigation without the prior written consent of the Manager
Indemnified Person if the compromise or settlement results, or may result in a finding of wrongdoing on the part of the Manager
Indemnified Person.
17. Duration
and Termination.
(a) With
respect to each Series identified as a Series on Schedule A hereto as in effect on the date of this Agreement, unless earlier terminated
with respect to any Series, this Agreement shall continue in full force and effect through two years from the effective date with
respect to each such Series of this Agreement. 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 (i) the vote of a majority of the Board of Trustees of the Fund, or (ii) 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 Trustees of the Fund who are not parties to this Agreement or “interested
persons” (as defined in the 1940 Act) of the Fund or the Manager, cast in person at a meeting called for the purpose of voting
on such approval.
With respect to any
Series that was added to Schedule A hereto as a Series after the date of this Agreement, the Agreement shall become effective on
the later of (i) the date Schedule A is amended to reflect the addition of such Series as a Series under the Agreement or (ii)
the date upon which the shares of the Series are first sold to the public, subject to the condition that the Fund’s Board
of Trustees, including a majority of those Trustees who are not interested persons (as such term is defined in the 1940 Act) of
the Manager, and the shareholders of such Series, shall have approved this Agreement. Unless terminated earlier 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 (i) the vote of a majority of the Board of Trustees
of the Fund, or (ii) vote of a majority of the outstanding voting shares of such 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 Trustees of the Fund who are not parties to this
Agreement or “interested persons” (as defined in the 1940 Act) of the Fund or the Manager, 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 continue this Agreement with respect to
such Series notwithstanding (i) that this Agreement has not been approved by the holders of a majority of the outstanding shares
of any other Series or (ii) that this agreement has not been approved by the vote of a majority of the outstanding shares of the
Fund, unless such approval shall be required by any other applicable law or otherwise.
Notwithstanding the
foregoing, this Agreement may be terminated with respect to any Series covered by this Agreement: (i) by the Manager at any time,
upon sixty (60) days’ written notice to the Sub-Adviser and the Fund, (ii) at any time without payment of any penalty by
the Fund, by the Fund’s Board of Trustees or a majority of the outstanding voting securities of each Series, upon sixty (60)
days’ written notice to the Manager and the Sub-Adviser, or (iii) by the Sub-Adviser upon three (3) months’ written
notice unless the Fund or the Manager requests additional time to find a replacement for the Sub-Adviser, in which case the Sub-Adviser
shall allow the additional time requested by the Fund or Manager not to exceed three (3) additional months beyond the initial three-month
notice period; provided, however, that the Sub-Adviser may terminate this Agreement at any time without penalty, effective upon
written notice to the Manager and the Fund, in the event either the Sub-Adviser (acting in good faith) or the Manager ceases to
be registered as an investment adviser under the Advisers Act or otherwise becomes legally incapable of providing investment management
services pursuant to its respective contract with the Fund, or in the event the Manager becomes bankrupt or otherwise incapable
of carrying out its obligations under this Agreement, or in the event that the Sub-Adviser does not receive compensation for its
services from the Manager or the Fund as required by the terms of this Agreement.
In the event of termination
for any reason, all records of each Series for which the Agreement is terminated shall promptly be returned to the Manager or the
Fund, free from any claim or retention of rights in such record by the Sub-Adviser, although
the Sub-Adviser may,
at its own expense, make and retain a copy of such records. This Agreement shall automatically terminate in the event
of its assignment (as such term is described in the 1940 Act). In the event this Agreement is terminated or is not approved
in the manner described above, the Sections or Paragraphs numbered 9, 10, 13, 14, 15 and 16 of this Agreement shall remain in effect,
as well as any applicable provision of this Section numbered 17 and, to the extent that only amounts are owed to the Sub-Adviser
as compensation for services rendered while the Agreement was in effect, Section 6.
(b) Notices. Any
notice must be in writing and shall be sufficiently given (1) when delivered in person, (2) when dispatched by telegram or electronic
facsimile transfer (confirmed in writing by postage prepaid first class air mail simultaneously dispatched), (3) when sent by internationally
recognized overnight courier service (with receipt confirmed by such overnight courier service), or (4) when sent by registered
or certified mail, to the other party at the address of such party set forth below or at such other address as such party may from
time to time specify in writing to the other party.
If to the Fund:
ING Equity Trust
7337 East Doubletree Ranch Road
Suite 100
Scottsdale, AZ 85258
Attention: Huey P. Falgout, Jr.
If to the Sub-Adviser:
LSV Asset Management
155 North Wacker Drive
Suite 4600
Chicago, IL 60606
Attention: Josh O’Donnell
If to the Manager:
ING Investments, LLC
7337 East Doubletree Ranch Road
Suite 100
Scottsdale, AZ 85258
Attention: Michael J. Roland
18. 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, and no amendment of this Agreement
shall be effective until approved as required by applicable law.
19. Miscellaneous.
(a) This
Agreement shall be governed by the laws of the State of Arizona, provided that nothing herein shall be construed in a manner inconsistent
with the 1940 Act, the Advisers Act or rules or orders of the SEC thereunder, and without regard for the conflicts of laws principle
thereof. The term “affiliate” or “affiliated person” as used in this Agreement shall mean “affiliated
person” as defined in Section 2(a)(3) of the 1940 Act.
(b) The
Manager and the Sub-Adviser acknowledge that the Fund enjoys the rights of a third-party beneficiary under this Agreement, and
the Manager acknowledges that the Sub-Adviser enjoys the rights of a third party beneficiary under the Management Agreement.
(c) 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.
(d) To
the extent permitted under Section 17 of this Agreement, this Agreement may only be assigned by any party with the prior written
consent of the other parties.
(e) 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.
(f) Nothing
herein shall be construed as constituting the Sub-Adviser as an agent or co-partner of the Manager, or constituting the Manager
as an agent or co-partner of the Sub-Adviser.
(g) This
Agreement may be executed in counterparts.
Appendix
C: Beneficial Ownership as of the Record Date
The following table
provides information about the persons or entities who, to the knowledge of the Fund, owned beneficially or of record 5% or more
of any class of the Fund’s outstanding shares as of February 10, 2014.
Name
and Address of Shareholder
|
Percent
of Class and Type of Ownership
1
|
Percentage
of Fund
|
ING Solution 2015 Portfolio
Attn Carneen Stokes
7337 E Doubletree Ranch Rd
Suite 100
Scottsdale, AZ 85258-2034
|
9.1% Class I;
Beneficial
|
9.1%
|
ING Solution 2025 Portfolio
Attn Carneen Stokes
7337 E Doubletree Ranch Rd
Suite 100
Scottsdale, AZ 85258-2034
|
23.6% Class I;
Beneficial
|
23.6%
|
ING Solution 2035 Portfolio
Attn Carneen Stokes
7337 E Doubletree Ranch Rd
Suite 100
Scottsdale, AZ 85258-2034
|
20.8% Class I;
Beneficial
|
20.8%
|
ING Solution 2045 Portfolio
Attn Carneen Stokes
7337 E Doubletree Ranch Rd
Suite 100
Scottsdale, AZ 85258-2034
|
16.8% Class I;
Beneficial
|
16.8%
|
|
1.
|
Each of these entities is the shareholder of record and may be deemed to be the beneficial owner
of the shares listed for certain purposes under the securities laws, although in certain instances they may not have an economic
interest in these shares and would, therefore, ordinarily disclaim any beneficial ownership therein.
|
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF INFORMATION STATEMENT
Relating to
ING Mid
Cap Value Fund
(a series of ING Equity Trust)
7337 East Doubletree Ranch Rd., Suite 100
Scottsdale, AZ 85258-2034
(800) 992-0180
This communication
(the “Notice”) presents only an overview of a more complete Information Statement that is available to you on the internet
relating to ING Mid Cap Value Fund (the “Fund”), a series of ING Equity Trust (the “Trust”). The Information
Statement details a sub-adviser change relating to the Fund. In connection with its duties as the investment adviser for the Trust,
ING Investments, LLC (the “Adviser”) reviews and evaluates the Trust’s sub-advisers on an ongoing basis.
At a meeting held
on November 21, 2013, the Board of Trustees of the Trust (the “Board”) approved the selection of LSV Asset Management
(the “Sub-Adviser”) pursuant to a sub-advisory agreement effective February 10, 2014 (the “Sub-Advisory Agreement”)
as an additional sub-adviser to the Fund. A prospectus supplement describing these and other changes was mailed to shareholders
on January 31, 2014.
The appointment of
the Sub-Adviser as the Fund’s sub-adviser under the Sub-Advisory Agreement was effected in accordance with an exemptive order
(the “Order”) that the U.S Securities and Exchange Commission granted to the Trust permitting the Adviser, with the
approval of the Fund’s Board but without obtaining shareholder approval, to enter into and materially amend sub-advisory
agreements with sub-advisers that are not affiliated with the Adviser as well as sub-advisers that are indirect or direct, wholly-owned
subsidiaries of the Adviser or of another company that, indirectly or directly wholly owns the Adviser. Consequently, the Trust
is not soliciting proxies to approve this change. The Order does, however, require that an information statement be provided to
you containing much of the same information that would have been included in a proxy statement soliciting approval of a new sub-advisory
agreement. In lieu of physical or electronic mail delivery of the Information Statement (other than on request as described below),
the Fund will make the Information Statement available to you online.
The Information Statement
will be available to review on the Internet at http://www.proxyvote.com/ing until July 1, 2014. A paper or email copy of the Information
Statement may be obtained, without charge, by contacting the Fund at the address or phone number listed above. If you want to receive
a paper or email copy of the Information Statement, you must request one no later than April 2, 2015.