AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
This Agreement, made and entered into as of May 1, 2002, amended and restated
effective as of February 1, 2004, and amended and restated effective as of June
30, 2005 by and between SECURITY LARGE CAP VALUE FUND, a Kansas corporation
(hereinafter referred to as the "Fund"), and SECURITY INVESTORS, LLC, a limited
liability company (hereinafter referred to as the "Adviser") (formerly Security
Management Company, LLC) is hereby amended and restated effective as of October
14, 2008.
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end management investment
company registered under the Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, the Fund is authorized to issue shares of capital stock in separate
Series, with each such Series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund currently offers shares in two separate series, including the
Large Cap Value Series and the Large Cap Value Institutional Series, such series
together with all other series subsequently established by the Fund with respect
to which the Fund desires to retain the Adviser to render investment advisory
services hereunder and with respect to which the Adviser is willing so to do,
being herein collectively referred to as the "Series"; and
WHEREAS, the Adviser is willing to provide investment research and advice to the
Fund on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises and mutual agreements made
herein, the parties agree as follows:
1. EMPLOYMENT OF THE ADVISER. The Fund hereby employs the Adviser to act as
investment adviser to the Fund with respect to the investment of its
assets and to supervise and arrange for the purchase of securities of the
Fund and the sales of securities held in the portfolio of the Fund,
subject always to the supervision of the Board of Directors of the Fund
(or a duly appointed committee thereof), during the period and upon and
subject to the terms and conditions described herein. The Adviser agrees
to maintain sufficient trained personnel and equipment and supplies to
perform its responsibilities under this Agreement and in conformity with
the current Prospectus(es) of the Fund and such other reasonable
standards of performance as the Fund may from time to time specify.
The Adviser hereby accepts such employment and agrees to perform the
services required by this Agreement for the compensation herein provided.
2. ALLOCATION OF EXPENSES AND CHARGES.
(a) Expenses of the Adviser. The Adviser shall pay all expenses in
connection with the performance of its services under this
Agreement, except as provided otherwise herein.
(b) Expenses of the Fund. Anything in this Agreement to the contrary
notwithstanding, the Fund shall pay or reimburse the Adviser for
the payment of the following described expenses of the Fund
whether or not billed to the Fund, the Adviser or any related
entity;
(i) brokerage fees and commissions;
(ii) taxes;
(iii) interest expenses;
(iv) any extraordinary expenses approved by the Board of
Directors of the Fund; and
(v) distribution fees paid under the Fund's Class A, Class B
and Class C Distribution Plans;
and, in addition to those expenses set forth above, the Fund shall
pay all of its expenses whether or not billed to the Fund, the
Adviser or any related entity.
3. COMPENSATION OF THE ADVISER.
(a) As compensation for the investment advisory services to be
rendered by the Adviser to the Fund for each of the years this
Agreement is in effect, the Fund shall pay the Adviser an annual
fee equal to 0.65% of the Fund's average daily net assets. Such
fee shall be calculated daily and payable monthly. If this
Agreement shall be effective for only a portion of a year, then
the Adviser's compensation for said year shall be prorated for
such portion. For purposes of this Section 3, the value of the net
assets of the Fund shall be computed in the same manner at the end
of the business day as the value of such net assets is computed in
connection with the determination of the net asset value of the
Fund's shares as described in the Fund's Prospectus(es).
(b) For each of the Fund's fiscal years that this Agreement remains in
force, the Adviser agrees that if total annual expenses of any
Series of the Fund, exclusive of interest and taxes, extraordinary
expenses (such as litigation), distribution fees paid by the Fund
under the Fund's Class A, Class B and Class C Distribution Plans,
but inclusive of the Adviser's compensation, exceed any expense
limitation imposed by state securities law or regulation in any
state in which shares of such Series of the Fund are then
qualified for sale, as such regulations may be amended from time
to time, the Adviser will contribute to such Series such funds or
waive such portion of its fee, adjusted monthly, as may be
requisite to insure that such annual expenses will not exceed any
such limitation. If this Agreement shall be effective for only a
portion of any fiscal year, then the maximum annual expenses shall
be prorated for
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such portion. Brokerage fees and commissions incurred in
connection with the purchase or sale of any securities by the Fund
shall not be deemed to be expenses within the meaning of this
paragraph (b).
4. INVESTMENT ADVISORY DUTIES.
(a) INVESTMENT ADVICE. The Adviser shall regularly provide the Fund
with investment research, advice and supervision, continuously
furnish an investment program, recommend which securities shall be
purchased and sold and what portion of the assets of the Fund
shall be held uninvested and arrange for the purchase of
securities and other investments for the Fund and the sale of
securities and other investments held in the portfolio of the
Fund. All investment advice furnished by the Adviser to the Fund
under this Section 4 shall at all times conform to any
requirements imposed by the provisions of the Fund's Articles of
Incorporation and Bylaws, the 1940 Act, the Investment Advisors
Act of 1940 and the rules and regulations promulgated thereunder,
and other applicable provisions of law, and the terms of the
registration statement of the Fund under the Securities Act of
1933 ("1933 Act") and/or the 1940 Act, as may be applicable at the
time, all as from time to time amended. The Adviser shall advise
and assist the officers or other agents of the Fund in taking such
steps as are necessary or appropriate to carry out the decisions
of the Board of Directors of the Fund (and any duly appointed
committee thereof) with regard to the foregoing matters and the
general account of the Fund's business.
(b) SUBADVISERS. Subject to the provisions of the 1940 Act and any
applicable exemptions thereto, the Adviser is authorized, but is
under no obligation, to enter into sub-advisory agreements (the
"Sub-Advisory Agreements") with one or more subadvisers (each a
"Subadviser") to provide investment advisory services to any
series of the Fund. Each Subadviser shall have investment
discretion with respect to the assets assigned to that Subadviser
by the Adviser. Consistent with the provisions of the 1940 Act and
any applicable exemption thereto, the Adviser may enter into
Sub-Advisory Agreements or amend Sub-Advisory Agreements without
the approval of the shareholders of the affected series.
(c) PORTFOLIO TRANSACTIONS AND BROKERAGE.
(i) Transactions in portfolio securities shall be effected by
the Adviser, through brokers or otherwise (including
affiliated brokers), in the manner permitted in this
Section 4 and in such manner as the Adviser shall deem to
be in the best interests of the Fund after consideration is
given to all relevant factors.
(ii) In reaching a judgment relative to the qualification of a
broker to obtain the best execution of a particular
transaction, the Adviser may take into account all relevant
factors and circumstances, including the size of any
contemporaneous market in such securities; the importance
to the Fund of speed and efficiency of execution; whether
the particular transaction is part of
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a larger intended change of portfolio position in the same
securities; the execution capabilities required by the
circumstances of the particular transaction; the capital
required by the transaction; the overall capital strength
of the broker; the broker's apparent knowledge of or
familiarity with sources from or to whom such securities
may be purchased or sold; as well as the efficiency,
reliability and confidentiality with which the broker has
handled the execution of prior similar transactions.
(iii) Subject to any statements concerning the allocation of
brokerage contained in the Fund's Prospectus(es) or
Statement(s) of Additional Information, the Adviser is
authorized to direct the execution of portfolio
transactions for the Fund to brokers who furnish investment
information or research service to the Adviser. Such
allocations shall be in such amounts and proportions as the
Adviser may determine. If the transaction is directed to a
broker providing brokerage and research services to the
Adviser, the commission paid for such transaction may be in
excess of the commission another broker would have charged
for effecting that transaction, if the Adviser shall have
determined in good faith that the commission is reasonable
in relation to the value of the brokerage and research
services provided, viewed in terms of either that
particular transaction or the overall responsibilities of
the Adviser with respect to all accounts as to which it now
or hereafter exercises investment discretion. For purposes
of the immediately preceding sentence, "providing brokerage
and research services" shall have the meaning generally
given such terms or similar terms under Section 28(e)(3) of
the Securities Exchange Act of 1934, as amended.
(iv) In the selection of a broker for the execution of any
transaction not subject to fixed commission rates, the
Adviser shall have no duty or obligation to seek advance
competitive bidding for the most favorable negotiated
commission rate to be applicable to such transaction, or to
select any broker solely on the basis of its purported or
"posted" commission rates.
(v) In connection with transactions on markets other than
national or regional securities exchanges, the Fund will
deal directly with the selling principal or market maker
without incurring charges for the services of a broker on
its behalf unless, in the best judgment of the Adviser,
better price or execution can be obtained by utilizing the
services of a broker.
(d) LIMITATION OF LIABILITY OF THE ADVISER WITH RESPECT TO RENDERING
INVESTMENT ADVISORY SERVICES. So long as the Adviser shall give
the Fund the benefit of its best judgment and effort in rendering
investment advisory services hereunder, the Adviser shall not be
liable for any errors of judgment or mistake of law, or for any
loss sustained by reason of the adoption of any investment policy
or the purchase, sale or retention of any security on its
recommendation, whether or not such recommendation shall have been
based upon its own investigation and research or upon
investigation and research made by any other individual, firm or
corporation,
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if such recommendation shall have been made and such other
individual, firm or corporation shall have been selected with due
care and in good faith. Nothing herein contained, however, shall
be construed to protect the Adviser against any liability to the
Fund or its shareholders by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties
under this Section 4. As used in this Section 4, "the Adviser"
shall include directors, officers and employees of the Adviser, as
well as the Adviser itself.
5. OTHER ACTIVITIES NOT RESTRICTED. Nothing in this Agreement shall prevent
the Adviser or any officer thereof from acting as investment adviser for
any other person, firm or corporation, nor shall it in any way limit or
restrict the Adviser or any of its directors, officers, stockholders or
employees from buying, selling, or trading any securities for its own
accounts or for the accounts of others for whom it may be acting;
provided, however, that the Adviser expressly represents that it will
undertake no activities which, in its judgment, will conflict with the
performance of its obligations to the Fund under this Agreement. The Fund
acknowledges that the Adviser acts as investment adviser to other
investment companies, and it expressly consents to the Adviser acting as
such; provided, however, that if in the opinion of the Adviser,
particular securities are consistent with the investment objectives of,
and desirable purchases or sales for the portfolios of one or more of
such other investment companies or series of such companies at
approximately the same time, such purchases or sales will be made on a
proportionate basis if feasible, and if not feasible, then on a rotating
or other equitable basis.
6. AMENDMENT. This Agreement may be amended at any time, without shareholder
approval to the extent permitted by applicable law, by a writing signed
by each of the parties hereto. Any change in the Fund's registration
statements or other documents of compliance or in the forms relating to
any plan, program or service offered by its current Prospectus which
would require a change in the Adviser's obligations hereunder shall be
subject to the Adviser's approval, which shall not be unreasonably
withheld.
7. DURATION AND TERMINATION OF AGREEMENT. This Agreement became effective on
May 1, 2002, and was amended and restated effective as of February 1,
2004 and again as of June 30, 2005 and March 7, 2008. This Agreement
shall continue in force until January 1, 2009, and for successive
12-month periods thereafter, unless terminated, provided that each such
continuance is specifically approved at least annually by (a) the vote of
the majority of the entire Board of Directors of the Fund, and the vote
of the majority of those directors who are not parties to this Agreement
or interested persons (as such terms are defined in the 0000 Xxx) of any
such party cast in person at a meeting called for the purpose of voting
on such approval, or (b) by the vote of a majority of those directors who
are not parties to this Agreement or interested persons (as such terms
are defined in the 0000 Xxx) of any such party cast in person at a
meeting called for the purpose of voting on such approval.
Upon this Agreement becoming effective, any previous Agreement between
the Fund and the Adviser providing for investment advisory services shall
concurrently terminate,
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except that such termination shall not affect any fees accrued and
guarantees of expenses with respect to any period prior to termination.
This Agreement may be terminated at any time without payment of any
penalty, by the Fund upon the vote of a majority of the Fund's Board of
Directors or, by a majority of the outstanding voting securities of the
Fund, or by the Adviser, in each case on sixty (60) days' written notice
to the other party. This Agreement shall automatically terminate in the
event of its assignment (as such term is defined in the 1940 Act).
8. SEVERABILITY. If any clause or provision of this Agreement is determined
to be illegal, invalid or unenforceable under present or future laws
effective during the term hereof, then such clause or provision shall be
considered severed herefrom and the remainder of this Agreement shall
continue in full force and effect.
9. APPLICABLE LAW. This Agreement shall be subject to and construed in
accordance with the laws of the State of Kansas.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereto duly authorized on
this 7th day of March, 2008.
SECURITY LARGE CAP VALUE FUND
By XXXXXXX X. XXXXXXX
-------------------------------------
Title: President
ATTEST:
XXX X. XXX
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Secretary
SECURITY INVESTORS, LLC
By: XXXXXXX X. XXXXXXX
-------------------------------------
Title: President
ATTEST:
XXX X. XXX
-----------------------------------
Secretary
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