Exhibit 99.k (xii)
ALLOCATION AGREEMENT
FIDELITY BOND
THIS AGREEMENT made as of this 24th day of May, 2002 by and among any of the
Funds listed on Schedule A and any separate classes thereof and all future
investment companies and any separate classes thereof (the "Funds"), which are
named insureds under a joint liability policy as described below and for which
ING Investments, LLC acts as investment manager are entered into under the
following circumstances:
A. Section 17(g) of the Investment Company Act of 1940, as amended ("xxx
0000 Xxx") provides that the Securities and Exchange Commission ("SEC") is
authorized to require that directors, officers and employees of registered
investment companies be covered under a liability, errors and omissions
insurance policy, and the SEC has promulgated rules and regulations dealing with
this subject ("Rule 17g-1");
B. The Funds are named as joint insureds under the terms of a joint
insurance policy ("Policy") which insures against illegal profit or gain,
intentional wrongful acts, libel, slander, defamation, ERISA claims, xxxxxxx
xxxxxxx, as well as other coverage as outlined in the Policy, by the directors,
officers and employees;
C. A majority of those members of the Board of Directors/Trustees of each
of the Funds, who are not "interested persons" as defined by Section 2(a)(19) of
the 1940 Act, have given due consideration to all factors relevant to the form,
amount and apportionment of premiums and recoveries under such Policy and the
Board of Directors/Trustees of each Fund has approved the term and amount of the
Policy, the portion of the premium payable by that party, and the manner in
which recovery on the Policy, if any, shall be shared by and among the parties
thereto; and
D. The Funds now desire to enter into the agreement required by Rule
17g-1 of the 1940 Act to establish the manner in which recovery under the
Policy, if any, shall be shared.
NOW, THEREFORE, IT IS HEREBY AGREED by and among the parties as follows:
1. Payment of Premiums.
Each Fund shall pay a portion of the premium due under the Policy
derived by multiplying the premium by a fraction, (i) the denominator of which
is the total net assets of all the Funds combined and (ii) the numerator of
which is the total net assets of each of the Funds individually. The net assets
of the classes are deemed to be represented by the net assets of their
respective funds. Each of the Funds agrees that the appropriateness of the
allocation of said premium will be determined no less often than annually. No
adjustment of the allocation of said premium will be implemented without
approval of the Boards of each of the Funds.
2. Allocation of Recoveries
(a) If more than one of the parties hereto is damaged in a single
loss for which recovery is received under the policy, each such party shall
receive that portion of the recovery which represents the loss sustained by that
party, unless the recovery is inadequate to fully indemnify such party
sustaining loss.
(b) If the recovery is inadequate to fully indemnify each such party
sustaining a loss, the recovery shall be allocated among such parties as
follows:
(i) Each Party sustaining a loss shall be allocated an amount
equal to the lesser of its actual loss or the minimum amount of policy which
would be required to be maintained by such party under a single insured policy
(determined as of the time of loss) in accordance with the provisions of Rule
17g-1.
(ii) The remaining portion of the proceeds shall be allocated to
each party sustaining a loss not fully covered by the allocation under
subparagraph (i) in the proportion that each such party's last payment of
premium bears to the sum of the last such premium payments of all such parties.
If such allocation would result in any party which had sustained a loss
receiving a portion of the recovery in excess of the loss actually sustained,
such excess portion shall be allocated among the other parties whose losses
would not be fully indemnified. The allocation shall bear the same proportion as
each such party's last payment of premium bears to the sum of the last premium
payments of all parties entitled to receive a share of the excess. Any
allocation in excess of a loss actually sustained by any such party shall be
reallocated in the same manner.
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3. OBLIGATION TO MAINTAIN MINIMUM COVERAGE.
Each of the Funds represents and warrants to each of the other parties
hereto that the minimum amount of coverage required of it by Rule 17g-1 as of
the date hereof is as reflected in the schedule attached hereto. Each of the
Funds agrees that it will determine, no less than at the end of each calendar
quarter, the minimum amount of coverage which would be required of it by Rule
17g-1 if a determination with respect to the adequacy of the coverage were
currently being made. In the event that the total amount of the minimum coverage
thus determined exceeds the amount of coverage of the then effective policy, the
Boards of each of the Funds will be notified and will determine whether it is
necessary or appropriate to increase the total amount of coverage of the policy
to an amount not less than the total amount of such minimums, or to secure such
excess coverage for one or more of the parties hereto, which, when added to the
total coverage of the policy, will equal an amount of such minimums. Unless a
Fund elects to terminate this Agreement (pursuant to Paragraph 4) and its
participation in a joint-insured policy, each Fund agrees to pay its fair
portion of the new or additional premium (taking into account all of the then
existing circumstances).
4. CONTINUATION AND TERMINATION. This Agreement shall become
effective on the date first written above, subject to the condition that the
Fund's Board of Directors/Trustees, including a majority of those
Directors/Trustees who are not interested persons (as such term is defined in
the 0000 Xxx) of the Manager, shall have approved this Agreement. This Agreement
shall supersede all prior agreements relating to an allocation of premium on any
joint insured policy and shall apply to the present liability policy coverage
and any renewal or replacement thereof. It shall continue until terminated by
any party hereto upon the giving of not less than sixty (60) days notice to the
other parties hereto in writing.
5. 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. A written amendment of this Agreement is effective
upon the approval of the Board of Directors/Trustees and the Manager.
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IN WITNESS WHEREOF, the parties hereto have caused these presents to be
duly executed by their duly authorized officers as of the date first above
written.
On Behalf of: All ING Funds Listed on Schedule A
By:/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Executive Vice President
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