As filed with the Securities and Exchange Commission on April 24, 2015
Securities Act File No. 333-
Investment Company Act File No. 811-05410
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-2
(Check Appropriate box or boxes)
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Registration Statement Under The Securities Act Of 1933 |
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Pre-Effective Amendment No. |
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Post-Effective Amendment No. |
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and/or |
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Registration Statement Under The Investment Company Act Of 1940 |
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Amendment No. 102 |
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(Check appropriate box or boxes) |
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VOYA PRIME RATE TRUST
(Exact Name of Registrant Specified in Charter)
7337 E. Doubletree Ranch Road, Suite 100
Scottsdale, AZ 85258
(Address of Principal Executive Offices)
Registrants Telephone Number, Including Area Code: (800) 992-0180
Huey P. Falgout, Jr. Voya Investments, LLC 7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258 (Name and Address of Agent for Service) |
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With copies to: Elizabeth J. Reza Ropes & Gray Prudential Tower 800 Boylston Street Boston, MA 02199-3600 |
Approximate Date of Proposed Offering:
As soon as practical after the effective date of this Registration Statement.
If any securities being registered on this form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with a dividend reinvestment plan, check the following box. x
It is proposed that this filing will become effective:
x When declared effective pursuant to Section 8(c) of the Securities Act of 1933.
Calculation of Registration Fee Under the Securities Act of 1933
Title of Securities Being
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Amount Being
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Proposed Maximum
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Proposed Maximum
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Amount of
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Shares of Beneficial Interest, without par value |
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1,000 |
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$5.97 |
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$5,970 |
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$0.70 |
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(1) |
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(d) under the Securities Act of 1933, based on net asset value per share as of April 21, 2015. |
(2) |
Transmitted prior to filing. |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such dates as the Commission, acting pursuant to said Section 8(a), may determine.
VOYA PRIME RATE TRUST
(Registrant)
25,000,000 Common Shares
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement consists of the following papers and documents:
* Cover Sheet
* Contents of Registration Statement
* Voya Prime Rate Trust 25,000,000 Common Shares Prospectus dated June 30, 2015
* Voya Prime Rate Trust 5,000,000 and 25,000,000 Common Shares Statement of Additional Information dated June 30, 2015
* Part C
* Signature Page
• | Voya Prime Rate Trust |
• | 25,000,000 Common Shares |
• | elect at least two trustees at all times; and |
• | elect a majority of the trustees at any time when dividends on any series of Preferred Shares are unpaid for two full years. |
• | less rigorous regulatory, accounting, and reporting requirements than U.S. borrowers; |
• | differing legal systems and laws relating to creditors' rights; |
• | the potential inability to enforce legal judgments; |
• | economic adversity that would result if the value of the borrower's non-U.S. dollar denominated revenues and assets were to fall because of fluctuations in currency values; and |
• | the potential for political, social, and economic adversity in the foreign borrower's country. |
Shareholder Transaction Expenses: | |
Shareholder Reinvestment Program Fees | None |
Privately Negotiated Transactions: | |
Sales Load (as a percentage of offering price) | 3.00% |
Annual Expenses (as a percentage of average net assets attributable to Common Shares): | |
Management Fees 1 | [1.50]% |
Interest Expense on Borrowed Funds | [ ]% |
Other Operating Expenses 2 | [ ]% |
Total Annual Expenses | [ ]% |
Fee Waivers/Reimbursements/Recoupment 3 | [None] |
Net Annual Expenses | [ ]% |
1 | Pursuant to the investment management agreement with the Trust, the Adviser is paid a fee of 1.05% of the Trust's Managed Assets. The portion of the management fee attributable to the advisory services is 0.80% and the portion of the management fee attributable to the administrative services is 0.25%. |
2 | Other Operating Expenses are estimated amounts for the current fiscal year and do not include the expenses of borrowing. |
3 | The Adviser is contractually obligated to limit expenses of the Trust, through [July 1, 2016]. The limitation does not extend to interest, taxes, investment-related costs, leverage expenses, extraordinary expenses, and Acquired Fund Fees and Expenses. The limitation is subject to possible recoupment by the adviser within 36 months of the waiver or reimbursement. Termination or modification of this obligation requires approval by the Trust’s board. |
1 Year | 3 Years | 5 Years | 10 Years | |||
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return and borrowings by the Trust in an aggregate amount equal to 30% of its Managed Assets. | $ | [ ] | [ ] | [ ] | [ ] |
Per Share Operating Performance |
Total Investment
Return (1) |
Ratios to average
net assets |
Supplemental
data |
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Net asset value, beginning of
year or period |
Net investment income (loss) | Net realized and unrealized gain (loss) | Distribution to Preferred Shareholders |
Change in net asset value from
Share offerings |
Total from investment operations |
Distributions to Common Shareholders
from net investment income |
Distributions from return of capital | Total distributions | Net asset value, end of year or period |
Closing market price, end of
year or period |
Total Investment Return at
net asset value (2) |
Total Investment Return at closing
market price (3) |
Expenses, net of fee waivers and/or
recoupments, if any (4) |
Expenses (before interest and other fees
related to revolving credit facility) (4) |
Expenses, prior to fee waivers and/or
recoupments, if any (4) |
Net investment income (loss) (4) | Net assets, end of year or period | Portfolio Turnover | ||||||||||||||||||||
Year or period ended | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | (%) | (%) | (%) | (%) | (%) | (%) | ($000's) | % | |||||||||||||||||||
02-28-15 | ||||||||||||||||||||||||||||||||||||||
02-28-14 | 6.02 | 0.40 | 0.07 | — | — | 0.47 | (0.40) | (0.01) | (0.41) | 6.08 | 5.87 | 8.15 | (4.04) | 2.15 | 1.65 | 2.15 | 6.47 | 898,254 | 96 | |||||||||||||||||||
02-28-13 | 5.79 | 0.46 | 0.19 | — | — | 0.65 | (0.42) | — | (0.42) | 6.02 | 6.55 | 11.72 | 27.73 | 2.14 | 1.63 | 2.14 | 7.76 | 887,047 | 93 | |||||||||||||||||||
02-29-12 | 6.08 | 0.35 | (0.32) | (0.00) * | — | 0.03 | (0.32) | — | (0.32) | 5.79 | 5.51 | 0.81 | (3.11) | 2.20 | 1.67 | 2.20 | 6.07 | 851,278 | 81 | |||||||||||||||||||
02-28-11 | 5.72 | 0.30 | 0.38 | (0.00) * | — | 0.68 | (0.30) | (0.02) | (0.32) | 6.08 | 6.02 | 12.32 | 7.09 | 1.93 | 1.59 | 1.93 | 4.87 | 893,661 | 60 | |||||||||||||||||||
02-28-10 | 3.81 | 0.28 | 1.95 | (0.00) * | — | 2.23 | (0.32) | — | (0.32) | 5.72 | 5.94 | 60.70 | 81.66 | 1.93 | 1.77 (6) | 1.99 (6) | 5.56 | 830,785 | 38 | |||||||||||||||||||
02-28-09 | 6.11 | 0.46 | (2.29) | (0.06) | — | (1.89) | (0.41) | — | (0.47) | 3.81 | 3.50 | (31.93) (5) | (32.03) (5) | 3.01 | 1.95 | 3.01 | 7.86 | 552,840 | 10 | |||||||||||||||||||
02-29-08 | 7.65 | 0.75 | (1.57) | (0.16) | — | (0.98) | (0.56) | — | (0.72) | 6.11 | 5.64 | (13.28) | (17.25) | 4.36 | 2.20 | 4.36 | 10.35 | 886,976 | 60 | |||||||||||||||||||
02-28-07 | 7.59 | 0.71 | 0.06 | (0.16) | — | 0.61 | (0.55) | — | (0.71) | 7.65 | 7.40 | 8.85 | 13.84 | 4.62 | 2.21 | 4.62 | 9.42 | 1,109,539 | 60 | |||||||||||||||||||
02-28-06 | 7.47 | 0.57 | 0.12 | (0.11) | — | 0.58 | (0.46) | — | (0.57) | 7.59 | 7.02 | 8.53 | (0.82) | 4.27 | 2.33 | 4.27 | 7.71 | 1,100,671 | 81 |
(1) | Total investment return calculations are attributable to common shares. |
(2) | Total investment return at net asset value has been calculated assuming a purchase at net asset value at the beginning of each period and a sale at net asset value at the end of each period and assumes reinvestment of dividends, capital gain distributions and return of capital distributions/allocations, if any, in accordance with the provisions of the dividend reinvestment plan. |
(3) | Total investment return at market value has been calculated assuming a purchase at market value at the beginning of each period and a sale at market value at the end of each period and assumes reinvestment of dividends, capital gain distributions, and return of capital/allocations, if any, in accordance with the provisions of the dividend reinvestment plan. |
(4) | The Adviser has agreed to limit expenses excluding interest, taxes, brokerage commission, leverage expenses, other investment related costs and extraordinary expenses, subject to possible recoupment by the Adviser within three years to 1.05% of Managed Assets plus 0.15% of average daily net assets. |
(5) | There was no impact on total return due to payments by affiliates. |
(6) | Includes excise tax fully reimbursed by the Investment Adviser. |
* | Amount is more than $(0.005). |
Ratios to average to average net assets
plus borrowings |
Supplemental data | |||||||||||||||||||||
Expenses (before interest and other fees
related to revolving credit facility) |
Expenses, prior to fee waivers and/or
recoupments, if any |
Expenses, net of fee waivers and/or
recoupments, if any |
Net investment income (loss) |
Preferred Shares - Aggregate amount
outstanding |
Liquidation and market value per share
of Preferred Shares |
Asset coverage inclusive of Preferred
Shares and debt per share (a) |
Borrowings at end of period | Asset coverage per $1,000 of debt (a) | Average borrowings |
Common shares outstanding at end of
year or period |
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Year or period ended | (%) | (%) | (%) | (%) | ($000's) | ($) | ($) | ($000's) | ($) | ($000's) | ($000's) | |||||||||||
02-28-15 | ||||||||||||||||||||||
02-28-14 | 1.15 | 1.50 | 1.50 | 4.51 | — | — | 3 | 407,000 | 3,207 | 387,979 | 147,788 | |||||||||||
02-28-13 | 1.17 | 1.53 | 1.53 | 5.55 | — | — | 3 | 370,600 | 3,394 | 345,145 | 147,427 | |||||||||||
02-29-12 | 1.24 | 1.64 | 1.64 | 4.51 | — | — | 3 | 364,000 | 3,339 | 293,444 | 147,116 | |||||||||||
02-28-11 | 1.39 | 1.68 | 1.68 | 4.26 | 100,000 | 25,000 | 102,850 | 187,000 | 6,314 | 122,641 | 146,954 | |||||||||||
02-28-10 | 1.67 (1) | 1.87 (1) | 1.81 | 5.23 | 200,000 | 25,000 | 98,400 | 83,000 | 13,419 | 46,416 | 145,210 | |||||||||||
02-28-09 | 1.54 | 2.37 | 2.37 | 6.21 | 225,000 | 25,000 | 70,175 | 81,000 | 10,603 | 227,891 | 145,178 | |||||||||||
02-29-08 | 1.60 | 3.17 | 3.17 | 7.53 | 450,000 | 25,000 | 53,125 | 338,000 | 4,956 | 391,475 | 145,094 | |||||||||||
02-28-07 | 1.56 | 3.25 | 3.25 | 6.63 | 450,000 | 25,000 | 62,925 | 281,000 | 6,550 | 459,982 | 145,033 | |||||||||||
02-28-06 | 1.58 | 2.90 | 2.90 | 5.24 | 450,000 | 25,000 | 55,050 | 465,000 | 4,335 | 509,178 | 145,033 |
(a) | Asset coverage ratios, for fiscal year periods beginning after 2011, is presented to represent the coverage availability to each $1,000 of borrowings. Asset coverage ratios, for periods prior to fiscal 2009, represented the coverage available for both the borrowings and Preferred Shares expressed in relation to each $1,000 of borrowings and Preferred Shares liquidation value outstanding. The Asset coverage ratio per $1,000 of debt for periods subsequent to fiscal 2008, is presented to represent |
the coverage available to each $1,000 of borrowings before consideration of any Preferred Shares liquidation price, while the Asset coverage inclusive of Preferred Shares, presents the coverage available to both borrowings and Preferred Shares, expressed in relation to the per share liquidation price of the Preferred Shares. | |
(1) | Includes excise tax fully reimbursed by the Investment Adviser. |
Price($) | NAV($) |
Premium/(Discount)
To NAV(%) |
Reported
NYSE Volume |
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Calendar Quarter Ended | High | Low | High | Low | High | Low | |
June 30, 2012 | 5.83 | 5.43 | 5.88 | 5.71 | (0.17) | (5.40) | 33,720,800 |
September 30, 2012 | 6.20 | 5.68 | 5.95 | 5.77 | 4.20 | (2.22) | 35,701,000 |
December 31, 2012 | 6.34 | 5.84 | 5.96 | 5.90 | 6.55 | (1.18) | 29,910,900 |
March 31, 2013 | 6.79 | 6.27 | 6.06 | 5.93 | 12.83 | 4.49 | 35,043,000 |
June 30, 2013 | 6.90 | 6.06 | 6.13 | 6.00 | 13.86 | 0.33 | 40,032,700 |
September 30, 2013 | 6.26 | 5.88 | 6.06 | 5.97 | 4.17 | (1.82) | 30,276,700 |
December 31, 2013 | 6.17 | 5.75 | 6.06 | 5.99 | 2.16 | (4.96) | 30,785,500 |
March 31, 2014 | 5.96 | 5.71 | 6.10 | 6.03 | (1.65) | (5.93) | 28,772,900 |
June 30, 2014 | |||||||
September 30, 2014 | |||||||
December 31, 2014 | |||||||
March 31, 2015 |
1. | Senior Loans. Under normal market conditions, at least 80% of the Trust's net assets (plus borrowings for investment purposes) will be invested in Senior Loans. This investment policy may be changed without shareholder approval so long as the Trust provides its shareholders with at least 60 days' prior notice of any changes in this investment policy. Under normal market conditions, the Trust invests at least 80% of its assets in Senior Loans made to corporations or other business entities organized under U.S. or Canadian law and that are domiciled in the United States and in U.S. territories and possessions or Canada. |
The Senior Loans in which the Trust invests either hold the most senior position in the capital structure of the borrower, hold an equal ranking with other senior debt, or have characteristics (such as a senior position secured by liens on a borrower's assets) that the Adviser or Sub-Adviser believes justify treatment as senior debt. These Senior Loans are typically below investment-grade credit quality. Investments rated below investment-grade (or of similar quality if unrated) are commonly known as high-yielding, high risk investments or as “junk” investments. | |
The Trust typically makes its investments in Senior Loans by purchasing a portion of the overall loan, i.e., the Trust becomes one of a number of lenders investing in the loan. The Trust may also make its investments in Senior Loans through the use of derivative instruments such as participations, credit-linked notes, credit default swaps, and total return swaps as long as the reference obligation for any such instrument is a Senior Loan. Investments through the use of such derivative instruments involve counterparty risk, i.e., the risk that the party from which such instrument is purchased will not perform as agreed. The Trust seeks to minimize such counterparty risk by purchasing such investments only from large, well established and highly rated counterparties. | |
2. | Other Investments. Under normal market conditions, the Trust may invest up to 20% of its total assets, measured at the time of investment, in a combination of one or more of the following types of investments (“Other Investments”): |
• | loans to borrowers organized or located in countries outside the United States and outside U.S. territories and possessions or Canada; |
• | unsecured floating rate loans, notes, and other debt instruments; |
• | floating rate subordinated loans; |
• | tranches of floating rate asset-backed securities, including structured notes; |
• | short-term debt securities; and |
• | equity securities incidental to investments in loans. |
3. | Cash and Short-Term Instruments. Under normal market conditions, the Trust may invest in cash and/or short-term instruments. During periods when, in the opinion of the Adviser or Sub-Adviser, a temporary defensive posture in the market is appropriate, the Trust may hold up to 100% of its assets in cash and/or short-term instruments. |
4. | Other Investment Strategies. The Trust may lend its portfolio securities, on a short-term or long-term basis, in an amount equal to up to 33 1 ⁄ 3 % of its total assets. |
1. | Industry Concentration. The Trust may invest in any industry. The Trust may not invest more than 25% of its total assets, measured at the time of investment, in any single industry. |
2. | Borrower Diversification. The Trust is diversified, as such term is defined in the 1940 Act. A diversified fund may not, as to 75% of its total assets, invest more than 5% of its total assets in any one issuer and may not purchase more than 10% of the outstanding voting securities of any one issuer (other than securities issues or guaranteed by the U. S. government or any of its agencies or instrumentalities, or other investment companies). The Trust will consider the borrower on a loan, including a loan participation, to be the issuer of such loan. With respect to no more than 25% of its total assets, the Trust may make investments that are not subject to the foregoing restrictions. |
1. | Limitations on currencies. The Trust's investments must be denominated in U.S. dollars, provided that the Trust may invest up to 15% of its total assets in investments denominated in the OECD currencies (including the euro), other than the U.S. dollar. The Trust will engage in currency exchange transactions to seek to hedge, as closely as practicable, 100% of the economic impact to the Trust arising from foreign currency fluctuations. |
2. | Maturity. Although the Trust has no restrictions on portfolio maturity, under normal market conditions, at least 80% of the Trust's total assets will be invested in assets with remaining maturities of one to ten years. The maximum maturity on any loan in which the Trust can invest is ten years. |
3. | Limitations on Other Investments. The Trust may also invest up to 20% of its total assets, measured at the time of investment, in Other Investments. The following additional limitations apply to Other Investments: |
• | Unsecured Debt Instruments. The Trust may not invest in unsecured floating rate loans, notes, and other debt instruments, in an aggregate amount that exceeds 20% of the Trust's total assets, measured at the time of investment. |
• | Equities. The Trust may acquire equity securities only as an incident to the purchase or ownership of a loan or in connection with a reorganization of a borrower or its debt. |
• | Subordinated Loans. The Trust may not invest in floating rate subordinated loans, whether or not secured, in an aggregated amount that exceeds 5% of its total assets, measured at the time of investment. |
4. | Investment Quality; Credit Analysis. Loans in which the Trust invests generally are rated below investment-grade credit quality or are unrated. In acquiring a loan, the Adviser or Sub-Adviser will consider some or all of the following factors concerning the borrower: ability to service debt from internally generated funds; adequacy of liquidity and working capital; appropriateness of capital structure; leverage consistent with industry norms; historical experience of achieving business and financial projections; the quality and experience of management; and adequacy of collateral coverage. The Adviser or Sub-Adviser performs its own independent credit analysis of each borrower. In so doing, the Adviser or Sub-Adviser may utilize information and credit analyses from agents that originate or administer loans, other lenders investing in a loan, and other sources. The Adviser or Sub-Adviser also may communicate directly with management of the borrowers. These analyses continue on a periodic basis for any Senior Loan held by the Trust. See “Risk Factors and Special Considerations - Credit Risk on Senior Loans.” |
5. | Use of Leverage. The Trust may borrow money and issue Preferred Shares to the fullest extent permitted by the 1940 Act. See “Investment Objective and Policies - Policy on Borrowing” and “Investment Objective and Policies - Policy on Issuance of Preferred Shares.” |
6. | Short-term Instruments. Short-term instruments in which the Trust invests may include: (i) commercial paper rated A-1 by Standard and Poor's Ratings Services (“S&P”) or P-1 by Moody's Investors Service, Inc. (“Moody's”), or of comparable quality as determined by the Adviser or Sub-Adviser; (ii) certificates of deposit, bankers' acceptances, and other bank deposits and obligations; and (iii) securities issued or guaranteed by the U.S. government, its agencies, or instrumentalities. |
Annual Expenses Without Borrowings
(as a percentage of net assets attributable to Common Shares) |
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Management Fees (as a percentage of Managed Assets) 1 | 1.05% |
Other Operating Expenses 2 | [ ]% |
Total Annual Expenses | [ ]% |
Fee Waivers/Reimbursements/Recoupment 3 | None |
Net Annual Expenses | [ ]% |
1 | Pursuant to the investment management agreement with the Trust, the Adviser is paid a fee of 1.05% of the Trust’s Managed Assets. The portion of the management fee attributable to the advisory services is 0.80% and the portion of the management fee attributable to the administrative services is 0.25%. |
2 | Other Operating Expenses are estimated amounts for the current fiscal year and do not include the expenses of borrowing. |
3 | The Adviser is contractually obligated to limit expenses of the Trust, through [July 1, 2016]. The limitation does not extend to interest, taxes, investment-related costs, leverage expenses, extraordinary expenses, and Acquired Fund Fees and Expenses. The limitation is subject to possible recoupment by the adviser within 36 months of the waiver or reimbursement. Termination or modification of this obligation requires approval by the Trust’s board. |
Assumed Portfolio Return, net of expenses 1 | -10% | -5% | 0% | 5% | 10% |
Corresponding Return to Common Shareholders 2 | -[ ]% | -[ ]% | -[ ]% | [ ]% | [ ]% |
1 | The Assumed Portfolio Return is required by regulation of the SEC and is not a prediction of, and does not represent, the projected or actual performance of the Trust. |
2 | In order to compute the Corresponding Return to Common Shareholders, the Assumed Portfolio Return is multiplied by the total value of the Trust's assets at the beginning of the Trust's fiscal year to obtain an assumed return to the Trust. From this amount, all interest accrued during the year is subtracted to determine the return available to shareholders. The return available to shareholders is then divided by the total value of the Trust's net assets attributable to Common Shares as of the beginning of the fiscal year to determine the Corresponding Return to Common Shareholders. |
• | Debt obligations are valued using an evaluated price provided by an independent pricing service. Evaluated prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect factors such as institution-size trading in similar groups of securities, developments related to specific securities, benchmark yield, quality, type of issue, coupon rate, maturity individual trading characteristics and other market data. |
• | Securities traded in the over-the-counter market are valued based on prices provided by independent pricing services or market makers. |
• | Options not listed on an exchange are valued by an independent source using an industry accepted model, such as Black-Scholes. |
• | Centrally cleared swap agreements are valued using a price provided by the central counterparty clearinghouse. |
• | Over-the-counter swap agreements are valued using a price provided by an independent pricing service. |
• | Forward foreign currency contracts are valued utilizing current and forward rates obtained from an independent pricing service. Such prices from the third party pricing service are for specific settlement periods and the Trust’s forward foreign currency contracts are valued at an interpolated rate between the closest preceding and subsequent period reported by the independent pricing service. |
• | Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by brokers. |
Title of Class |
Number
Authorized |
Number Held By
the Trust for its Own Account |
Number
Outstanding |
Common Shares | unlimited | 0 | [ ] |
TABLE OF CONTENTS | |
Page | |
Change of Name
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Investment Objective
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Investment Restrictions
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Additional Information About Investments and Investment Techniques
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Management of the Trust
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Code of Ethics
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Proxy Voting Procedures
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Control Persons and Principal Holders of Securities
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Investment Management and Other Service Providers
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Adviser
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Sub-Adviser
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Distributor
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Shareholder Reinvestment Program
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Portfolio Transactions
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Portfolio Turnover Rate
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Net Asset Value
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Federal Taxation
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Advertising and Performance Data
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General Information
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Custodian
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Legal Counsel
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Independent Registered Public Accounting Firm
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Financial Statements
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Appendix A
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A-1 |
1940 Act File No. | 811-05410 |
PRO-PL1F-25M | (0615-063015) |
1. | issue senior securities, except insofar as the Fund may be deemed to have issued a senior security by reason of: (i) entering into certain interest rate hedging transactions; (ii) entering into reverse repurchase agreements; (iii) borrowing money in an amount permitted under the 1940 Act, including the rules, regulations, interpretations thereunder, and any exemptive relief provided by the SEC; or (iv) issuing a class or classes of preferred shares in an amount not exceeding 50%, or such other percentage permitted by law, of the Fund’s total assets less all liabilities and indebtedness not represented by senior securities; |
2. | invest more than 25% of its total assets in any industry; |
3. | invest in marketable warrants other than those acquired in conjunction with Senior Loans and such warrants will not constitute more than 5% of its assets; |
4. | make investments in any one issuer other than U.S. government securities if, immediately after such purchase or acquisition, more than 5% of the value of the Fund’s total assets would be invested in such issuer, or the Fund would own more than 25% of any outstanding issue, except that up to 25% of the Fund’s total assets may be invested without regard to the foregoing restrictions. For the purpose of the foregoing restriction, the Fund will consider the borrower of a Senior Loan to be the issuer of such Senior Loan. In addition, with respect to a Senior Loan under which the Fund does not have privity with the borrower or would not have a direct cause of action against the borrower in the event of the failure of the borrower to pay scheduled principal or interest, the Fund will also separately meet the foregoing requirements and consider each interpositioned bank (a lender from which the Fund acquires a Senior Loan) to be an issuer of the Senior Loan; |
5. | act as an underwriter of securities, except to the extent that it may be deemed to act as an underwriter in certain cases when disposing of its portfolio investments or acting as an agent or one of a group of co-agents in originating Senior Loans; |
6. | purchase or sell equity securities (except that the Fund may, incidental to the purchase or ownership of an interest in a Senior Loan, or as part of a borrower reorganization, acquire, sell and exercise warrants and/or acquire or sell other equity securities), real estate, real estate mortgage loans, commodities, commodity futures contracts, or oil or gas exploration or development programs; or sell short, purchase or sell straddles, spreads, or combinations thereof, or write put or call options; |
7. | make loans of money or property to any person, except that the Fund: (i) may make loans to corporations or other business entities, or enter into leases or other arrangements that have the characteristics of a loan; (ii) may lend portfolio instruments; and (iii) may acquire securities subject to repurchase agreements; |
8. | purchase shares of other investment companies, except in connection with a merger, consolidation, acquisition or reorganization; or |
9. | make investments on margin or hypothecate, mortgage, or pledge any of its assets except for the purpose of securing borrowings as described above in connection with the issuance of senior securities and then only in an amount up to 331/3% (50% in the case of the issuance of a preferred class of shares), or such other percentage permitted by law, of the value of the Fund’s total assets (including, with respect to borrowings, the amount borrowed) less all liabilities other than borrowings (or, in the case of the issuance of senior securities, less all liabilities and indebtedness not represented by senior securities). |
• | to the Fund’s independent registered public accounting firm, named herein, for use in providing audit opinions; |
• | to financial printers for the purpose of preparing Fund regulatory filings; |
• | for the purpose of due diligence regarding a merger or acquisition; |
• | to a new adviser or sub-adviser prior to the commencement of its management of a Fund; |
• | to rating and ranking agencies such as Bloomberg, Morningstar, Lipper, and S&P (such agencies may receive more raw data from a Fund than is posted on the Fund’s website); |
• | to consultants for use in providing asset allocation advice in connection with investments by affiliated funds-of-funds in a Fund; |
• | to service providers, on a daily basis, in connection with their providing services benefiting a Fund such as, but not limited to, the provision of analytics for securities lending oversight and reporting, proxy voting or class action service providers; |
• | to a third party for purposes of effecting in-kind redemptions of securities to facilitate orderly redemption of portfolio assets and minimal impact on remaining Fund shareholders; |
• | to certain wrap fee programs, on a weekly basis, on the first business day following the previous calendar week; or |
• | to a third party who acts as a “consultant” and supplies the consultant’s analysis of holdings (but not actual holdings) to the consultant’s clients (including sponsors of retirement plans or their consultants) or who provides regular analysis of Fund portfolios. The types, frequency and timing of disclosure to such parties vary depending upon information requested. |
Party | Purpose | Frequency |
Time Lag Between
Date of Information and Date Information Released |
The Bank of New York Mellon |
Credit Approval Process
for the Voya family of funds line of credit |
As requested | None |
Institutional Shareholder Services Inc. | Proxy Voting Services | Daily | None |
Institutional Shareholder Services Inc. | Class Action Services | Monthly | 10 days |
Charles River Development | Compliance | Daily | None |
Albridge Analytics, an indirect wholly-owned subsidiary of The Bank of New York Mellon |
Provision of Analytics
for Oversight and Reporting of Securities Lending |
Daily | None |
Name, Address and Age | Position(s) Held with the Trust | Term of Office and Length of Time Served 1 | Principal Occupation(s) During the Past 5 Years | Number of Funds in the Fund Complex Overseen by Trustees 2 | Other Board Positions Held by Trustees |
Independent Trustees | |||||
Colleen D. Baldwin
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 54 |
Trustee | October 2007 – Present | President, Glantuam Partners, LLC, a business consulting firm (January 2009 – Present). | 158 | DSM/Dentaquest, Boston MA (February 2014 – Present). |
John V. Boyer
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 61 |
Chairperson
Trustee |
January 2014 – Present
January 2005 – Present |
President and Chief Executive Officer, Bechtler Arts Foundation, an arts and education foundation (January 2008 – Present). | 158 | None. |
Patricia W. Chadwick
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 66 |
Trustee | January 2006 – Present | Consultant and President, Ravengate Partners LLC, a consulting firm that provides advice regarding financial markets and the global economy (January 2000 – Present). | 158 | Wisconsin Energy Corporation (June 2006 – Present) and The Royce Funds (35 funds) (December 2009 – Present). |
Albert E. DePrince, Jr.
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 74 |
Trustee | May 2013 – Present | Retired. Formerly, Professor of Economics and Finance, Middle Tennessee State University (August 1991– July 2014); Dr. DePrince continued to hold a position with the university under a post-retirement contract through the end of 2014. | 158 | None. |
Name, Address and Age | Position(s) Held with the Trust | Term of Office and Length of Time Served 1 | Principal Occupation(s) During the Past 5 Years | Number of Funds in the Fund Complex Overseen by Trustees 2 | Other Board Positions Held by Trustees |
Peter S. Drotch
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 73 |
Trustee | October 2007 – Present | Retired. | 158 | First Marblehead Corporation (September 2003 – Present). |
Russell H. Jones
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 70 |
Trustee | May 2013 – Present | Retired. | 158 | None. |
Patrick W. Kenny
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 72 |
Trustee | January 2005 – Present | Retired. | 158 | Assured Guaranty Ltd. (April 2004 – Present). |
Joseph E. Obermeyer
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 57 |
Trustee | May 2013 – Present | President, Obermeyer & Associates, Inc., a provider of financial and economic consulting services (November 1999 – Present). | 158 | None. |
Sheryl K. Pressler
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 64 |
Trustee | January 2006 – Present | Consultant (May 2001 – Present). | 158 | None. |
Roger B. Vincent
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 69 |
Trustee | February 2002 – Present | Retired. Formerly, President, Springwell Corporation, a corporate finance firm (March 1989 – August 2011). | 158 | UGI Corporation (February 2006 – Present) and UGI Utilities, Inc. (February 2006 – Present). |
Trustee who is an “Interested Person” | |||||
Shaun Mathews
3
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 59 |
Trustee | June 2006 – Present | President and Chief Executive Officer, Voya Investments, LLC (November 2006 – Present). | 158 | Voya Capital Corporation, LLC and Voya Investments Distributor, LLC, (December 2005 – Present); Voya Funds Services, LLC, Voya Investments, LLC and Voya Investment Management, (March 2006 – Present); and Voya Investment Trust Co. (April 2009 – Present). |
1 | Trustees serve until their successors are duly elected and qualified. The tenure of each Trustee who is not an “interested person” as defined in the 1940 Act, of the Fund (as defined below, “Independent Trustee”) is subject to the Board’s retirement policy, which states that each duly elected or appointed Independent Trustee shall retire from and cease to be a member of the Board of Trustees at the close of business on December 31 of the calendar year in which the Independent |
Trustee attains the age of 75. A majority vote of the Board’s other Independent Trustees may extend the retirement date of an Independent Trustee if the retirement would trigger a requirement to hold a meeting of shareholders of the Trust under applicable law, whether for the purposes of appointing a successor to the Independent Trustee or otherwise comply under applicable law, in which case the extension would apply until such time as the shareholder meeting can be held or is no longer required (as determined by a vote of a majority of the other Independent Trustees). | |
2 | For the purposes of this table, “Fund Complex” means the Voya family of funds, including the following investment companies: Voya Asia Pacific High Dividend Equity Income Fund; Voya Balanced Portfolio, Inc.; Voya Emerging Markets High Dividend Equity Fund; Voya Equity Trust; Voya Funds Trust; Voya Global Advantage and Premium Opportunity Fund; Voya Global Equity Dividend and Premium Opportunity Fund; Voya Infrastructure, Industrials and Materials Fund; Voya Intermediate Bond Portfolio; Voya International High Dividend Equity Income Fund; Voya Investors Trust; Voya Money Market Portfolio; Voya Mutual Funds; Voya Natural Resources Equity Income Fund; Voya Partners, Inc.; Voya Prime Rate Trust; Voya Senior Income Fund; Voya Separate Portfolios Trust; Voya Series Fund, Inc.; Voya Strategic Allocation Portfolios, Inc.; Voya Variable Funds; Voya Variable Insurance Trust; Voya Variable Portfolios, Inc.; and Voya Variable Products Trust. The number of funds in the Fund Complex is as of March 31, 2015. |
3 | Mr. Mathews is deemed to be an “interested person” of the Trust, as defined in the 1940 Act, because of his current affiliation with any of the Voya funds, Voya Financial, Inc. or Voya Financial, Inc.’s affiliates. |
Name, Address and Age | Position(s) Held with the Trust | Term of Office and Length of Time Served 1 | Principal Occupation(s) During the Past 5 Years |
Shaun P. Mathews
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 59 |
President and Chief Executive Officer | November 2006 - Present | President and Chief Executive Officer, Voya Investments, LLC (November 2006 – Present). |
Michael J. Roland
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 56 |
Executive Vice President | February 2002 - Present | Managing Director and Chief Operating Officer, Voya Investments, LLC and Voya Funds Services, LLC (April 2012 – Present). Formerly, Chief Compliance Officer, Directed Services LLC and Voya Investments, LLC (March 2011 – December 2013); Executive Vice President and Chief Operating Officer, Voya Investments, LLC and Voya Funds Services, LLC (January 2007 – April 2012) and Chief Compliance Officer, Voya Family of Funds (March 2011 – February 2012). |
Stanley D. Vyner
230 Park Avenue New York, New York 10169 Age: 64 |
Executive Vice President
Chief Investment Risk Officer |
August 2003 - Present
September 2009 - Present |
Executive Vice President, Voya Investments, LLC (July 2000 – Present) and Chief Investment Risk Officer, Voya Investments, LLC (January 2003 – Present). |
Kevin M. Gleason
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 48 |
Chief Compliance Officer | February 2012 - Present | Senior Vice President and Chief Compliance Officer, Voya Investments, LLC (February 2012- Present). Formerly, Assistant General Counsel and Assistant Secretary, The Northwestern Mutual Life Insurance Company, (June 2004 – January 2012). |
Todd Modic
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 47 |
Senior Vice President, Chief/Principal Financial Officer and Assistant Secretary | March 2005 - Present | Senior Vice President, Voya Funds Services, LLC (March 2005 – Present). |
Name, Address and Age | Position(s) Held with the Trust | Term of Office and Length of Time Served 1 | Principal Occupation(s) During the Past 5 Years |
Daniel A. Norman
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 57 |
Senior Vice President
Treasurer |
April 1995 - Present | Senior Vice President and Group Head, Voya Investment Management Co. LLC (January 2000 – Present) |
William H. Rivoir III
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 64 |
Senior Vice President and Assistant Secretary | February 2001 - Present | Senior Vice President, Voya Investment Management Co. LLC (January 2004 – Present) |
Kimberly A. Anderson
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 50 |
Senior Vice President | November 2003 - Present | Senior Vice President, Voya Investments, LLC (October 2003 – Present). |
Jeffrey A. Bakalar
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 55 |
Senior Vice President | November 1999 - Present | Senior Vice President and Group Head, Voya Investment Management Co. LLC (January 2000 – Present) |
Julius Drelick III
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 48 |
Senior Vice President | July 2012 - Present | Senior Vice President – Fund Compliance, Voya Funds Services, LLC (June 2012 – Present); and Chief Compliance Officer of Directed Services LLC and Voya Investments, LLC (January 2014 – Present). Formerly, Vice President - Platform Product Management & Project Management, Voya Investments, LLC (April 2007 – June 2012). |
Elliot A. Rosen
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 61 |
Senior Vice President | May 2002 - Present | Senior Vice President, Voya Investment Management Co. LLC (February 1999 – Present) |
Robert Terris
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 44 |
Senior Vice President | May 2006 - Present | Senior Vice President, Head of Division Operations, Voya Funds Services, LLC (January 2006 – Present). |
Fred Bedoya
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 42 |
Vice President and Treasurer | September 2012 - Present | Vice President, Voya Funds Services, LLC (March 2012 – Present). Formerly, Assistant Vice President – Director, Voya Funds Services, LLC (March 2003 – March 2012). |
Maria M. Anderson
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 56 |
Vice President | September 2004 - Present | Vice President, Voya Funds Services, LLC (September 2004 – Present). |
Name, Address and Age | Position(s) Held with the Trust | Term of Office and Length of Time Served 1 | Principal Occupation(s) During the Past 5 Years |
Lauren D. Bensinger
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 61 |
Vice President | February 2003 - Present | Vice President, Voya Investments, LLC and Voya Funds Services, LLC (February 1996 – Present); Vice President, Voya Investments, LLC (October 2004 – Present); and Vice President and Money Laundering Reporting Officer, Voya Investments Distributor, LLC (April 2010 – Present). Anti-Money Laundering Compliance Officer, Voya Financial, Inc. (January 2013 – Present); Money Laundering Reporting Officer, Voya Investment Management Trust Co. (October 2012 – Present). Formerly, Chief Compliance Officer, Voya Investments Distributor, LLC (August 1995 – April 2010). |
Sara Donaldson
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 55 |
Vice President | September 2014 - Present | Vice President, Voya Funds Services, LLC (April 2014 – Present). Formerly, Director, Compliance, AXA Rosenberg Global Services, LLC (September 1997 – March 2014). |
Robyn L. Ichilov
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 47 |
Vice President | November 1997 - Present | Vice President, Voya Funds Services, LLC (November 1995 – Present) and Voya Investments, LLC (August 1997 – Present). Formerly, Treasurer, Voya Family of Funds (November 1999 – February 2012). |
Jason Kadavy
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 39 |
Vice President | September 2012 - Present | Vice President, Voya Funds Services, LLC (July 2007 – Present). |
Kimberly K. Springer
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 57 |
Vice President | March 2006 - Present | Vice President – Mutual Fund Product Development, Voya Investments, LLC (July 2012 – Present); Vice President, Voya Investment Management Voya Family of Funds (March 2010 – Present) and Vice President, Voya Funds Services, LLC (March 2006 - Present). Formerly Managing Paralegal, Registration Statements (June 2003 – July 2012). |
Name, Address and Age | Position(s) Held with the Trust | Term of Office and Length of Time Served 1 | Principal Occupation(s) During the Past 5 Years |
Craig Wheeler
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 46 |
Vice President | May 2013 - Present | Vice President – Director of Tax, Voya Funds Services, LLC (March 2013 – Present). Formerly, Assistant Vice President – Director of Tax, Voya Funds Services, LLC (March 2008 – February 2013). |
Huey P. Falgout, Jr.
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 51 |
Secretary | August 2003 - Present | Senior Vice President and Chief Counsel, Voya Investment Management – Mutual Fund Legal Department (March 2010 – Present). |
Paul A. Caldarelli
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 63 |
Assistant Secretary | June 2010 - Present | Vice President and Senior Counsel, Voya Investment Management – Mutual Fund Legal Department (March 2010 – Present). |
Theresa K. Kelety
7337 East Doubletree Ranch Road, Suite 100 Scottsdale, AZ 85258-2034 Age: 52 |
Assistant Secretary | August 2003 - Present | Vice President and Senior Counsel, Voya Investment Management – Mutual Fund Legal Department (March 2010 – Present). |
1 | The Officers hold office until the next annual meeting of the Board of Trustees and until their successors shall have been elected and qualified. |
Joint IRC | DE IRC | I/B/F IRC | |
Voya Prime Rate Trust | X |
Fund | Dollar Range of Equity Securities in each Fund as of December 31, 2014 | ||||
Colleen D. Baldwin | John V. Boyer | Patricia W. Chadwick | Albert E. DePrince, Jr. | Peter S. Drotch | |
Voya Prime Rate Trust | None | None | None | None | None |
Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee in the Voya family of funds | Over $100,000 1 |
Over $100,000
Over $100,000 1 |
Over $100,000 | Over $100,000 1 | Over $100,000 |
1 | Includes the value of shares in which a Trustee has an indirect interest through a deferred compensation plan and/or a 401(K) plan. |
Name of Trustee | Name of Owners and Relationship to Trustee | Company | Title of Class | Value of Securities | Percentage of Class |
Colleen D. Baldwin | N/A | N/A | N/A | N/A | N/A |
John V. Boyer | N/A | N/A | N/A | N/A | N/A |
Patricia W. Chadwick | N/A | N/A | N/A | N/A | N/A |
Albert E. DePrince, Jr. | N/A | N/A | N/A | N/A | N/A |
Peter S. Drotch | N/A | N/A | N/A | N/A | N/A |
Russell H. Jones | N/A | N/A | N/A | N/A | N/A |
Patrick W. Kenny | N/A | N/A | N/A | N/A | N/A |
Joseph Obermeyer | N/A | N/A | N/A | N/A | N/A |
Sheryl K. Pressler | N/A | N/A | N/A | N/A | N/A |
Roger B. Vincent | N/A | N/A | N/A | N/A | N/A |
Fund | Aggregate Compensation | ||||
Russell H. Jones | Patrick W. Kenny | Joseph E. Obermeyer | Sheryl K. Pressler | Roger B. Vincent | |
Voya Prime Rate Trust | [ ] | [ ] | [ ] | [ ] | [ ] |
Pension or Retirement Benefits Accrued as Part of Fund Expenses | N/A | N/A | N/A | N/A | N/A |
Estimated Annual Benefits Upon Retirement | N/A | N/A | N/A | N/A | N/A |
Total Compensation from the Fund and the Voya familiy of funds Paid to Trustees |
Name of Fund | Class | Name and Address |
Percentage
of Class |
Percentage
of Fund |
Voya Prime Rate Trust | [ ] | [ ] | [ ]% | [ ]% |
Fund | February 28, | ||
2015 | 2014 | 2013 | |
Voya Prime Rate Trust | |||
Management Fee (Prior to May 1, 2015) | [ ] | $10,245,189 | $9,685,176 |
Administrative Services Fee (Prior to May 1, 2015) | $ 3,201,622 | $3,026,618 | |
Management Fee including Administrative Services (effective May 1, 2015) | None | None | None |
Fund | February 28, | ||
2015 | 2014 | 2013 | |
Voya Prime Rate Trust | [ ] | [ ] | [ ] |
Sub-Adviser | Annual Sub-Advisory Fee |
Voya Investment Management Co. LLC (“Voya IM”) | 0.3600% |
Fund | February 28, | ||
2015 | 2014 | 2013 | |
Voya Prime Rate Trust | [ ] | $4,610,335 | $4,358,337 |
Portfolio Manager | Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | |||
Number of Accounts | Total Assets | Number of Accounts | Total Assets | Number of Accounts | Total Assets | |
Jeffrey A. Bakalar | [ ] | [ ] | [ ] | [ ] | [ ] | [ ] |
Daniel A. Norman | [ ] | [ ] | [ ] | [ ] | [ ] | [ ] |
1 | [16] of these accounts with total assets of $[ ] have performance-based advisory fees. |
Portfolio Manager | Dollar Range of Fund Shares Owned |
Jeffrey A. Bakalar | [$50,001-$100,000] |
Daniel A. Norman | [Over $100,000] |
Amount | Character | Expiration Dates | |
Voya Prime Rate Trust | $ (41,585,301.00) | Short-Term | 2017 |
$(125,812,939.00) | Short-Term | 2018 | |
$ (24,760,715.00) | Short-Term | 2019 | |
$ (14,998,121.00) | Long-Term | None | |
$ (207,157,076.00) | Total |
ACSC | Shares are depleted on a first-in, first-out basis with the cost basis calculated by multiplying the shares redeemed by the average cost per share on all shares purchased on or after January 1, 2012. |
FIFO (First In, First Out) | Oldest shares purchased are redeemed first. |
LIFO (Last In, First Out) | Most recent shares purchased are redeemed first. |
HIFO (Highest Cost In, First Out) | Shares with highest cost basis are redeemed first. |
LOFO (Lowest Cost In First Out) | Shares with lowest cost basis are redeemed first. |
HILT (Highest Cost Long Term In, First Out) | Will redeem the long-term highest cost available shares first. |
HIST (Highest Cost Short Term In, First Out) | Will redeem the short-term highest cost available shares first. |
LILT (Lowest Cost Long Term In, First Out) | Will redeem the long-term lowest cost available shares first. |
LIST (Lowest Cost Short Term In, First Out) | Will redeem the short-term lowest cost available shares first. |
Specific Lot Depletion | The shares sold are specifically identified by you at the time of redemption. |
PROXY VOTING PROCEDURES AND GUIDELINES
VOYA FUNDS
VOYA INVESTMENTS, LLC
DIRECTED SERVICES LLC
Effective Date: July 10, 2003
Revision Date: March 13, 2015
Proxy Voting Procedures and Guidelines for the Voya Funds and Advisers
Introduction
This document reflects the Proxy Voting Guidelines and Procedures (the Guidelines, the Procedures and collectively the Guidelines and Procedures) of the Voya funds (the Funds), and the Funds investment advisers, Voya Investments, LLC and Directed Services LLC (each referred to as the Adviser and collectively the Advisers). Please see www.voyainvestments.com for the list of funds to which the Guidelines apply.
The investment advisers to the Funds have a fiduciary duty to vote proxies in a timely manner and make voting decisions that are in the Funds beneficial owners best interests by maximizing the value of their shares over the long-term. The Funds investment advisers, in exercising their delegated authority, will abide by the Guidelines with regard to voting proxies.
The Guidelines summarize the Boards (as defined below) positions on various issues of concern to investors, and give an indication of how Funds securities will be voted on proposals dealing with particular issues.
The Procedures summarize the processes established and abided by in order to effectively implement the Guidelines.
Delegation of Voting Authority
Boards of Directors/Trustees
The Boards of Directors/Trustees of the Voya funds (the Board) have developed these Guidelines and Procedures to ensure that proxies are voted in the Funds beneficial owners best interests. The Board annually reviews and approves these Guidelines and Procedures, which may be amended only by the Board. Review of these Guidelines and Procedures are at the Boards discretion, and it may make any revisions it deems appropriate. Non-material amendments to the Guidelines and Procedures may be approved for immediate implementation by the President or Chief Financial Officer of the Funds, subject to ratification at the next regularly scheduled Boards Compliance Committee meeting.
Compliance Committee
The Board has delegated to its Compliance Committee the authority and responsibility to:
· oversee the implementation of these Guidelines and Procedures
· make determinations on behalf of the Board with respect to voting proxies on the Funds and Advisers behalf
· review and recommend changes to the proxy voting policies and procedures of the Funds, the Advisers and the sub-advisers, as applicable
The Board considers any proxy voting determination made by the Compliance Committee or any of its members as the Guidelines permit to be a good faith determination. The Compliance Committee may rely on the Advisers through the Proxy Coordinator, Proxy Advisory Firm, and/or Proxy Group (as defined below) to manage the application of these Guidelines and Procedures. Finally, the Compliance Committee will conduct itself in accordance with its charter.
Advisers
Voya Investments, LLC and Directed Services LLC are the investment advisers for the Funds. Each Adviser has adopted the Guidelines and Procedures in connection with voting the portfolio securities for the Funds for which it serves as the Adviser.
The Board has delegated to the Advisers the authority and responsibility to vote all proxies with respect to all of the Funds portfolio securities in accordance with the Guidelines. The Board may revoke such delegation with respect to any proxy or proposal, and assume the
responsibility of voting any Fund proxy or proxies as they deem appropriate.
The Board may elect to delegate proxy voting to a sub-adviser of the Voya funds and also approve the sub-advisers proxy policies and procedures for implementation on behalf of such Voya fund (a Sub-Adviser-Voted Fund). Sub-Adviser-Voted Funds are not covered under these Guidelines and Procedures, except as described in the Reporting and Record Retention section below with respect to vote reporting requirements. However, they are covered by the Sub-Advisers proxy policies, provided that the Board has approved them on behalf of the Sub-Adviser-Voted Fund, and ratifies any subsequent changes at the next regularly scheduled Compliance Committee meeting.
Proxy Coordinator
As described below, the Voya Proxy Coordinator will vote proxies on behalf of the Funds and the Advisers in connection with annual and special meetings of shareholders (except those regarding bankruptcy matters and/or related plans of reorganization).
Advisers Roles and Responsibilities
Proxy Coordinator
The Proxy Coordinator is responsible for overseeing the Proxy Advisory Firm (as defined below) and voting the Funds proxies in accordance with the Guidelines and Procedures on behalf of the Funds and the Advisers. The Proxy Coordinator is authorized to direct the Proxy Advisory Firm to vote a Funds proxy in accordance with the Guidelines and Procedures. Responsibilities assigned to the Proxy Coordinator, or activities that support it, may be performed by such members of the Proxy Group (as defined below) or employees of the Advisers affiliates as the Proxy Group deems appropriate.
The Proxy Coordinator is also responsible for identifying and informing Counsel (as defined below) of potential conflicts between the proxy issuer and the Proxy Advisory Firm, the Advisers, the Funds principal underwriters, or an affiliated person of the Funds. The Proxy Coordinator will identify such potential conflicts of interest based on information the Proxy Advisory Firm periodically provides; client analyses, distributor, broker-dealer, and vendor lists; and information derived from other sources, including public filings.
Proxy Advisory Firm
The Board has approved retaining an independent proxy voting service (the Proxy Advisory Firm) to assist the Advisers in voting the Funds proxies of publicly traded securities through the provision of vote analysis, implementation, recordkeeping, and disclosure services. The Proxy Advisory Firm is Institutional Shareholder Services Inc., a subsidiary of Vestar Capital Partners.
The Proxy Advisory Firm is responsible for coordinating with the Funds custodians to ensure that all proxy materials received by the custodians relating to the portfolio securities are processed in a timely fashion. To the extent applicable, the Proxy Advisory Firm is required to provide research, analysis, and vote recommendations under its Proxy Voting guidelines, as well as to vote and/or refer all proxies in accordance with the Guidelines.
Proxy Group
The Advisers have established a Proxy Group (the Proxy Group) that assists in the review of the Proxy Advisory Firms recommendations when a proxy voting issue is referred to the Proxy Group through the Proxy Coordinator. The members of the Proxy Group, which may include employees of the Advisers affiliates, are identified in Exhibit 1 , and may be amended from time to time at the Advisers discretion.
Investment Professionals
The Funds Sub-Advisers and/or portfolio managers are each referred to herein as an
Investment Professional and collectively, Investment Professionals. The Board encourages Investment Professionals to submit a recommendation to the Proxy Group regarding proxy voting related to the portfolio securities over which they have day-to-day portfolio management responsibility. Additionally, when requested, Investment Professionals are responsible for submitting a recommendation to the Proxy Group regarding proxy voting related to the portfolio securities over which they have day-to-day portfolio management responsibility.
Counsel
A member of the mutual funds legal practice group of Voya Investment Management (Counsel) is responsible for determining if a potential conflict of interest is in fact deemed a conflict of interest.
Proxy Voting Procedures
Proxy Group Oversight
As mentioned above, the Advisers have established the Proxy Group to assist in the review of the Proxy Advisory Firms recommendations.
A minimum of four (4) members of the Proxy Group (or three (3) if one member of the quorum is either the Funds Chief Investment Risk Officer or Chief Financial Officer) will constitute a quorum for purposes of taking action at any meeting of the Group.
The Proxy Group may meet in person or by telephone. The Proxy Group also may take action via electronic mail in lieu of a meeting, provided that the Proxy Coordinator follows the directions of a majority of a quorum responding via electronic mail.
A Proxy Group meeting will be held whenever:
· The Proxy Coordinator receives a recommendation from an Investment Professional to vote a Funds proxy contrary to the Guidelines.
· The Proxy Advisory Firm has made no recommendation on a matter and the Procedures do not provide instruction.
· A matter requires case-by-case consideration, including those in which the Proxy Advisory Firms recommendation is deemed to be materially conflicted.
· The Proxy Coordinator requests the Proxy Groups input and vote recommendation on a matter.
In its discretion, the Proxy Group may provide the Proxy Coordinator with standing instructions to perform responsibilities assigned to the Proxy Group, or activities in support thereof, on its behalf, provided that such instructions do not contravene any requirements of these Procedures or the Guidelines.
If the Proxy Group has previously provided the Proxy Coordinator with standing instructions to vote in accordance with the Proxy Advisory Firms recommendation and no issue of conflict must be considered, the Proxy Coordinator may implement the instructions without calling a Proxy Group meeting.
For each proposal referred to the Proxy Group, it will review:
· the relevant Guidelines and Procedures,
· the recommendation of the Proxy Advisory Firm, if any,
· the recommendation of the Investment Professional(s), if any,
· other resources that any Proxy Group member deems appropriate to aid in a determination of a recommendation.
Vote Instruction
The vote of a simple majority of the voting members present will determine any matter
submitted to a vote. Tie votes will be resolved by securing the vote of members not present at the meeting; provided, however, that the Proxy Coordinator will ensure compliance with all applicable voting and conflict of interest procedures, and will use best efforts to secure votes from as many absent members as may reasonably be accomplished, and to provide such members with a substantially similar level of relevant information as that provided at the in-person meeting.
In the event a tie vote cannot be resolved, or in the event that the vote remains a tie, the Proxy Coordinator will refer the vote to the Compliance Committee Chair for vote determination.
In the event a tie vote cannot be timely resolved in connection with a voting deadline, the Proxy Coordinator will vote in accordance with the Proxy Advisory Firms recommendation, unless the Proxy Advisory Firms recommendation is considered to be materially conflicted, in which case no action will be taken on the matter ( i.e. , a Non-Vote).
A member of the Proxy Group may abstain from voting on any given matter, provided that the member does not participate in the Proxy Group discussion(s) in connection with the vote determination. If abstention results in the loss of quorum, the process for resolving tie votes will be observed.
If the Proxy Group recommends that a Fund vote contrary to the Guidelines, or if the Proxy Advisory Firms recommendation on a matter is deemed to be materially conflicted, the Proxy Group will follow the Out-of-Guidelines procedures.
The Proxy Group may vote contrary to the Guidelines based on a recommendation from an Investment Professional, provided the conflict of interest review process is followed.
Vote Determination and Execution
The Proxy Group receives and thoroughly reviews and evaluates the research and vote recommendations from the Proxy Advisory Firm prior to making a final voting decision. The Board does not consider the Proxy Advisory Firms recommendations to be the ultimate decision. The Board through the Proxy Group exercises its independent judgment when making a voting decision, and has developed these Guidelines to stipulate the final voting decision.
The Guidelines specify how the Funds generally will vote with respect to the proposals indicated. Additionally, in all cases, unless otherwise noted, the Proxy Group instructs the Proxy Coordinator, on behalf of the Advisers, to vote in accordance with the Guidelines and Procedures.
Within-Guidelines Votes: Votes in Accordance with the Guidelines
In the event the Proxy Group and, where applicable, an Investment Professional participating in the voting process, recommend a vote Within Guidelines, the Proxy Group will instruct the Proxy Advisory Firm, through the Proxy Coordinator, to vote in this manner.
In cases when an Investment Professional submits a recommendation, the Investment Professional must disclose in writing any potential conflict of interest or state they do not have a conflict of interest.
Out-of-Guidelines Votes:
· Votes Contrary to the Guidelines and Procedures
· Proxy Advisory Firm Does not Provide a Recommendation and the Guidelines do not provide voting instruction
· Proxy Advisory Firms Recommendation is Conflicted
A vote would be considered Out-of-Guidelines if the:
· Proxy Group or an Investment Professional recommends that a Fund vote contrary to the
Guidelines and/or the recommendation of the Proxy Advisory Firm.
· Guidelines and Procedures provides no instruction and the Proxy Advisory Firm has made no recommendation on a matter.
· Proxy Advisory Firms recommendation on a matter is considered to be materially conflicted.
A vote will not be deemed to be Out-of-Guidelines if the Investment Professionals recommendation is contrary to the Guidelines and/or the Proxy Advisorys Firm recommendation, and the Guidelines stipulate that primary consideration will be given to input from the Investment Professional. Regardless, the Investment Professional must disclose in writing any potential conflict of interest or state they do not have a conflict of interest. If the Investment Professional discloses a potential conflict of interest, and Counsel determines that the conflict of interest appears to exist, the proposal will be referred to the Compliance Committee for review as described in the Conflict of Interest section below. The Proxy Group members will not be required to complete a Conflicts Report in connection with such votes, other than the conflict disclosure statement they are required to make prior to reviewing the proposal.
Routine Matters
Upon instruction, the Proxy Advisory Firm will submit a vote in accordance with the Guidelines where such Guidelines provide a clear policy ( e.g. , For, Against, Withhold, or Abstain) on a proposal.
Matters Requiring Case-by-Case Consideration
The Proxy Advisory Firm will refer proxy proposals accompanied by its written analysis and vote recommendation to the Proxy Coordinator when the Guidelines indicate case-by-case. Additionally, the Proxy Advisory Firm will refer any proxy proposal to the Proxy Coordinator for instructions as if it were a matter requiring case-by-case consideration under circumstances where the application of the Guidelines is unclear or appears to involve unusual or controversial issues.
Upon receipt of a referral from the Proxy Advisory Firm, the Proxy Coordinator may solicit additional research or clarification from the Proxy Advisory Firm, Investment Professional(s), or other sources.
The Proxy Coordinator will review matters requiring a case-by-case consideration to determine if the Proxy Group had previously provided the Proxy Coordinator with standing vote instructions in accordance with the Proxy Advisory Firms recommendation, or a provision within the Guidelines is applicable based on prior voting history.
If a matter requires input and vote determination from the Proxy Group, the Proxy Coordinator will forward the Proxy Advisory Firms analysis and recommendation, the Proxy Coordinators recommendation and/or any research obtained from the Investment Professional(s), the Proxy Advisory Firm, or any other source to the Proxy Group. The Proxy Group may consult with the Proxy Advisory Firm and/or Investment Professional(s) as appropriate.
The Proxy Coordinator will use best efforts to convene a Proxy Group meeting with respect to all matters requiring its consideration. In the event quorum requirements cannot be timely met in connection with a voting deadline, it is the policy of the Funds and Advisers to vote in accordance with the Proxy Advisory Firms recommendation, unless the Proxy Advisory Firms recommendation is considered to be materially conflicted, in which case no action will be taken on the matter ( i.e. , a Non-Vote).
Non-Votes: Votes in which No Action is Taken
The Proxy Group may recommend that a Fund refrain from voting under certain circumstances
including:
· The economic effect on shareholders interests or the value of the portfolio holding is indeterminable or insignificant, e.g. , proxies in connection with fractional shares, securities no longer held in the portfolio of a Voya fund or proxies being considered on behalf of a Fund that is no longer in existence.
· The cost of voting a proxy outweighs the benefits, e.g. , certain international proxies, particularly in cases when share blocking practices may impose trading restrictions on the relevant portfolio security.
· The Proxy Advisory Firms recommendation has been deemed to be conflicted.
In such cases, the Proxy Group may instruct the Proxy Advisory Firm, through the Proxy Coordinator, not to vote such proxy. The Proxy Group may provide the Proxy Coordinator with standing instructions on parameters that would dictate a Non-Vote without the Proxy Groups review of a specific proxy.
Further, Counsel may permit the Proxy Coordinator to abstain from voting any proposal that is subject to a material conflict, provided such abstention does not have the same effect as an against vote, and therefore has no effect on the outcome of the vote.
If Counsel considers the Proxy Advisory Firms recommendation to be materially conflicted on a matter, no action will be taken on such matter, either by abstaining from voting any proposal(s) subject to the material conflict or not voting the entire proxy ( i.e. , a Non-Vote), as Counsel deemed appropriate with respect to the nature of the Proxy Advisory Firms material conflict.
The Proxy Coordinator will make reasonable efforts to secure and vote all other proxies for the Funds, particularly in markets where shareholders rights are limited.
Matters Requiring Further Consideration
Referrals to the Compliance Committee
If a vote is deemed Out-of-Guidelines and Counsel has determined that a material conflict of interest appears to exist with respect to the party or parties ( i.e . Proxy Advisory Firm, the Advisers, underwriters, affiliates, any participating Proxy Group member, or any Investment Professional(s)) participating in the voting process, the Proxy Coordinator will refer the vote to the Compliance Committee Chair.
The Compliance Committee may consider all recommendations, analyses, research and Conflicts Reports the Proxy Coordinator provides and any other written materials used to establish whether a conflict of interest exists, in determining how to vote the proxies referred to the Compliance Committee. The Compliance Committee, generally through the Committee Chair, will instruct the Proxy Coordinator how such referred proposals should be voted.
The Proxy Coordinator uses best efforts to timely refer matters to the Compliance Committee for its consideration. In the event any such matter cannot be timely referred to or considered by the Compliance Committee, the Compliance Committees standing instruction is to vote Within Guidelines.
Consultation with Compliance Committee
The Proxy Coordinator may consult the Compliance Committee Chair for guidance on behalf of the Committee if application of the Guidelines and Procedures is unclear or in connection with any unusual or controversial issue or a recommendation received from an Investment Professional. The Chair may consider all recommendations, analyses, research, or Conflicts Reports provided. The Chair may provide guidance or direct the Proxy Coordinator to refer the proposal(s) to the full Compliance Committee. The guidance of the Chair, or the Compliance Committee, as applicable, will receive the Proxy Groups primary consideration in making a vote
determination.
As mentioned in the Reporting and Record Retention section below, the Compliance Committee will receive a report for proposals that were voted Out-of-Guidelines, Within Guidelines if the Investment Professionals recommendation was not agreed to, or the proposal was referred to the Compliance Committee.
Conflicts of Interest
As a fiduciary, the Advisers always must act in the beneficial owners of the Funds best interests. Therefore, the Board of Directors, Advisers, Proxy Coordinator, Proxy Group, Investment Professionals and others supporting these Guidelines and Procedures strive to avoid even the appearance of a conflict that may compromise the trust of the Funds beneficial owners.
Conflicts of interest can arise in situations where:
· The issuer is a vendor whose products or services are material to the Voya Funds, the Advisers or their affiliates.
· The issuer is an entity participating to a material extent in the distribution of the Voya Funds
· The issuer is a significant executing broker dealer;
· Any individual that participates in the voting process for the Funds including an Investment Professional, a member of the Proxy Group, an employee of the Advisers, or Director/ Trustee of the Board serves as a director or officer of the issuer; or,
· The issuer is Voya Financial.
Potential Conflicts with a Proxy Issuer
A conflict of interest may exist when a relationship between the issuer and the party or parties reviewing the issuer could unduly influence a vote recommendation. Therefore, as previously described, the Proxy Coordinator is responsible for identifying and informing Counsel of potential conflicts with the proxy issuer. In addition to obtaining potential conflict of interest information described in the Roles and Responsibilities section above, members of the Proxy Group are required to disclose to the Proxy Coordinator any potential conflicts of interests prior to discussing the Proxy Advisory Firms recommendation.
In the event a Proxy Group member believes that a potential or perceived conflict of interest exists that may preclude him/her from making a vote determination in the best interests of the beneficial owners of the Funds, the Proxy Group member will advise the Proxy Coordinator. The Proxy Group member may elect to recuse himself/herself from consideration of the relevant proxy or ask the Proxy Coordinator to solicit the opinion of Counsel on the matter, recusing himself/herself only in the event Counsel determines that a material conflict of interest exists. If recusal, whether voluntary or pursuant to Counsels findings, does not occur prior to the members participation in any Proxy Group discussion of the relevant proxy, any Out-of-Guidelines Vote determination is subject to the Compliance Committee referral process. Should members of the Proxy Group verbally disclose a potential conflict of interest, they are required to complete a Conflict of Interest Report, which will be reviewed by Counsel.
Investment Professionals are also required to complete a Conflict of Interest Report or confirm in they do not have any potential conflicts of interests when submitting a vote recommendation to the Proxy Coordinator.
The Proxy Coordinator gathers and analyzes the information provided by the Proxy Advisory
Firm, the Advisers, the Funds principal underwriters, affiliates of the Funds, members Proxy Group, Investment Professionals, and the Directors and Officers of the Funds. Counsel will document such potential material conflicts of interest on a consolidated basis as appropriate.
If Counsel determines that a material conflict of interest does not appear to exist with respect a proxy issuer, any participating Proxy Group member, or any participating Investment Professional(s), the Proxy Coordinator will instruct the Proxy Advisory Firm to vote the proxy as recommended by the Proxy Group.
Compliance Committee Oversight
The Proxy Coordinator will refer a proposal to the Funds Compliance Committee if the Proxy Group recommends an Out-of-Guidelines Vote, and Counsel has determined that a material conflict of interest appears to exist.
The Proxy Coordinator will refer the proposal to the Funds Compliance Committee for determination so that the conflicted party(ies) have no opportunity to exercise voting discretion over a Funds proxy in a situation when such parties may have a conflict of interest.
The Proxy Coordinator will refer the proposal to the Compliance Committee Chair, forwarding all information relevant to the Compliance Committees review, including the following or a summary of its contents:
· the applicable Guidelines and Procedures
· the Proxy Advisory Firm recommendation
· the Investment Professional(s)s recommendation, if applicable
· any resources used by the Proxy Group in arriving at its recommendation
· Counsels findings
· Conflicts Report(s) and/or any other written materials establishing whether a conflict of interest exists
In the event a member of the Funds Compliance Committee believes he/she has a conflict of interest that would preclude him/her from making a vote determination in the best interests of the applicable Funds beneficial owners, the Compliance Committee member will advise the Compliance Committee Chair and recuse himself/herself with respect to the relevant proxy determinations.
Conflicts Reports
Investment Professionals, the Proxy Advisory Firm, and members of the Compliance Committee, the Proxy Group, and the Proxy Coordinator are required to disclose any potential conflicts of interest and/or confirm they do not have a conflict of interest in connection with their participation in the voting process for portfolio securities. The Conflicts Report should describe any known relationships of either a business or personal nature that Counsel has not previously assessed, which may include communications with respect to the referral item, but excluding routine communications with or submitted to the Proxy Coordinator or Investment Professional(s) on behalf of the subject company or a proponent of a shareholder proposal.
The Conflicts Report should also include written confirmation that the Investment Professional based the recommendation in connection with an Out-of-Guidelines Vote or under circumstances where a conflict of interest exists solely on the investment merits of the proposal and without regard to any other consideration.
Completed Conflicts Reports should be provided to the Proxy Coordinator within two business days and may be submitted to the Proxy Coordinator verbally, provided the Proxy Coordinator completes the Conflicts Report, and the submitter reviews and approves the Conflict Report in writing.
The Proxy Coordinator will forward all Conflicts Reports to Counsel for review. Upon review, Counsel will provide the Proxy Coordinator with a brief statement regarding whether or not a material conflict of interest is present.
Counsel will document such potential conflicts of interest on a consolidated basis as appropriate rather than maintain individual Conflicts Reports.
Assessment of the Proxy Advisory Firm
In furtherance of the Advisers fiduciary duty to the Funds and their beneficial owners, the Advisers established and maintain procedures to ensure the Advisers are voting the Funds proxies in accordance with the Funds beneficial owners best interest and the Guidelines. Therefore, prior to engaging the services of any new proxy service and annually thereafter, the Proxy Coordinator, on behalf of the Advisers, will assess if the Proxy Advisory Firm:
· is independent from the Advisers
· has resources that indicate it can competently provide analysis of proxy issues
· can make recommendations in an impartial manner and in the best interests of the Funds and their beneficial owners
· has adequate compliance policies and procedures to:
· ensure that its proxy voting recommendations are based on current and accurate information
· identify and address conflicts of interest.
The Proxy Coordinator will utilize, and the Proxy Advisory Firm will comply with, such methods for completing the assessment as the Proxy Coordinator may deem reasonably appropriate. The Proxy Advisory Firm will also promptly notify the Proxy Coordinator in writing of any material change to information previously provided to the Proxy Coordinator in connection with establishing the Proxy Advisory Firms independence, competence, or impartiality.
Information provided in connection with the Proxy Advisory Firms potential conflict of interest will be forwarded to Counsel for review. Counsel will review such information and advise the Proxy Coordinator as to whether a material concern exists and if so, determine the most appropriate course of action to eliminate such concern.
Voting Funds of Funds, Investing Funds and Feeder Funds
Funds that are Funds-of-Funds will echo vote their interests in underlying mutual funds, which may include mutual funds other than the Voya funds indicated on Voyas website (www.voyainvestments.com). Meaning that, if the Fund-of-Funds must vote on a proposal with respect to an underlying investment company, the Fund-of-Funds will vote its interest in that underlying fund in the same proportion all other shareholders in the underlying investment company voted their interests.
However, if the underlying fund has no other shareholders, the Fund-of-Funds will vote as follows:
· If the Fund-of-Funds and the underlying fund are being solicited to vote on the same proposal ( e.g. , the election of fund directors/trustees), the Fund-of-Funds will vote the shares it holds in the underlying fund in the same proportion as all votes received from the holders of the Fund-of-Funds shares with respect to that proposal.
· If the Fund-of-Funds is being solicited to vote on a proposal for an underlying fund ( e.g. , a new Sub-Adviser to the underlying fund), and there is no corresponding proposal at the Fund-of-Funds level, the Board will determine the most appropriate method of voting with respect to the underlying fund proposal.
An Investing Fund ( e.g ., any Voya fund), while not a Fund-of-Funds will have the foregoing
Fund-of-Funds procedure applied to any Investing Fund that invests in one or more underlying funds. Accordingly:
· Each Investing Fund will echo vote its interests in an underlying fund, if the underlying fund has shareholders other than the Investing Fund.
· In the event an underlying fund has no other shareholders, and the Investing Fund and the underlying fund are being solicited to vote on the same proposal, the Investing Fund will vote its interests in the underlying fund in the same proportion as all votes received from the holders of its own shares on that proposal.
· In the event an underlying fund has no other shareholders, and there is no corresponding proposal at the Investing Fund level, the Board will determine the most appropriate method of voting with respect to the underlying fund proposal.
A fund that is a Feeder Fund in a master-feeder structure passes votes requested by the underlying master fund to its shareholders. Meaning that, if the master fund solicits the Feeder Fund, the Feeder Fund will request instructions from its own shareholders, either directly or, in the case of an insurance-dedicated Fund, through an insurance product or retirement plan, as to how it should vote its interest in an underlying master fund.
When a Voya fund is a feeder in a master-feeder structure, proxies for the portfolio securities owned by the master fund will be voted pursuant to the master funds proxy voting policies and procedures. As such, except as described in the Reporting and Record Retention section below, Feeder Funds will not be subject to these Guidelines and Procedures.
Securities Lending
Many of the Funds participate in securities lending arrangements to generate additional revenue for the Fund. Accordingly, the Fund will not be able to vote securities that are on loan under these types of arrangements. However, under certain circumstances, for voting issues that may have a significant impact on the investment, the Proxy Group or Proxy Coordinator may request to recall securities that are on loan if they determine that the benefit of voting outweighs the costs and lost revenue to the Fund and the administrative burden of retrieving the securities.
Investment Professionals may also deem a vote is material in the context of the portfolio(s) they manage. Therefore, they may request that lending activity on behalf of their portfolio(s) with respect to the relevant security be reviewed by the Proxy Group and considered for recall and/or restriction. The Proxy Group will give primary consideration to relevant Investment Professional input in its determination of whether a given proxy vote is material and the associated security accordingly restricted from lending. The determination that a vote is material in the context of a Funds portfolio will not mean that such vote is considered material across all Funds voting at that meeting. In order to recall or restrict shares on a timely basis for material voting purposes, the Proxy Coordinator, on behalf of the Proxy Group, will use best efforts to consider, and when appropriate, to act upon, such requests on a timely basis. Requests to review lending activity in connection with a potentially material vote may be initiated by any relevant Investment Professional and submitted for the Proxy Groups consideration at any time.
Reporting and Record Retention
Reporting by the Funds
Annually in August, each Fund and each Sub-Adviser-Voted Fund will post its proxy voting record, or a link to the prior one-year period ending on June 30 th on the Voya funds website. The proxy voting record for each Fund and each Sub-Adviser-Voted Fund will also be available on Form N-PX in the EDGAR database on the website of the Securities and Exchange Commission (SEC). For any Voya fund that is a feeder in a master/feeder structure, no proxy
voting record related to the portfolio securities owned by the master fund will be posted on the Voya funds website or included in the Funds Form N-PX; however, a cross-reference to the master funds proxy voting record as filed in the SECs EDGAR database will be included in the Funds Form N-PX and posted on the Voya funds website. If an underlying master fund solicited any Feeder Fund for a vote during the reporting period, a record of the votes cast by means of the pass-through process described above will be included on the Voya funds website and in the Feeder Funds Form N-PX.
Reporting to the Compliance Committee
At each regularly scheduled quarterly Compliance Committee meeting, the Compliance Committee will receive a report from the Proxy Coordinator indicating each proxy proposal, or a summary of such proposals, that was:
1. Voted Out-of-Guidelines, including any proposals voted Out-of-Guidelines as a result of special circumstances raised by an Investment Professional;
2. Voted Within Guidelines in cases when the Proxy Group did not agree with an Investment Professionals recommendation;
3. Referred to the Compliance Committee for determination.
The report will indicate the name of the company, the substance of the proposal, a summary of the Investment Professionals recommendation, where applicable, and the reasons for voting, or recommending, an Out-of-Guidelines Vote or, in the case of (2) above, a Within-Guidelines Vote.
Reporting by the Proxy Coordinator on behalf of the Adviser
The Adviser will maintain the records required by Rule 204-2(c)(2), as may be amended from time to time, including the following:
· A copy of each proxy statement received regarding a Funds portfolio securities. Such proxy statements the issuers send are available either in the SECs EDGAR database or upon request from the Proxy Advisory Firm.
· A record of each vote cast on behalf of a Fund.
· A copy of any Adviser-created document that was material to making a proxy vote decision, or that memorializes the basis for that decision.
· A copy of written requests for Fund proxy voting information and any written response thereto or to any oral request for information on how the Adviser voted proxies on behalf of a Fund.
· A record of all recommendations from Investment Professionals to vote contrary to the Guidelines,
· All proxy questions/recommendations that have been referred to the Compliance Committee, and all applicable recommendations, analyses, research, Conflict Reports, and vote determinations.
All proxy voting materials and supporting documentation will be retained for a minimum of six years, the first two years in the Advisers office.
Records Maintained by the Proxy Advisory Firm
The Proxy Advisory Firm will retain a record of all proxy votes handled by the Proxy Advisory Firm. Such record must reflect all the information required to be disclosed in a Funds Form N-PX pursuant to Rule 30b1-4 under the Investment Company Act. In addition, the Proxy Advisory Firm is responsible for maintaining copies of all proxy statements received by issuers and to promptly provide such materials to the Adviser upon request.
Exhibit 1 Proxy Group
Name |
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Title or Affiliation |
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Stanley D. Vyner |
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Chief Investment Risk Officer and Executive Vice President, Voya Investments, LLC |
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Julius A. Drelick III, CFA |
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Senior Vice President, Head of Fund Compliance, Voya Funds Services, LLC |
|
|
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Kevin M. Gleason |
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Senior Vice President, Voya Investment Management LLC; and Chief Compliance Officer of the Voya Family of Funds, |
|
|
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Todd Modic |
|
Senior Vice President, Voya Funds Services, LLC and Voya Investments, LLC; and Chief Financial Officer of the Voya Family of Funds |
|
|
|
Maria Anderson |
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Vice President, Fund Compliance, Voya Funds Services, LLC |
|
|
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Sara Donaldson |
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Proxy Coordinator for the Voya Family of Funds and Vice President, Proxy Voting, Voya Funds Services, LLC |
|
|
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Harley Eisner |
|
Vice President, Financial Analysis, Voya Funds Services, LLC |
|
|
|
Evan Posner, Esq. |
|
Vice President and Counsel, Voya Family of Funds |
|
|
|
Kristin Lynch |
|
Assistant Vice President, Office of the Chief Compliance Officer, Voya Investment Management LLC |
Effective as of November 12, 2014
PROXY VOTING GUIDELINES
Introduction
Proxies must be voted in the best interest of the Funds beneficial owners. The Guidelines summarize the Funds positions on various issues of concern to investors, and give an indication of how Fund securities will be voted on proposals dealing with particular issues. Nevertheless, the Guidelines are not exhaustive, do not include all potential voting issues, and proposals may be addressed, as necessary, on a CASE-BY-CASE basis rather than according to the Guidelines.
These Guidelines apply to securities of publicly traded companies and to those of privately held companies if publicly available disclosure permits such application. All matters for which such disclosure is not available shall be considered CASE-BY-CASE .
The Board encourages Investment Professionals to submit a recommendation to the Proxy Group regarding proxy voting related to the portfolio securities over which they have day-to-day portfolio management responsibility. Recommendations from the Investment Professionals may be submitted or requested in connection with any proposal and are likely to be requested with respect to proxies for private equity or fixed income securities and/or proposals related to merger transactions/corporate restructurings, proxy contests, or unusual or controversial issues.
These policies may be overridden in any case as provided for in the Procedures. Similarly, the Procedures provide that proposals whose Guidelines prescribe a firm voting position may instead be considered on a CASE-BY-CASE basis when unusual or controversial circumstances so dictate.
Interpretation and application of these Guidelines is not intended to supersede any law, regulation, binding agreement, or other legal requirement to which an issuer may be or become subject. No proposal shall be supported whose implementation would contravene such requirements.
General Policies
In cases receiving CASE-BY-CASE consideration, including cases not specifically provided for under these Guidelines, the Funds policy is to vote in accordance with the recommendation provided by the Funds Proxy Advisory Firm.
Further, the Funds policy is to vote in accordance with the Proxy Advisory Firms recommendation when such recommendation aligns with the recommendation of the relevant companys management or management has made no recommendation. However, this policy will not apply to CASE-BY-CASE proposals for which a contrary recommendation from the relevant Investment Professional(s) is being utilized.
Investment Professionals input will be given primary consideration with respect to CASE-BY-CASE proposals being considered on behalf of the relevant Fund if they involve merger transactions/corporate restructurings, proxy contests, fixed income or private equity securities, or unusual or controversial issues.
The Funds policy is to not support proposals that would impose a negative impact on existing rights of the Funds beneficial owners to the extent that any positive impact would not be deemed sufficient to outweigh removal or diminution of such rights. Depending on the relevant market, appropriate opposition may be expressed as an ABSTAIN, AGAINST, or WITHHOLD vote.
International Policies
Companies incorporated outside the U.S. are subject to the foregoing U.S. Guidelines if they are listed on a U.S. exchange and treated as a U.S. domestic issuer by the SEC. Where applicable, certain U.S. Guidelines may also be applied to companies incorporated outside the U.S., e.g. , companies with a significant base of U.S. operations and employees. However, the following provide for differing regulatory and legal requirements, market practices, and political and economic systems existing in various international markets.
Funds will vote AGAINST international proxy proposals when the Proxy Advisory Firm recommends
voting AGAINST such proposal because relevant disclosure by the company, or the time provided for consideration of such disclosure, is inadequate.
The Funds will consider proposals that are associated with a firm AGAINST vote on a CASE-BY-CASE basis if the Proxy Advisory Firm recommends their support when:
· The company or market transitions to better practices ( e.g ., having committed to new regulations or governance codes);
· The market standard is stricter than the Funds guidelines; or
· It is the more favorable choice when shareholders must choose between alternate proposals.
Proposal Specific Policies
As mentioned above, these policies may be overridden in any case as provided for in the Procedures. Similarly, the Procedures provide that proposals whose Guidelines prescribe a firm voting position may instead be considered on a CASE-BY-CASE basis when unusual or controversial circumstances so dictate.
Proxy Contests:
Consider votes in contested elections on a CASE-BY-CASE basis, with primary consideration given to input from the relevant Investment Professional(s).
Reimburse Proxy Solicitation Expenses
Consider Shareholder proposals to reimburse proxy solicitation expenses on a CASE-BY-CASE basis; vote FOR if the Funds supports the associated director candidates.
Uncontested Proxies:
1- The Board of Directors
Overview
The Funds will lodge disagreement with a companys policies or practices by withholding support from the relevant proposal rather than from the director nominee(s) to which the Proxy Advisory Firm assigns a correlation. Support will be withheld from directors deemed responsible for governance shortfalls. If the director(s) are not standing for election (e.g., the board is classified), support will not be withheld from others in their stead. When a determination is made to withhold support due to concerns other than those related to an individual directors independence or actions, responsibility may be attributed to the entire board, a committee, or an individual (such as the CEO or committee chair), taking into consideration whether the desired effect is to send a message or to remove the director from service.
The Funds will vote FOR directors in connection with issues raised by the Proxy Advisory Firm if the director did not serve on the board or relevant committee during the majority of the time period relevant to the concerns cited by the Proxy Advisory Firm.
Vote with the Proxy Advisory Firms recommendation when more candidates are presented than available seats and no other provisions under these Guidelines apply.
In cases where a director holds more than one board seat and corresponding votes, manifested as one seat as a physical person plus an additional seat as a representative of a legal entity, generally vote with the Proxy Advisory Firms recommendation to withhold support from the legal entity and vote on the physical person.
Vote with the Proxy Advisory Firms recommendation to withhold support from directors for whom support has become moot since the time the individual was nominated ( e.g. , due to death, disqualification, or determination not to accept appointment).
Independence
Determination of Independence
The Fund will leverage the Proxy Advisory Firms standards with respect to determining director independence. These standards provide that, to be considered completely independent, a director shall have no material connection to the company other than the board seat.
Although the Funds may agree with the Proxy Advisory Firms independence standards, such agreement shall not dictate that a Funds vote will be cast according to the Proxy Advisory Firms corresponding recommendation. Further, the application of Guidelines in connection with such standards will apply only when the directors level of independence can be ascertained based on available disclosure. Note: Non-voting directors ( e.g. , director emeritus or advisory director) shall be excluded from calculations with respect to majority board independence.
Board Independence
The Funds policy is that a board should be majority independent or meet the applicable independence requirements of the relevant listing exchange. T herefore, the Funds will consider non-independent directors standing for election on a CASE-BY-CASE basis when the full board is not majority independent or does not meet the applicable independence requirements of the relevant listing exchange .
· WITHHOLD support from the fewest non-independent directors whose removal would achieve majority independence across the remaining board, except that support may be withheld from additional directors whose relative level of independence cannot be differentiated.
· WITHHOLD support from all non-independent directors, including the founder, chairman, or CEO, if the number required to achieve majority independence is equal to or greater than the number of non-independent directors standing for election.
· Vote FOR non-independent directors in the role of CEO, and when appropriate, founder or chairman, and determine support for other non-independent directors based on the qualifications and contributions of the director as well as the Funds voting precedent for assessing relative independence to management ( e.g. , insiders holding senior executive positions are deemed less independent than affiliated outsiders with a transactional or advisory relationship to the company).
· WITHHOLD support from non-independent director or bundled slates if the boards independence cannot be ascertained due to inadequate disclosure.
· WITHHOLD support from bundled slates which include non-independent directors and where the boards independence does not meet the applicable independence requirements of the relevant listing exchange
Consider non-independent directors on a CASE-BY-CASE basis when the Proxy Advisory Firm has raised concerns regarding diminished shareholder value as evidenced by a significant drop in share price, voting with Proxy Advisory Firms recommendation AGAINST such directors when few, if any, outside directors are present on the board AND:
· The founding family has retained undue influence over the company despite a history of scandal or problematic controls; and
· The directors have engaged in protectionist activities such as introduction of a poison pill or preferential and/or dilutive share issuances; or
· Evidence exists regarding compliance or accounting shortfalls.
For companies in Japan , generally follow the Proxy Advisory Firms recommendations in furtherance of greater board independence and minority shareholder protections, including to WITHHOLD support from:
At all companies :
· The top executive(s) if the board does not include at least one outside director.
At companies with controlling shareholders :
· The top executive(s) if the board does not include at least two independent directors.
At companies with a three-committee structure :
· Non-independent outside directors if the board is not majority independent.
· Non-independent directors serving on the nominating committee if the board does not include at least two independent directors.
However, v ote FOR the top executive at companies in Japan if the only reason the Proxy Advisory Firms Withhold recommendation is due to the company underperforming in terms of capital efficiency; i.e., when the company has posted average return on equity (ROE) of less than five percent over the last five fiscal years.
For companies in Italy presenting multiple slates of directors ( voto di lista ), WITHHOLD support from all slates until director names are disclosed, and upon disclosure, follow the Proxy Advisory Firms standards for assessing which slate is best suited to represent shareholder interests.
WITHHOLD support from directors or slates of directors when they are presented in a manner not aligned with market best practice and/or regulation, including:
· Bundled slates of directors ( e.g. , Canada , France , Hong Kong , or Spain );
· Simultaneous reappointment of retiring directors ( e.g. , South Africa );
· In markets with term lengths capped by regulation or market practice, directors whose terms exceed the caps or are not disclosed; or
· Directors whose names are not disclosed in advance of the meeting or far enough in advance relative to voting deadlines to make an informed voting decision.
Consider self-nominated or shareholder-nominated director candidates on a CASE-BY-CASE basis, with voting decisions generally based on the Proxy Advisory Firms approach to evaluating such candidates, except that:
· An unqualified candidate will not be supported simply to effect a protest vote;
· A candidate will not be supported if the candidates agenda is not in line with the long-term best interests of the company; and
· Cases of multiple self-nominated candidates may be considered as a proxy contest if similar issues are raised ( e.g. , potential change in control).
Key Committee Independence
WITHHOLD support from non-independent directors if:
· They sit on the audit or remuneration (compensation) committee,
· The full board serves as the audit or remuneration (compensation) committee, or
· The company does not have an audit or remuneration (compensation) committee.
WITHHOLD support from audit or remuneration (compensation) committee slates that include non-independent directors in the election.
Vote FOR non-independent directors who sit on the nominating committee, provided that such committee meets the applicable independence requirements of the relevant listing exchange.
Vote FOR nominating committee slates that include non-independent directors in the election.
Vote FOR non-independent directors if the full board serves as the nominating committee OR has not created the committee, provided that the company is in compliance with all provisions of the listing exchange in connection with performance of relevant functions ( e.g. , performance of relevant functions by a majority of independent directors in lieu of the formation of a separate committee).
Consider on a CASE-BY-CASE basis the non-independent directors if the company is not in compliance with all required provisions of the listing exchange.
Vote AGAINST proposals that permit non-board members to serve on the audit, remuneration (compensation), or nominating committee, provided that bundled slates may be supported if no slate nominee serves on the relevant committee(s) except where market practice otherwise dictates.
Consider other concerns regarding committee members on a CASE-BY-CASE basis.
Shareholder Proposals Regarding Board/Key Committee Independence
Director Independence
Vote AGAINST shareholder proposals seeking to redefine director independence or directors specific roles ( e.g. , responsibilities of the lead director).
Majority Independent Board
Vote AGAINST shareholder proposals asking that more than a simple majority of directors be independent.
Increase Key Committee Independence
Vote AGAINST shareholder proposals asking that the independence of the nominating committee be greater than that required by the listing exchange.
Board Composition
Attendance
WITHHOLD support from a director who, during both of the most recent two years, attended less than 75 percent of the board and committee meetings during the directors period of service without a valid reason for the absences.
Vote FOR in connection with attendance issues for directors who have served on the board for less than the two most recent years.
WITHHOLD support if two-year attendance cannot be ascertained from available disclosure.
The two-year attendance policy shall be applied to attendance of statutory auditors at Japanese companies.
Over-boarding
Vote FOR directors without regard to over-boarding issues, unless when in conjunction with attendance issues during the most recent year. Consider such circumstances on a CASE-BY-CASE basis.
Vote AGAINST shareholder proposals limiting the number of public company boards on which a director may serve.
Chairman / CEO
Vote FOR directors without regard to recommendations that the position of chairman should be separate from that of CEO, or should otherwise required to be independent, unless other concerns requiring CASE-BY-CASE consideration are raised ( e.g ., former CEOs proposed as board chairmen in markets, such as the United Kingdom , for which best practice recommends against such practice).
Vote AGAINST shareholder proposals requiring that the positions of chairman and CEO be held separately, unless significant corporate governance concerns have been cited. Consider such circumstances on a CASE-BY-CASE basis.
Board Accountability
Compensation Practices ( U.S. and Canada )
It is the Funds policy that matters of compensation are best determined by an independent board and compensation committee. Therefore support may be withheld from compensation committee members whose actions or disclosure do not appear to support compensation practices aligned with the best interests of the company and its shareholders.
The Funds generally will lodge disagreement with a companys compensation policies or practices by withholding support from the relevant proposal rather than from the compensation committee members. However, where applicable, votes on compensation committee members in connection with compensation practices should be considered on a CASE-BY-CASE basis:
· Say on pay . If shareholders have been provided with an advisory vote on executive compensation (say on pay), and practices not supported under these Guidelines (provisions under Section 2. Compensation) have been identified, the Funds will align with the Proxy Advisory Firm when a vote AGAINST the say on pay proposal has been recommended in lieu of withholding support from certain nominees for compensation concerns. Companies receiving negative recommendations on both
compensation committee members and say on pay (or shareholders have not been provided with a say on pay) regarding issues not otherwise supported by these Guidelines will be considered on a CASE-BY-CASE basis.
· Say on pay responsiveness . Compensation committee members opposed by the Proxy Advisory Firm for failure to sufficiently address compensation concerns evidenced by significant opposition to the most recent say on pay vote will be considered on a CASE-BY-CASE basis, factoring in the following:
· If the most recent say on pay vote received majority opposition and the company has not demonstrated an adequate level of responsiveness, WITHHOLD support from the compensation committee chair.
· If the most recent say on pay vote passed but received significant opposition, vote FOR the compensation committee members if a Fund voted FOR that say on pay or did not have voting rights on that proposal. If a Fund voted AGAINST the say on pay and the company has not demonstrated an adequate level of responsiveness, vote WITHHOLD support from the compensation committee chair.
· If the compensation committee chair is not standing for election under circumstances meriting the chairs opposition, WITHHOLD support from the other compensation committee members. If no compensation committee members are standing for election, consider other directors on a CASE-BY-CASE basis.
· Say on frequency . If the Proxy Advisory Firm opposes directors because the company has implemented a say on pay schedule that is less frequent than the frequency most recently preferred by at least a plurality of shareholders, WITHHOLD support from the compensation committee chair. If the compensation committee chair is not standing for election, WITHHOLD support from the other compensation committee members. If no compensation committee members are standing for election, consider other directors on a CASE-BY-CASE basis.
· Tenure . Vote FOR compensation committee members who did not serve on the compensation committee during the majority of the time period relevant to the concerns cited by the Proxy Advisory Firm.
· Repricing . If the Proxy Advisory Firm recommends withholding support from compensation committee members in connection with their failure to seek, or acknowledge, a shareholder vote on plans to reprice, replace, buy back, or exchange options, WITHHOLD support from such directors. (Note: cancellation of options would not be considered an exchange unless the cancelled options were re-granted or expressly returned to the plan reserve for reissuance.)
· Commitments . Vote FOR compensation committee members receiving an adverse recommendation due to problematic pay practices if the company makes a public commitment ( e.g. , via a Form 8-K filing) to rectify the practice on a going-forward basis. However, consider on a CASE-BY-CASE basis if the company does not rectify the practice by the following years annual general meeting.
· Burn Rate Commitment . If burn rate commitment issues are raised , consider compensation committee members on a CASE-BY-CASE basis, taking into account factors such as burn rate history and issuers rationale and disclosure.
· Other . If the Proxy Advisory Firm has raised other considerations regarding poor compensation practices, consider compensation committee members on a CASE-BY-CASE basis.
For all other markets , consider remuneration committee members on a CASE-BY-CASE basis if the Proxy Advisory Firm recommends withholding support from directors in connection with remuneration practices not otherwise supported by these Guidelines (provisions under Section 2. Compensation) , including cases in which the issuer has not followed market practice by submitting a resolution on executive compensation.
Accounting Practices
Vote FOR audit committee members, or the companys CEO or CFO if nominated as directors, who did not serve on the committee or did not have responsibility over the relevant financial function, during the
majority of the time period relevant to the concerns cited.
Consider the companys CEO and CFO, if nominated as directors, and audit committee members on a CASE-BY-CASE basis if poor accounting practice concerns are raised . Vote FOR if the company has not yet had a full year to remediate the concerns since the time they were identified or if the company has taken adequate steps to remediate the concerns cited, which would typically include removing or replacing the responsible executives, and if the concerns are not re-occurring.
WITHHOLD support from audit committee members if the company has failed to disclose auditors fees broken down by category.
WITHHOLD support from the relevant proposal (provisions under Section 3. Auditor Ratification) rather than from the audit committee members if there are concerns regarding a companys non-audit fees.
Problematic Actions
When the Proxy Advisory Firm recommends withholding support due to assessment that a director acted in bad faith or against shareholder interests in connection with a major transaction, such as a merger or acquisition, or due to other material failures or problematic actions, consider on a CASE-BY-CASE basis, factoring in the merits of the directors performance, rationale, and disclosure provided.
If the Proxy Advisory Firm cites concerns regarding actions in connection with a directors service on another board , vote FOR the director if the company has provided adequate rationale regarding the appropriateness of the director to serve on the board under consideration.
When the Proxy Advisory Firm recommends withholding support from any director due to share pledging concerns, consider on a CASE-BY-CASE basis, factoring in the pledged amount, unwind time, and any historical concerns being raised. Responsibility will be assigned to the pledgor, where the pledged amount and unwind time are deemed significant and, therefore, an unnecessary risk to the company.
Consider directors for whom scandals or internal controls concerns have been raised on a CASE-BY-CASE basis, supporting the directors or slates of directors unless:
· The scandal or shortfall in controls took place at the company, or an affiliate, for which the director is being considered;
· Culpability can be attributed to the director ( e.g. , director manages or audits the relevant function); and
· The director has been directly implicated, with resulting arrest and criminal charge or regulatory sanction.
Anti-Takeover Measures
Consider on a CASE-BY-CASE basis any director responsible for implementing excessive anti-takeover measures, including failure to remove restrictive poison pill features or to ensure a pills expiration or timely submission to shareholders for vote, unless a company has implemented a policy that should reasonably prevent abusive use of its poison pill. WITHHOLD support from the board chair or, if not standing for election, the lead director. If neither is standing for election, WITHHOLD support from all continuing directors.
Consider on a CASE-BY-CASE basis any directors where the company has failed to opt out of a state law requiring companies to implement a staggered board structure. WITHHOLD support from the board chair, or if not standing for election, lead director. If neither is standing for election, WITHHOLD support from all continuing directors when the company:
· Demonstrates sustained poor stock performance (measured by one- and three-year total shareholder returns); and
· Has a non-shareholder-approved poison pill in place, without provisions to redeem or seek approval in a reasonable period of time; or
· Maintains a dual class capital structure, imposes a supermajority vote requirement, or has authority to issue blank check preferred stock.
Performance Test for Directors
Consider directors failing the Proxy Advisory Firms performance test, which includes market-based and operating performance measures, on a CASE-BY-CASE basis. WITHHOLD support from the board
chair, or if not standing for election, lead director. If neither is standing for election, WITHHOLD support from all continuing directors in cases where the directors have received a negative recommendation due to sustained poor stock performance ( measured by one- and three-year total shareholder returns) combined with multiple takeover defenses/entrenchment devices if the company:
· Is a controlled company or has a non-shareholder-approved poison pill in place, without provisions to redeem or seek approval in a reasonable period of time; or
· Maintains a dual class capital structure, imposes a supermajority vote requirement, or has authority to issue blank check preferred stock.
Sustained poor stock performance combined with other takeover defenses/ entrenchment devices will be considered on a CASE-BY-CASE basis.
Board Responsiveness
Consider on a CASE-BY-CASE basis any director where the company has failed to implement a majority-approved shareholder proposal. Vote FOR if the shareholder proposal has been reasonably addressed or the Funds Guidelines or voting record did not support the relevant proposal or issue. WITHHOLD support from the board chair, or, if not standing for election, from all continuing directors, if the shareholder proposal at issue is supported under these Guidelines and the board has not disclosed a credible rationale for not implementing the proposal.
In the U.S. , proposals seeking shareholder ratification of a poison pill may be deemed reasonably addressed if the company has implemented a policy that should reasonably prevent abusive use of the pill.
If the board has not acted upon a director not receiving shareholder support representing a majority of the votes cast at the previous annual meeting, consider directors on a CASE-BY-CASE basis. Vote FOR directors when:
· The issue relevant to the majority negative vote has been adequately addressed or cured, which may include disclosure of the boards rationale; or
· The Funds Guidelines or voting record do not support the relevant proposal or issue causing the majority negative vote.
If the above provisions have not been satisfied, WITHHOLD support from the chair of the nominating committee, or if not standing for election, consider other directors on a CASE-BY-CASE basis.
BoardRelated Proposals
Classified/Declassified Board Structure
Vote AGAINST proposals to classify the board unless the proposal represents an increased frequency of a directors election in the staggered cycle (e.g., seeking to move from a three-year cycle to a two-year cycle). Vote FOR proposals to repeal classified boards and to elect all directors annually.
Board Structure
Vote FOR management proposals to adopt or amend board structures or policies, except consider such proposals on a CASE-BY-CASE basis if the board is not majority independent, corporate governance concerns have been identified, or the proposal may result in a material reduction in shareholders rights.
Vote AGAINST shareholder proposals to impose new board structures or policies, except consider such proposals on a CASE-BY-CASE basis if the board is not majority independent and corporate governance concerns have been identified.
For companies in Japan , generally follow the Proxy Advisory Firms approach to proposals seeking a board structure that would provide greater independence oversight of management and the board.
Board Size
Vote FOR proposals that seek to fix the size of the board or designate a range for its size.
Vote AGAINST proposals that give management the ability to alter the size of the board outside of a specified range without shareholder approval.
Board Size (International)
Vote FOR proposals seeking a board range if the range is reasonable in the context of market practice and anti-takeover considerations. Proposed article amendments in this regard will be considered on a CASE-BY-CASE basis.
Director and Officer Indemnification and Liability Protection
Proposals on director and officer indemnification and liability protection should be evaluated on a CASE-BY-CASE basis, using Delaware law as the standard.
Vote AGAINST proposals to limit or eliminate entirely directors and officers liability in connection with monetary damages for violating the duty of care.
Vote AGAINST indemnification proposals that would expand coverage beyond legal expenses to acts that are more serious violations of fiduciary obligation, such as negligence.
Director and Officer Indemnification and Liability Protection (International)
Vote in accordance with the Proxy Advisory Firms standards for indemnification and liability protection for officers and directors, voting AGAINST overly broad provisions.
Discharge of Management/Supervisory Board Members
Vote FOR management proposals seeking the discharge of management and supervisory board members (including when the proposal is bundled), unless concerns are raised about the past actions of the companys auditors or directors, or legal or regulatory action is being taken against the board by other shareholders.
Vote FOR such proposals in connection with remuneration practices otherwise supported under these Guidelines or as a means of expressing disapproval of broader practices of the company or its board.
Establish Board Committee
Vote FOR shareholder proposals that seek creation of an audit, compensation, or nominating committee of the board, unless the committee in question is already in existence or the company claims an exemption of the listing exchange ( e.g. , committee functions are served by a majority of independent directors).
Vote AGAINST shareholder proposals requesting creation of additional board committees or offices, except as otherwise provided for herein.
Filling Board Vacancies / Removal of Directors
Vote AGAINST proposals that provide that directors may be removed only for cause.
Vote FOR proposals to restore shareholder ability to remove directors with or without cause.
Vote AGAINST proposals that provide that only continuing directors may elect replacements to fill board vacancies.
Vote FOR proposals that permit shareholders to elect directors to fill board vacancies.
Stock Ownership Requirements
Vote AGAINST shareholder proposals requiring directors to own a minimum amount of company stock in order to qualify as a director or to remain on the board.
Term Limits / Retirement Age
Vote FOR management proposals and AGAINST shareholder proposals limiting the tenure of outside directors or imposing a mandatory retirement age for outside directors (unless the proposal seeks to relax existing standards).
2- Compensation
Frequency of Advisory Votes on Executive Compensation
Vote FOR proposals seeking an annual say on pay and AGAINST those seeking a less frequent.
Proposals to Provide an Advisory Vote on Executive Compensation ( Canada )
Vote FOR , with a preference for an ANNUAL vote.
Executive Pay Evaluation
Advisory Votes on Executive Compensation (Say on Pay) and Remuneration Reports
Vote FOR management proposals seeking ratification of the companys executive compensation structure unless the program includes practices or features not supported under these Guidelines, and the proposal receives a negative recommendation from the Proxy Advisory Firm.
Listed below are examples of compensation practices and provisions, and respective consideration treatment under the Guidelines, factoring in whether the company has provided reasonable rationale/disclosure for such factors or the proposal as a whole.
Consider on a CASE-BY-CASE basis:
· Single Trigger Equity Provisions
· Short-Term Investment Plans where the board has exercised discretion to exclude extraordinary items.
· Long-Term Incentive Plans where executives already hold significant equity positions.
· Long-Term Incentive Plans where the vesting period is too short
· Pay Practices (or combination of practices) that appear to have created a misalignment between CEO pay and performance with regard to shareholder value.
· Excessive levels of discretionary bonuses, recruitment awards, retention awards, non-compete payments, severance/termination payments, perquisites (unreasonable levels in context of total compensation or purpose of the incentive awards or payouts).
Vote AGAINST :
· Provisions that permit repricing, replacement, buy back, or exchange options. (Note: cancellation of options would not be considered an exchange unless the cancelled options were re-granted or expressly returned to the plan reserve for reissuance.)
· Retesting in connection with achievement of performance hurdles.
· Compensation structures that unreasonably insulate pay from performance conditions.
· Single Trigger Cash Severance Provisions in new or materially amended plans, contracts, or payments that do not require an actual change in control in order to be triggered, or such provisions that are maintained in agreements previously opposed by a Fund.
· Named executives officers have material input into setting their pay.
· Short-Term Incentive Plans where treatment of payout factors has been inconsistent ( e.g. , exclusion of losses but not gains).
· Long-Term Incentive Plans that are inadequately aligned with shareholders because the performance period being measured within the vesting cycle is too short.
· Long-Term Incentive Plans that lack an appropriate equity component ( e.g., overly cash-based plans).
· For companies in international markets, plans provide for contract or notice periods or severance/termination payments that exceed market practices, e.g., relative to multiple of annual compensation.
Equity-Based and Other Incentive Plans
Equity Compensation
Votes with respect to compensation and employee benefit plans, or the issuance of shares in connection with such plans, should be determined on a CASE-BY-CASE basis. If the Proxy Advisory Firm issues a negative recommendation and one of the reasons provided below is found to be true for the plan or issuance in question, vote AGAINST the plan or issuance:
Plan Cost
· Vote AGAINST if the plan exceeds recommended cost ( U.S. or Canada ).
· Vote AGAINST if a cost or dilution assessment may not be possible due to the method of disclosing shares allocated to the plan(s).
Dilution
Vote AGAINST if the plan exceeds recommended burn rates and/or dilution limits, including cases in
which dilution cannot be fully assessed ( e.g. , due to inadequate disclosure).
Repricing or Replacement of Options
· Vote AGAINST plans that:
· Permit repricing of stock options, or any form or alternative to repricing, without shareholder approval,
· Include provisions that permit repricing, replacement, or exchange transactions that do not meet recommended criteria, or
· Give the board sole discretion to approve option repricing, replacement, or exchange programs.
· Consider on a CASE-BY-CASE basis specific proposals to reprice options.
Discounts
Vote AGAINST if there are deep or near-term discounts (or the equivalent, such as dividend equivalents on unexercised options) to executives or directors.
Vesting or Performance Periods
Vote AGAINST if the plan includes vesting or performance periods that do not meet recommended standards.
Vesting upon Change in Control
Vote AGAINST if the plan provides for vesting upon change in control if deemed to evidence a potential conflict of interest or anti-takeover device or if the change in control definition is too liberal.
Retesting
Vote AGAINST if the plan provides for retesting in connection with achievement of performance hurdles.
Misalignment between CEO Pay and Performance
Vote AGAINST if the proposed awards further misaligns the CEO pay and performance with regard to shareholder value, including where pay appears unreasonably insulated from performance conditions and/or awards under the plan are concentrated among named executive officers.
Plans Administered by Potential Grant Recipients
Vote AGAINST .
Awards to Outside Directors
Vote AGAINST if the plan provides for retirement benefits or equity incentive awards to outside directors if not in line with market practice.
Financial Assistance/Loans to Participants
Vote AGAINST if the plan permits financial assistance to executives, directors, subsidiaries, affiliates, or related parties that is not in line with market practice.
Long-Term Incentive Plans
Vote AGAINST long-term incentive plans that are inadequately aligned with shareholders because the performance period is too short or they lack an appropriate equity component.
· In cases where executives already hold significant equity positions, these proposals will be reviewed on a CASE-BY-CASE basis.
Overly Liberal Change in Control Definition
Vote AGAINST . (This refers to plans that would reward recipients even if the event does not result in an actual change in control or results in a change in control but does not terminate the employment relationship.)
Inadequate Performance or Vesting Criteria
These proposals will be reviewed on a CASE-BY-CASE basis.
Post-Employment Vesting or Exercise of Options
Vote AGAINST if deemed inappropriate.
Eliminate Existing Shareholder Approval Requirements for Material Plan Changes
Vote AGAINST , unless the company has provided a reasonable rationale and/or adequate disclosure regarding the requested changes.
Material Amendments to Plans
Vote AGAINST if the plan allows plan administrators to make material amendments without shareholder approval unless adequate prior disclosure has been provided.
Amendment Procedures for Equity Compensation Plans and Employee Stock Purchase Plans (ESPPs) (Toronto Stock Exchange Issuers)
Vote AGAINST if the amendment procedures do not preserve shareholder approval rights.
Contract or Notice Periods or Severance/Termination Payments
Vote AGAINST if the plan provides for contract or notice periods or severance/termination payments that exceed market practice, e.g. , relative to multiples of annual compensation.
Stock Option Plans for Independent Internal Statutory Auditors ( Japan )
Vote AGAINST .
Matching Share Plans
Vote AGAINST if the matching share plan that does not meet recommended standards, considering holding period, discounts, dilution, participation, purchase price, and performance criteria.
Employee Stock Purchase Plans
Consider CASE-BY-CASE with voting decisions generally based on the Proxy Advisory Firms approach to evaluating such proposals.
Capital Issuances in Support of Employee Stock Purchase Plans
Consider CASE-BY-CASE with voting decisions generally based on the Proxy Advisory Firms approach to evaluating such proposals.
OBRA-Related Compensation Proposals
Plans Intended to Qualify for Favorable Tax Treatment under Section 162(m) of OBRA
Vote AGAINST if a potential recipient under the plan(s) sits on the committee that exercises discretion over the related compensation awards. Vote FOR plans in cases where the only concern cited is lack of board independence, provided that the board meets the independence requirements of the relevant listing exchange. Consider other concerns CASE-BY-CASE .
Amendments that Place a Cap on Annual Grants or Amend Administrative Features to Comply with Section 162(m) of OBRA
Vote FOR .
Amendments to Add Performance-Based Goals to Comply with Section 162(m) of OBRA
Vote FOR , unless the amendments are clearly inappropriate.
Amendments to Increase Shares and Retain Tax Deductions under OBRA
Consider on a CASE-BY-CASE basis.
Approval of Cash or Cash-and-Stock Bonus Plans to Exempt the Compensation from Taxes under Section 162(m) of OBRA
Vote FOR , with primary consideration given to managements assessment that such plan meets the requirements for exemption of performance-based compensation. However, consider on a CASE-BY-CASE basis when broader compensation concerns exist.
Implement 401(k) Employee Benefit Plans for Employees
Vote FOR .
Director Compensation
Non-Executive Director Cash Compensation
Factor in the merits of the rationale and disclosure provided. Vote FOR if the amount is not excessive, there is no evidence of abuse, the recipients overall compensation appears reasonable, the administrating committee meets exchange or market standards for independence, and other significant
market standards are met. Otherwise, consider on a CASE-BY-CASE basis.
Non-Executive Director Equity Compensation
Consider on a CASE-BY-CASE basis.
Bonus Payments ( Japan )
Vote FOR if all payments are for directors or auditors who have served as executives of the company, and against if any payments are for outsiders. Otherwise, consider on a CASE-BY-CASE basis.
Bonus Payments Scandals
Vote AGAINST bonus proposals for retiring directors or continuing directors or auditors when culpability can be attributed to the nominee, unless bundled with bonuses for a majority of directors or auditors a Fund is voting FOR.
Severance Agreements
Vesting of Equity Awards upon Change in Control
Vote FOR management proposals seeking a specific treatment ( e.g. , double trigger or pro-rata) of equity that vests upon change in control, unless evidence exists of abuse in historical compensation practices.
Vote AGAINST shareholder proposals regarding the treatment of equity if:
· The change in control cash severance provisions are double-triggered; and
· The company has provided a reasonable rationale regarding the treatment of equity.
Executive Severance or Termination Arrangements, Including those Related to Executive Recruitment or Retention
Vote FOR such compensation arrangements if:
· The primary concerns raised would not result in a negative vote, under these Guidelines, on a management say on pay proposal, the relevant board or committee member(s);
· The company has provided adequate rationale and/or disclosure; or
· Support is recommended as a condition to a major transaction such as a merger.
Single Trigger Cash Severance Provisions
Vote AGAINST new or materially amended plans, contracts, or payments that include single trigger change in control cash severance provisions or do not require an actual change in control in order to be triggered.
Compensation-Related Shareholder Proposals
Double Triggers
Vote FOR shareholder proposals seeking double triggers on change in control cash severance provisions.
Executive and Director Compensation
Unless evidence exists of abuse in historical compensation practices, vote AGAINST shareholder proposals that seek to impose new compensation structures or policies.
Holding Periods
Vote AGAINST shareholder proposals requiring mandatory periods for officers and directors to hold company stock.
Submit Parachute Arrangements for Shareholder Ratification
Vote FOR (with parachutes defined as compensation arrangements related to termination that specify change in control events). Vote CASE-BY-CASE if the proposal does not include unduly restrictive or arbitrary provisions such as advance approval requirements.
Submit Severance and Termination Payments for Shareholder Ratification
Vote FOR shareholder proposals to submit executive severance agreements for shareholder ratification, if such proposals specify change in control events, Supplemental Executive Retirement Plans, or deferred executive compensation plans, or if ratification is required by the listing exchange.
3- Audit-Related
Auditor Ratification
Except in cases of poor accounting practices or fees for non-audit services exceed 50 percent of total auditor fees, vote FOR management proposals to ratify auditors.
In the U.S. and Canada , vote FOR ; however, consider on a CASE-BY-CASE basis if the Proxy Advisory Firm cites poor accounting practices including:
· T otal non-audit fees exceed the total of audit fees, audit-related fees, and tax compliance and preparation fees ( i.e ., non-audit services exceed 50 percent of total auditor fees) . For purposes of this review, fees deemed to be reasonable, non-recurring exceptions to the non-audit fee category ( e.g. , significant, one-time events such as those related to an IPO) shall be excluded.
· The company has failed to disclose the auditors fees broken down by category.
Vote AGAINST if the company has failed to disclose auditors fees.
Vote FOR shareholder proposals asking the company to present its auditor annually for ratification.
For all other markets , follow the Proxy Advisory Firms standards.
Consider on a CASE-BY-CASE basis if:
· The Proxy Advisory Firm raises questions of disclosure or auditor independence;
· Fees for non-audit services exceed 50 percent of total auditor fees and the company has not provided adequate rationale regarding the non-audit fees.
Vote AGAINST if the company has failed to disclose auditors fees.
Remuneration of Auditors
Vote FOR , unless there is evidence of excessive compensation relative to the size and nature of the company.
Auditor Independence
Consider shareholder proposals asking companies to prohibit their auditors from engaging in non-audit services (or capping the level of non-audit services) on a CASE-BY-CASE basis.
Audit Firm Rotation
Vote AGAINST shareholder proposals asking for mandatory audit firm rotation.
Indemnification of Auditors
Vote AGAINST the indemnification of auditors.
Independent Statutory Auditors ( Japan )
Vote AGAINST if the candidate is affiliated ( e.g. , if the nominee has worked a significant portion of his career for the company, its main bank, or one of its top shareholders.)
Consider on a CASE-BY-CASE basis bundled slates of directors.
Consider on a CASE-BY-CASE basis cases where multiple slates of statutory auditors are presented.
Vote AGAINST incumbent directors at companies implicated in scandals or exhibiting poor internal controls.
Statutory Auditors Remuneration
Vote FOR as long as the amount is not excessive (e.g., significant increases should be supported by adequate rationale and disclosure), there is no evidence of abuse, the recipients overall compensation appears reasonable, and the board and/or responsible committee meet exchange or market standards for independence.
4- Shareholder Rights and Defenses
Advance Notice for Shareholder Proposals
Vote FOR management proposals related to advance notice period requirements, provided that the period requested is in accordance with applicable law and no material governance concerns have been identified in connection with the company.
Amendments to Corporate Documents
Except to align with legislative or regulatory changes or when support is recommended by the Proxy Advisory Firm or relevant Investment Professional(s), vote AGAINST proposals seeking to remove shareholder approval requirements or otherwise remove or diminish shareholder rights, e.g. , by:
· Adding restrictive provisions;
· Removing provisions or moving them to portions of the charter not requiring shareholder approval; or
· In corporate structures such as holding companies, removing provisions in an active subsidiarys charter that provide voting rights to parent company shareholders.
This policy would also apply to proposals seeking to amend or approve corporate agreements that the Proxy Advisory Firm recommends AGAINST because a similar reduction in shareholder rights is requested.
Vote AGAINST proposals for charter amendments that support board entrenchment or may be used as an anti-takeover device (or to further anti-takeover conditions), particularly if the proposal is bundled or the board is classified.
Vote FOR proposals seeking charter or bylaw amendments to remove anti-takeover provisions.
Appraisal Rights
Vote FOR proposals to restore, or provide shareholders with, rights of appraisal.
Article and Bylaw Amendments
Consider on a CASE-BY-CASE basis all proposals seeking adoption of, or amendments to, the articles of association, bylaws, or related board policies.
Vote FOR the proposal if:
· The change or policy is editorial in nature;
· Shareholder rights are protected;
· There is negligible or positive impact on shareholder value;
· Management provides adequate reasons for the amendments or the Proxy Advisory Firm otherwise supports managements position;
· It seeks to discontinue and/or delist a form of the companys securities when the relevant Fund does not hold the affected security type;
· Notice or disclosure requirements are reasonable; or
· The company is required to do so by law (if applicable).
Vote AGAINST the proposal if:
· It removes or lowers quorum requirements for board or shareholder meetings below levels recommended by the Proxy Advisory Firm;
· Restrict shareholders ability to vote on directors;
· It reduces relevant disclosure to shareholders;
· It seeks to align the articles with provisions of another proposal not supported by these Guidelines;
· It is not supported under these Guidelines, is presented within a bundled proposal, and the negative impact, on balance, outweighs any positive impact; or
· It imposes a negative impact on existing shareholder rights, including rights of the Funds, or diminishes accountability to shareholders to the extent that any positive impact would not be deemed to be sufficient to outweigh removal or diminution of such rights.
With respect to article amendments for Japanese companies:
· Vote FOR management proposals to amend a companys articles to expand its business lines.
· Vote FOR management proposals to amend a companys articles to provide for an expansion or reduction in the size of the board, unless the expansion/reduction is clearly disproportionate to the growth/decrease in the scale of the business or raises anti-takeover concerns.
· If anti-takeover concerns exist, vote AGAINST management proposals, including bundled proposals, to amend a companys articles to authorize the Board to vary the annual meeting record date or to otherwise align them with provisions of a takeover defense.
· Follow the Proxy Advisory Firms guidelines with respect to management proposals regarding amendments to authorize share repurchases at the boards discretion, voting AGAINST proposals unless there is little to no likelihood of a creeping takeover or constraints on liquidity (free float of shares is low), and where the company is trading at below book value or is facing a real likelihood of substantial share sales; or where this amendment is bundled with other amendments which are clearly in shareholders interest.
Majority Voting Standard
Vote FOR proposals seeking election of directors by the affirmative vote of the majority of votes cast in connection with a meeting of shareholders, provided they contain a plurality carve-out for contested elections, and provided such standard does not conflict with state law in which the company is incorporated.
Vote FOR amendments to corporate documents or other actions promoting a majority standard. (See also Section 8. Mutual Fund Proxies.)
Cumulative Voting
Vote FOR shareholder proposals to restore or permit cumulative voting.
Vote AGAINST management proposals to eliminate cumulative voting if:
· The company is controlled;
· Maintains a classified board of directors; or
· Maintains a dual class voting structure.
Proposals may be supported irrespective of classification if a company plans to declassify its board or adopt a majority voting standard.
Confidential Voting
Vote FOR management proposals to adopt confidential voting.
Vote FOR shareholder proposals that request companies to adopt confidential voting, use independent tabulators, and use independent inspectors of election as long as the proposals include clauses for proxy contests as follows:
· In the case of a contested election, management should be permitted to request that the dissident group honor its confidential voting policy.
· If the dissidents agree, the policy remains in place.
· If the dissidents do not agree, the confidential voting policy is waived.
Fair Price Provisions
Consider proposals to adopt fair price provisions on a CASE-BY-CASE basis.
Vote AGAINST fair price provisions with shareholder vote requirements greater than a majority of disinterested shares.
Poison Pills
Consider on a CASE-BY-CASE basis management proposals to approve or ratify a poison pill or any plan or charter amendment ( e.g. , investment restrictions) that can reasonably be construed as an anti-takeover measure, with voting decisions based on the Proxy Advisory Firms approach to evaluating such proposals, considering factors such as rationale, trigger level, and sunset provisions. Votes will be cast in a manner that seeks to preserve shareholder value and the right to consider a valid offer, voting AGAINST management proposals in connection with poison pills or anti-takeover activities (e.g., disclosure requirements or issuances, transfers, or repurchases) that do not meet the Proxy Advisory Firms standards.
DO NOT VOTE AGAINST director remuneration in connection with poison pill considerations raised.
Vote FOR shareholder proposals that ask a company to submit its poison pill for shareholder ratification, or to redeem its pill in lieu thereof, unless:
· Shareholders have approved adoption of the plan;
· A policy has already been implemented by the company that should reasonably prevent abusive use of the pill; or
· The board had determined that it was in the best interest of shareholders to adopt a pill without delay, provided that such plan would be put to shareholder vote within twelve months of adoption or expire, and if not approved by a majority of the votes cast, would immediately terminate.
Consider on a CASE-BY-CASE basis shareholder proposals to redeem a companys poison pill.
Proxy Access
Consider on a CASE-BY-CASE basis proposals to provide shareholders with access to managements proxy material in order to nominate their own candidates(s) to the board, factoring in considerations such as whether significant or multiple corporate governance concerns have been identified.
Vote FOR management proposals also supported by the Proxy Advisory Firm.
Quorum Requirements
Consider on a CASE-BY-CASE basis proposals to lower quorum requirements for shareholder meetings below a majority of the shares outstanding.
Reincorporation Proposals
Consider proposals to change a companys state of incorporation on a CASE-BY-CASE basis. Vote FOR management proposals not assessed as:
· A potential takeover defense; or
· A significant reduction of minority shareholder rights that outweigh the aggregate positive impact, but if so assessed, weighing managements rationale for the change.
Vote FOR management reincorporation proposals upon which another key proposal, such as a merger transaction, is contingent if the other key proposal is also supported.
Vote AGAINST shareholder reincorporation proposals not also supported by the company.
Shareholder Advisory Committees
Consider on a CASE-BY-CASE basis proposals to establish a shareholder advisory committee.
Shareholder Ability to Call Special Meetings
Vote FOR shareholder proposals that provide shareholders with the ability to call special meetings when either of the:
· Company does not currently permit shareholders to do so;
· Existing ownership threshold is greater than 25 percent; or
· Sole concern relates to a net-long position requirement.
Written Consent
Vote AGAINST shareholder proposals seeking the right to act by written consent if the company:
· Permits shareholders to call special meetings;
· Does not impose supermajority vote requirements; and
· Has otherwise demonstrated its accountability to shareholders ( e.g. , the company has reasonably addressed majority-supported shareholder proposals).
Consider management proposals to eliminate the right to act by written consent on a CASE-BY-CASE basis, voting FOR if the above conditions are present.
Vote FOR shareholder proposals seeking the right to act by written consent if the above conditions are not present.
Consider management proposals to permit shareholders to call special meetings on a CASE-BY-CASE basis.
State Takeover Statutes
Consider on a CASE-BY-CASE basis proposals to opt-in or out of state takeover statutes (including control share acquisition statutes, control share cash-out statutes, freezeout provisions, fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions, anti-greenmail provisions, and disgorgement provisions).
Supermajority Shareholder Vote Requirement
Vote AGAINST proposals to require a supermajority shareholder vote and FOR proposals to lower supermajority shareholder vote requirements.
Consider on a CASE-BY-CASE basis if the company has shareholder(s) with significant ownership levels and the retention of existing supermajority requirements in order to protect minority shareholder interests.
Time-Phased Voting
Vote AGAINST proposals to implement, and FOR proposals to eliminate, time-phased or other forms of voting that do not promote a one share, one vote standard.
Unequal Voting Rights
Vote AGAINST dual-class exchange offers and dual-class recapitalizations.
White Squire Placements
Vote FOR shareholder proposals to require approval of blank check preferred stock issues for other than general corporate purposes.
5- Capital and Restructuring
Consider management proposals to make changes to the capital structure not otherwise addressed under these Guidelines on a CASE-BY-CASE basis, voting with the Proxy Advisory Firms recommendation unless a contrary recommendation from the relevant Investment Professional(s) is utilized.
Capital
Common Stock Authorization
Consider proposals to increase the number of shares of common stock authorized for issuance on a CASE-BY-CASE basis. The Proxy Advisory Firms proprietary approach of determining appropriate thresholds will be utilized in evaluating such proposals. In cases where the requests are above the allowable threshold, a company-specific qualitative review ( e.g. , considering rationale and prudent historical usage) will be utilized.
Vote FOR proposals within the Proxy Advisory Firms allowable thresholds, or those in excess but meeting Proxy Advisory Firms qualitative standards, to authorize capital increases, unless the company states that the stock may be used as a takeover defense.
Vote FOR proposals to authorize capital increases exceeding the Proxy Advisory Firms thresholds when a companys shares are in danger of being delisted or if a companys ability to continue to operate as a going concern is uncertain.
Notwithstanding the above, vote AGAINST :
· Proposals to increase the number of authorized shares of a class of stock if the issuance which the increase is intended to service is not supported under these Guidelines ( e.g. , merger or acquisition proposals).
· Nonspecific proposals authorizing excessive discretion to a board.
Dual Class Capital Structures
Vote AGAINST :
· Proposals to create or perpetuate dual class capital structures unless supported by the Proxy Advisory Firm ( e.g. , to avert bankruptcy or generate non-dilutive financing, and not designed to increase the voting power of an insider or significant shareholder).
· Proposals to increase the number of authorized shares of the class of stock that has superior voting rights in companies that have dual class capital structures.
However, consider such proposals CASE-BY-CASE if:
· Bundled with favorable proposal(s);
· Approval of such proposal(s) is a condition of such favorable proposal(s); or
· Part of a recapitalization for which support is recommended by the Proxy Advisory Firm or relevant Investment Professional (s).
Consider management proposals to eliminate or make changes to dual class capital structures on a
CASE-BY-CASE basis, voting with the Proxy Advisory Firms recommendation.
Vote FOR shareholder proposals to eliminate dual class capital structures unless the relevant Fund owns a class with superior voting rights.
General Share Issuances ( International )
Consider specific issuance requests on a CASE-BY-CASE basis based on the proposed use and the companys rationale.
Vote AGAINST requests to reissue repurchased shares unless a related general issuance request is supported.
Voting decisions to determine support for general issuance requests (with or without preemptive rights), or related requests to repurchase and reissue shares, shall be based on the following, as identified by the Proxy Advisory Firm:
· Their amount relative to currently issued capital;
· Appropriate volume and duration parameters; and
· Market-specific considerations ( e.g. , priority right protections in France , reasonable levels of dilution and discount in Hong Kong ).
Vote AGAINST proposals to issue shares (with or without preemptive rights), convertible bonds, or warrants, to grant rights to acquire shares, or to amend the corporate charter relative to such issuances or grants when concerns have been identified by the Proxy Advisory Firm with respect to:
· Inadequate disclosure;
· Inadequate restrictions on discounts;
· Failure to meet the Proxy Advisory Firms standards for general issuance requests; or
· Authority to refresh share issuance amounts without prior shareholder approval.
Vote AGAINST nonspecific proposals authorizing excessive discretion to a board.
Increases in Authorized Capital ( International )
Unless otherwise provided for herein, voting decisions should be based on the Proxy Advisory Firms approach, as follows.
Vote FOR :
· Nonspecific proposals, including bundled proposals, to increase authorized capital up to 100 percent over the current authorization unless the increase would leave the company with less than 30 percent of its new authorization outstanding.
· Specific proposals to increase authorized capital, unless:
· The specific purpose of the increase (such as a share-based acquisition or merger) does not meet these Guidelines for the purpose being proposed; or
· The increase would leave the company with less than 30 percent of its new authorization outstanding after adjusting for all proposed issuances.
Vote AGAINST proposals to adopt unlimited capital authorizations or the proposal allows the board excessive discretion.
Preemptive Rights
Consider on a CASE-BY-CASE basis shareholder proposals that seek preemptive rights or management proposals that seek to eliminate them. In evaluating proposals on preemptive rights, consider the size of a company and the characteristics of its shareholder base.
Adjustments to Par Value of Common Stock
Vote FOR management proposals to reduce the par value of common stock, unless doing so raises other concerns not otherwise supported under these Guidelines.
Preferred Stock
Utilize the Proxy Advisory Firms approach for evaluating issuances or authorizations of preferred stock, taking into account the Proxy Advisory Firms support of special circumstances, such as mergers or acquisitions, as well as the following criteria:
Consider proposals to increase the number of shares of preferred stock authorized for issuance on a CASE-BY-CASE basis. This approach incorporates both qualitative and quantitative measures, including a review of:
· Past performance ( e.g. , board governance, shareholder returns and historical share usage); and
· The current request ( e.g. , rationale, whether shares are blank check and declawed, and dilutive impact as determined through the Proxy Advisory Firms proprietary model for assessing appropriate thresholds).
Vote AGAINST proposals authorizing the issuance of preferred stock or creation of new classes of preferred stock with unspecified voting, conversion, dividend distribution, and other rights (blank check preferred stock).
Vote FOR proposals to issue or create blank check preferred stock in cases when the company expressly states that the stock will not be used as a takeover defense.
Vote AGAINST where the company expressly states that, or fails to disclose whether, the stock may be used as a takeover defense.
Vote FOR proposals to authorize or issue preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable.
Consider on a CASE-BY-CASE basis proposals to increase the number of blank check preferred shares after analyzing the number of preferred shares available for issue given a companys industry and performance in terms of shareholder returns.
Preferred Stock ( International )
Voting decisions should generally be based on the Proxy Advisory Firms approach, including:
· Vote FOR the creation of a new class of preferred stock or issuances of preferred stock up to 50 percent of issued capital unless the terms of the preferred stock would adversely affect the rights of existing shareholders.
· Vote FOR the creation/issuance of convertible preferred stock as long as the maximum number of common shares that could be issued upon conversion meets the Proxy Advisory Firms guidelines on equity issuance requests.
· Vote AGAINST the creation of:
(1) a new class of preference shares that would carry superior voting rights to the common shares, or
(2) blank check preferred stock, unless the board states that the authorization will not be used to thwart a takeover bid.
Shareholder Proposals Regarding Blank Check Preferred Stock
Vote FOR shareholder proposals to have blank check preferred stock placements, other than those shares issued for the purpose of raising capital or making acquisitions in the normal course of business, submitted for shareholder ratification.
Share Repurchase Programs
Vote FOR management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms, but vote AGAINST plans with terms favoring selected parties.
Vote FOR management proposals to cancel repurchased shares.
Vote AGAINST proposals for share repurchase methods lacking adequate risk mitigation or exceeding appropriate volume or duration parameters for the market.
Consider shareholder proposals seeking share repurchase programs on a CASE-BY-CASE basis, with input from the relevant Investment Professional(s) to be given primary consideration.
Stock Distributions: Splits and Dividends
Vote FOR management proposals to increase common share authorization for a stock split, provided that the increase in authorized shares falls within the Proxy Advisory Firms allowable thresholds.
Reverse Stock Splits
Consider on a CASE-BY-CASE basis management proposals to implement a reverse stock split.
In the event the split constitutes a capital increase effectively exceeding the Proxy Advisory Firms allowable threshold because the request does not proportionately reduce the number of shares authorized, consider managements rationale and/or disclosure, voting FOR , but not supporting additional requests for capital increases on the same agenda.
Allocation of Income and Dividends ( International )
With respect to Japanese companies, consider management proposals concerning allocation of income and the distribution of dividends, including adjustments to reserves to make capital available for such purposes, on a CASE-BY-CASE basis, voting with the Proxy Advisory Firms recommendations to support such proposals unless:
· The dividend payout ratio has been consistently below 30 percent without adequate explanation; or
· The payout is excessive given the companys financial position.
Vote FOR such proposals by companies in other markets.
Vote AGAINST proposals where companies are seeking to establish or maintain disparate dividend distributions between stockholders of the same share class ( e.g ., long-term stockholders receiving a higher dividend ratio (Loyalty Dividends)).
In any market, in the event multiple dividend proposals are on the same agenda, consider on a CASE-BY-CASE basis.
Stock (Scrip) Dividend Alternatives ( International )
Vote FOR most stock (scrip) dividend proposals, but vote AGAINST proposals that do not allow for a cash option unless management demonstrates that the cash option is harmful to shareholder value.
Tracking Stock
Consider the creation of tracking stock on a CASE-BY-CASE basis, with primary consideration given to input from the relevant Investment Professional(s).
Capitalization of Reserves ( International )
Vote FOR proposals to capitalize the companys reserves for bonus issues of shares or to increase the par value of shares, unless concerns not otherwise supported under these Guidelines are raised by the Proxy Advisory Firm.
Debt Instruments and Issuance Requests ( International )
Vote AGAINST proposals authorizing excessive discretion to a board to issue or set terms for debt instruments ( e.g. , commercial paper).
Vote FOR debt issuances for companies when the gearing level (current debt-to-equity ratio) is between zero and 100 percent.
Consider on a CASE-BY-CASE basis proposals where the issuance of debt will result in the gearing level being greater than 100 percent, or for which inadequate disclosure precludes calculation of the gearing level, comparing any such proposed debt issuance to industry and market standards, and with voting decisions based on the Proxy Advisory Firms approach to evaluating such requests.
Debt Restructurings
Consider on a CASE-BY-CASE basis proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan.
Financing Plans ( International )
Vote FOR the adoption of financing plans if they are in the best economic interests of shareholders.
Investment of Company Reserves ( International )
Consider proposals on a CASE-BY-CASE basis.
Restructuring
Mergers and Acquisitions
Vote FOR a proposal not typically supported under these Guidelines if a key proposal, such as a merger transaction, is contingent upon its support and a vote FOR is recommended by the Proxy Advisory Firm or relevant Investment Professional(s).
Votes on mergers and acquisitions will be reviewed a CASE-BY-CASE basis with voting decisions based on the Proxy Advisory Firms approach to evaluating such proposals if no input is provided by the relevant Investment Professional(s).
Corporate Restructurings
Votes on corporate restructuring proposals should be considered on a CASE-BY-CASE basis. Such proposals include, but are not limited to:
· Demergers
· Minority squeezeouts
· Leveraged buyouts
· Spinoffs
· Liquidations
· Dispositions
· Divestitures
· Asset sales
Waiver on Tender-Bid Requirement ( International )
Consider proposals on a CASE-BY-CASE basis seeking a waiver for a major shareholder or concert party from the requirement to make a buyout offer to minority shareholders, voting FOR when little concern of a creeping takeover exists and the company has provided a reasonable rationale for the request.
Related Party Transactions ( International )
Consider related party transactions on a CASE-BY-CASE basis.
Vote FOR approval of such transactions unless the agreement requests a strategic move outside the companys charter, contains unfavorable or high-risk terms ( e.g. , deposits without security interest or guaranty), or is deemed likely to have a negative impact on director or related party independence.
6- Environmental and Social Issues
Environmental and Social Proposals
Boards of directors and company management are responsible for guiding the corporation in connection with matters that are most often the subject of shareholder proposals on environmental and social issues. Such matters may include:
· Ensuring that the companies they oversee comply with applicable legal, regulatory and ethical standards;
· Effectively managing risk, and
· Assessing and addressing matters that may have a financial impact on shareholder value.
The Funds will vote in accordance with the boards recommendation on such proposals based on the guidelines below.
The Funds will vote AGAINST shareholder proposals seeking to:
· Dictate corporate conduct;
· Impose excessive costs or restrictions;
· Duplicate policies already substantially in place; or
· Release information that would not help a shareholder evaluate an investment in the corporation as an economic matter.
Certain instances will be considered CASE-BY-CASE . If it appears that both:
(1) The stewardship has fallen short as evidenced by the companys failure to align its actions and disclosure with market practice and that of its peers; or the companys having been subject to significant controversies, litigation, fines, or penalties in connection with the relevant issue; and
(2) The issue is material to the company.
Approval of Donations (International)
Vote FOR proposals if they are for single- or multi-year authorities and prior disclosure of amounts is provided. Otherwise, vote AGAINST such proposals.
7- Routine/Miscellaneous
Routine Management Proposals
Vote FOR routine management proposals unless the Proxy Advisory Firm recommends voting AGAINST, prompting a CASE-BY-CASE consideration.
Authority to Call Shareholder Meetings on Less than 21 Days Notice
For companies in the United Kingdom , consider on a CASE-BY-CASE basis, factoring in whether the company has provided clear disclosure of its compliance with any hurdle conditions for the authority imposed by applicable law and has historically limited its use of such authority to time-sensitive matters.
Approval of Financial Statements and Director and Auditor Reports (International)
Vote AGAINST if there are concerns regarding inadequate disclosure, remuneration arrangements (including severance/termination payments exceeding local standards for multiples of annual compensation), or consulting agreements with non-executive directors.
Consider on a CASE-BY-CASE basis if there are other concerns regarding severance/termination payments.
Vote AGAINST if there is concern about the companys financial accounts and reporting, including related party transactions.
Vote AGAINST board-issued reports receiving a negative recommendation from the Proxy Advisory Firm due to concerns regarding independence of the board or the presence of non-independent directors on the audit committee.
Vote FOR if the only reason for a negative recommendation by the Proxy Advisory Firm is to express disapproval of broader practices of the company or its board.
Other Business
Vote AGAINST proposals for Other Business, unless the company has provided adequate disclosure regarding the matters to be raised under Other Business. Consider such instances CASE-BY-CASE .
Adjournment
These items often appear on the same agenda as a primary proposal, such as a merger or corporate restructuring.
· Vote FOR when the primary proposal is also supported.
· If there is no primary proposal, vote FOR if all other proposals are supported and AGAINST if all other proposals are opposed.
· Consider other circumstances on a CASE-BY-CASE basis.
Changing Corporate Name
Vote FOR proposals requesting a change in corporate name.
Multiple Proposals
Multiple proposals of a similar nature presented as options to the course of action favored by management may all be voted FOR , provided that:
· Support for a single proposal is not operationally required;
· No one proposal is deemed superior in the interest of the Fund(s); and
· Each proposal would otherwise be supported under these Guidelines.
Vote AGAINST any proposals that would otherwise be opposed under these Guidelines.
Bundled Proposals
Vote FOR if all of the bundled items are supported by these Guidelines.
Vote AGAINST if one or more items are not supported by these Guidelines, and if the Proxy Advisory Firm deems the negative impact, on balance, to outweigh any positive impact.
Moot Proposals
This instruction is in regard to items for which support has become moot (e.g., an incentive grant to a person no longer employed by the company); WITHHOLD support if recommended by the Proxy Advisory Firm.
8- Mutual Fund Proxies
Approving New Classes or Series of Shares
Vote FOR the establishment of new classes or series of shares.
Authorizing the Board to Hire and Terminate Sub-Advisers Without or Without Shareholder Approval
Vote FOR these proposals.
Master-Feeder Structure
Vote FOR the establishment of a master-feeder structure.
Establish Director Ownership Requirement
Vote AGAINST shareholder proposals for the establishment of a director ownership requirement.
The matters below should be examined on a CASE-BY-CASE basis:
· Election of Directors
· Converting Closed-end Fund to Open-end Fund
· Proxy Contests
· Investment Advisory Agreements
· Preferred Stock Proposals
· 1940 Act Policies
· Changing a Fundamental Restriction to a Non-fundamental Restriction
· Change Fundamental Investment Objective to Non-fundamental
· Name Rule Proposals
· Disposition of Assets/Termination/Liquidation
· Changes to the Charter Document
· Changing the Domicile of a Fund
· Change in Funds Sub-classification
· Distribution Agreements
· Mergers
· Reimburse Shareholder for Expenses Incurred
· Terminate the Investment Adviser
· Majority Voting Proposals.
PART C
OTHER INFORMATION
Voya Prime Rate Trust
(25,000,000 Common Shares)
Item 25. Financial Statements and Exhibits
1 . Financial Statements
Contained in Part A:
Financial Highlights for the years ended [February 28, 2015], February 28 2014, and 2013, February 29, 2012, February 28, 2011, 2010, and 2009, February 29, 2008, February 28, 2007, and 2006.
Financial Statements are incorporated in Part B by reference to Registrants [February 28, 2015] annual shareholder report (audited).
2. Exhibits
(a) 1. Agreement and Declaration of Trust dated December 2, 1987.(1)
(i) Amendment to the Agreement and Declaration of Trust dated March 26, 1996 and effective April 12, 1996.(1)
(ii) Amendment to the Agreement and Declaration of Trust dated October 23, 1998 and effective November 16, 1998.(7)
(iii) Amendment to the Agreement and Declaration of Trust dated October 20, 2000 and effective October 20, 2000.(9)
(iv) Amendment to the Agreement and Declaration of Trust dated February 20, 2002 and effective March 1, 2002.(10)
(v) Amendment to the Agreement and Declaration of Trust dated June 11, 2010.(20)
(vi) Amendment to the Agreement and Declaration of Trust dated January 23, 2014.(24)
(b) 1. By-Laws adopted at a meeting of the Board of Trustees on December 2, 1987.(15)
(i) Amendment dated June 18, 1997 to By-Laws, amends paragraph 3.5 and 3.6 of Article 3.(2)
(ii) Amendment adopted on August 2, 1999 to By-Laws amends Section 11.5 of Article 11.(8)
(iii) Amendment adopted on July 26, 2000 to By-Laws, amends Section 11.1 and 11.3 of Article 11.(9)
(iv) Amendment adopted on November 10, 2005 to By-Laws, amends Section 11.5 of Article 11.1(5)
(c) Not Applicable
(d) 1. Form of Certificate of Designation for Preferred Shares dated October 20, 2000.(20)
2. Form of Share Certificate.(9)
3. Certificate Evidencing the Termination of the Certificate of Designation for Preferred Shares dated June 28, 2012. (23)
(e) Shareholder Reinvestment Program effective November, 2009 Filed herein.
(f) Not Applicable
(g)
1. Investment Management Agreement between Voya Investments, LLC and Voya Prime Rate Trust dated November 28, 2014 Filed herein.
2. Sub-Advisory Agreement between Voya Investments, LLC and Voya Investment Management Co. LLC dated November 28, 2014 Filed herein.
(h)
1. Distribution Agreement between Voya Prime Rate Trust and Voya Investments Distributor, LLC (25 Million Shares) dated November 18, 2014 Filed herein.
2. Underwriting Agreement for the Preferred Shares dated November 13, 2000.(12)
(i) Underwriting Agreement for the Preferred Shares dated October 30, 2000.(12)
(i) Not Applicable
(j)
1. Custodian and Investment Accounting Agreement between Registrant and State Street Bank and Trust Company effective November 1, 2001.(12)
(i) First Amendment dated March 1, 2002 to the Custodian and Investment Accounting Agreement.(12)
(ii) Amended and Restated Exhibit A effective November 22, 2002 with respect to the Custodian and Investment Accounting Agreement.(12)
(iii) Second Amendment dated October 1, 2007 to the Custodian and Investment Accounting Agreement.(16)
(iv) Third Amendment dated August 2, 2010 to the Custodian and Investment Accounting Agreement.(20)
2. Fee Allocation Agreement (FT Interactive) dated August 21, 2003.(12)
(i) Amended Schedule A dated May 2013 to the FT Fee Allocation Agreement. (23)
3. Amended and Restated Proxy Agent Fee Allocation Agreement dated January 1, 2008 amends and restates the Proxy Agent Allocation Agreement dated August 21, 2003. (22)
(i) Amended Schedule A dated May 2013 to the Amended and Restated ISS Proxy Agent Fee Allocation Agreement. (23)
(ii) Schedule B dated June 30, 2003 to Amended and Restated ISS Proxy Agent Fee Allocation Agreement.(15)
4. Allocation Agreement Fidelity Bond made May 24, 2002.(12)
(i) Amended Schedule A dated May 2007 with respect to the Allocation Agreement (Blanket Bond) dated January 2005.(15)
5. Allocation Agreement Directors & Officers Liability made May 24, 2002.(12)
(i) Amended Schedule A dated September 12, 2013 with respect to the Allocation Agreement Directors & Officers Liability.(24)
6. Transfer Agency Services Agreement dated February 25, 2009 PNC Global Investment Servicing (U.S.) Inc., (PNC) and Voya Prime Rate Trust.(17)
(i) Amended Schedule A dated March 28, 2013 to the Transfer Agency Services Agreement between PNC Global Investment Servicing (U.S.) Inc. and Voya Prime Rate Trust. (23)
(ii) Amendment dated February 8, 2011 to Transfer Agency Services Agreement between BNY Mellon Investment Servicing (US) Inc. (formerly, PNC) and Voya Prime Rate Trust.(21)
(k)
1. Administration Agreement dated January 1, 2015 Filed herein.
2. Revolving Credit and Security Agreement between Voya Prime Rate Trust and Citibank dated July 16, 2003.(12)
(i) Amendment No. 1 to the Revolving Credit and Security Agreement dated February 3, 2004.(12)
(ii) Amendment No. 2 to the Revolving Credit and Security Agreement dated July 13, 2004.(13)
(iii) Amendment No. 3 to the Revolving Credit and Security Agreement dated October 15, 2004.(13)
3. Second Amended and Restated Credit Agreement with Bank of America.(12)
4. Auction Agency Agreement dated November 16, 2000.(12)
(i) Auction Agency Agreement dated November 2, 2000.(12)
5. Broker-Dealer Agreement (UBS) dated November 16, 2000.(12)
(i) Broker-Dealer Agreement (Salomon Smith Barney) dated November 16, 2000.(12)
(ii) Broker-Dealer Agreement, dated November 16, 2000 (Lehman Brothers).(12)
(iii) Broker-Dealer Agreement (Gruntal & Co.) dated November 16, 2000.(12)
(iv) Broker-Dealer Agreement (PaineWebber) dated November 2, 2000.(12)
(v) Broker-Dealer Agreement (Gruntal & Co.) dated November 2, 2000.(12)
(vi) Broker-Dealer Agreement (Salomon Smith Barney) dated November 2, 2000.(12)
(vii) Broker-Dealer Agreement (Lehman Brothers) dated October 31, 2000.(12)
6. DTC Letter of Representations as to Preferred Shares dated November 15, 2000.(12)
(i) DTC Letter of Representation as to Preferred Shares dated November 1, 2000.(12)
7. Expense Limitation Agreement effective November 18, 2014 between Voya Investments, LLC and Voya Prime Rate Trust Filed herein.
(l) 1. Opinion of Ropes & Gray LLP To be filed by subsequent amendment.
(m) Not Applicable
(n) 1. Consent of Ropes & Gray LLP To be filed by subsequent amendment.
2. Consent of KPMG LLP To be filed by subsequent amendment.
(o) Not Applicable
(p) Certificate of Initial Capital.(4)
(q) Not Applicable
(r)
1. Voya Funds and Advisers Code of Ethics Amended May 2014.(24)
(1) Incorporated herein by reference to Amendment No. 20 to Registrants Registration Statement under the Investment Company Act of 1940 (the 1940 Act) on Form N-2 (File No. 811-5410), filed on September 16, 1996.
(2) Incorporated herein by reference to Amendment No. 24 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on November 7, 1997.
(3) Incorporated herein by reference to Amendment No. 22 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on June 23, 1997.
(4) Incorporated herein by reference to Pre-Effective Amendment No. 1 to Registrants initial registration statement on form N-2 (File No. 33-18886), filed on January 22, 1988.
(5) Incorporated herein by reference to Amendment No. 27 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on May 15, 1998.
(6) Incorporated herein by reference to Amendment No. 28 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on August 19, 1998.
(7) Incorporated herein by reference to Amendment No. 29 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on December 2, 1998.
(8) Incorporated herein by reference to Amendment No. 33 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on May 9, 2000.
(9) Incorporated herein by reference to Amendment No. 38 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on October 23, 2000.
(10) Incorporated herein by reference to Amendment No. 45 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on April 30, 2002.
(11) Incorporated herein by reference to Amendment No. 53 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on June 26, 2003.
(12) Incorporated herein by reference to Amendment No. 58 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on June 28, 2004.
(13) Incorporated herein by reference to Amendment No. 61 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on June 30, 2005.
(14) Incorporated herein by reference to Amendment No. 65 to Registrants Registration Statement under the 1940 Act on Form N-2 (File No. 811-5410), filed on June 30, 2006.
(15) Incorporated herein by reference to Amendment No. 69 to Registrants Registration Statement under the 1940 Act on Form N-2 (file No. 811-5410), filed on June 29, 2007.
(16) Incorporated herein by reference to Amendment No. 73 to Registrants Registration Statement under the 1940 Act on Form N-2 (file No. 811-5410), filed on June 27, 2008.
(17) Incorporated herein by reference to Amendment No. 79 to Registrants Registration Statement under the 1940 Act on Form N-2 (file No. 811-5410), filed on August 13, 2009.
(18) Incorporated herein by reference to Amendment No. 81 to Registrants Registration Statement under the 1940 Act on Form N-2 (file No. 811-5410), filed on April 22, 2010.
(19) Incorporated herein by reference to Amendment No. 83 to Registrants Registration Statement under the 1940 Act on Form N-2 (file No. 811-5410), filed on June 28, 2010.
(20) Incorporated herein by reference to Amendment No. 85 to the Registrants Registration Statement under the 1940 Act on Form N-2 (file No. 811-5410), filed on April 27, 2011.
(21) Incorporated herein by reference to Amendment No. 87 to the Registrants Registration Statement under the 1940 Act on Form N-2 (file No. 811-5410), filed on June 28, 2011.
(22) Incorporated herein by reference to Amendment No. 92 to the Registrants Registration Statement under the 1940 Act on Form N-2 (file No. 811-5410), filed on June 27, 2012.
(23) Incorporated herein by reference to Amendment No. 96 to the Registrants Registration Statement under the 1940 Act on Form N-2 (file No. 811-5410), filed on June 21, 2013.
(24) Incorporated herein by reference to Amendment No. 100 to the Registrants Registration Statement under the 1940 Act on Form N-2 (filed No. 811-5410), filed on June 24, 2014.
Item 26. Marketing Agreements
Not Applicable.
Item 27. Other Expenses of Issuance and Distribution
Not Applicable.
Item 28. Persons Controlled by or Under Common Control
Not Applicable.
Item 29. Number of Holders of Securities
(1) Title of Class |
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(2) Number of Record Holders
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Common Shares of beneficial interest, par value $0.01 per share |
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Item 30. Indemnification
Registrants Agreement and Declaration of Trust generally provides that the Trust shall indemnify each of its Trustees and officers (including persons who serve at the Trusts request as directors, officers, or trustees of another organization in which the Trust has any interest as a shareholder, creditor, or otherwise) (Covered Persons) against all liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees reasonably incurred in connection with the defense or disposition of any action, suit, or other proceeding, whether civil or criminal, by reason of being or having been such a Covered Person except with respect to any matter as to which such Covered Person shall have been finally adjudicated: (a) not to have acted in good faith in the reasonable
belief that such Covered Persons action was in the best interest of the Trust; or (b) to be liable to the Trust or its shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of duties involved in the conduct of such Covered Persons office.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to Trustees, officers, and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of the Registrant of expenses incurred or paid by a Trustee, officer, or controlling person of the Registrant in the successful defense of any action, suit, or proceeding) is asserted by such Trustee, officer, or controlling person in connection with the securities being registered, the Registrant will submit, unless in the opinion of its counsel the matter has been settled by controlling precedent, to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Item 31. Business and Other Connections of Investment Adviser
Information as to the Trustees and officers of the Adviser, together with information as to any other business, profession, vocation, or employment of a substantial nature engaged in by the directors and officers of the Adviser in the last two years, is included in its application for registration as an investment adviser on Form ADV (File No. 801-48282) filed under the Investment Advisers Act of 1940, as amended (Advisers Act), and is incorporated herein by reference thereto.
Information as to the directors and officers of the sub-adviser, together with information as to any other business, profession, vocation, or employment of a substantial nature engaged in by the directors and officers of the sub-adviser in the last two years, is included in its application for registration as an investment adviser on Form ADV for Voya Investment Management Co. LLC (File No. 801-9046) filed under the Investment Adviser Act of 1940, as amended, and is incorporated by reference thereto.
Item 32. Location of Accounts and Records
The amounts and records of the Registrant will be maintained at its office at 7337 E. Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258, at the office of its sub-adviser, Voya Investment Management Co. LLC, 230 Park Avenue, New York, NY 10169, and at the office of its custodian, State Street Bank & Trust, 801 Pennsylvania, Kansas City, Missouri 64105.
Item 33. Management Services
Not Applicable.
Item 34. Undertakings
1. The Registrant undertakes to suspend the Offer until the prospectus is amended if: (a) subsequent to the effective date of this registration statement, the net asset value declines more than ten percent from its net asset value as of the effective date of this registration statement; or (b) the net asset value increases to an amount greater than the net proceeds as stated in the prospectus included in this registration statement.
2. Not Applicable.
3. Not Applicable.
4. The Registrant undertakes:
a. to file, during any period in which offers or sales are being made, a post-effective amendment to the registration statement: (i) to include any prospectus required by Section 10(a)(3) of the 1933 Act; (ii) to reflect in the prospectus any facts or events after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
b. that, for the purpose of determining any liability under the 1933 Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of those securities at that time shall be deemed to be the initial bona fide offering thereof; and
c. to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; and
d. Not Applicable
e. that, for the purpose of determining liability of the Registrant under the 1933 Act to any purchaser in the initial distribution of securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to the purchaser: (i) any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 497 under the 1933 Act; (ii) the portion of any advertisement pursuant to Rule 482 under the 1933 Act relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and (iii) any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
5.
a. The Registrant undertakes that for the purpose of determining any liability under the 1933 Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant under Rule 497(h) under the 1933 Act [17 CFR 230.497(h)] shall be deemed to be part of this Registration Statement as of the time it was declared effective; and
b. that for the purpose of determining any liability under the 1933 Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof.
6. The Registrant undertakes to send by first class mail or other means designed to ensure equally prompt delivery, within two business days of receipt of a written or oral request, any Statement of Additional Information.
SIGNATURES
Pursuant to requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale and State of Arizona on the 24th day of April, 2015.
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VOYA PRIME RATE TRUST |
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By: |
/s/ Huey P. Falgout, Jr. |
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Huey P. Falgout, Jr. |
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Secretary |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated:
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Interested Trustee and President and Chief Executive Officer |
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April 24, 2015 |
Shaun P. Mathews* |
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Senior Vice President, Chief/Principal Financial Officer |
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April 24, 2015 |
Todd Modic* |
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Trustee |
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April 24, 2015 |
Colleen D. Baldwin* |
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Trustee |
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April 24, 2015 |
John V. Boyer* |
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Trustee |
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April 24, 2015 |
Patricia W. Chadwick* |
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Trustee |
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April 24, 2015 |
Albert E. DePrince, Jr.* |
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Trustee |
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April 24, 2015 |
Peter S. Drotch* |
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Trustee |
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April 24, 2015 |
Russell H. Jones* |
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Trustee |
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April 24, 2015 |
Patrick W. Kenny* |
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Trustee |
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April 24, 2015 |
Joseph E. Obermeyer* |
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Trustee |
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April 24, 2015 |
Sheryl K. Pressler* |
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Trustee |
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April 24, 2015 |
Roger B. Vincent* |
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* By: |
/s/ Huey P. Falgout, Jr. |
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Huey P. Falgout, Jr. |
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Attorney-in-Fact** |
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** Powers of Attorney for Shaun P. Mathews, Todd Modic and each Trustee dated May 22, 2013 were filed as attachments to Amendment No. 96 to the Registrants Registration Statement under the 1940 Act on Form N-2 (file No. 811-5410), filed on June 21, 2013.
EXHIBIT INDEX
Voya Prime Rate Trust
(25,000,000 Common Shares)
EXHIBIT NUMBER |
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EXHIBIT NAME |
2(e) |
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Shareholder Reinvestment Program effective November, 2009 |
2(g)1 |
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Investment Management Agreement between Voya Investments, LLC and Voya Prime Rate Trust dated November 18, 2014 |
2(g)2 |
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Sub-Advisory Agreement between Voya Investments, LLC and Voya Investment Management Co. LLC dated November 18, 2014 |
2(h)1 |
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Distribution Agreement between Voya Prime Rate Trust and Voya Investments Distributor, LLC (25 Million Shares) dated November 18, 2014 |
2(k)1 |
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Administration Agreement dated January 1, 2015 |
2(k)7 |
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Expense Limitation Agreement effective November 18, 2014 between Voya Investments, LLC and Voya Prime Rate Trust |
Exhibit 2(e)
ING PRIME RATE TRUST
SHAREHOLDER REINVESTMENT PROGRAM
PURPOSE
The purpose of the ING Prime Rate Trust Shareholder Reinvestment Program (the Program) is to provide shareholders of ING Prime Rate Trust (the Trust) with a convenient and economical way to purchase common shares of the Trust (Shares) and to reinvest their cash dividends from the Trust in additional Shares.
ADMINISTRATION
The Program is administered by PNC Global Investment Servicing (U.S.) Inc. (the Administrator), which also serves as the Trusts transfer agent and dividend disbursing agent. As Administrator, PNC Global Investment Servicing (U.S.) Inc. acts as agent for Program participants, purchases and holds Shares acquired under the Program, keeps records, sends confirmations of account activity to participants, and performs other duties related to the Program as provided herein.
IMPORTANT CONTACTS
Administrator : |
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Trust : |
Attention: President |
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PNC Global Investment Servicing (U.S.) Inc. |
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Shareholder Services Department |
301 Bellevue Parkway |
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Telephone: (800) 992-0180 |
Wilmington, Delaware 19809 |
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DEFINITIONS
In addition to terms otherwise defined herein, the following terms, when written with capitalized initial letters, will have the following meanings when used in this Program.
Administrator means the entity that administers the Program, currently PNC Global Investment Servicing (U.S.) Inc.
Beneficial Owner means a shareholder that beneficially owns Shares that are registered in a name other than such shareholders name (for example, where Shares are held in the name of a broker, bank or other nominee).
Broker and Nominee Form Due Date means the date upon which a Broker and Nominee Form is due for a Beneficial Owner making an optional cash investment to participate in the next OCI Investment Date. The Broker and Nominee Form Due Date is
two business days preceding the relevant OCI Pricing Period.
Dividend means dividends and capital gain distributions, if any.
Dividend Record Date means a date established by the Trust upon which the Shareholders of Record on that day will be entitled to receive the next Dividend.
Dividend Reinvestment Date means the date upon which Dividends paid to participants in the Program are invested in additional Shares. Dividend Reinvestment Dates will be set by the Trust in advance. Participants can obtain a schedule of upcoming Dividend Reinvestment Dates by calling the Trust.
DRIP means Dividend Reinvestment.
DRIP Pricing Period means the period encompassing the Valuation Date and the prior trading day.
Market Price means the volume-weighted average sales price, per Share, as reported on the New York Stock Exchange Composite Transaction Tape as shown for any day on Bloomberg screen AQR.
OCI means optional cash investment.
OCI Investment Date means the date upon which optional cash investments received on or before the relevant OCI Payment Due Date are first applied by the Administrator to the purchase of Shares. OCI Investment Dates will be set by the Trust in advance. Please refer to Attachment A for a schedule of upcoming OCI Investment Dates.
OCI Payment Due Date means the date upon which payment of any optional cash investment by a shareholder is due (by 4:00 pm Eastern time on such date) to be eligible for investment on the next OCI Investment Date. The OCI Payment Due Date is two business days preceding the relevant OCI Pricing Period.
OCI Pricing Period means a period of five business days, beginning four Trading Days prior to the Valuation Date through and including the Valuation Date.
Open Market means transactions occurring on the New York Stock Exchange, any other exchange or over-the-counter.
Shareholder of Record means a shareholder that owns Shares in his or her own name.
Trading Day means a day on which trades of the Shares are reported on the New York Stock Exchange.
Valuation Date means the date upon which it is determined, based upon the Market
Price and the net asset value of Shares on such date, whether the Administrator will purchase Shares on the Open Market or the Trust will issue the Shares for the Program.
Please refer to Attachment A for a schedule of upcoming Valuation Dates.
PARTICIPATION
Participation in the Program is open to any shareholder of the Trust. By electing to participate in the Program, a participant appoints the Administrator as his/her agent and directs the Trust to pay to the Administrator all of the participants cash Dividends, and directs the Administrator to purchase additional Shares of the Trust with such Dividends.
Shareholders of Record
A Shareholder of Record may participate directly in the Program by either telephoning the Trust at (800) 992-0180 or delivering a completed Shareholder Investment Program Participation Form to the Administrator. A Participation Form will be furnished at any time upon request to the Trust.
Beneficial Owners
A Beneficial Owner may participate in the Program by either (i) becoming a Shareholder of Record by having ten or more shares registered into such shareholders own name, or (ii) coordinating such Beneficial Owners participation with a broker, bank or other nominee who is the record holder to participate on such shareholders behalf.
A Beneficial Owner must contact their broker, bank or other nominee and complete any required documentation. The broker, bank or other nominee will coordinate participation with its securities depository, which will provide the Administrator with the information necessary to allow the Beneficial Owner to participate in the Program. See the section titled Broker and Nominee Form for a discussion of the requirements for optional cash investments of a Beneficial Owner.
Requests to participate in the Program will be processed as promptly as practicable.
The Program is intended for the benefit of investors in the Trust and not for persons or entities who accumulate accounts under the Program over which they have control for the purpose of exceeding the $100,000 per month optional cash investment maximum or who engage in transactions that cause or are designed to cause aberrations in the price or trading volume of the Shares. Notwithstanding anything in the Program to the contrary, the Trust reserves the right to exclude from participation in the Program, at any time, (i) persons or entities who the Trust concludes are attempting to circumvent the Programs $100,000 per month optional cash investment maximum by accumulating accounts over which they have control, or (ii) any other persons or entities, as determined in the sole discretion of the Trust.
REINVESTMENT OF DIVIDENDS
Dividends paid to participants in the Program will be reinvested in additional Shares on each relevant Dividend Reinvestment Date and will be credited to shareholder accounts as of that date. For a discussion of the source and price of shares purchased pursuant to the reinvestment of Dividends, see the section titled Source and Price of Shares for DRIP and OCI.
TO BE EFFECTIVE WITH RESPECT TO A PARTICULAR DIVIDEND, THE ADMINISTRATOR MUST RECEIVE TELEPHONE INSTRUCTIONS OR A PARTICIPATION FORM AT LEAST THREE BUSINESS DAYS BEFORE THE DIVIDEND RECORD DATE . Dividends will continue to be reinvested until the participant provides new telephone or written instructions to the Administrator or the Program is terminated.
OPTIONAL CASH INVESTMENTS
Participants may make optional cash investments in amounts not exceeding $100,000 per month by personal check, wire investment, or an On-Demand Electronic Deduction from your bank account. Beneficial Owners wanting to participate in optional cash investments must instruct their broker, bank or other nominee to complete a Broker and Nominee Form and transmit the optional cash payment to the Administrator. See explanation of Broker and Nominee Form below. Optional cash investments must be at least $100 for any single investment and may not exceed $100,000 per month. (For the purposes of these limitations, all Program accounts under the common control or management of a participant may be aggregated, at the Trusts sole discretion.) There is no obligation to make an optional cash investment at any time, and the amount of such investments may vary from time to time. For a discussion of the source and price of shares purchased pursuant to optional cash investments, see the section titled Source and Price of Shares for DRIP and OCI.
OPTIONAL CASH INVESTMENTS NOT EXCEEDING $100,000 MUST BE RECEIVED BY THE ADMINISTRATOR NO LATER THAN 4:00 P.M. EASTERN TIME ON THE OCI PAYMENT DUE DATE. The Trust may delay the mailing of stock certificates purchased by check until such check has cleared (or been paid by) the bank on which the check was written. This process may take up to 15 days or more. All optional cash investments are subject to collection by the Administrator for full face value in U.S. funds.
The Administrator will apply the optional cash investment from a participant to the purchase of Shares for the account of the participant on the related OCI Investment Date or Waiver Investment Date (see the sections titled Source and Price of Shares for DRIP and OCI).
Upon a participants written request received by the Administrator no later than two business days prior to the OCI Pricing Period, an optional cash investment not already invested under the Program will be canceled or refunded to the participant, as appropriate. However, in such event, no refund of a check will be made until the funds have cleared. Accordingly, such refunds may be delayed by up to three weeks.
NO INTEREST WILL BE PAID ON AMOUNTS HELD BY THE ADMINISTRATOR PENDING INVESTMENT OR TO BE REFUNDED TO THE PARTICIPANT .
Broker and Nominee Form
The Broker and Nominee Form provides the only means by which a broker, bank or other nominee holding shares of a Beneficial Owner in the name of a major securities depository may invest optional cash investments within the minimum and maximum investment limitations established for the Program (see Optional Cash Investments below) on behalf of such Beneficial Owner or interested investor. A Broker and Nominee Form must be delivered to the Administrator each time such broker, bank or other nominee transmits optional cash investments. Broker and Nominee Forms will be furnished at any time upon request to the Trust.
The Broker and Nominee Form and appropriate instructions must be received by the Administrator not later than 4:00 pm Eastern time on the Broker and Nominee Form Due Date in order for any optional cash investment to be invested on the OCI Investment Date.
SOURCE AND PRICE OF SHARES FOR DRIP AND OCI
Source of Shares
When the Trusts Shares are Trading at a Premium
If the Market Price, plus the estimated fees to purchase the Shares, is equal to or exceeds the net asset value per Share on the Valuation Date, the Trust may issue the Shares to be acquired under the Program.
When the Trusts Shares are Trading at a Discount
If the Market Price, plus the estimated fees to purchase the Shares, is less than the net asset value per Share on the Valuation Date, the Administrator will purchase Shares on the Open Market through a bank or securities broker (including an affiliate of the Administrator) as provided herein. If the Market Price, plus estimated fees, exceeds the net asset value before the Administrator has completed its purchases, the Administrator will use reasonable efforts to cease purchasing Shares, and the Trust shall issue the remaining Shares.
The Trust may, without prior notice to participants, determine that it will not issue new Shares for purchase pursuant to the Program, even when shares are trading at a Premium, in which case the Administrator will purchase Shares pursuant to the Program on the Open Market.
Price of Shares
Shares Issued by the Trust
Dividend Reinvestment:
Shares issued by the Trust in connection with the reinvestment of Dividends will be acquired under the Program on the relevant Dividend Reinvestment Date at the greater of (i) net asset value at the close of business on the Valuation Date, or (ii) the average of the daily Market Price of the Shares during the DRIP Pricing Period, minus a discount of 5%.
Optional Cash Investments:
Shares issued by the Trust will be acquired under the Program on the relevant OCI Investment Date at the greater of (i) net asset value at the close of business on the Valuation Date, or (ii) the average of the daily Market Price of the Shares during the OCI Pricing Period minus a discount, determined at the sole discretion of the Trust, ranging from 0% to 5%.
On the last business day of each month, the Trust may establish a discount applicable to optional cash investments. The discount will be in effect for the following OCI Pricing Period. The discount for optional cash investments is set by the Trust and may be changed or eliminated by the Trust without prior notice to participants at any time. Participants may obtain the applicable discount by telephoning the Trust at (800) 992-0180.
Shares Purchased on the Open Market
Dividend Reinvestment:
If some or all of the Shares are purchased on the Open Market, Shares purchased pursuant to the reinvestment of Dividends will be credited to the participants account at the weighted average price per share of all such shares purchased with respect to the relevant Dividend Reinvestment Date.
Optional Cash Investments:
If some or all of the Shares are purchased on the Open Market, Shares purchased pursuant to optional cash investments will be credited to the participants account at the weighted average price per share of all such Shares purchased as of the relevant OCI Investment Date.
When Shares are to be purchased on the Market, the Administrator will begin making purchases as soon as practicable on the day after the Valuation Date and in no event later than 6 business days after the Valuation Date, except where and to the extent necessary under any applicable federal securities laws or other government or stock exchange regulations. Shares will be applied to the Participants account as of the relevant Investment Date. The Administrator may commingle each participants funds with those of other participants for the purpose of executing purchases.
Dividend and voting rights on shares purchased in the Open Market will commence upon settlement, which is normally three business days after purchase. However, shares purchased in
the Open Market within a period of three business days prior to and including a Dividend record date are considered purchased ex-dividend and therefore are not entitled to payment of that Dividend or voting rights.
Shares purchased on the Open Market will not be eligible for the discount to Market Priceand are subject to such terms and conditions, including price and delivery, as the Administrator may accept.
OPTIONAL CASH INVESTMENTS MAY BE MADE IN THE FOLLOWING WAYS:
By Wire |
Optional cash investments may be made by wire transfer to the Administrator. Call the Administrator at (800) 992-0180 to obtain a wire reference number. Give that number to your bank and instruct them to wire the funds to the Trust as follows:
Investors Fiduciary Trust Co. (Kansas City, MO) ABA #101003621 Credit to: ING Prime Rate Trust A/C# 751-8315 For Further Credit to (Your Name and Account Number)
Participants making wire investments may be charged fees by the commercial bank initiating the transfer.
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By Electronic Funds Transfer |
Optional cash investments may be made by an On-Demand Electronic Funds Transfer. You must establish the privilege by completing an OCI Electronic Funds Transfer Form prior to initiating an Electronic Funds Transfer. The properly completed form must be received by the Administrator prior to the last business day of the month to be effective for the next OCI Investment Date. Call the Administrator at (800) 992-0180 to obtain the form.
Once the Administrator receives and processes your properly completed form, you may initiate an Electronic Funds Transfer from your pre-designated U.S. bank account by instructing the Trust by telephone at (800) 992-0180, or in writing, to complete a purchase into your account for a specified amount (not less than $100 and not more than $100,000). Each On-Demand Electronic Funds Transfer must be separately initiated. Instructions must be received by the Trust on or before the OCI Payment Due Date
Once the Electronic Funds Transfer is initiated by your telephone call or letter of instruction, the funds will be drawn from the pre-designated bank account providing the account contains funds sufficient to complete the transfer and will be invested in Shares on the relevant OCI Investment Date. An insufficient or uncollected account balance will void the transaction and you may be subject to fees by your bank.
You may change the pre-designated bank by providing new written instructions to the Administrator. The new instructions must be received by the Administrator prior to the last business day of the month to be effective for the next months OCI Investment Date. |
The Trust reserves the right to reject any purchase.
REPORTS TO PARTICIPANTS; TAX IMPLICATIONS
Participants will receive an account confirmation after each transaction. Participants should retain these account confirmations to be able to establish the cost basis of shares purchased under the Program for income tax and other purposes.
The automatic reinvestment of dividends will not relieve you of any income tax payable on the dividends. If shares are purchased at a discount from the market price, participants may have income equal to the discount. Please consult with your personal tax advisor.
All notices, account confirmations and reports from the Administrator to a participant will be addressed to the participant at his or her latest address of record with the Administrator. Therefore, participants must promptly notify the Administrator of any change of address. To be effective with respect to mailings of Dividend checks and account confirmations, address changes must be received by the Administrator or the Trust prior to the record date for that Dividend.
CERTIFICATES FOR SHARES
The Administrator will hold Shares purchased under the Program in book entry form. Participants may obtain a certificate for all or some of the whole Shares held in their account by
writing or telephoning the Trusts Shareholder Services Department. Issuance of a certificate pursuant to such request in no way affects Dividend reinvestment (see Reinvestment of Dividends above).
Shares of stock held in book entry form for a participant cannot be pledged or assigned. A participant who wishes to pledge or assign any such Shares must request that a certificate for such Shares be issued in the participants name.
PLAN OF DISTRIBUTION; EXPENSES
Subject to the availability of Shares registered for issuance under the Program, there is no total maximum number of Shares that can be issued pursuant to the Program.
From time to time, financial intermediaries, including brokers and dealers, and other persons may engage in positioning transactions in order to benefit from the discount from the market price of Shares acquired through the Program. Such Shares may be resold in market transactions (including coverage of short positions) on any national securities exchange on which Shares of the Trust trade or in privately negotiated transactions. Such transactions could cause fluctuations in the trading volume and price of the Shares. The difference between the price such owners pay to the Trust for Shares acquired under the Program, after deduction of the applicable discount from the market price, and the price at which such Shares are resold, may be deemed to constitute underwriting commissions received by such owners in connection with such transactions.
The Trust will pay the costs of administering the Program. There will be no brokerage charges on purchases of Shares by the Administrator directly from the Trust in connection with the reinvestment of dividends or Optional Cash Investments. For shares purchased on the Open Market, participants will pay a pro rata portion of brokerage commissions for such purchase. Brokerage charges for purchasing Shares for individual accounts through the Program may be expected, but are not guaranteed, to be less than the usual brokerage charge for such transactions, as the Administrator will usually be purchasing shares for all participants in blocks and prorating the lower commission thus attainable.
The Administrator may charge a participant for additional services not provided under the Program or where specified charges are indicated. Brokers or nominees who participate on behalf of Beneficial Owners for whom they are holding shares may charge such Beneficial Owners fees in connection with such participation, for which neither the Administrator nor the Trust will be responsible.
CLOSING OF A PARTICIPANTS ACCOUNT
When a shareholder wants to close his/her account, a stock certificate for full Shares in the account must be requested from the Trust. The shareholder can then deliver the certificate to their broker or dealer for sale on the Open Market. Fractional Shares will be held and aggregated with other fractional Shares being liquidated by the Administrator, as agent of the Program and as
Transfer Agent of the Trust, and paid by check when actually sold. Fractional Shares will be sold by the Administrator either on the Open Market or to the Program for use in Dividend reinvestment or cash investment transactions. The price for fractional Shares will be either the actual market price received, after deducting any commissions, for open market sales, or the average daily Market Price for the two Trading Days immediately preceding the relevant Investment Date for sales to the Program. If the certificate for full Shares or sale proceeds for fractional Shares are to be sent to anyone other than the registered owner(s) at the address of record or broker/dealer of record, a signature guaranteed request will be required in order to process the request.
MISCELLANEOUS
Requesting Cash Dividends
Shareholders may request to receive their dividends in cash at any time by giving the Administrator written notice or by contacting the Trusts Shareholder Service Department at (800) 992-0180. Such request will be effective immediately if the Administrator receives notice at least three business days prior to the relative Dividend Record Date; otherwise such notice will be effective for the next Dividend Record Date and any subsequent Dividends.
Voting of Shares Held in the Program
Whole and fractional shares held in an account may be voted in person or by the proxy sent to the participant.
Stock Dividend or Rights Offering
Any Dividends in Shares distributed by the Trust on Shares held in book entry will be added to the participants account.
In the event of a rights offering, the participant will receive rights based upon the total number of whole shares owned in book entry form and certificated shares outstanding in the participants name.
Limitation of Liability
Neither the Trust nor the Administrator (nor any of their respective agents, representatives, employees, officers, trustees, directors, or subcontractors) will be liable in administering the Program for any act performed in good faith nor for any good faith omission to act, including, without limitation, any claim of liability arising with respect to the prices or times at which shares are purchased or sold for participants, or, with respect to fractional Shares any change in the market value of Shares, or from failure to terminate a participants account upon such a participants death. The foregoing does not represent a waiver of any rights a participant may have under applicable securities laws.
Change or Termination of the Program
The Trust, in its sole discretion, may suspend, modify or terminate the Program at any time in whole, in part, or in respect of participants in one or more jurisdictions. Notice of such suspension, modification or termination will be sent to all affected participants. No such event will affect any Shares then credited to a participants account. Upon any whole or partial termination of the Program by the Trust, the participant may request a certificate for any amount of full Shares held in book entry form. Fractional Shares will be held and aggregated with other fractional Shares being liquidated by the Administrator, as agent of the Program and as Transfer Agent of the Trust, and paid for by check when actually sold. Any change in the Optional Cash Investment Discount made by the Trust shall not constitute a modification of the Program requiring notice to the participants.
Termination of the Administrator
The Administrator may withdraw as Administrator to the Program upon 90 days written notice to the Trust, in which case the Trust will select a replacement to serve as Administrator. The Trust may also terminate the Administrator upon 90 days written notice, and select a replacement to serve as Administrator.
Termination of Participation
If a participant owns fewer than ten whole Shares of the Trust, the participants participation in the Program may be terminated. The Trust may also terminate any participants participation in the Program for any reason (including, without limitation, the attempted circumvention by a participant of the $100,000 monthly maximum for cash purchases through the accumulation of Program accounts over which the participant has control) after written notice mailed in advance to such participant at the address appearing on the Administrators records. Participants whose participation in the Program has been terminated will receive a certificate for full Shares in their account. Fractional Shares will be held and aggregated with other fractional Shares being liquidated by the Administrator as agent of the Program and as Transfer Agent of the Trust and paid for by check when actually sold.
Profits on Sales of Shares
There is no assurance that participants will be able to sell Shares purchased pursuant to the Program at a profit.
Future Dividends
The payment of Dividends is dependent upon the generation of income by the Trust. There is no assurance that income will continue to be generated by the Trust in the future from which Dividends may be paid, and, therefore, there is no assurance that there will continue to be Dividends in the future to be reinvested pursuant to the Program.
ATTACHMENT A
Shareholder Investment Program
Schedule of Important Dates - Optional Cash Investments
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Exhibit 2(g)1
INVESTMENT MANAGEMENT AGREEMENT
VOYA PRIME RATE TRUST
AGREEMENT , effective as of November 18, 2014, between Voya Prime Rate Trust (the Fund), a Massachusetts business trust and Voya Investments, LLC (the Adviser), a limited liability company organized and existing under the laws of the State of Arizona (the Agreement).
WHEREAS , the Fund is a closed-end management investment company, registered as such under the Investment Company Act of 1940, as amended (the 1940 Act); and
WHEREAS , the Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, and is engaged in the business of supplying investment advice, investment management and administrative services, as an independent contractor; and
WHEREAS , the Fund desires to retain the Adviser to render advice and services pursuant to the terms and provisions of this Agreement, and the Adviser is willing to furnish said advice and services.
NOW, THEREFORE , in consideration of the covenants and the mutual promises hereinafter set forth, the parties hereto, intending to be legally bound hereby, mutually agree as follows:
1. Employment : The Fund hereby employs the Adviser and the Adviser hereby accepts such employment, to render investment advice and investment management services with respect to the assets of the Trust, subject to the supervision and direction of the Trustees. The Adviser shall, as part of its duties hereunder (i) furnish the Fund with advice and recommendations with respect to the investment of the Trusts assets and the purchase and sale of its portfolio securities, including the taking of such other steps as may be necessary to implement such advice and recommendations, (ii) furnish the Fund with reports, statements and other data on securities, economic conditions and other pertinent subjects which the Trusts Board of Trustees may request, (iii) permit its officers and employees to serve without compensation as Trustees of the Fund if elected to such positions and (iv) in general superintend and manage the investment of the Trust, subject to the ultimate supervision and direction to the Trusts Board of Trustees.
Subject to the approval of the Trustees of the Fund, 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. The Fund and Adviser understand and agree that the Adviser may manage the Fund with either a single or multiple sub-advisers, which contemplates that the Adviser will, among other things: (i) continually evaluate the performance of any Sub-Adviser to the Fund; and (ii) periodically make recommendations to the Funds Trustees regarding the results of its evaluation and monitoring functions. The Fund recognizes that, subject to the approval of the Trustees of the Fund, a Sub-Advisers services may be terminated or modified and that the Adviser may appoint a new Sub-Adviser for the Fund.
2. The Adviser shall use its best judgment and efforts in rendering the advice and services to the Fund as contemplated by this Agreement.
3. The Adviser shall, for all purposes herein, be deemed to be an independent contractor, and shall, unless otherwise expressly provided and authorized, have no authority to act for or represent the Fund in any way, or in any way be deemed an agent for the Fund. It is expressly understood and agreed that the services to be rendered by the Adviser to the Fund under the provisions of this Agreement are not to be deemed exclusive, and the Adviser shall be free to render similar or different services to others so long as its ability to render the services provided for in this Agreement shall not be impaired thereby.
4. The Adviser agrees to use its best efforts in the furnishing of such advice and recommendations to the Fund, in the preparation of reports and information, and in the management of the Funds assets, all pursuant to this Agreement, and for this purpose the Adviser shall, at its own expense, maintain such staff and employ or retain such personnel and consult with such other persons as it shall from time to time determine to be necessary to the performance of its obligations under this Agreement. Without limiting the generality of the foregoing, the staff and personnel of the Adviser shall be deemed to include persons employed or retained by the Adviser to furnish statistical, research, and other factual information, advice regarding economic factors and trends, information with respect to technical and scientific developments, and such other information, advice and assistance as the Adviser may desire and request.
5. The Fund will from time to time furnish to the Adviser detailed statements of the investments and assets of the Fund and information as to its investment objectives and needs, and will make available to the Adviser such financial reports, proxy statements, legal and other information relating to its investments as may be in the possession of the Fund or available to it and such other information as the Adviser may reasonably request.
6. Whenever the Adviser has determined that the Fund should tender securities pursuant to a tender offer solicitation, the Adviser shall designate an affiliate as the tendering dealer so long as it is legally permitted to act in such capacity under the federal securities laws and rules thereunder and the rules of any securities exchange or association of which such affiliate may be a member. Such affiliated dealer shall not be obligated to make any additional commitments of capital, expense or personnel beyond that already committed (other than normal periodic fees or payments necessary to maintain its corporate existence and membership in the National Association of Securities Dealers, Inc.) as of the date of this Agreement. This Agreement shall not obligate the Adviser or such affiliate (i) to act pursuant to the foregoing requirement under any circumstances in which they might reasonably believe that liability might be imposed upon them as a result of so acting, or (ii) to institute legal or other proceedings to collect fees which may be considered to be due from others to it as a result of such a tender, unless the Fund shall enter into an agreement with such affiliate to reimburse it for all expenses connected with attempting to collect such fees, including legal fees and expenses and that portion of the compensation due to their employees which is attributable to the time involved in attempting to collect such fees.
7. The Adviser shall bear and pay the costs of rendering the services to be performed by it under this Agreement. The Fund shall bear and pay for all other expenses of its operation, including, but not limited to, expenses incurred in connection with the issuance, registration and transfer of its shares; fees of its custodian, transfer and shareholder servicing agent; costs and expenses of pricing and calculating its daily net asset value and of maintaining its books of account required by the 1940 Act; expenditures in connection with meetings of the shareholders and directors, except those called solely to accommodate the Adviser; salaries of officers and fees and expenses of directors or members of any advisory board or committee who are not members of, affiliated with or interested persons of the Adviser; salaries of personnel involved in placing orders for the execution of the Funds portfolio transactions or in maintaining registration of its shares under state securities laws; insurance premiums on property or personnel of the Fund which inure to its benefit; the cost of preparing and printing reports, proxy statements and registration statement of the Fund, as may be amended or supplemented from time to time (the Registration Statement) as filed with the SEC or other communications for distribution to its shareholders; legal, auditing and accounting fees; Board-approved trade association dues; fees and expenses of registering and maintaining registration of its shares for sale under federal and applicable state securities laws; and all other charges and costs of its operation plus any extraordinary and non-recurring expenses, except as herein otherwise prescribed. To the extent the Adviser incurs any costs or performs any services which are an obligation of the Fund, as set forth herein, the Fund shall promptly reimburse the Adviser for such costs and expenses. To the extent the services for which the Fund is obligated to pay are performed by the Adviser, the Adviser shall be entitled to recover from the Fund only to the extent of its costs for such services.
8. The Adviser may delegate the performance of certain investment advisory services, as described hereunder, to a Sub-Adviser.
9. 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 Funds Board of Trustees investment advisory firms (however organized) to provide investment advice to the Fund, and, at the expense of the Adviser, engage (which engagement may also be by the Fund) any such investment advisory firm to render investment advice and manage the investments of the Fund and the composition the Funds portfolio of securities and investments, including cash, and the purchase, retention and disposition thereof, or any offering thereof, in accordance with the Funds investment objective or objectives and policies as stated in the Funds 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 Fund, including without limitation, perform periodic detailed analysis and review of the Sub-Advisers investment performance in respect of the Fund 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 Trustees 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 Trustees may reasonably request;
(c) review and consider any changes in the personnel of the Sub-Adviser responsible for performing the Sub-Advisers obligations and make appropriate reports to the Board of Trustees;
(d) review and consider any changes in the ownership or senior management of the Sub-Adviser and make appropriate reports to the Board of Trustees;
(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 such Sub-Advisers provide under each Sub-Advisers Sub-Advisory Agreement;
(g) assist the Board of Trustees and management of the Fund 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 the Fund, the 1940 Act, Subchapter M of the Internal Revenue Code, and if applicable, regulations under such provisions, and other applicable law;
(i) if appropriate, analyze and recommend for consideration by the Funds Board of Trustees termination of a contract with a Sub-Adviser under which the Sub-Adviser provides investment advisory services to Fund;
(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 Trustees 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 Trustees shall reasonably request consistent with this Agreement and applicable law.
10.
(a) The Fund agrees to pay to the Adviser, and the Adviser agrees to accept, as full compensation for all administrative and investment management services furnished or provided to the Fund and as full reimbursement for all expenses assumed by the Adviser, a management fee equal to the amount specified for the Fund on Schedule A .
(b) The management fees shall be accrued daily by the Fund and paid to the Adviser at the end of each calendar month.
(c) To the extent that the gross operating costs and expenses of the Fund (excluding any interest taxes, brokerage commissions, and, with the prior written approval of any state securities commission requiring same, any extraordinary expenses, such as litigation) exceed the allowable expense limitations of the state in which shares of the Fund are registered for sale having the most stringent expense reimbursement provisions, the Adviser shall reimburse the Fund for the amount of such excess.
(d) The management fee payable by the Fund hereunder shall be reduced to the extent that an affiliate of the Adviser has actually received cash payments of tender offer solicitation fees less certain costs and expenses incurred in connection therewith, as referred to in Paragraph 6 herein.
11. The Adviser agrees that neither it nor any of its officers or employees shall take any short position in the capital stock of the Fund. This prohibition shall not prevent the purchase of such shares by any of the officers and directors or bona fide employees of the Adviser or any trust, pension, profit-sharing or other benefit plan for such persons or affiliates thereof, at a price not less than the net asset value thereof at the time of purchase, as allowed pursuant to rules promulgated under the 1940 Act, as amended.
12. Nothing herein contained shall be deemed to require the Fund to take any action contrary to the Declaration of Fund or By-Laws of the Fund, or any applicable statute or regulation, or to relieve or deprive the Trustees of the Fund of its responsibility for and control of the conduct of the affairs of the Fund.
13.
(a) In the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of obligations or duties hereunder on the part of the Adviser, the Adviser shall not be subject to liability to the Fund, or to any shareholder of the Fund, for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security by the Fund.
(b) Notwithstanding the foregoing, the Adviser agrees to reimburse the Fund for any and all costs, expenses, and counsel and Trustees fees reasonably incurred by the Fund in the preparation, printing and distribution of proxy statements, amendments to its Registration Statement, the holding of meetings of its shareholders or Trustees, the conduct of factual investigations, any legal or administrative proceedings (including any applications for exemptions or determinations by the Securities and Exchange Commission) which the Fund incurs as a result of action or inaction of the Adviser or any of its shareholders where the action or inaction necessitating such expenditures (i) is directly or indirectly related to any transactions or proposed transaction in the shares or control of the Adviser or its affiliates (or litigation related to any pending or proposed future transaction in such shares or control) which shall have been undertaken without the prior, express approval of the Funds Trustees, or (ii) is within the sole control of the Adviser or any of its affiliates or any of their officers, directors, employees or shareholders. The Adviser shall not be obligated pursuant to the provisions of this subparagraph 12(b), to reimburse the Fund for any expenditures related to the institution of an administrative proceeding or civil litigation by the Fund or by a Fund shareholder seeking to recover all or a
portion of the proceeds derived by any shareholder of the Adviser or any of its affiliates from the sale of his shares of the Adviser, or similar matters. So long as this Agreement is in effect, the Adviser shall pay to the Fund the amount due for expenses subject to this subparagraph 12(b) within thirty (30) days after a bill or statement has been received by the Fund therefor. This provision shall not be deemed to be a waiver of any claim the Fund may have or may assert against the Adviser or others or costs, expenses, or damages heretofore incurred by the Fund for costs, expenses, or damages the Fund may hereafter incur which are not reimbursable to it hereunder.
(c) No provision of this Agreement shall be construed to protect any director or officer of the Fund, or of the Adviser, from liability in violation of Sections 17(h) and (i) of the 1940 Act.
14. This Agreement shall become effective on the date first written above, subject to the condition that the Funds Trustees, including a majority of those Trustees who are not interested persons (as such term is defined in the 1940 Act) of the Adviser, and the shareholders of the Fund, shall have approved this Agreement. Unless terminated as provided herein, the Agreement shall continue in full force and effect for two years from the effective date of this Agreement, and shall continue from year to year thereafter so long as such continuation is approved at least annually by (i) the Trustees of the Fund or by the vote of a majority of the outstanding voting securities of the Fund, and (ii) the vote of a majority of the Trustees of the Fund who are not parties to this Agreement or interested persons thereof, cast in person at a meeting called for the purpose of voting on such approval.
15. This Agreement may be terminated at any time, without payment of any penalty, by the Trustees of the Fund or by vote of a majority of the outstanding voting securities of the Fund, upon sixty (60) days written notice to the Adviser, and by the Adviser upon sixty (60) days written notice to the Fund.
16. This Agreement shall terminate automatically in the event of any transfer or assignment thereof, as defined in the 1940 Act, as amended.
17. It is understood that the name Voya Investments, LLC or any trademark, trade name, service mark, or logo, or any variation of such trademark, service mark, or logo of the Adviser or its affiliates, including but not limited to the mark Voya (collectively, the Voya Marks) is the valuable property of the Adviser and its affiliates, and that the Fund and the Series have the right to use such Voya Marks only so long as this Agreement or any subsequent agreement with the Adviser in replacement of this Agreement shall continue with respect to such Fund and Series. Upon termination of this Agreement without its replacement by a subsequent agreement, the Fund (or Series) shall, as soon as is reasonably possible, discontinue all use of the Voya Marks and, in the case of the Fund, shall promptly amend its Declaration of Trust to change its name (if such name is included therein).
18. This Agreement may not be transferred, assigned, sold or in any manner hypothecated or pledged without the affirmative vote or written consent of the holders of a majority of the outstanding voting securities of the Fund.
19. 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.
20. The term majority of the outstanding voting securities of the Fund shall have the meaning as set forth in the 1940 Act, as amended.
21. 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 Investment Advisors Act of 1940, or any rules or orders of the SEC thereunder.
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IN WITNESS WHEREOF , the parties hereto have caused this instrument to be executed as of the day and year first above written.
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VOYA PRIME RATE TRUST |
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/s/ Kimberly A. Anderson |
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Kimberly A. Anderson |
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Senior Vice President |
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VOYA INVESTMENTS, LLC |
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By: |
/s/ Todd Modic |
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Todd Modic |
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Senior Vice President |
SCHEDULE A
with respect to the
INVESTMENT MANAGEMENT AGREEMENT
between
VOYA PRIME RATE TRUST
and
VOYA INVESTMENTS, LLC
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Annual Investment Management Fee
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Voya Prime Rate Trust |
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0.80 |
% |
* Managed Assets shall mean the Funds average daily gross asset value, minus the sum of the Funds accrued and unpaid dividends on any outstanding preferred shares and accrued liabilities (other than liabilities for the principal amount of any borrowings incurred, commercial paper or notes issued by the Fund and the liquidation preference of any outstanding preferred shares.
Exhibit 2(g)2
SUB-ADVISORY AGREEMENT
VOYA PRIME RATE TRUST
AGREEMENT , effective as of November 18, 2014, between Voya Investments, LLC, an Arizona limited liability company (the Manager), and Voya Investment Management Co. LLC, a Delaware limited liability company (the Sub-Adviser).
WHEREAS , Voya Prime Rate Trust (the Fund) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a closed-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 , pursuant to an Investment Management Agreement, effective as of November 18, 2014 (the Investment 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 Funds series; and
WHEREAS , pursuant to authority granted to the Manager in the Investment Management Agreement, the Manager wishes to retain the Sub-Adviser to furnish investment advisory services 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 Fund 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 the Fund, the term Fund shall be interpreted for purposes of this Agreement to include those assets of the Fund over which the Sub-Adviser is directed by the Manager to provide investment advisory services.
2. Sub-Adviser Duties . Subject to the supervision of the Funds Board of Trustees and the Manager, the Sub-Adviser will provide a continuous investment program for the Funds portfolio and determine in its discretion the composition of the assets of the Funds 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 the Funds assets by determining the securities and other investments that shall be purchased, entered into, sold, closed, or exchanged for the Fund, when these transactions should be executed, and what portion of the assets of the Fund should be held in the various securities and other investments in which it may invest. To the extent permitted by the investment policies of the Fund, the Sub-Adviser shall make decisions for the Fund as to foreign currency matters and make determinations as to and execute and perform foreign currency exchange contracts on behalf of
the Fund. The Sub-Adviser will provide the services under this Agreement in accordance with the Funds investment objective or objectives, policies, and restrictions as stated in the Funds 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 Funds 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 Managers 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-Adviser Agreement, the Sub-Adviser will comply with the following policies and procedures:
(i) The Sub-Adviser will manage the Fund 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, if applicable, manage the Fund so that no action or omission on the part of the Sub-Adviser shall cause the Fund 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 Fund 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 it receives on behalf of the Fund solicited by or with respect to the issuers of securities in which assets of the Fund 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 reasonably 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 Fund 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 Fund. 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 the Fund, the Sub-Adviser will arrange for the transmission to the custodian and portfolio accounting agent for the Fund 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 Fund, as may be reasonably necessary to enable the custodian and portfolio accounting agent to perform its administrative and recordkeeping responsibilities with respect to the Fund. With respect to portfolio securities to be settled through the Depository Fund Company, the Sub-Adviser will arrange for the prompt transmission of the confirmation of such trades to the Funds 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 Fund 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 Funds 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 the Funds 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 make available to the Fund and the Manager, promptly upon request, any of the Funds 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 Fund 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.
(c) The Sub-Adviser will provide reports to the Funds Board of Trustees for consideration at meetings of the Board of Trustees on the investment program for the Fund and the issuers and securities represented in the Funds portfolio, and will furnish the Funds Board of Trustees with respect to the Fund such periodic and special reports as the Trustees and the Manager may reasonably request.
(d) With respect to any investments, including, but not limited to, repurchase and reverse repurchase agreements, derivatives contracts, futures contracts, International Swaps and Derivatives Association, Inc. Master Agreements, and options on futures contracts (futures), which are permitted to be made by the Sub-Adviser in accordance with this Agreement and the investment objectives and strategies of the Series as outlined in the Registration Statement for the Fund, the Manager hereby authorizes and directs the Sub-Adviser to do and perform every act and thing whatsoever necessary or incidental in performing its duties and obligations under this Agreement including, but not limited to, executing as agent, on behalf of each Series, brokerage agreements and other documents to establish, operate and conduct all brokerage or other trading accounts, and executing as agent, on behalf of each Series, such agreements and other documentation as may be required for the purchase or sale, assignment, transfer and ownership of any permitted investment, including limited partnership agreements, repurchase and derivative master agreements, including any schedules and annexes to such agreements, releases, consents, elections and confirmations. The Manager acknowledges and understands that it will be bound by any such trading accounts established, and agreements and other documentation executed, by the Sub-Adviser for such investment purposes.
3. Broker-Dealer Selection . The Sub-Adviser is authorized to make decisions to buy and sell securities and other investments the Funds portfolio, broker-dealer selection, and negotiation of brokerage commission rates in effecting a security transaction. The Sub-Advisers primary consideration in effecting a security transaction will be to obtain the best execution for the Fund, taking into account the factors specified in the prospectus and/or statement of additional information for the Fund, and determined in consultation with the Adviser, 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 firms risk in positioning a block of securities. Accordingly, the price to the Fund 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 Funds 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 the Fund 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-Advisers or the Managers overall responsibilities with respect to the Fund 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 the Fund 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 the Fund 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 Fund, 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 Funds 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-Advisers 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 Funds 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 the Fund, the Manager will pay the Sub-Adviser an annual fee equal to the amount specified for the Fund, 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 Investment 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 Investment Management fee under said Investment Management Agreement when due, and the amount that was paid is insufficient to cover the Sub-Advisers 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 Investment Management Agreement and the Manager will take all steps appropriate under the circumstances to collect the amount due from the Fund.
8. 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 Ò 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 Fund 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 the Fund, 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-Advisers 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.
9. 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: (1) 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 (2) upon having a reasonable basis for believing that the Fund 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 Fund), 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: (1) 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 Managers registration as an investment adviser; or has commenced proceedings or an investigation that may result in any of these actions; or (2) upon having a reasonable basis for believing that the Fund has ceased to qualify or might not qualify as a regulated investment company under Subchapter M of the Internal Revenue Code.
10. Books and Records . The Sub-Adviser hereby agrees that all records which it maintains for the Fund may be the property of the Fund and further agrees to surrender promptly to the Fund any of such records upon the Funds or the Managers 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.
11. 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 Fund 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 this Fund.
12. Non-Exclusivity . The services of the Sub-Adviser to 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, provided, however, that 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,, except that such consultations are permitted between the current and successor sub-advisers of the Fund 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 Fund concerning the Sub-Adviser or the Fund other than the information or representations contained in the Registration Statement, prospectus, or statement of additional information for the Funds 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: (1) shall bear no responsibility and shall not be subject to
any liability for any act or omission respecting the Fund; and (2) 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-Advisers duties, or by reason of reckless disregard of the Sub-Advisers 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 Managers responsibilities to the Fund which: (1) may be based upon the Managers 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 Managers 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 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-Advisers responsibilities as Sub-Adviser of the Fund which: (1) may be based upon the Sub-Advisers 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-Advisers 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 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) This Agreement shall become effective on the date first indicated above, subject to the condition that the Funds 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 or the Sub-Adviser, and the shareholders of the Fund, shall have approved this Agreement. Unless terminated as provided herein, this Agreement shall remain in full force and effect for two years from the effective date of this Agreement and continue on an annual basis thereafter with respect to the Fund covered by this Agreement; provided that such annual continuance is specifically approved each year by: (1) the Board of Trustees of the Fund, or by the vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund; and (2) the vote of a majority of those Trustees who are not parties to this Agreement or interested persons (as such term is defined in the 1940 Act) of any such party to this Agreement 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 the Fund shall be effective to continue this Agreement with respect to the Fund notwithstanding: (1) that this Agreement has not been approved by the holders of a majority of the outstanding shares of any other series of the Fund; or (2) 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 the Fund covered by this Agreement: (1) by the Manager at any time, upon sixty days written notice to the Sub-Adviser and the Fund; (2) at any time without payment of any
penalty by the Fund, by the Funds Board of Trustees or a majority of the outstanding voting securities of the Fund, upon sixty days written notice to the Manager and the Sub-Adviser; or (3) by the Sub-Adviser upon three 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 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 the Fund 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 10, 11, 13, 14, 15, and 16 of this Agreement shall remain in effect, as well as any applicable provision of this Section numbered 18 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:
Voya Prime Rate Trust
7337 East Doubletree Ranch Road, Suite 100
Scottsdale, AZ 85258-2034
Attention: Kimberly A. Anderson
If to the Sub-Adviser:
Voya Investment Management Co. LLC
One Orange Way, C1-N
Windsor, CT 06095
Attention: Carolyn Augur Birbara, Legal Department
With a copy to:
Voya Investment Management Co. LLC
230 Park Avenue
New York, NY 10169
Attention: Gerald Lins
If to the Manager:
Voya 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 New York, 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 Investment 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.
(REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF , the parties hereto have caused this instrument to be executed as of the day and year first above written.
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VOYA INVESTMENTS, LLC |
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By: |
/s/ Todd Modic |
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Todd Modic |
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Senior Vice President |
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VOYA INVESTMENT MANAGEMENT CO. LLC |
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By: |
/s/ Christopher Kurtz |
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Name: |
Christopher Kurtz |
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Title: |
VP Finance |
SCHEDULE A
with respect to the
SUB-ADVISORY AGREEMENT
between
VOYA INVESTMENTS, LLC
and
VOYA INVESTMENT MANAGEMENT CO. LLC
Series |
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Annual Sub-Advisory Fee
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Voya Prime Rate Trust |
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0.3600 |
% |
* Managed Assets are defined as the Funds average daily gross asset value, minus the sum of the Funds accrued and unpaid dividends on any outstanding preferred shares and accrued liabilities (other than liabilities for the principal amount of any borrowings incurred, commercial paper or notes issued by the Fund, and the liquidation preference of any outstanding preferred shares).
Exhibit 2(h)1
DISTRIBUTION AGREEMENT
(25 MILLION SHARES)
Parties: |
Voya Prime Rate Trust (the Trust) |
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Voya Investments Distributor, LLC (the Distributor) |
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Date: |
November 18, 2014 |
WHEREAS, Voya Prime Rate Trust is a Massachusetts business trust operating as a closed-end management investment company;
WHEREAS, the Trust has filed a registration statement (the Registration Statement) on Form N-2 under the Investment Company Act of 1940, as amended (the 1940 Act) (File No. 811-5410) and under the Securities Act of 1933, as amended (the 1933 Act) (File No. 333-61831) to register shares of the Trust which may be issued and sold from time to time;
WHEREAS, the Distributor is registered as a broker-dealer under the provisions of the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority; and
WHEREAS, the Trusts Board of Trustees (the Trustees) has adopted a resolution approving this Agreement (the Agreement), and such resolution was adopted at a meeting of the Trustees, at which a majority of Trustees, including a majority of the Trusts Trustees who are not interested persons (as defined in the 1940 Act) of the Trusts investment manager or its affiliates, were present and voted in favor of the said resolution approving this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Appointment of Distributor; Acceptance . The Trust hereby appoints the Distributor as the principal underwriter and distributor for shares of the Trust to be issued pursuant to the Registration Statement (the Shares) and the Distributor hereby accepts such appointment and agrees to serve as the principal underwriter and distributor for the Shares.
2. Sale of Shares . The Distributor will use reasonable efforts to promote the sale of the Shares, but the Distributor is not obligated to sell any specific number of Shares. The Shares will only be sold on such days as shall be agreed to between the Distributor and the Trust. The Trust will deliver to the Distributor such Shares as the Distributor may sell.
3. Offering Price . The public offering price per Share shall be determined in accordance with the then current prospectus of the Trust under the Registration Statement. In no event shall the public offering price be less than the current net asset value per Share (the Minimum Price). The Distributor shall suspend the sale of Shares if the per share price of the Shares is less than the Minimum Price.
4. Sales Commissions and Discounts . The Distributor shall not be entitled to receive any sales commission or discount from the Trust for its services hereunder.
5. Furnishing of Information . The Trust will furnish the Distributor with such number
of copies of the Registration Statement as the Distributor shall reasonably request, and the Trust warrants to the Distributor that the statements therein contained are true and correct as of the date of the Registration Statement, as it may be amended or supplemented from time to time. The Trust will also furnish the Distributor with such other information that the Distributor may reasonably request for use in connection with the distribution of the Shares, including, at least annually, audited financial statements of the Trusts books and accounts certified by independent public accountants.
6. Conduct of Business . Other than the currently effective Prospectus and Statement of Additional Information, the Distributor will not use any sales materials or statements except literature or advertising which conforms to the requirements of federal and state securities laws and regulations and which have been filed, where necessary, with the appropriate regulatory authorities. The Distributor will furnish to the Trust copies of all material prior to its use and no such material shall be published if the Trust shall reasonably and promptly object.
7. Compliance with Law . The Distributor shall comply with applicable federal and state laws and regulations where the Trusts Shares are offered for sale and conduct its affairs with the Trust and with dealers, brokers or investors in accordance with the Conduct Rules of the National Association of Securities Dealers, Inc.
8. Other Activities . The Distributors services pursuant to this Agreement shall not be deemed to be exclusive, and the Distributor may render similar services and act as an underwriter, distributor or dealer for other investment companies in the offering of their shares.
9. Suspension of Sales . The Trust reserves the right at all times to suspend or limit the public offering of the Shares upon written notice to the Distributor, and to reject any order in whole or in part.
10. Payment of Expenses . The Distributor shall bear all expenses incurred by it in connection with its duties and activities under this Agreement. The Trust shall bear all costs and expenses of the Trust, including expenses (including legal fees) pertaining to the preparation and filing of the Registration Statement and Prospectus and any amendments or supplements thereto, and expenses pertaining to the preparation, printing and distribution of any reports or communications to shareholders, including Prospectuses and Statements of Additional Information, annual or interim reports or proxy materials.
11. Agent of Trust . Any person, even though also an officer, employee or agent of the Distributor, who may be or become an officer, Trustee, employee or agent of the Trust, shall be deemed, when rendering services to the Trust or acting in any business of the Trust, to be rendering such services to or acting solely for the Trust and not as an officer, partner, employee or agent or one under the control or direction of the Distributor even though paid by the Distributor.
12. Records . All records maintained by the Distributor in connection with this Agreement shall be the property of the Trust and shall be returned to the Trust upon termination of this Agreement, free from any claims or retention of rights by the Distributor. The Distributor shall keep confidential any information obtained pursuant to this Agreement and shall disclose such information only if the Trust has authorized such disclosure or if such disclosure is expressly required by applicable federal or state regulatory authorities.
13. Duration and Termination . This Agreement shall become effective on November 18,
2014or on such later date approved by the Trusts Board of Trustees, including a majority of those Trustees who are not parties to this Agreement or interested persons (as such term is defined the 1940 Act) thereof. Unless terminated as provided herein, the Agreement shall continue in full force and effect for two years from the effective date of this Agreement. Thereafter, unless earlier terminated, this Agreement shall continue in effect from year to year for successive one (1) year periods if approved at least annually (i) either by a majority vote (as defined in the Prospectus) of the shareholders of the Trust or by a majority of the Trustees of the Trust , and (ii)by the vote of a majority of those Trustees who are not interested persons, cast in person at a meeting called for the purpose of voting on such approval; provided, however , that this Agreement may be terminated by the Trust or by a majority vote of the shareholders of the Trust on 60 days written notice to the Distributor, or by the Distributor at any time on 60 days written notice to the Trust, in all cases without the payment of any penalty. This Agreement will automatically and immediately terminate in the event of its assignment (as described in the 1940 Act).
14. Liability of Distributor . The Distributor shall not be liable to the Trust for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with the matters to which this Agreement relates, except a loss resulting from the Distributors willful misfeasance, bad faith or negligence in the performance of its duties, or by reason of its reckless disregard of its obligations and duties under this Agreement.
15. Agreement and Declaration of Trust and Limitation of Liability . A copy of the Agreement and Declaration of Trust of the Trust is on file with the Secretary of State of the Commonwealth of Massachusetts, and notice is hereby given that this Agreement is executed by an officer of the Trust on behalf of the Trustees of the Trust, as Trustees and not individually, and that the obligations of this Agreement with respect to the Trust shall be binding upon the assets and properties of the Trust only and shall not be binding upon the assets or properties of the Trustees, officers, employees, agents or shareholders of the Trust individually.
16. Notices . Notices of any kind to be given to the Distributor by the Trust shall be in writing and shall be duly given if mailed, first class postage prepaid, or delivered to the Distributor at its principal place of business or at such other address or to such individual as shall be specified by the Distributor to the Trust. Notices of any kind to be given to the Trust shall be in writing and shall be duly given if mailed, first class postage prepaid, or delivered to the Trust at its principal place of business or at such other address or to such individual as shall be specified by the Trust.
17. Reports . The Distributor shall prepare reports to the Trustees of the Trust showing such information as from time to time shall be reasonably requested by the Trustees or as are required of the Distributor by applicable laws and regulations.
18. Independent Contractor Status . The Distributor shall for all purposes herein provided be deemed to be an independent contractor and, unless otherwise expressly provided or authorized, shall have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. It is understood and agreed that the Distributor, by separate agreement with the Trust, may also serve the Trust in other capacities.
19. Miscellaneous . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original. 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 Securities Exchange Act of 1934, as amended, or any rule or order of the Securities and Exchange Commission. 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.
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VOYA PRIME RATE TRUST |
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By: |
/s/ Kimberly A. Anderson |
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Kimberly A. Anderson |
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Senior Vice President |
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VOYA INVESTMENTS DISTRIBUTOR, LLC |
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By: |
/s/ Michael J. Roland |
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Michael J. Roland |
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Executive Vice President |
Exhibit 2(k)1
ADMINISTRATION AGREEMENT
This AGREEMENT made this January 1, 2015 between each of the registered investment companies (each a Fund and collectively, the Funds), on behalf of each series thereof (each a Series) set forth on Schedule A hereto, as such schedule may be amended from time to time to add additional Funds or Series, and Voya Funds Services, LLC (the Administrator), a Delaware limited liability company.
WHEREAS , the Fund is either an open-end or closed-end investment management company registered under the Investment Company Act of 1940, as amended (the 1940 Act);
WHEREAS , the Fund desires to avail itself of the services of the Administrator for the provision of administrative services for the Fund; and
WHEREAS , the Administrator is willing to render such services to the Fund.
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 Fund hereby appoints the Administrator, subject to the direction of the Board of Directors/Trustees, for the period and on the terms set forth in this Agreement, to provide administrative services, as described herein, with respect to the Fund. The Administrator accepts such appointment and agrees to render the services set forth herein.
2. Services of the Administrator . Subject to the general supervision of the Board of Directors/Trustees of the Funds, the Administrator shall provide all administrative services reasonably necessary for the ordinary operation of each Fund as of the date first above written (Administrative Services). Provided, however, that Administrative Services shall not include the services identified on Schedule B and, therefore, such services shall be deemed to be outside of the scope of this Agreement.
3. Conformity with Applicable Law . The Administrator, in the performance of its duties and obligations under this Agreement, shall act in conformity with the Registration Statement of the Fund and with the instructions and directions of the Board of Directors/Trustees of the Fund and will conform to, and comply with, the requirements of the 1940 Act and all other applicable federal and state laws and regulations.
4. Exclusivity . The services of the Administrator to the Fund under this Agreement are not to be deemed exclusive, and the Administrator, 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 the Fund) and to engage in other activities, so long as its services hereunder are not impaired thereby.
5. Allocation and Delegation of Responsibilities . The Administrative Services may be furnished by any directors, officers or employees of the Administrator or of affiliates of the Administrator. The Administrator may, at the expense of the Administrator, retain the services of a third party as its delegate, under the Administrators supervision, to provide in its stead any
Administrative Service; provided, however, that any such delegation to a third party shall be subject to the approval of Funds Board of Directors/Trustees. The Administrator shall remain liable to the Fund for any service delegated to a third party pursuant to Section 5 to the same extent as if the Administrator provided the services itself.
6. Expenses . During the term of this Agreement, the Administrator will be responsible for paying the expenses incurred by it in connection with its activities under this Agreement described on Schedule C attached hereto, as it may be revised from time to time to account for changes in the vendors paid.
7. Compensation .
(a) For the services provided by the Administrator pursuant to this Agreement, the Fund will pay to the Administrator the annual fee set forth in Schedule D hereto.
(b) The administration fee shall be accrued daily by the Fund and paid to the Administrator at the end of each calendar month.
8. Liability of the Administrator .
(a) General. The Administrator 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 Administrator nor its stockholders, officers, directors/trustees 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 Administrators duties, or by reason of reckless disregard of the Administrators obligations and duties under this Agreement. The liability incurred by the Administrator pursuant to this paragraph 8(a) in any year shall be limited to the revenues of the Administrator derived from the Fund in that fiscal year of the Fund. The Administrator shall look solely to Fund property for satisfaction of claims of any nature against the Fund or a director, officer, employee or agent of the Fund individually arising in connection with the affairs of the Fund.
(b) Fund Disclosures .
(i) The Administrator shall be responsible for preparing the Funds registration statements and supplements to the Funds prospectuses and statements of additional information (Disclosure Documents), and for filing or arranging for the filing of such Disclosure Documents with the Securities and Exchange Commission (SEC) and other federal and state regulatory authorities as may be required by applicable law.
(ii) Notwithstanding anything in Section 8 or elsewhere in this Agreement, the Administrator shall exercise reasonable care consistent with a fiduciary duty in fulfilling its responsibilities under Section 8(b)(i) of this Agreement.
(iii) In the event of a claim, litigation, liability, or a regulatory action or investigation (collectively, a Disclosure Claim) that arises out of or is based upon the disclosure in a Disclosure Document for the Fund (including, but not limited to, a claim arising from an untrue statement or alleged untrue statement in a registration statement for the Fund or an omission or alleged omission of a material fact required to be stated therein or necessary to make statements made in a registration statement not misleading), the Administrator shall indemnify and hold harmless the Fund and each individual who, during the term of this Agreement, serves or had served as a Director/Trustee of the Fund who is not an interested person of the Fund, as such term is defined in the 1940 Act (an Independent Director/Trustee), if such Disclosure Claim arises from the Administrators failure or alleged failure to exercise reasonable care consistent with a fiduciary duty in the preparation or filing of the Funds Disclosure Documents for the loss, costs, or damages, including amounts paid in settlement with the written consent of the Administrator, which consent shall not be unreasonably withheld, and including reasonable legal and other expenses, that arise from such Disclosure Claim.
(iv) In addition to the indemnification provided in Section 8(b)(iii) of this Agreement, the Administrator agrees to indemnify and hold harmless the Independent Directors/Trustees for the costs of defense of a Disclosure Claim, including reasonable attorneys fees, regardless of whether such Disclosure Claim arises from the Administrators failure or alleged failure to exercise reasonable care consistent with a fiduciary duty in the preparation of the Funds Disclosure Documents, subject to the Administrators right to assume the defense of such Disclosure Claim pursuant to Section 8(b)(ix) of this Agreement.
(v) The parties expressly acknowledge that this Section 8(b) confers rights and remedies upon the Fund and each Independent Director/Trustee, including the right to enforce the indemnification provided for in Sections 8(b)(iii) and 8(b)(iv) of this Agreement. The obligation of the Administrator to provide indemnification to the Fund and the Independent Directors/Trustees, as set forth in this Section 8(b), shall remain in effect after the termination of this Agreement.
(vi) The indemnification of the Fund provided for in Section 8(b)(iii) of this Agreement shall apply only to the extent that any loss to the Fund is not covered by insurance held by the Fund, and shall not apply if: (A) the disclosure giving rise to the Disclosure Claim was provided by or on behalf of an Independent Director/Trustee for inclusion in the Funds Disclosure Documents; or (B) indemnification is not allowed under applicable law.
(vii) The indemnification of an Independent Director/Trustee provided in Sections 8(b)(iii) and 8(b)(iv) of this Agreement shall apply only to the extent that any loss to the Independent Director/Trustee is not covered by insurance held by the Fund or the Independent Director/Trustee , and shall not apply if: (A) losses are actually indemnified by the Fund, consistent with the Funds organizational documents; (B) the disclosure giving rise to the Disclosure Claim was provided by or on behalf of an Independent Director/Trustee for inclusion in the Funds Disclosure Documents; (C) losses are the result of willful misfeasance, bad faith, gross negligence or reckless disregard on the part of an Independent Director/Trustee; or (D) indemnification is not allowed under applicable law.
(viii) The Administrator shall not be liable for indemnification of an Independent Director/Trustee under this Section 8(b) unless the Independent Director/Trustee has notified the Administrator in writing within a reasonable time after the summons or other first legal process giving information of the nature of the Disclosure Claim is served upon such Independent Director/Trustee (or after such Independent Director/Trustee shall have received notice of such service on any designated agent); provided, however, that notification of the Administrator is not required if the Administrator had actual knowledge about the nature of the Disclosure Claim. In the event of a request for indemnification from an Independent Director/Trustee, the Administrator shall pay advances to the fullest extent permissible under the 1940 Act and applicable state law.
(ix) In the event of a request for indemnification from the Fund or an Independent Director/Trustee (Indemnified Party), the Administrator shall be entitled, upon notice to the Indemnified Party, to assume the defense of any Disclosure Claim against the Indemnified Party, with counsel satisfactory to the Administrator and the Indemnified Party.
(x) Section 8(a) shall not apply to a claim for indemnification under this Section 8(b).
9. Continuation and Termination . This Agreement shall become effective on the date first written above. The Agreement shall continue in full force and effect through January 1, 2016 and shall continue from year to year thereafter, unless terminated as provided herein.
This Agreement may be terminated by the Fund at any time, without the payment of any penalty, by the Board of Directors/Trustees of the Fund on sixty (60) days written notice to the Administrator, or by the Administrator at any time, without the payment of any penalty, on sixty (60) days written notice to the Fund.
10. Amendment. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties. This Agreement shall extend to and shall be binding upon the parties thereto, and their respective successors and assigns; provided, however, that this Agreement
11. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original.
12. Applicable Law .
(a) This Agreement shall be governed by the laws of the State of Delaware, provided that nothing herein shall be construed in a manner inconsistent with the 1940 Act, the Investment Advisers Act of 1940, or any rules or order of the SEC thereunder.
(b) 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.
(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.
13. Limitation of Liability for Claims . The Administrator is hereby expressly put on notice of the limitation of liability as set forth in the Declaration and agrees that the obligations assumed by the Fund on behalf of each Series pursuant to this Agreement shall be limited in all cases to each applicable Series and their assets, and the Administrator shall not seek satisfaction of any such obligation from the shareholders of any Fund or any other Series of the Fund, or from any director, trustee, officer, employee or agent of the Fund. The Administrator understands that the rights and obligations of each Series under the Declaration are separate and distinct from those of any and all other Series.
IN WITNESS WHEREOF , the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.
By and on Behalf of each of the Funds set forth on Schedule A hereto |
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dated the date of this Agreement: |
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By: |
/s/ Kimberly A. Anderson |
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Kimberly A. Anderson |
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Senior Vice President |
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VOYA FUNDS SERVICES, LLC |
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By: |
/s/ Todd Modic |
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Todd Modic |
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Senior Vice President |
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SCHEDULE A
with respect to the
ADMINISTRATION AGREEMENT
between
Funds set forth on Schedule A and
Voya Funds Services, LLC
CLOSED-END FUNDS:
Voya Asia Pacific High Dividend Equity Income Fund
Voya Emerging Markets High Dividend Equity Fund
Voya Global Advantage and Premium Opportunity Fund
Voya Global Equity Dividend and Premium Opportunity Fund
Voya Infrastructure, Industrials and Materials Fund
Voya International High Dividend Equity Income Fund
Voya Natural Resources Equity Income Fund
Voya Prime Rate Trust
Voya Senior Income Fund
OPEN-END FUNDS:
Voya Balanced Portfolio, Inc.
Voya Balanced Portfolio
Voya Equity Trust
Voya Growth Opportunities Fund
Voya Large Cap Value Fund
Voya MidCap Opportunities Fund
Voya Multi-Manager Mid Cap Value Fund
Voya Real Estate Fund
Voya SmallCap Opportunities Fund
Voya Funds Trust
Voya Floating Rate Fund
Voya GNMA Income Fund
Voya High Yield Bond Fund
Voya Intermediate Bond Fund
Voya Short Term Bond Fund
Voya Strategic Income Opportunities Fund
Voya Intermediate Bond Portfolio
Voya Intermediate Bond Portfolio
Voya Investors Trust
VY® BlackRock Inflation Protected Bond Portfolio
VY® Clarion Global Real Estate Portfolio
VY® Clarion Real Estate Portfolio
VY® DFA World Equity Portfolio
VY® FMRSM Diversified Mid Cap Portfolio
VY® Franklin Income Portfolio
VY® Franklin Mutual Shares Portfolio
VY® Franklin Templeton Founding Strategy Portfolio
Voya Global Perspectives Portfolio
Voya Global Resources Portfolio
Voya High Yield Portfolio
VY® Invesco Growth and Income Portfolio
VY® JPMorgan Emerging Markets Equity Portfolio
VY® JPMorgan Small Cap Core Equity Portfolio
Voya Large Cap Growth Portfolio
Voya Large Cap Value Portfolio
Voya Limited Maturity Bond Portfolio
Voya Liquid Assets Portfolio
VY® Morgan Stanley Global Franchise Portfolio
Voya Multi-Manager Large Cap Core Portfolio
Voya Retirement Conservative Portfolio
Voya Retirement Growth Portfolio
Voya Retirement Moderate Growth Portfolio
Voya Retirement Moderate Portfolio
VY® T. Rowe Price Capital Appreciation Portfolio
VY® T. Rowe Price Equity Income Portfolio
VY® T. Rowe Price International Stock Portfolio
VY® Templeton Global Growth Portfolio
Voya U.S. Stock Index Portfolio
Voya Money Market Portfolio
Voya Money Market Portfolio
Voya Mutual Funds
Voya Diversified Emerging Markets Debt Fund
Voya Diversified International Fund
Voya Emerging Markets Equity Dividend Fund
Voya Global Bond Fund
Voya Global Equity Dividend Fund
Voya Global Natural Resources Fund
Voya Global Perspectives Fund
Voya Global Real Estate Fund
Voya Global Value Advantage Fund
Voya International Core Fund
Voya International Real Estate Fund
Voya Multi-Manager Emerging Markets Equity Fund
Voya Multi-Manager International Equity Fund
Voya Multi-Manager International Small Cap Fund
Voya Russia Fund
Voya Partners, Inc.
Voya Aggregate Bond Portfolio
VY® American Century Small-Mid Cap Value Portfolio
VY® Baron Growth Portfolio
VY® Columbia Contrarian Core Portfolio
VY® Columbia Small Cap Value II Portfolio
VY® Fidelity® VIP Contrafund® Portfolio
VY® Fidelity® VIP Equity-Income Portfolio
VY® Fidelity® VIP Mid Cap Portfolio
Voya Global Bond Portfolio
Voya Index Solution 2015 Portfolio
Voya Index Solution 2020 Portfolio
Voya Index Solution 2025 Portfolio
Voya Index Solution 2030 Portfolio
Voya Index Solution 2035 Portfolio
Voya Index Solution 2040 Portfolio
Voya Index Solution 2045 Portfolio
Voya Index Solution 2050 Portfolio
Voya Index Solution 2055 Portfolio
Voya Index Solution Income Portfolio
VY® Invesco Comstock Portfolio
VY® Invesco Equity and Income Portfolio
VY® JPMorgan Mid Cap Value Portfolio
VY® Oppenheimer Global Portfolio
VY® Pioneer High Yield Portfolio
Voya Solution 2015 Portfolio
Voya Solution 2020 Portfolio
Voya Solution 2025 Portfolio
Voya Solution 2030 Portfolio
Voya Solution 2035 Portfolio
Voya Solution 2040 Portfolio
Voya Solution 2045 Portfolio
Voya Solution 2050 Portfolio
Voya Solution 2055 Portfolio
Voya Solution Aggressive Portfolio
Voya Solution Balanced Portfolio
Voya Solution Conservative Portfolio
Voya Solution Income Portfolio
Voya Solution Moderately Aggressive Portfolio
Voya Solution Moderately Conservative Portfolio
VY® T. Rowe Price Diversified Mid Cap Growth Portfolio
VY® T. Rowe Price Growth Equity Portfolio
VY® Templeton Foreign Equity Portfolio
Voya Separate Portfolios Trust
Voya Emerging Markets Corporate Debt Fund
Voya Emerging Markets Hard Currency Debt Fund
Voya Emerging Markets Local Currency Debt Fund
Voya Investment Grade Credit Fund
Voya Retirement Solution 2020 Fund
Voya Retirement Solution 2025 Fund
Voya Retirement Solution 2030 Fund
Voya Retirement Solution 2035 Fund
Voya Retirement Solution 2040 Fund
Voya Retirement Solution 2045 Fund
Voya Retirement Solution 2050 Fund
Voya Retirement Solution 2055 Fund
Voya Retirement Solution Income Fund
Voya Securitized Credit Fund
Voya Series Fund, Inc.
Voya Capital Allocation Fund
Voya Core Equity Research Fund
Voya Corporate Leaders 100 Fund
Voya Global Target Payment Fund
Voya Large Cap Growth Fund
Voya Mid Cap Value Advantage Fund
Voya Money Market Fund
Voya Small Company Fund
Voya Strategic Allocation Portfolios, Inc.
Voya Strategic Allocation Conservative Portfolio
Voya Strategic Allocation Growth Portfolio
Voya Strategic Allocation Moderate Portfolio
Voya Variable Funds
Voya Growth and Income Portfolio
Voya Variable Portfolios, Inc.
Voya Australia Index Portfolio
Voya Emerging Markets Index Portfolio
Voya Euro STOXX 50® Index Portfolio
Voya FTSE 100 Index® Portfolio
Voya Global Value Advantage Portfolio
Voya Hang Seng Index Portfolio
Voya Index Plus LargeCap Portfolio
Voya Index Plus MidCap Portfolio
Voya Index Plus SmallCap Portfolio
Voya International Index Portfolio
Voya Japan TOPIX Index® Portfolio
Voya Russell Large Cap Growth Index Portfolio
Voya Russell Large Cap Index Portfolio
Voya Russell Large Cap Value Index Portfolio
Voya Russell Mid Cap Growth Index Portfolio
Voya Russell Mid Cap Index Portfolio
Voya Russell Small Cap Index Portfolio
Voya Small Company Portfolio
Voya U.S. Bond Index Portfolio
Voya Variable Products Trust
Voya International Value Portfolio
Voya MidCap Opportunities Portfolio
Voya SmallCap Opportunities Portfolio
SCHEDULE B
with respect to the
ADMINISTRATION AGREEMENT
between
Funds set forth on Schedule A and
Voya Funds Services, LLC
EXCLUDED SERVICES
As set forth in Section 2 of this Agreement, the direct provision of the following services shall be deemed to be outside the scope of this Agreement.
1. Investment advisory services of the sort provided by the investment adviser or sub-adviser to a Fund
2. Underwriting or distribution services of the sort provided by the underwriter or distributor to a Fund
3. Distribution or shareholder services provided to a Fund pursuant to a plan, whether or not adopted under Rule 12b-1 promulgated under the 1940 Act
4. Custody services such as those currently provided by The Bank of New York Mellon and State Street Bank
5. Fund accounting services of the sort currently provided by The Bank of New York Mellon and State Street Bank, inclusive of pricing services utilized by the fund accounting agents
6. Transfer agency and recordkeeping services provided by various brokers/dealers and other intermediaries
7. Transfer agency services such as those currently provided by The Bank of New York Mellon and Computershare Limited
8. Printing and postage for shareholder reports, prospectuses and statements of additional information such as is currently provided by Merrill Corporation, Universal Wilde, RR Donnelley & Sons Company and Broadridge Financial Solutions, Inc.
9. External counsel and legal services such as those currently provided to the Funds or to the independent Directors/Trustees by Dechert LLP, Goodwin Procter LLP, and K&L Gates LLP
10. Audits and semi-annual reviews of financial statements, prospectuses and Form N-14 filings such as those currently provided by KPMG LLP
11. Tax consulting services, review of tax compliance and other tax services such as those currently provided by KPMG LLP
12. Fair value pricing services such as those currently provided by Interactive Data Corporation
13. Proxy tabulation and solicitation services related to shareholder meetings for a Fund, such as those currently provided by Broadridge Financial Solutions, Inc. and/or Computershare Limited
14. Identifying and tracking services for wash sales activity such as those currently provided by Gainskeeper (Wolters Kluwer Financial Services, Inc.)
15. Attribution and risk analysis services provided in support of the Chief Investment Risk Officer such as those currently provided by the Bank of New York-Wilshire Atlas/Axiom Attribution and Risk Analysis System
16. Recordkeeping services related to the Director/Trustee deferred compensation plan such as those currently provided by Pen-Cal Administrators
17. Call center services related to phone representatives that service existing fund shareholders of record such as those currently provided by The Bank of New York Mellon Services
18. Consultants hired at the request of the Board of Directors/Trustees to advise them
19. Administrative Services that are not reasonably necessary for the ordinary operation of each Fund as of the date first above written, but that may be required in the future
SCHEDULE C
with respect to the
ADMINISTRATION AGREEMENT
between
Funds set forth on Schedule A
And
Voya Funds Services, LLC
EXPENSES
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EXPENSE
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CURRENT
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DESCRIPTION |
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% Borne
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ALLOCATION NOTE |
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Allocated Expenses |
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1 |
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General Services |
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KPMG LLP (17f-2 Audit Fees) |
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Affiliated sub-custodian account test work |
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50% |
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2 |
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Fund Accounting/ Financial Reporting Services |
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Morgan Stanley GICS Direct License |
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Industry Classification for equity securities for financial reporting purposes |
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50% |
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Funds portion is limited to a maximum of $40,000. |
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3 |
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Fund Accounting/ Financial Reporting Services |
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RIMES Technologies Corporation |
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Aggregated benchmark data (returns). Data is used in Funds annual and semi-annual reports and prospectuses. |
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60% |
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4 |
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Proxy Voting Services |
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Institutional Shareholder Services (ISS, Inc.) |
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Proxy Advisory Services and Voting Agent Service |
|
50% |
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
|
Proxy Voting Services |
|
Farient |
|
Proxy Analysis |
|
50% |
|
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
Finance Services |
|
Bloomberg / Morningstar / NYSE / Strategic Insight / Institutional Investor / Etc. |
|
Market Data Service Providers (Non-CIRO usage) |
|
95% |
|
Allocation to the Funds is based on Board usage/subscriptions. Only actual Board usage costs are allocated to the Funds. |
|
|
|
|
|
|
|
|
|
|
|
7 |
|
Industry Association Dues |
|
Investment Company Institute |
|
General membership fees |
|
90% |
|
Funds portion is limited to a maximum of the fee paid by the Funds for Mutual Funds Directors Forum membership. |
(1) CIRO and CCO costs are considered extraordinary expenses and are therefore excluded from expenses that are subject to the Funds Expense Limitation Agreements.
(2) Overhead includes the costs associated with the following items; technology (except for Market Data Services and any IT Software expenses that are for the sole use of the CIRO or CCO); facilities; equipment; printing; and postage.
# |
|
EXPENSE
|
|
CURRENT
|
|
DESCRIPTION |
|
% Borne
|
|
ALLOCATION NOTE |
|
|
|
|
|
|
|
|
|
|
|
Voya Expenses, continued |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
16 |
|
Operational Services |
|
Eagle Pace |
|
Fund Data Warehouse - Annual License Agreement |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
17 |
|
Product Management/ Development Services |
|
The Bank of New York- Wilshire Atlas/Axiom Attribution and Risk Analysis System - Voya Use |
|
Attribution Analysis |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
18 |
|
Legal Services |
|
Dechert LLP (External Legal Fees) |
|
External counsel and legal services provided to Voya regarding Advisory/ Administrator Matters |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
19 |
|
Legal Services |
|
Voya Funds Services, LLC (Internal Legal Fees) |
|
Legal services for Management and the Funds performed by Internal Legal Staff |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
20 |
|
Legal Services |
|
Diligent Boardbooks |
|
Online Board Document Management System for Board Meeting Materials |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
21 |
|
Legal Services |
|
ARC System |
|
Content Management System for Registration Statement Production |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
22 |
|
Legal Services |
|
Abel Noser |
|
Trade Cost Analysis |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
23 |
|
Legal Services |
|
Board IQ / Ignites |
|
Industry Publications |
|
100% |
|
|
SCHEDULE D
with respect to the
ADMINISTRATION AGREEMENT
between
Funds set forth on Schedule A
and
Voya Funds Services, LLC
Fund |
|
Administrative Services Fee |
|
|
|
Open-End Funds set forth on Schedule A |
|
0.10% (as a percentage of average daily net assets) |
|
|
|
Closed-End Funds set forth on Schedule A (except Voya Prime Rate Trust) |
|
0.10% (as a percentage of Managed Assets*) |
|
|
|
Voya Prime Rate Trust |
|
0.25% (as a percentage of Managed Assets*) |
* Managed Assets shall mean the Funds average daily gross asset value, minus the sum of the Funds accrued and unpaid dividends on any outstanding preferred shares and accrued liabilities (other than liabilities for the principal amount of any borrowings incurred, commercial paper or notes issued by the Fund and the liquidation preference of any outstanding preferred shares).
Exhibit 2(k)7
EXPENSE LIMITATION AGREEMENT
VOYA PRIME RATE TRUST
This EXPENSE LIMITATION AGREEMENT (the Agreement) is effective November 18, 2014, by and between Voya Investments, LLC (the Investment Manager) and Voya Prime Rate Trust (the Registrant). The Registrant is not a series fund investment company, therefore this Agreement shall apply to the Registrant, and the use of the terms Fund or Funds herein shall refer to the Registrant.
WHEREAS, the Registrant is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a closed-end management investment company; and
WHEREAS , the Registrant and the Investment Manager desire that the provisions of this Agreement do not adversely affect a Funds status as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code), do not interfere with a Funds ability to compute its taxable income under Code Section 852, do not adversely affect the status of the distributions a Fund makes as deductible dividends under Code Section 562, and do comply with the requirements of Revenue Procedure 99-40 (or any successor pronouncement of the Internal Revenue Service); and
WHEREAS, the Registrant and the Investment Manager have entered into an investment management agreement (the Management Agreement), pursuant to which the Investment Manager provides investment advisory services to each Fund; and
WHEREAS, the Registrant and the Investment Manager have determined that it is appropriate and in the best interests of the Funds and their shareholders to maintain the expenses of each Fund at a level below the level to which each such Fund might otherwise be subject.
NOW, THEREFORE, the parties hereto agree as follows:
1. Expense Limitation .
1.1 Applicable Expense Limit . To the extent that the ordinary operating expenses, including but not limited to investment advisory fees payable to the Investment Manager, but excluding interest, taxes, investor relations services, other investment-related costs, leverage expenses (as defined below), extraordinary expenses such as litigation, other expenses not incurred in the ordinary course of such Funds business, and expenses of any counsel or other persons or services retained by such Funds Trustees who are not interested persons, as that term is defined in the 1940 Act, of the Investment Manager (the Fund Operating Expenses), incurred by each Fund listed on Schedule A during any term of this Agreement (the Term) exceed the Operating Expense Limit, as defined in Section 1.2 below, for such Fund for such Term, such excess amount (the Excess Amount) shall be the liability of the Investment Manager. For the purposes of this Agreement, leverage expenses shall mean fees, costs and expenses incurred by a Funds use of leverage (including, without limitation, expenses incurred
by a Fund in creating, establishing and maintaining leverage through borrowings or the issuance of preferred shares).
1.2 Operating Expense Limit . The Operating Expense Limit in any Term with respect to each Fund shall be the amount specified in Schedule A .
1.3 Daily Computation . The Investment Manager shall determine on each business day whether the aggregate Term to date Fund Operating Expenses for any Fund exceed the Operating Expense Limit, as such Operating Expense Limit has been pro-rated to the date of such determination (the Pro-Rated Expense Cap). If, on any business day, the aggregate Term to date Fund Operating Expenses for any Fund do not equal the Pro-Rated Expense Cap for that Fund, the amount of such difference shall be netted against the previous days accrued amount for Excess Amounts or Recoupment Amounts (as defined below), and the difference shall be accrued for that day as an Excess Amount or Recoupment Amount as applicable.
1.4 Payment . At the end of each month, the accruals made pursuant to Section 1.3 above shall be netted, and the result shall be remitted by the Investment Manager to the Fund (pursuant to Section 1.1 above) if such netting results in an Excess Amount, and it shall be remitted to the Investment Manager if such netting results in a Recoupment Amount and the Investment Manager is entitled to a Recoupment Amount pursuant to Section 2 below. Any such amounts remitted to a Fund, or repaid by a Fund, shall be allocated to a Fund in accordance with the terms of the 1940 Act. The Registrant may offset amounts owed to a Fund pursuant to this Agreement against the Funds advisory fee payable to the Investment Manager.
2. Right to Recoupment . If the Investment Manager has waived or reduced any investment advisory fees, or made any payments pursuant to Section 1.4 above, relating to any of the 36 months immediately preceding any month end calculation pursuant to Section 1.4 above, the Investment Manager shall be entitled to recoup from a Fund any such investment advisory fees waived or reduced and any such payments made (collectively, a Recoupment Amount), if (i) on the date of any calculation under Section 1.3, the aggregate Term to date Fund Operating Expenses for any Fund are less than that days Pro-Rated Expense Cap for that Fund, and (ii) such Recoupment Amounts have not already been recouped. Any amounts recouped from a Fund shall be recouped in accordance with the 1940 Act. Amounts recouped shall be allocated to the oldest Recoupment Amounts during such 36-month period until fully recouped, and thereafter to the next oldest Recoupment Amounts, and so forth.
3. Term and Termination . This Agreement shall have an initial term with respect to each Fund ending on the date indicated on Schedule A , as such schedule may be amended from time to time. Thereafter, this Agreement shall automatically renew for one-year terms with respect to a Fund unless the Investment Manager provides written notice of the termination of this Agreement to a lead Independent Director of the Registrant within 90 days of the end of the then current term for that Fund and such termination is approved by the Board of Directors of the Registrant. In addition, this Agreement shall terminate with respect to a Fund upon termination of the Management Agreement with respect to such Fund, or it may be terminated by the Registrant, without payment of any penalty, upon written notice to the Investment Manager at its principal place of business within 90 days of the end of the then current term for a Fund.
4. Miscellaneous .
4.1 Captions . The captions in this Agreement are included for convenience of reference only and in no other way define or delineate any of the provisions hereof or otherwise affect their construction or effect.
4.2 Interpretation . Nothing herein shall be deemed to require the Registrant or a Fund to take any action contrary to the Registrants articles of incorporation, declaration of trust, or similar governing document, an applicable prospectus or statement of additional information, or any applicable statutory or regulatory requirement, or to relieve or deprive the Registrants Board of Trustees of its responsibility for and control of the conduct of the affairs of the Registrant or the Funds.
4.3 Definitions . Any question of interpretation of any term or provision of this Agreement, including but not limited to the investment management fee, the computations of net asset values, and the allocation of expenses, having a counterpart in or otherwise derived from the terms and provisions of the Management Agreement or the 1940 Act, shall have the same meaning as and be resolved by reference to such Management Agreement or the 1940 Act.
4.4 Amendments . This Agreement, including the applicable expense limits for a Fund as set forth on Schedule A , may be amended only by a written agreement signed by each of the parties hereto and such amendment is approved by the Board of Directors of the Registrant.
(REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF , the parties have caused this Agreement to be signed by their respective officers thereunto duly authorized, as of the day and year first above written.
VOYA PRIME RATE TRUST |
|
VOYA INVESTMENTS, LLC |
||
|
|
|
||
|
|
|
||
By: |
/s/ Kimberly A. Anderson |
|
By: |
/s/ Todd Modic |
|
Kimberly A. Anderson |
|
|
Todd Modic |
|
Senior Vice President |
|
|
Senior Vice President |
SCHEDULE A
to the
EXPENSE LIMITATION AGREEMENT
VOYA PRIME RATE TRUST
OPERATING EXPENSE LIMITS
Name of Fund* |
|
Maximum Operating Expense Limit
|
|
|
|
Voya Prime Rate Trust
|
|
1.05% of
|
|
/s/ H.E. |
|
HE |
Effective Date: November 18, 2014 in connection with the Voya Financial, Inc. change of control.
* This Agreement shall automatically renew for one-year terms with respect to a Fund unless otherwise terminated in accordance with the Agreement.
(1) Managed Assets are defined as the Funds average daily gross asset value, minus the sum of the Funds accrued and unpaid dividends on any outstanding preferred shares and accrued liabilities (other than liabilities for the principal amount of any borrowings incurred, commercial paper or notes issued by the Fund and the liquidation preference of any outstanding preferred shares).