INVESTMENT MANAGEMENT AGREEMENT
This Agreement, made and entered into this 27th day of January, 2000, and
amended and restated effective as of November 18, 2005 and amended and restated
as of February 8, 2008, by and between SECURITY EQUITY FUND, a Kansas
corporation (hereinafter referred to as the "Fund"), and SECURITY INVESTORS,
LLC, a Kansas limited liability company (hereinafter referred to as the
"Adviser") (formerly, Security Management Company, LLC);
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 Adviser is willing to provide investment research and advice to the
Fund on the terms and conditions hereinafter set forth;
WHEREAS, this Agreement has last been amended and restated to reflect
non-material amendments, including a change in the Adviser's name, the
liquidation of three Series of the Fund, and the addition of three new Series of
the Fund;
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.
(c) EXPENSE CAP. For each of the Fund's full fiscal years that this
Agreement remains in force, the Adviser agrees that if total annual
expenses of each Series of the Fund identified below, exclusive of
interest, taxes, extraordinary expenses (such as litigation), brokerage
fees and commissions, and 12b-1 fees paid under a Fund's Class A, Class
B or Class C Distribution Plans, but inclusive of the Adviser's
compensation, exceeds the amount set forth below (the "Expense Cap"),
the Adviser shall contribute to such Series such funds or waive such
portion of its fee, adjusted monthly, as may be required to insure that
the total annual expenses of the Series shall not exceed the Expense
Cap. If this Agreement shall be effective for only a portion of a
Series' fiscal year, then the maximum annual expenses shall be prorated
for such portion.
EXPENSE CAP
Select 25 Series, Class A, B and C - 1.75%
3. COMPENSATION OF THE ADVISER.
(a) As compensation for the investment advisory services to be rendered by
the Adviser to Global Series and Small Cap Growth Series, for each of
the years this Agreement is in effect, each of the foregoing Series
shall pay the Adviser an annual fee equal to 1.00% of its respective
average daily net assets. Such fee shall be calculated daily and
payable monthly. As compensation for the investment advisory services
to be rendered by the Adviser to Equity Series and Select 25 Series,
for each of the years this Agreement is in effect, each of the
foregoing Series shall pay the Adviser an annual fee equal to 0.75% of
its respective average daily net assets. As compensation for the
investment advisory services to be rendered by the Adviser to Small Cap
Value Series and Global Institutional Fund, for each of the years this
Agreement is in effect, each of the foregoing Series shall pay the
Adviser an annual fee equal to 0.90% of its respective average daily
net assets. Such fee shall be calculated daily and payable monthly. As
compensation for the investment advisory services to be rendered by the
Adviser to Mid Cap Value Institutional Fund, for
each of the years this Agreement is in effect, Mid Cap Value
Institutional Fund shall pay the Adviser an annual fee equal to 0.85%
of average daily net assets. Such fee shall be calculated daily and
payable monthly. As compensation for the investment advisory services
to be rendered by the Adviser to Mid Cap Value Series for each of the
years this Agreement is in effect, the Mid Cap Value Series shall pay
the Adviser an annual fee equal to 1.00% of its average daily net
assets of $200 million or less; plus an annual rate of 0.75% of its
average daily net assets of more than $200 million. Such fee shall be
calculated daily and payable monthly. As compensation for the
investment advisory services to be rendered by the Adviser to Alpha
Opportunity Series, Alpha Opportunity Series shall pay the Adviser a
fee as described in paragraphs 3(c) and 3(d) below. 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 each Series
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 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) and distribution fees paid 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 Series' fiscal year, then the maximum annual expenses shall be
prorated for such portion. Brokerage fees and commissions incurred in
connection with the purchase or sale of any securities by a Series
shall not be deemed to be expenses within the meaning of this paragraph
(b).
(c) Total Fee. (1) During the first 12 months of operations of Alpha
Opportunity Series, the Series shall pay the Adviser an investment
advisory fee equal to 2.00% of average daily net assets, accrued daily
and paid monthly (without any adjustment of the type discussed below).
(2) Thereafter, as compensation for the investment advisory services to
be rendered by the Adviser to Alpha Opportunity Series, the Series
shall pay the Adviser at the end of each calendar month, an advisory
fee (the "Total Fee") composed of: (i) a base fee equal to 2.00% (on an
annual basis), of the Alpha Opportunity Series' average daily net
assets over the month (the "Base Fee"); and (ii) a performance
adjustment to the Base Fee as further explained in (d) below (the
"Performance Adjustment"). The Total Fee shall be accrued daily and
paid monthly, with such
periodic adjustments as deemed appropriate in accordance with
applicable law and accounting standards.
(3) If the Adviser shall serve for less than the whole of any calendar
month, the Total Fee mentioned above shall be calculated on a pro rata
basis for the portion of the month for which the Adviser has served as
adviser.
(d) Calculation of Performance Adjustment. Each month, the rate of any
positive Performance Adjustment shall be equal to 0.75% multiplied by
the ratio of the number of percentage points by which the investment
performance of the Series (the "Investment Performance") exceeds the
investment record (the "Investment Record") of the Standard & Poor's
500 Composite Stock Price Index (the "Index") over the twelve-month
period ending on the last day of that month (the "Measuring Period") as
compared to 15 percentage points. For example, if the Investment
Performance of the Series was 6.6% and the Investment Record of the
Index was 0%, the ratio would be 6.6 to 15, or 0.44, times 0.75%, for
an upward Performance Adjustment rate of 0.33%.
Similarly, the rate of any negative Performance Adjustment shall be
equal to 0.75% multiplied by the ratio of the number of percentage
points by which the Investment Performance of the Series is less than
the Investment Record of the Index over the Measuring Period as
compared to 15 percentage points. For example, if the Investment
Performance of the Series was -10.0% and the Investment Record of the
Index was 0%, the ratio would be 10 to 15, or 0.667, times 0.75%, for a
downward Performance Adjustment rate of 0.50%.
After the rate of the Performance Adjustment has been determined as
described above, the Adviser will determine the dollar amount of such
Performance Adjustment by multiplying the Performance Adjustment rate
by the average daily net assets of the Series during the Measuring
Period and dividing that number by the number of days in the Measuring
Period and then multiplying that amount by the number of days in the
current month. The dollar amount of the Total Fee then equals the
dollar amount of the Base Fee as adjusted by the dollar amount of the
Performance Adjustment.
Each month, the maximum or minimum Performance Adjustment shall be
equal to 1/12th of 0.75% of the average daily net assets of the Series
during the Measuring Period (subject to minor accounting adjustments to
account for the specific number of days in the month) when the
Investment Performance of the Series is superior or inferior to the
Investment Record of the Index by 15 percentage points or more over the
Measuring Period. The maximum Total Fee payable to the Adviser in any
month is then equal to 1/12th
of 2.00% of the Series' average daily net assets over that month (i.e.,
the Base Fee), plus 1/12th of 0.75% of the Series' average daily net
assets over the Measuring Period (i.e., the maximum positive
Performance Adjustment); and the minimum Total Fee payable to the
Adviser is equal to 1/12th of 2.00% of the Series' average daily net
assets over that month (i.e., the Base Fee), less 1/12th of 0.75% of
the Series' average daily net assets over the Measuring Period (i.e.,
the maximum negative Performance Adjustment) (subject to accounting
adjustments to account for the specific number of days in the month).
The Investment Performance of the Series will be determined by
reference to Class A shares of the Series in accordance with Rule
205-1(a) under the Investment Advisers Act of 1940 ("Advisers Act"). As
such, it shall be equal to the sum of: (i) the change in the net asset
value of Class A shares during the Measuring Period, (ii) the value of
all cash distributions made by the Series to holders of its Class A
shares accumulated to the end of the Measuring Period, and (iii) the
value of capital gains taxes per Class A share, if any, paid or payable
on undistributed realized long-term gains accumulated to the end of the
Measuring Period, and will be expressed as a percentage of the net
asset value per share of the Class A shares at the beginning of the
Measuring Period (for this purpose, the value of distributions per
share of realized capital gains, of dividends per share paid from
investment income and of capital gains taxes per share paid or payable
on undistributed realized long-term capital gains are treated as
reinvested in Class A shares at the net asset value per share in effect
at the close of business on the record date for the payment of such
distributions and dividends and the date on which provision is made for
such taxes, after giving effect to such distributions, dividends and
taxes).
The Investment Record of the Index will be determined in accordance
with Rule 205-1(b) under the Advisers Act. As such, it shall be equal
to the sum of: (i) the change in the level of the Index during the
Measuring Period, and (ii) the value, computed consistently with the
Index, of cash distributions made by companies whose securities
comprise the Index accumulated to the end of the Measuring Period, and
will be expressed as a percentage of the Index at the beginning of the
Measuring Period.
It is the intent of the parties to this Agreement that the Total Fee
arrangement comply with Section 205 of the Advisers Act, Rules 205-1
and 205-2 thereunder, as each may be amended from time to time (the
"Fulcrum Fee Provisions"). Any question in interpreting and
implementing the Total Fee arrangement shall be answered in accordance
with the Fulcrum Fee Provisions.
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
statements 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
of the series 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 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 shall have been
based upon its own investigation and research or upon investigation and
research made by any other individual, firm or corporation, 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 shall, however, 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 their own accounts or for the accounts of others for whom
they 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(es) 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 shall continue in
force with respect to a Series for an initial term of up to two years, and
then for successive 12-month periods thereafter, unless terminated, provided
each such continuance is specifically approved at least annually by (a) the
vote of a majority of the entire Board of Directors of the Fund, or by the
vote of the holders of a majority of the outstanding voting securities of
each series of the Fund (as defined in the 1940 Act), and (b) the vote of a
majority of the directors of the Fund who are not parties to this Agreement
or interested persons (as such terms are defined in the Investment Company
Act of 1940) of any such party cast in person at a meeting of such directors
called for the purpose of voting upon such approval. In the event a majority
of the outstanding shares of one series vote for continuance of the
Agreement, it will be continued for that series even though the Agreement is
not approved by either a majority of the outstanding shares of any other
series or by a majority of outstanding shares of the Fund.
Upon this Agreement becoming effective, any previous Agreement between the
Fund and the Adviser providing for investment advisory services shall
concurrently terminate, 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 as to any series of the Fund
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 applicable series 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 the day, month
and year first above written.
SECURITY EQUITY FUND
By XXXXXX X. XXXXX
------------------------------
Xxxxxx X. Xxxxx
Title: President
ATTEST:
XXX X. XXX
-------------------------------------
Xxx X. Xxx
Secretary
SECURITY INVESTORS, LLC
By XXXXXXX X. XXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxx
Title: President
ATTEST:
XXX X. XXX
-------------------------------------
Xxx X. Xxx
Secretary
AMENDMENT TO
INVESTMENT MANAGEMENT AGREEMENT
WHEREAS, Security Equity Fund (the "Fund") and Security Investors, LLC (the
"Adviser") are parties to an Investment Management Agreement made and entered
into on January 27, 2000, and amended and restated effective as of November 18,
2005 and amended and restated as of February 8, 2008 (the "Agreement");
WHEREAS, on May 9, 2008, the Board of Directors of the Fund authorized the Fund
to offer its common stock in a new series designated as All Cap Value Series and
authorized changes to the Adviser's compensation in connection with the Alpha
Opportunity Series;
WHEREAS, the parties hereto wish to amend the Agreement to reflect the changes
authorized by the Board of Directors of the Fund;
NOW, THEREFORE, in consideration of the premises and mutual agreements made
herein, the parties agree as follows:
Section 3 of the Agreement is hereby deleted in its entirety and replaced with
the new Section 3 set forth below:
3. COMPENSATION OF THE ADVISER.
(a) As compensation for the investment advisory services to be rendered by
the Adviser to Global Series and Small Cap Growth Series, for each of
the years this Agreement is in effect, each of the foregoing Series
shall pay the Adviser an annual fee equal to 1.00% of its respective
average daily net assets. Such fee shall be calculated daily and
payable monthly. As compensation for the investment advisory services
to be rendered by the Adviser to Equity Series and Select 25 Series,
for each of the years this Agreement is in effect, each of the
foregoing Series shall pay the Adviser an annual fee equal to 0.75% of
its respective average daily net assets. As compensation for the
investment advisory services to be rendered by the Adviser to Small Cap
Value Series and Global Institutional Fund, for each of the years this
Agreement is in effect, each of the foregoing Series shall pay the
Adviser an annual fee equal to 0.90% of its respective average daily
net assets. Such fee shall be calculated daily and payable monthly. As
compensation for the investment advisory services to be rendered by the
Adviser to Mid Cap Value Institutional Fund, for each of the years this
Agreement is in effect, Mid Cap Value Institutional Fund shall pay the
Adviser an annual fee equal to 0.85% of average daily net assets. Such
fee shall be calculated daily
and payable monthly. As compensation for the investment advisory
services to be rendered by the Adviser to Mid Cap Value Series for each
of the years this Agreement is in effect, the Mid Cap Value Series
shall pay the Adviser an annual fee equal to 1.00% of its average daily
net assets of $200 million or less; plus an annual rate of 0.75% of its
average daily net assets of more than $200 million. Such fee shall be
calculated daily and payable monthly. As compensation for the
investment advisory services to be rendered by the Adviser to All Cap
Value Series for each of the years this Agreement is in effect, the All
Cap Value Series shall pay the Adviser an annual fee equal to 0.70% of
its average daily net assets. Such fee shall be calculated daily and
payable monthly. As compensation for the investment advisory services
to be rendered by the Adviser to Alpha Opportunity Series for each of
the years this Agreement is in effect, the Alpha Opportunity Series
shall pay the Adviser an annual fee equal to 1.25% of its 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
each Series 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 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) and distribution fees paid 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 Series' fiscal year, then the maximum annual expenses shall be
prorated for such portion. Brokerage fees and commissions incurred in
connection with the purchase or sale of any securities by a Series
shall not be deemed to be expenses within the meaning of this paragraph
(b).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the
Investment Management Agreement to be duly executed by their respective officers
thereto duly authorized as of August 15, 2008.
SECURITY EQUITY FUND
By XXXXX X. XXXXXXX
------------------------------
Xxxxx X. Xxxxxxx
Title: Vice President
ATTEST:
XXXXX XXXXXXXX
-------------------------------------
Xxxxx Xxxxxxxx
Assistant Secretary
SECURITY INVESTORS, LLC
By XXXXX X. XXXXXXX
------------------------------
Xxxxx X. Xxxxxxx
Title: Vice President
ATTEST:
XXXXX XXXXXXXX
-------------------------------------
Xxxxx Xxxxxxxx
Assistant Secretary
AMENDMENT TO
INVESTMENT MANAGEMENT AGREEMENT
WHEREAS, Security Equity Fund (the "Fund") and Security Investors, LLC (the
"Adviser") are parties to an Investment Management Agreement made and entered
into on January 27, 2000, and amended and restated effective as of November 18,
2005 and amended and restated as of February 8, 2008 and amended and restated as
of May 9, 2008 (the "Agreement");
WHEREAS, on August 15, 2008, the Board of Directors of the Fund resolved to
terminate the sub-advisory agreement between the Adviser and RS Investment
Management Co. LLC, the sub-adviser to the Small Cap Growth Series of the Fund;
and
WHEREAS, the Adviser agreed to reduce the investment advisory fee payable to it
pursuant to the Agreement from an annual rate of 1.00% of each Fund's average
daily net assets to an annual rate of 0.85% of the Fund's average daily net
assets effective as of the close of business on November 17, 2008; and
WHEREAS, the parties hereto wish to amend the Agreement to reflect the change
authorized by the Board of Directors of the Fund;
NOW, THEREFORE, in consideration of the premises and mutual agreements made
herein, the parties agree as follows:
Effective November 17, 2008, Section 3 of the Agreement is deleted in its
entirety and replaced with the new Section 3 set forth below:
3. COMPENSATION OF THE ADVISER.
(a) As compensation for the investment advisory services to be rendered by
the Adviser to Global Series, for each of the years this Agreement is
in effect, the Global Series shall pay the Adviser an annual fee equal
to 1.00% of its respective average daily net assets. Such fee shall be
calculated daily and payable monthly. As compensation for the
investment advisory services to be rendered by the Adviser to Equity
Series, and Select 25 Series, for each of the years this Agreement is
in effect, each of the foregoing Series shall pay the Adviser an annual
fee equal to 0.75% of its respective average daily net assets. Such fee
shall be calculated daily and payable monthly. As compensation for the
investment advisory services to be rendered by the Adviser to Small Cap
Value Series and Global Institutional Fund, for each of the years this
Agreement is in effect, each of the foregoing Series shall pay the
Adviser an annual fee equal to 0.90% of its respective average daily
net assets. Such fee shall be calculated daily and payable monthly. As
compensation for the investment advisory services to be rendered by
the Adviser to Mid Cap Value Institutional Fund and Small Cap Growth
Series, for each of the years this Agreement is in effect, each of the
foregoing Series shall pay the Adviser an annual fee equal to 0.85% of
average daily net assets. Such fee shall be calculated daily and
payable monthly. As compensation for the investment advisory services
to be rendered by the Adviser to Mid Cap Value Series for each of the
years this Agreement is in effect, the Mid Cap Value Series shall pay
the Adviser an annual fee equal to 1.00% of its average daily net
assets of $200 million or less; plus an annual rate of 0.75% of its
average daily net assets of more than $200 million. Such fee shall be
calculated daily and payable monthly. As compensation for the
investment advisory services to be rendered by the Adviser to All Cap
Value Series for each of the years this Agreement is in effect, the All
Cap Value Series shall pay the Adviser an annual fee equal to 0.70% of
its average daily net assets. Such fee shall be calculated daily and
payable monthly. As compensation for the investment advisory services
to be rendered by the Adviser to Alpha Opportunity Series for each of
the years this Agreement is in effect, the Alpha Opportunity Series
shall pay the Adviser an annual fee equal to 1.25% of its 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
each Series 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 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) and distribution fees paid 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 Series' fiscal year, then the maximum annual expenses shall be
prorated for such portion. Brokerage fees and commissions incurred in
connection with the purchase or sale of any securities by a Series
shall not be deemed to be expenses within the meaning of this paragraph
(b).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the
Investment Management Agreement to be duly executed by their respective officers
thereto duly authorized as of November 24, 2008.
SECURITY EQUITY FUND
By XXXXX X. XXXXXXX
------------------------------
Xxxxx X. Xxxxxxx
Title: Vice President
ATTEST:
XXX X. XXX
-------------------------------------
Xxx X. Xxx
Secretary
SECURITY INVESTORS, LLC
By XXXXX X. XXXXXXX
------------------------------
Xxxxx X. Xxxxxxx
Title: Vice President
ATTEST:
XXX X. XXX
-------------------------------------
Xxx X. Xxx
Secretary
AMENDMENT TO
INVESTMENT MANAGEMENT AGREEMENT
WHEREAS, Security Equity Fund (the "Fund") and Security Investors, LLC (the
"Adviser") are parties to an Investment Management Agreement made and entered
into on January 27, 2000, and amended and restated effective as of November 18,
2005 and amended and restated as of February 8, 2008 and amended and restated as
of May 9, 2008 (the "Agreement");
WHEREAS, on November 21, 2008, the Board of Directors of the Fund authorized the
Fund to offer its common stock in a new series designated as All Cap Growth
Series;
WHEREAS, the parties hereto wish to amend the Agreement to reflect the change
authorized by the Board of Directors of the Fund;
NOW, THEREFORE, in consideration of the premises and mutual agreements made
herein, the parties agree as follows:
Section 3 of the Agreement is hereby deleted in its entirety and replaced with
the new Section 3 set forth below:
3. COMPENSATION OF THE ADVISER.
(a) As compensation for the investment advisory services to be rendered by
the Adviser to Global Series and Small Cap Growth Series, for each of
the years this Agreement is in effect, each of the foregoing Series
shall pay the Adviser an annual fee equal to 1.00% of its respective
average daily net assets. Such fee shall be calculated daily and
payable monthly. As compensation for the investment advisory services
to be rendered by the Adviser to Equity Series, All Cap Growth Series
and Select 25 Series, for each of the years this Agreement is in
effect, each of the foregoing Series shall pay the Adviser an annual
fee equal to 0.75% of its respective average daily net assets. As
compensation for the investment advisory services to be rendered by the
Adviser to Small Cap Value Series and Global Institutional Fund, for
each of the years this Agreement is in effect, each of the foregoing
Series shall pay the Adviser an annual fee equal to 0.90% of its
respective average daily net assets. Such fee shall be calculated daily
and payable monthly. As compensation for the investment advisory
services to be rendered by the Adviser to Mid Cap Value Institutional
Fund, for each of the years this Agreement is in effect, Mid Cap Value
Institutional Fund shall pay the Adviser an annual fee equal to 0.85%
of average daily net assets. Such fee shall be calculated daily and
payable monthly. As compensation for the investment advisory services
to be rendered by the Adviser to Mid Cap Value Series for each of the
years this Agreement is in effect, the Mid Cap Value Series shall pay
the Adviser an annual fee equal to 1.00% of its average daily net
assets of $200 million or less; plus an annual rate of 0.75% of its
average daily net assets of more than $200 million. Such fee shall be
calculated daily and payable monthly. As compensation for the
investment advisory services to be rendered by
the Adviser to All Cap Value Series for each of the years this
Agreement is in effect, the All Cap Value Series shall pay the Adviser
an annual fee equal to 0.70% of its average daily net assets. Such fee
shall be calculated daily and payable monthly. As compensation for the
investment advisory services to be rendered by the Adviser to Alpha
Opportunity Series for each of the years this Agreement is in effect,
the Alpha Opportunity Series shall pay the Adviser an annual fee equal
to 1.25% of its 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 each Series 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 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) and distribution fees paid 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 Series' fiscal year, then the maximum annual expenses shall be
prorated for such portion. Brokerage fees and commissions incurred in
connection with the purchase or sale of any securities by a Series
shall not be deemed to be expenses within the meaning of this paragraph
(b).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the
Investment Management Agreement to be duly executed by their respective officers
thereto duly authorized as of February 2, 2009.
SECURITY EQUITY FUND
By XXXXXXX X. XXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxx
Title: President
ATTEST:
XXX X. XXX
-------------------------------------
Xxx X. Xxx
Secretary
SECURITY INVESTORS, LLC
By XXXXXXX X. XXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxx
Title: President
ATTEST:
XXX X. XXX
-------------------------------------
Xxx X. Xxx
Secretary
AMENDMENT TO
INVESTMENT MANAGEMENT AGREEMENT
WHEREAS, Security Equity Fund (the "Fund") and Security Investors, LLC (the
"Adviser") are parties to an Investment Management Agreement made and entered
into on January 27, 2000, and amended and restated effective as of November 18,
2005 and amended and restated as of February 8, 2008 and amended and restated as
of May 9, 2008 (the "Agreement");
WHEREAS, on November 21, 2008, the Board of Directors of the Fund authorized the
Fund to offer its common stock in a new series designated as All Cap Growth
Series;
WHEREAS, the parties hereto wish to amend the Agreement to reflect the change
authorized by the Board of Directors of the Fund;
NOW, THEREFORE, in consideration of the premises and mutual agreements made
herein, the parties agree as follows:
Section 3 of the Agreement is hereby deleted in its entirety and replaced with
the new Section 3 set forth below:
3. COMPENSATION OF THE ADVISER.
(a) As compensation for the investment advisory services to be rendered by
the Adviser to Global Series, Global Institutional Fund and Small Cap
Value Series, for each of the years this Agreement is in effect, each
of the foregoing shall pay the Adviser an annual fee equal to 1.00% of
its respective average daily net assets. Such fee shall be calculated
daily and payable monthly. As compensation for the investment advisory
services to be rendered by the Adviser to Equity Series, All Cap Growth
Series, Select 25 Series and Mid Cap Value Institutional Fund, for each
of the years this Agreement is in effect, each of the foregoing shall
pay the Adviser an annual fee equal to 0.75% of its respective average
daily net assets. As compensation for the investment advisory services
to be rendered by the Adviser to Small Cap Growth Series, for each of
the years this Agreement is in effect, Small Cap Growth Series shall
pay the Adviser an annual fee equal to 0.85% of average daily net
assets. Such fee shall be calculated daily and payable monthly. As
compensation for the investment advisory services to be rendered by the
Adviser to Mid Cap Value Series for each of the years this Agreement is
in effect, the Mid Cap Value Series shall pay the Adviser an annual fee
equal to 1.00% of its average daily net assets of $200 million or less;
plus an annual rate of 0.75% of its average daily net assets of more
than $200 million. Such fee shall be calculated daily and payable
monthly. As compensation for the investment advisory services to be
rendered by the Adviser to All Cap Value Series for each of the years
this Agreement is in effect, the All Cap Value Series shall pay the
Adviser an annual fee equal to
0.70% of its average daily net assets. Such fee shall be calculated
daily and payable monthly. As compensation for the investment advisory
services to be rendered by the Adviser to Alpha Opportunity Series for
each of the years this Agreement is in effect, the Alpha Opportunity
Series shall pay the Adviser an annual fee equal to 1.25% of its
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 each Series 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 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) and distribution fees paid 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 Series' fiscal year, then the maximum annual expenses shall be
prorated for such portion. Brokerage fees and commissions incurred in
connection with the purchase or sale of any securities by a Series
shall not be deemed to be expenses within the meaning of this paragraph
(b).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the
Investment Management Agreement to be duly executed by their respective officers
thereto duly authorized as of February 2, 2009.
SECURITY EQUITY FUND
By
-----------------------------------------------------
Xxxxxxx X. Xxxxxxx
Title: President
ATTEST:
---------------------------------------------
---------------------------------------------
Secretary
SECURITY INVESTORS, LLC
By
-----------------------------------------------------
Xxxxxxx X. Xxxxxxx
Title: President
ATTEST:
---------------------------------------------
---------------------------------------------
Secretary
