EXHIBIT h(3)
ALLOCATION AGREEMENT
INVESTMENT COMPANY BLANKET BOND
THIS AGREEMENT made as of this 24th day of September, 2003 by and among
any of the Funds listed on Schedule A attached hereto and any separate classes
thereof and all future investment companies and any separate classes thereof
(the "Funds"), which are named insureds under a joint Investment Company Blanket
Bond, as described below, and for which ING Investments, LLC (the "Manager")
acts as investment manager is entered into under the following circumstances:
A. Section 17(g) of the Investment Company Act of 1940, as
amended (the "1940 Act") provides that the U.S. Securities and Exchange
Commission (the "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 roles and
regulations dealing with this subject ("Rule 17g-1");
B. The Funds are named as joint insureds under the terms of
a joint Investment Company Blanket Bond (the "Bond") which provides first party
coverage against direct loss to each and all insured Funds arising out of
employee dishonesty, loss of property-on premises or in transit, forgery or
alteration, counterfeit currency or forged securities. The Bond provides
coverage for the insured Funds, officers and Directors/Trustees and any other
coverage as outlined in the Bond, by the directors, officers and employees;
C. A majority of those members of the Board of
Directors/Trustees of each of the Funds (the "Board"), 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 the Bond and the Board of Directors/Trustees
of each Fund has approved the term and amount of the Bond, the portion of the
premium payable by that party, and the manner in which recovery on the Bond, 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 Bond, 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 Bond 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 Board 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 Bond, 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:
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(i) Each party sustaining a loss shall be allocated an
amount equal to the lesser of its actual loss or the minimum amount of Bond,
which would be required to be maintained by such party under a single Bond
(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.
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 Bond, the Board 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 Bond to an amount not less than
3
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 Bond,
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 Bond, 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 each
Fund's Board, including a majority of those Directors/Trustees who are not
interested persons, as such term is defined in the 1940 Act, as amended, of the
Manager, shall have approved this Agreement. This Agreement shall supersede all
prior agreements relating to an allocation of premium on any joint Bond and
shall apply to the present Bond 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 each Board and the Manager.
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
------------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
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SCHEDULE A
Brokerage Cash Reserves
ING Aeltus Money Market Fund
ING Balanced Fund
ING Bond Fund
ING Classic Principal Protection Fund I
ING Classic Principal Protection Fund II
ING Classic Principal Protection Fund III
ING Classic Principal Protection Fund IV
ING GET Fund - Series D
ING GET Fund - Series E
ING GET Fund - Series G
ING GET Fund - Series H
ING GET Fund - Series I
ING GET Fund - Series J
ING GET Fund - Series K
ING GET Fund - Series L
ING GET Fund - Series M
ING GET Fund - Series N
ING GET Fund - Series P
ING GET Fund - Series Q
ING GET Fund - Series R
ING GET Fund - Series S
ING GET Fund - Series T
ING GET Fund - Series U
ING GET Fund - Series V
ING Government Fund
ING Growth and Income Fund
ING Growth Fund
ING Index Plus LargeCap Fund
ING Index Plus MidCap Fund
ING Index Plus Protection Fund
ING Index Plus SmallCap Fund
ING International Growth Fund
ING Small Company Fund
ING Strategic Allocation Balanced Fund
ING Strategic Allocation Growth Fund
ING Strategic Allocation Income Fund
ING Technology Fund
ING Value Opportunity Fund
ING VP Balanced Portfolio, Inc.
ING XX Xxxx Portfolio
ING VP Growth and Income Portfolio
ING VP Growth Portfolio
ING VP Index Plus LargeCap Portfolio
ING VP Index Plus MidCap Portfolio
ING VP Index Plus SmallCap Portfolio
ING VP International Equity Portfolio
ING VP Money Market Portfolio
ING VP Small Company Portfolio
ING VP Strategic Allocation Balanced Portfolio
ING VP Strategic Allocation Growth Portfolio
ING VP Strategic Allocation Income Portfolio
ING VP Technology Portfolio
ING VP Value Opportunity Portfolio
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ING FUNDS SERVICES, LLC
(FIDELITY BOND ANALYSIS)
AUGUST 27, 2003
GROSS
ASSET SIZE MINIMUM BONDING
NAME OF FUND CLASSIFICATION REQUIREMENT
------------ -------------- ---------------
ING VP BALANCED PORTFOLIO. INC. $1,271,085,898 1,000,000,000 to 1,500,000,000 1,250,000
--------------
ING VP Balanced Portfolio $1,271,085,898
ING STRATEGIC ALLOCATION PORTFOLIOS. INC. $ 497,452,252 250,000,000 to 500,000,000 750,000
--------------
ING VP Strategic Allocation Growth Portfolio $ 190,828,532
ING VP Strategic Allocation Balanced Portfolio $ 181,460,031
ING VP Strategic Allocation Income Portfolio $ 125,163,689
ING GET FUNDS $3,225,916,284 3,000,000,000 to 3,500,000,000 2,100,000
--------------
ING GET Fund - Series D $ 332,274,033
ING GET Fund - Series E $ 373,932,741
ING GET Fund - Series G $ 182,681,299
ING GET Fund - Series H $ 134,886,070
ING GET Fund - Series I $ 79,144,000
ING GET Fund - Series J $ 65,279,272
ING GET Fund - Series K $ 75,970,855
ING GET Fund - Series L $ 70324,913
ING GET Fund - Series M $ 102,638,303
ING GET Fund - Series N $ 105,659,465
ING GET Fund - Series P $ 185,794,461
ING GET Fund - Series Q $ 195,663,782
ING GET Fund - Series R $ 183,686,997
ING GET Fund - Series S $ 276,641,045
ING GET Fund - Series T $ 209,206,979
ING GET Fund - Series U $ 215,697,846
ING GET Fund- Series V $ 436,434,223
ING XX XXXX PORTFOLIO $1,246,847,072 1,000,000,000 to 1,500,000,000 1,250,000
--------------
ING XX Xxxx Portfolio $1,246,847,072
ING VP MONEY MARKET PORTFOLIO $1,385,038,341 1,000,000,000 to 1,500,000,000 1,250,000
--------------
ING VP Money Market Portfolio $1,385,038,341
ING VARIABLE FUNDS $3,505,094,585 3,500,000,000 to 4,000,000,000 2,300,000
--------------
ING VP Growth and Income Portfolio $3,505,094,585
ING VARIABLE PORTFOLIOS, INC. $2,625,731,352 2,500,00,000 to 3,000,000,000 1,900,000
--------------
ING VP Growth Portfolio $ 208,719,953
ING VP Index Plus LargeCap Portfolio $1,218,757,878
ING VP Index Plus MidCap Portfolio $ 349,946,217
ING VP Index Plus SmallCap Portfolio $ 130,573,352
ING VP International Equity Portfolio $ 33,720,337
ING VP Small Company Portfolio $ 380,042,246
ING VP Technology Portfolio $ 71,523,441
ING VP Value Opportunity Portfolio $ 232,447,928
ING SERIES FUND, INC. $3,000,641,373 3,000,000,000 to 3,500,000,000 2,100,000
--------------
Brokerage Cash Reserves $ 340,206,073
ING Aeltas Money Market Fund $ 297,538,698
ING Balanced Fund $ 115,930,370
ING Bond Fund $ 143,576,217
ING Classic Principal Protection Fund I $ 104,069,163
ING Classic Principal Protection Fund II $ 89,286,201
ING Classic Principal Protection Fund III $ 77,470,049
ING Classic Principal Protection Fund IV $ 48,543,789
ING Government Fund $ 83,340,129
ING Growth and Income Fund $ 236,291,643
ING Growth Fund $ 185,420,472
ING Index Plus LargeCap Fund $ 424,261,255
ING Index Plus MidCap Fund $ 105,772,290
ING Index Plus Protection Fund $ 41,355,484
ING Index Plus SmallCap Fund $ 38,463,164
ING International Growth Fund $ 59,401,767
ING Small Company Fund $ 300,206,600
ING Strategic Allocation Balanced Fund $ 89,425,117
ING Strategic Allocation Growth Fund $ 69,644,178
ING Strategic Allocation Income Fund $ 48,616,059
ING Technology Fund $ 64,594,796
ING Value Opportunity Fund $ 37,227,859
MINIMUM BOND REQUIREMENT 12,900,000
PRESENT COVERAGE 15,000,000
RESERVE 2,100,000
TOTAL ASSETS COVERED $16,757,807,157
