Exhibit (9)(e)
Fidelity Bond Allocation Agreement
Among Rydex Series Trust, PADCO Advisors, Inc.,
The Rydex Advisor Variable Annuity Account,
PADCO Advisors II, Inc., and
PADCO Service Company, Inc.
PAGE
Amendment to
FIDELITY BOND ALLOCATION AGREEMENT
among
RYDEX SERIES TRUST,
PADCO ADVISORS, INC.,
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT,
PADCO ADVISORS II, INC.,
and
PADCO SERVICE COMPANY, INC.
The following Amendment is made to the first paragraph of
the Preamble to the Fidelity Bond Allocation Agreement, dated
June 26, 1996, among Rydex Series Trust, PADCO Advisors, Inc.,
Rydex Advisor Variable Annuity Account, PADCO Advisors II,
Inc., and PADCO Service Company, Inc. (the "Allocation
Agreement"), and is hereby incorporated into and made a part
of the Allocation Agreement:
The first two paragraphs to the Preamble to the
Allocation Agreement are amended, effective
September 26, 1996, to read as follows:
ALLOCATION AGREEMENT (the "Agreement"),
is made as of this 26th day of June, 1996,
by and among:
R Y DEX SERIES TRUST (the "Trust"), a
registered investment company organized as
a Delaware business trust on March 9,
1993, with its principal place of business
at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000, on behalf of
the Trust and the Trust's series of THE
NOVA FUND, THE URSA FUND, THE RYDEX OTC
FUND, THE RYDEX PRECIOUS METALS FUND, THE
RYDEX U.S. GOVERNMENT BOND FUND, THE JUNO
FUND, THE RYDEX U.S. GOVERNMENT MONEY
MARKET FUND, THE RYDEX INSTITUTIONAL MONEY
MARKET FUND, and THE RYDEX HIGH YIELD
FUND, and all future registered investment
companies which are named insureds under a
joint fidelity bond as described below and
for which PADCO Advisors, Inc. acts as
PAGE
investment adviser and for which PADCO
Service Company, Inc. acts as transfer
agent and shareholder servicing agent (the
above-referenced entities hereinafter are
collectively referred to as the "Rydex
Funds");
In witness whereof, the parties hereto have caused these
Amendments to be executed in their names and on their behalf
and through their duly-authorized officers as of the 26th day
of September, 1996.
ATTEST: RYDEX SERIES TRUST
By:/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx,
Xx.
Name: Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx, Xx.
Title: Vice President President
ATTEST: RYDEX SERIES TRUST on behalf of
the RYDEX FUNDS of RYDEX
SERIES
TRUST
By:/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx,
Xx.
Name: Xxxxxx X. Xxxxxx Xxxxxx X.Xxxxxx, Xx.
Title: Vice President President
2
ATTEST: PADCO ADVISORS, INC.
By:/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx Xxxxxx X.Xxxxxx, Xx.
Title: Secretary President
ATTEST: RYDEX ADVISOR VARIABLE
ANNUITY ACCOUNT
By:/s/ Xxxxxx X. Xxxxxx By: / s / L. Xxxxxxx
Xxxxxxxxx.
Name: Xxxxxx X. Xxxxxx L. Xxxxxxx Xxxxxxxxx
Title: Vice President Vice President
ATTEST: RYDEX ADVISOR VARIABLE ANNUITY
ACCOUNT on behalf of the
SUBACCOUNTS of RYDEX ADVISOR
VARIABLE ANNUITY ACCOUNT
By:/s/ Xxxxxx X. Xxxxxx By: /s/ L. Xxxxxxx Xxxxxxxxx
Name: Xxxxxx X. Xxxxxx L. Xxxxxxx Xxxxxxxxx
Title: Vice President Vice President
ATTEST: PADCO ADVISORS II, INC.
By:/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx Xxxxxx X.Xxxxxx, Xx.
Title: Secretary President
ATTEST: PADCO SERVICE COMPANY, INC.
By:/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx Xxxxxx X.Xxxxxx, Xx.
Title: Secretary President
3
Fidelity Bond Allocation Agreement
Among Rydex Series Trust,
PADCO Advisors, Inc.,
The Rydex Advisor Variable Annuity Account,
PADCO Advisors II, Inc.,
and
PADCO Service Company, Inc.
Dated June 26, 1996
THIS ALLOCATION AGREEMENT (the "Agreement"), is made as of
this 26th day of June, 1996, by and among:
R Y D E X SERIES TRUST (the "Trust"), a registered
investment company organized as a Delaware business
trust on March 9, 1993, with its principal place of
b u siness at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000, on behalf of the Trust and
the Trust's series of THE NOVA FUND, THE URSA FUND, THE
RYDEX OTC FUND, THE RYDEX PRECIOUS METALS FUND, THE
RYDEX U.S. GOVERNMENT BOND FUND, THE JUNO FUND, THE
RYDEX U.S. GOVERNMENT MONEY MARKET FUND, and THE RYDEX
I N S TITUTIONAL MONEY MARKET FUND, and all future
registered investment companies which are named insureds
under a joint fidelity bond as described below and for
which PADCO Advisors, Inc. acts as investment adviser
and for which PADCO Service Company, Inc. acts as
transfer agent and shareholder servicing agent (the
above-referenced entities hereinafter are collectively
referred to as the "Rydex Funds");
P A D C O ADVISORS, INC. ("PADCO I"), a registered
investment adviser incorporated under the laws of the
State of Maryland on February 5, 1993, with its
principal place of business at 0000 Xxxxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000;
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT (the "Separate
Account"), a registered investment company established
as a managed separate account of Great American Reserve
Insurance Company ("Great American Reserve") under the
laws of the State of Texas on April 15, 1996, with its
principal place of business at 00000 Xxxxx Xxxxxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxx 00000, and with offices at 0000
Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, on
b e half of the Separate Account and the Separate
Account's subaccounts of THE NOVA SUBACCOUNT, THE URSA
SUBACCOUNT, THE OTC SUBACCOUNT, THE PRECIOUS METALS
SUBACCOUNT, THE U.S. GOVERNMENT BOND SUBACCOUNT, THE
JUNO SUBACCOUNT, THE MONEY MARKET I SUBACCOUNT, and THE
MONEY MARKET II SUBACCOUNT, and all future registered
investment companies which are named insureds under a
joint fidelity bond as described below and for which
PADCO Advisors II, Inc. acts as investment adviser and
for which PADCO Service Company, Inc. acts as Subaccount
asset allocation administration servicer (the above-
referenced subaccounts of the Separate Account
h e r einafter are collectively referred to as the
"Subaccounts");
PADCO ADVISORS II, INC. ("PADCO II"), a registered
investment adviser incorporated under the laws of the
State of Maryland on July 5, 1994, with its principal
p l a c e of business at 0000 Xxxxxxxxx Xxxxxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000; and
P A D CO SERVICE COMPANY, INC. (the "Servicer"), a
registered transfer agent incorporated under the laws of
the State of Maryland on October 6, 1993, with its
principal place of business at 0000 Xxxxxxxxx Xxxxxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000.
This Agreement is entered into by the aforementioned parties
(collectively, the "Joint Insureds") under the following
circumstances:
W I T N E S S E T H
WHEREAS, Section 17(g), "Transactions of Certain Affiliated
Persons and Underwriters," of the Investment Company Act of
1 9 40, as amended (the "1940 Act"), provides that the
Securities and Exchange Commission (the "Commission") is
a u t horized to require that officers and employees of
registered investment companies be bonded against larceny and
embezzlement, and the Commission, under Rule 17g-1, "Bonding
of Officers and Employees of Registered Management Investment
Companies," under the 1940 Act, has promulgated rules and
regulations dealing with this subject;
WHEREAS, the Trust, the Rydex Funds, PADCO I, the Separate
Account, the Subaccounts, PADCO II, and the Servicer, are
named or will be named as joint insureds under the terms of a
certain bond or policy of insurance which insures against
larceny and embezzlement of officers and employees (the
"Fidelity Bond"), a copy of which Fidelity Bond is attached
hereto as Exhibit A;
WHEREAS, the trustees of the Trust (the "Trustees"),
including a majority of the Trustees who are not "interested
persons" of the Trust, as that term is defined in Section
2(a)(19) of the 1940 Act, and the managers of the Separate
Account (the "Managers"), including a majority of the Managers
who are not "interested persons" of the Separate Account, as
that term is defined in Section 2(a)(19) of the 1940 Act, and
have considered all relevant factors, including, but not
limited to, the number of the parties named as "joint
insureds" under the joint Fidelity Bond, the nature of the
business activities of such Joint Insureds, the amount of the
joint insured bond, the amount of the premium for such bond,
and the ratable allocation of the premium among all parties
named as insureds under the joint Fidelity Bond, and have
determined that the share of the premium allocated to each of
the Rydex Funds and to each of the New Subaccounts is less
than the premium each such Rydex Fund and each such New
Subaccount, respectively, would have had to pay if each such
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Rydex Fund and each such New Subaccount had provided and
maintained a single insured bond, as required pursuant to
paragraph (e) of Rule 17g-1, and also have determined that it
would be in the best interests of (1) the Trust and the Rydex
Funds and (2) the Separate Account and the Subaccounts for (1)
the Trust and the Rydex Funds and (2) the Separate Account and
the Subaccounts, respectively, to be included as covered joint
insureds under the joint insured Fidelity Bond, pursuant to
the requirements of Rule 17g-1 under the 1940 Act;
WHEREAS, a majority of the Trustees of the Trust who are
not "interested persons," as that term is defined in Section
2(a)(19) of the 1940 Act, and a majority of the Managers of
the Separate Account who are not "interested persons," as that
term is defined in Section 2(a)(19) of the 1940 Act, each has
given due consideration to all factors relevant to the form,
amount, and apportionment of premiums and recoveries on such
joint insured Fidelity Bond and such Managers have approved
the term and amount of the Fidelity Bond, the portions of the
premium payable by each of the Rydex Funds, the Subaccounts,
PADCO I, PADCO II, and the Servicer, and the manner in which
recovery of said Fidelity Bond, if any, shall be shared by and
among the parties hereto as set forth; and
WHEREAS, the Trust, the Rydex Funds, PADCO I, the Separate
Account, the Subaccounts, PADCO II, and the Servicer now
desire to enter into the agreement required by Rule 17g-l(f)
under the 1940 Act to establish the manner in which recovery
on said Fidelity Bond, if any, shall be shared.
NOW, THEREFORE, IT IS HEREBY AGREED by and among the
parties as follows:
1. Payment of Premiums
PADCO I shall pay eight percent (8%), PADCO II shall pay
eight percent (8%), the Servicer shall pay four percent (4%),
and the Rydex Funds and the Subaccounts shall pay eighty
percent (80%) of the premium payable under the Fidelity Bond.
Each of the Rydex Funds and the Subaccounts shall pay that
percentage of said amount of the premium due under the
Fidelity Bond which is derived by a fraction, (i) the
denominator of which is the total net assets of all the Rydex
Funds and Subaccounts combined, and (ii) the numerator of
which is the total net assets of each such Rydex Fund or each
such Subaccount individually.
Each of the Rydex Funds, PADCO I, each of the Subaccounts,
PADCO II, and the Servicer agree that the appropriateness of
the allocation of said premium will be determined jointly by
PADCO I and PADCO II (collectively, the "Advisors") on a
monthly basis, subject to approval by both the Trustees and
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the Managers of both the Fidelity Bond and this Allocation
Agreement no less often than annually.
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
Fidelity 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 indemnify fully
such party sustaining a loss.
(b) If the recovery is inadequate to indemnify fully
each such party sustaining a loss, then the recovery shall be
allocated among such parties as follows:
(i) Each such party sustaining a loss shall be allocated
an amount equal to the lesser of that party's actual loss or
the minimum amount of bond which would be required to be
m a intained by such party under a single insured bond
(determined as of the time of the loss) in accordance with the
provisions of Rule 17g-l(d)(1) under the 1940 Act.
(ii) The remaining portion of the proceeds shall be
allocated to each such party sustaining a loss not fully
covered by the allocation under subparagraph 2(b)(i), above,
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
(a) Each of the Rydex Funds and each of the Subaccounts
represents and warrants to each of the other parties hereto
that the minimum amount of coverage required of each such
Rydex Fund and each such Subaccount, respectively, shall be
determined as of the date hereof pursuant to the schedule set
forth in paragraph (d)(1) of Rule 17g-1 under the 1940 Act.
The parties hereto agree that the Advisors will determine
jointly, no less than at the end of each calendar quarter, the
minimum amount of coverage which would be required of each of
the Rydex Funds and each of the Subaccounts by Rule 17g-
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1(d)(1) if a determination with respect to the adequacy of the
coverage were currently being made.
(b) In the event that the total amount of the minimum
coverages thus determined exceeds the amount of coverage of
the then-effective Fidelity Bond, the Trustees and the
Managers will be notified and will determine whether it is
necessary or appropriate to increase the total amount of
coverage of the Fidelity Bond 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 Fidelity Bond, will equal
an amount of such minimums.
(c) Unless either or both the Trust and the Separate
Account elects to terminate this Agreement (pursuant to
Paragraph 4, below) and the Trust's and the Separate Account's
respective participation in a joint-insured bond, each Rydex
Fund and each Subaccount agrees to pay the Rydex Fund's and
the Subaccount's respective fair portion of the new or
additional premium (taking into account all of the then-
existing circumstances).
4. Prior Agreements; Termination
T h is Agreement shall supersede all prior agreements
relating to an allocation of premium on any joint insured bond
and shall apply to the present Fidelity Bond coverage and any
renewal or replacement thereof. This Agreement 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. Law Governing
This Agreement is governed by the laws of the State of
Maryland (without reference to such state's conflict of law
rules).
6. Counterparts
This Agreement may be executed in counterparts, each of
which shall be deemed an original, but which together shall
constitute one and the same instrument.
7. Amendment, Modification, and Waiver
No term or provision of this Agreement may be amended,
modified, or waived without the affirmative vote or action by
written consent of each of the parties hereto.
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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.
ATTEST: RYDEX SERIES TRUST
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxxx, Xx.
Title: Vice President President
ATTEST: RYDEX SERIES TRUST on behalf of
the RYDEX FUNDS of RYDEX
SERIES
TRUST
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Albert P. Viragh,
Xx.Xxxx: Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxxx, Xx.
Title: Vice President President
ATTEST: PADCO ADVISORS, INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxxx, Xx.
Title: Vice President President
ATTEST: RYDEX ADVISOR VARIABLE
ANNUITY ACCOUNT
By: /s/ Xxxxxxx X. Xxxxx By: /s/ L. Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx X. Xxxxx L. Xxxxxxx Xxxxxxxxx
Title: Vice President Vice President
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ATTEST: RYDEX ADVISOR VARIABLE ANNUITY
ACCOUNT on behalf of the
SUBACCOUNTS of RYDEX ADVISOR
VARIABLE ANNUITY ACCOUNT
By: /s/ Xxxxxxx X. Xxxxx By: /s/ L. Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx X. Xxxxx L. Xxxxxxx Xxxxxxxxx
Title: Vice President Vice President
ATTEST: PADCO ADVISORS II, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx, Xx.
Title: Secretary President
ATTEST: PADCO SERVICE COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx, Xx.
Title: Secretary President
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