INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
This Agreement, made and entered into this 8th day of December, 1988, by
and between SECURITY EQUITY FUND, a Kansas corporation (hereinafter referred to
as the "Fund"), and SECURITY MANAGEMENT COMPANY, a Kansas corporation
(hereinafter referred to as "SMC");
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
WHERE, SMC is willing to provide investment research and advice, general
administrative, fund accounting, transfer agency, and dividend disbursing
services to the Fund on the terms and conditions hereinafter set forth and to
arrange for the provision of all other services (except for those services
specifically excluded in this Agreement) required by the Fund, including
custodial, legal, auditing and printing;
NOW, THEREFORE, in consideration of the premises and mutual agreements made
herein, the parties agree as follows:
1. EMPLOYMENT OF SMC. The Fund hereby employs SMC to (a) act as investment
adviser to the Fund with respect to the investment of its assets and to
supervise and arrange the purchase of securities for the Fund and the sale
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; (b) to provide the Fund with general
administrative, fund accounting, transfer agency, and dividend disbursing
services described and set forth in Schedule A attached hereto and made a
part of this Agreement by reference; and (c) to arrange for, monitor, and
bear the expense of, the provision to the Fund of all other services
required by the Fund, including but not limited to services of independent
accountants, legal counsel, custodial services and printing. SMC may, in
accordance with all applicable legal requirements, engage the services of
other persons or entities, regardless of any affiliation with SMC, to
provide services to the Fund under this Agreement. SMC agrees to maintain
sufficient trained personnel and equipment and supplies to perform its
responsibilities under this Agreement and in conformity with the current
Prospectus of the Fund and such other reasonable standards of performance
as the Fund may from time to time specify and shall use reasonable care in
selecting and monitoring the performance of third parties, who perform
services for the Fund. SMC shall not guarantee the performance of such
persons.
SMC 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 SMC. SMC shall pay all expenses in connection with the
performance of its services under this Agreement, including all fees
and charges of third parties providing services to the Fund, whether
or not such expenses are billed to SMC or the Fund, except as
otherwise provided herein.
(B) EXPENSES OF THE FUND. Anything in this Agreement to the contrary
notwithstanding, the Fund shall pay, or reimburse SMC for the payment
of, the following described expenses of the Fund whether or not billed
to the Fund, SMC or any related entity;
(i) brokerage fees and commissions;
(ii) taxes;
(iii) interest expenses; and
(iv) any extraordinary expenses approved by the Board of Directors
of the Fund.
3. COMPENSATION OF SMC.
(a) In consideration of the services to be rendered by SMC pursuant to
this Agreement, the Fund shall pay SMC an annual fee equal to 2% of
the first $10 million of the average net assets of the Fund, and 1
1/2% of the next $20 million of the average net assets, and 1% of the
remaining average net assets of the Fund for any fiscal year,
determined and payable monthly. If this Agreement shall be effective
for only a portion of a year in which a fee is owed, then SMC's
compensation for the 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 as the value of such net assets
is computed in connection with the determination of the net asset
value of the shares of the Fund as described in the Fund's Prospectus
and Statement of Additional Information.
(b) For each of the Fund's full fiscal years during which this Agreement
remains in force, SMC agrees that if the total annual expenses of the
Fund, exclusive of those expenses listed in paragraph 2(b) of this
Agreement, but inclusive of SMC's compensation, exceed any expense
limitation imposed by state securities law or regulation in any state
in which shares of the Fund are then qualified for sale, as such
regulations may be amended from time to time, SMC will contribute to
the Fund such funds or waive that portion of its fee on a monthly
basis as may be necessary to insure that its total expenses will not
exceed any state limitation. If this paragraph of the Agreement shall
be effective for only a portion of one of the Fund's fiscal years,
then the maximum annual expenses shall be prorated for such portion.
4. INVESTMENT ADVISORY DUTIES.
(A) INVESTMENT ADVICE. SMC 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 SMC to the Fund under this paragraph 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. SMC 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) PORTFOLIO TRANSACTIONS AND BROKERAGE.
(i) Transactions in portfolio securities shall be effected by SMC,
through brokers or otherwise, in the manner permitted in this
paragraph 4 and in such manner as SMC 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, SMC 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 or Statement of
Additional Information, SMC is authorized to direct the
execution of portfolio transactions for the Fund to brokers who
furnish investment information or research service to the SMC.
Such allocations shall be in such amounts and proportions as
SMC may determine. If the transaction is directed to a broker
providing brokerage and research services to SMC, the
commission paid for such transactions may be in excess of the
commission another broker would have charged for effecting that
transaction, if SMC 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 SMC 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, SMC 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 SMC, better price or execution can be
obtained by utilizing the services of a broker.
(C) SMC NOT TO RECEIVE COMMISSIONS. In connection with the purchase or
sale of portfolio securities for the account of the Fund, neither SMC
nor any officer or director of SMC shall act as principal or receive
any compensation from the Fund other than its compensation as provided
for in Section 3 above. If SMC, or any "affiliated person" (as defined
in the 0000 Xxx) receives any cash, credits, commissions or tender
fees from any person in connection with transactions in portfolio
securities of the Fund (including but not limited to the tender or
delivery of any securities held in such portfolio), SMC shall
immediately pay such amount to the Fund in cash or as a credit against
any then earned but unpaid management fees due by the Fund to SMC.
(D) LIMITATION OF LIABILITY OF SMC WITH RESPECT TO RENDERING INVESTMENT
ADVISORY SERVICES. So long as SMC shall give the Fund the benefit of
its best judgment and effort in rendering investment advisory services
hereunder, SMC 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 SMC 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 paragraph 4. As used in this paragraph 4, "SMC"
shall include directors, officers and employees of SMC, as well as
that corporation itself.
5. ADMINISTRATIVE AND TRANSFER AGENCY SERVICES.
(A) RESPONSIBILITIES OF SMC. SMC will provide the Fund with general
administrative, fund accounting, transfer agency, and dividend
disbursing services described and set forth in Schedule A attached
hereto and made a part of this Agreement by reference. SMC agrees to
maintain sufficient trained personnel and equipment and supplies to
perform such services in conformity with the current Prospectus of the
Fund and such other reasonable standards of performance as the Fund
may from time to time specify, and otherwise perform such services in
an accurate, timely, and efficient manner.
(B) INSURANCE. The Fund and SMC agree to procure and maintain, separately
or as joint insureds with themselves, their directors, employees,
agents and others, and other investment companies for which SMC acts
as investment adviser and transfer agent, a policy or policies of
insurance against loss arising from breaches of trust, errors and
omissions, and a fidelity bond meeting the requirements of the 1940
Act, in the amounts and with such deductibles as may be agreed upon
from time to time. SMC shall be solely responsible for the payment of
premiums due for such policies.
(C) REGISTRATION AND COMPLIANCE.
(i) SMC represents that as of the date of this Agreement it is
registered as a transfer agent with the Securities and Exchange
Commission ("SEC") pursuant to Subsection 17A of the Securities
and Exchange Act of 1934 and the rules and regulations
thereunder, and agrees to maintain said registration and comply
with all of the requirements of said Act, rules and regulations
so long as this Agreement remains in force.
(ii) The Fund represents that it is a diversified management
investment company registered with the SEC in accordance with
the 1940 Act and the rules and regulations thereunder, and
authorized to sell its shares pursuant to said Act, the 1933 Act
and the rules and regulations thereunder.
(D) LIABILITY AND INDEMNIFICATION WITH RESPECT TO RENDERING ADMINISTRATIVE
AND TRANSFER AGENCY SERVICES. SMC shall be liable for any actual
losses, claims, damages or expenses (including any reasonable counsel
fees and expenses) resulting from SMC's bad faith, willful
misfeasance, reckless disregard of its obligations and duties,
negligence or failure to properly perform any of its responsibilities
or duties under this Section 5. SMC shall not be liable and shall be
indemnified and held harmless by the Fund, for any claim, demand or
action brought against it arising out of or in connection with:
(i) The bad faith, willful misfeasance, reckless disregard of its
duties or negligence by the Board of Directors of the Fund, or
SMC's acting upon any instructions properly executed or and
authorized by the Board of Directors of the Fund;
(ii) SMC acting in reliance upon advice given by independent counsel
retained by the Board of Directors of the Fund.
In the event that SMC requests the Fund to indemnify or hold it
harmless hereunder, SMC shall use its best efforts to inform the Fund
of the relevant facts concerning the matter in question. SMC shall use
reasonable care to identify and promptly notify the Fund concerning
any matter which presents, or appears likely to present, a claim for
indemnification against the Fund.
The Fund shall have the election of defending SMC against any claim
which may be the subject of indemnification hereunder. In the event
the Fund so elects, it will so notify SMC and thereupon the Fund shall
take over defenses of the claim, and if so requested by the Fund, SMC
shall incur no further legal or other claims related thereto for which
it would be entitled to indemnity hereunder provided, however, that
nothing herein contained shall prevent SMC from retaining, at its own
expense, counsel to defend any claim. Except with the Fund's prior
consent, SMC shall in no event confess any claim or make any
compromise in any matter in which the Fund will be asked to indemnify
or hold SMC harmless hereunder.
PUNITIVE DAMAGES. SMC shall not be liable to the Fund, or any
third party, for punitive, exemplary, indirect, special or
consequential damages (even if SMC has been advised of the
possibility of such damage) arising from its obligations and the
services provided under this paragraph 5, including but not
limited to loss of profits, loss of use of the shareholder
accounting system, cost of capital and expenses of substitute
facilities, programs or services.
FORCE MAJEURE. Anything in this paragraph 5 to the contrary
notwithstanding, SMC shall not be liable for delays or errors
occurring by reason of circumstances beyond its control,
including but not limited to acts of civil or military authority,
national emergencies, work stoppages, fire, flood, catastrophe,
earthquake, acts of God, insurrection, war, riot, failure of
communication or interruption.
(E) DELEGATION OF DUTIES. SMC may, at its discretion, delegate, assign, or
subcontract any of the duties, responsibilities and services governed
by this paragraph 5, to its parent company, Security Benefit Group,
Inc. or any of its affiliates, whether or not by formal written
agreement. SMC shall, however, retain ultimate responsibility to the
Fund, and shall implement such reasonable procedures as may be
necessary, for assuring that any duties, responsibilities or services
so assigned, subcontracted or delegated are performed in conformity
with the terms and conditions of this Agreement.
6. OTHER ACTIVITIES NOT RESTRICTED. Nothing in this Agreement shall prevent
SMC or any officer thereof from acting as investment adviser, administrator
or transfer agent for any other person, firm or corporation, nor shall it
in any way limit or restrict SMC 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 SMC 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 SMC acts as investment adviser, administrator and
transfer agent to other investment companies, and it expressly consents to
SMC acting as such; provided, however, that if in the opinion of SMC,
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.
7. AMENDMENT. This Agreement and the schedules forming a part hereof 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 SMC's obligations
hereunder shall be subject to SMC's approval, which shall not be
unreasonably withheld.
8. DURATION AND TERMINATION OF AGREEMENT. This Agreement shall become
effective on January 31, 1989, provided that on December 8, 1988, it is
approved by a majority of the holders of the outstanding voting securities
of the Fund. This Agreement shall continue in effect until January 1, 1990,
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 a 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 the
outstanding voting securities of the Fund (as defined in the 1940 Act).
Upon this Agreement becoming effective, any previous Agreement between the
Fund and SMC providing for investment advisory, administrative or transfer
agency 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 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 SMC, 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).
9. 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.
10. 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 Xxxxxxx X. Xxxxxxxx
-------------------------
President
(Corporate Seal)
ATTEST:
Xxx X. Xxx
-------------------------
Secretary
SECURITY MANAGEMENT COMPANY
By Xxxxxxx X. Xxxxxxxx
-------------------------
President
(Corporate Seal)
ATTEST:
Xxx X. Xxx
-------------------------
Secretary
SCHEDULE A
INVESTMENT ADVISORY, ADMINISTRATIVE SERVICES
AND TRANSFER AGENCY AGREEMENT
SCHEDULE OF ADMINISTRATIVE AND FUND ACCOUNTING FACILITIES AND SERVICES
Security Management Company agrees to provide the Fund the following
administrative facilities and services.
1. FUND AND PORTFOLIO ACCOUNTING
a. Maintenance of Fund General Ledger and Journal.
b. Preparing and recording disbursements for direct Fund expenses.
c. Preparing daily money transfers.
d. Reconciliation of all Fund bank and custodian accounts.
e. Assisting Fund independent auditors as appropriate.
f. Prepare daily projection of available cash balances.
g. Record trading activity for purposes of determining net asset values
and daily dividend.
h. Prepare daily portfolio evaluation report to value portfolio securities
and determine daily accrued income.
i. Determine the daily net asset value per share.
j. Determine the daily, monthly, quarterly, semiannual or annual dividend
per share.
k. Prepare monthly, quarterly, semiannual and annual financial statements.
l. Provide financial information for reports to the Securities and
Exchange Commission in compliance with the provisions of the Investment
Company Act of 1940 and the Securities Act of 1933, the Internal
Revenue Service and any other regulatory agencies as required.
m. Provide financial, yield, net asset value, etc. information to NASD and
other survey and statistical agencies as instructed by the Fund.
n. Reports to the Audit Committee of the Board of Directors, if
applicable.
2. LEGAL
a. Provide registration and other administrative services necessary to
qualify the shares of the Fund for sale in those jurisdictions
determined from time to time by the Fund's Board of Directors (commonly
known as "Blue Sky Registration").
b. Provide registration with and reports to the Securities and Exchange
Commission in compliance with the provisions of the Investment Company
Act of 1940 and the Securities Act of 1933.
c. Prepare and review Fund Prospectus and Statement of Additional
Information.
d. Prepare proxy statements and oversee proxy tabulation for annual
meetings.
e. Prepare Board materials and maintain minutes of the Board meetings.
f. Draft, review and maintain contractual agreements between Fund and
Investment Adviser, Custodian, Distributor and Transfer Agent.
g. Oversee printing of proxy statements, financial reports to
shareholders, prospectus and Statements of Additional Information.
h. Provide legal advice and oversight regarding shareholder transactions,
administrative services, compliance with contractual agreements and the
provisions of the 1940 and 1933 Acts.
SCHEDULE OF SHARE TRANSFER AND DIVIDEND DISBURSING SERVICES
Security Management Company agrees to provide the Fund the following
transfer agency and dividend disbursing service.
1. Maintenance of shareholder accounts, including processing of new accounts.
2. Posting address changes and other file maintenance for shareholder
accounts.
3. Posting all transactions to the shareholder file, including:
a. Direct purchases.
b. Wire order purchases.
c. Direct redemptions.
d. Wire order redemptions.
e. Draft redemptions.
f. Direct exchanges.
g. Transfers.
h. Certificate issuances.
i. Certificate deposits.
4. Monitor fiduciary processing, insuring accuracy and deduction of fees.
5. Prepare daily reconciliation's of shareholder processing to money movement
instructions.
6. Handle bounced check collections. Immediately liquidate shares purchased
and return to the shareholder the check and confirmation of the
transaction.
7. Issuing all checks and stopping and replacing lost checks.
8. Draft clearing services.
a. Maintenance of signature cards and appropriate corporate resolutions.
b. Comparison of the signature on the check to the signatures on the
signature card for the purpose of paying the face amount of the check
only.
c. Receiving checks presented for payment and liquidating shares after
verifying account balance.
d. Ordering checks in quantity specified by the Fund for the shareholder.
9. Mailing confirmations, checks and/or certificates resulting from
transaction requests to shareholders.
10. Performing all of the Fund's other mailings, including:
a. Dividend and capital gain distributions.
b. Semiannual and annual reports.
c. 1099/year-end shareholder reporting.
d. Systematic withdrawal plan payments.
e. Daily confirmations.
11. Answering all service related telephone inquiries from shareholders and
others, including:
a. General and policy inquiries (research and resolve problems).
b. Fund yield inquiries.
c. Taking shareholder processing requests and account maintenance changes
by telephone as described above.
d. Submit pending requests to correspondence.
e. Monitor on-line statistical performance of unit.
f. Develop reports on telephone activity.
12. Respond to written inquiries (research and resolve problems), including:
a. Initiate shareholder account reconciliation proceeding when
appropriate.
b. Notify shareholder of bounced investment checks.
c. Respond to financial institutions regarding verification of deposit.
d. Initiate proceedings regarding lost certificates.
e. Respond to complaints and log activities.
f. Correspondence control.
13. Maintaining and retrieving all required past history for shareholders and
provide research capabilities as follows:
a. Daily monitoring of all processing activity to verify back-up
documentation.
b. Provide exception reports.
c. Microfilming.
d. Storage, retrieval and archive.
14. Prepare materials for annual meetings.
a. Address and mail annual proxy and related material.
b. Prepare and submit to Fund an affidavit of mailing.
c. Furnish certified list of shareholders (hard copy or microfilm) and
inspectors of elections.
15. Report and remit as necessary for state escheat requirements.
Approved: Fund X. X. XXXXXXXX SMC X. X. XXXXXXXX
------------------------------- ----------------------
AMENDMENT TO INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
WHEREAS, Security Equity Fund (the "Fund") and Security Management Company
("SMC") are parties to an Investment Management and Services Agreement dated
December 8, 1988 (the "Agreement"), under which SMC agrees to provide investment
research and advice, general administrative, fund accounting, transfer agency
and dividend disbursing services to the Fund in return for the compensation
specified in the Agreement;
WHEREAS, on July 23, 1993, the Board of Directors of the Fund authorized the
Fund to offer shares of the Fund in two separate series, the Equity Series and
the Global Series, with each series representing separate interests in a
separate portfolio of securities and other assets;
WHEREAS, on July 23, 1993, the Board of Directors of the Fund further authorized
the Fund to offer its shares in two classes, Class A shares and Class B shares;
WHEREAS, the Fund had previously issued shares, now designated as Class A shares
of the Equity Series, with respect to which SMC had previously provided the
services set forth in this Agreement;
WHEREAS, on July 23, 1993, the Board of Directors of the Fund voted to amend
this Agreement to provide that SMC would provide services to the Global Series
of the Fund pursuant to this Agreement;
WHEREAS, the Fund has adopted a Distribution Plan with respect to its Class B
shares and, as a result, such shares are subject to distribution fees to which
Class A shares are not subject;
WHEREAS, the distribution fees associated with Class B shares require the
amendment of the Agreement relative to that class of shares;
WHEREAS, the changes to the Agreement which are contemplated by this Amendment
do not affect the interests of Class A shareholders of the Equity Series; and
WHEREAS, on October 1, 1993, the initial shareholder of Class B shares of the
Equity Series and Class A and Class B shares of the Global Series approved such
amendment to this Agreement;
NOW, THEREFORE, the Fund and SMC hereby amend the Investment Management and
Services Agreement, dated December 8, 1988, effective October 1, 1993, as
follows:
A. SMC agrees to provide investment research and advice, general
administrative, fund accounting, transfer agency and dividend disbursing
services to the Global Series of the Fund pursuant to the terms and
conditions set forth in the Agreement, as amended in sections B and C below.
B. Paragraph 2(b) shall be deleted in its entirety and the following paragraph
inserted in lieu thereof:
(b) EXPENSES OF THE FUND. Anything in this Agreement to the contrary
notwithstanding, the Fund shall pay, or reimburse SMC for the payment
of, the following described expenses of the Fund whether or not billed
to the Fund, SMC 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 B Distribution
Plan.
C. Paragraph 3(a) and (b) shall be deleted in their entirety and the following
paragraphs inserted in lieu thereof:
3. COMPENSATION OF SMC
(a) As compensation for the services to be rendered by SMC as provided
for herein, for each of the years this Agreement is in effect, the
Fund shall pay SMC an annual fee equal to 2 percent of the first
$10 million of the average net assets, 1 1/2percent of the next
$20 million of the average net assets, and 1 percent of the
remaining average net assets of the Equity Series of the Fund for
any fiscal year, and 2 percent of the first $70 million of the
average net assets and 1 1/2 percent of the remaining average net
assets of the Global Series of the Fund for any fiscal year. Such
fees shall be determined and payable monthly. If this Agreement
shall be effective for only a portion of a year, then SMC'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
such 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.
(b) For each of the Fund's fiscal years this Agreement remains in
force, SMC 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 B Distribution Plan, but inclusive of SMC'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, SMC 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 years, 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).
D. Paragraph 5(e) shall be deleted in its entirety and the following inserted
in lieu thereof:
5. (e) DELEGATION OF DUTIES
SMC may, at its discretion, delegate, assign or subcontract any of
the duties, responsibilities and services governed by this
agreement, to its parent company, Security Benefit Group, Inc.,
whether or not by formal written agreement, or to any third party,
provided that such arrangement with a third party has been
approved by the Board of Directors of the Fund. SMC shall,
however, retain ultimate responsibility to the Fund and shall
implement such reasonable procedures as may be necessary for
assuring that any duties, responsibilities or services so
assigned, subcontracted or delegated are performed in conformity
with the terms and conditions of this agreement.
IN WITNESS WHEREOF, the parties hereto have made this Amendment to the
Investment Management and Services Agreement this 1st day of October 1993.
SECURITY EQUITY FUND
ATTEST: By: X. X. XXXXXXXX
-------------------------
Xxx X. Xxx
-------------------------
Xxx X. Xxx, Secretary
SECURITY MANAGEMENT COMPANY
By: X. X. XXXXXXXX
-------------------------
ATTEST:
Xxx X. Xxx
-------------------------
Xxx X. Xxx, Secretary
AMENDMENT TO
INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
WHEREAS, Security Equity Fund (the "Fund") and Security Management Company
("SMC") are parties to an Investment Management and Services Agreement, dated
December 8, 1988, as amended (the "Agreement"), under which SMC agrees to
provide investment research and advice, general administrative, fund accounting,
transfer agency and dividend disbursing services to the Fund in return for the
compensation specified in the Agreement;
WHEREAS, on April 3, 1995, the Board of Directors of the Fund authorized the
Fund to offer its common stock in a new series designated as the Asset
Allocation Series, in addition to its presently offered series of common stock
of Equity Series and Global Series, with each series representing separate
interests in a separate portfolio of securities and other assets;
WHEREAS, on April 3, 1995, the Board of Directors of the Fund further authorized
the Fund to offer shares of the Asset Allocation Series in two classes,
designated Class A shares and Class B shares;
WHEREAS, on April 3, 1995, the Board of Directors of the Fund approved the
amendment of the Agreement to provide that SMC would provide investment advisory
and business management services to each class of common stock of the Asset
Allocation Series of the Fund under the terms and conditions of the Agreement;
and
WHEREAS, on April 18, 1995, the initial shareholder of the Asset Allocation
Series approved such amendment to the Agreement;
NOW, THEREFORE BE IT RESOLVED, that the Fund and SMC hereby amend the Agreement,
effective June 1, 1995, to provide that SMC shall provide all investment
advisory services, general administrative, fund accounting, transfer agency and
dividend disbursing services to the Asset Allocation Series of the Fund pursuant
to the terms set forth in the Agreement, as amended on October 1, 1993 and as
follows.
Paragraph 1 is deleted in its entirety and the following paragraph inserted in
lieu thereof:
1. EMPLOYMENT OF SMC.
The Fund hereby employs SMC to (a) act as investment adviser to the Fund
with respect to the investment of its assets and to supervise and arrange
the purchase of securities for 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; (b) to provide the Fund with general administrative, fund
accounting, transfer agency, and dividend disbursing services described and
set forth in Schedule A attached hereto and made a part of this Agreement
by reference; and (c) to arrange for, and monitor, the provision to the
Fund of all other services required by the Fund, including but not limited
to services of independent accountants, legal counsel, custodial services
and printing. SMC may, in accordance with all applicable legal
requirements, engage the services of other persons or entities, regardless
of any affiliation with SMC, to provide services to the Fund under this
Agreement. SMC shall bear the expense of providing such other services to
the Equity and Global Series. Asset Allocation Series shall bear the
expense of such other services and all other expenses of the Series. SMC
agrees to maintain sufficient trained personnel and equipment and supplies
to perform its responsibilities under this Agreement and in conformity with
the current Prospectus of the Fund and such other reasonable standards of
performance as the Fund may from time to time specify and shall use
reasonable care in selecting and monitoring the performance of third
parties, who perform services for the Fund. SMC shall not guarantee the
performance of such persons.
Paragraphs 2(a) and (b) shall be deleted in their entirety and the following
paragraphs shall be inserted in lieu thereof:
(a) EXPENSES OF SMC. SMC shall pay all expenses in connection with the
performance of its services under this Agreement, including with
respect to the Equity and Global Series, all fees and charges of third
parties providing services to the Fund, whether or not such expenses
are billed to SMC or the Fund, except as provided otherwise herein.
(b) EXPENSES OF THE FUND. Anything in this Agreement to the contrary
notwithstanding, the Fund shall pay or reimburse SMC for the payment
of the following described expenses of the Fund whether or not billed
to the Fund, SMC 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 B
Distribution Plan;
and, in addition to those expenses set forth above, Asset Allocation
Series shall pay all expenses of the Series whether or not billed to
the Fund, SMC or any related entity, including, but not limited to the
following: Board of Directors' fees; legal, auditing and accounting
expenses; insurance premiums; broker's commissions; taxes and
governmental fees and any membership dues; fees of custodian; expenses
of obtaining quotations on the Fund's portfolio securities and pricing
of the Fund's shares; costs and expenses in connection with the
registration of the Fund's capital stock under the Securities Act of
1933 and qualification of the Fund's capital stock under the Blue Sky
laws of the states where such stock is offered; costs and expenses in
connection with the registration of the Fund under the Investment
Company Act of 1940 and all periodic and other reports required
thereunder; expenses of preparing, printing and distributing reports,
proxy statements, prospectuses, statements of additional information,
notices and distributions to stockholders; costs of stockholder and
other meetings; and expenses of maintaining the Fund's corporate
existence.
Paragraph 3(a) shall be deleted in its entirety and the following paragraph
inserted in lieu thereof:
3. COMPENSATION OF SMC.
(a) As compensation for the services to be rendered by SMC to Equity Series
and Global Series as provided for herein, for each of the years this
Agreement is in effect, the Fund shall pay SMC an annual fee equal to (1) 2
percent of the first $10 million of the average daily net assets, 1 1/2
percent of the next $20 million of the average daily net assets, and 1
percent of the remaining average daily net assets of the Equity Series of
the Fund for any fiscal year, and (2) 2 percent of the first $70 million of
the average daily net assets and 1 1/2 percent of the remaining average
daily net assets of the Global Series of the Fund for any fiscal year. Such
fees shall be determined daily and payable monthly. As compensation for the
investment advisory services to be rendered by SMC to Asset Allocation
Series, for each of the years this agreement is in effect, the Asset
Allocation Series shall pay SMC an annual fee equal to 1% of the average
daily net assets of the Asset Allocation Series. As compensation for the
administrative services to be rendered by SMC to Asset Allocation Series,
the Asset Allocation Series shall pay SMC an annual fee equal to .045% of
the average daily net assets of Asset Allocation Series, plus the greater
of .10% of its average daily net assets or (i) $30,000 in the year ending
April 29, 1996; (ii) $45,000 in the year ending April 29, 1997, and (iii)
$60,000 thereafter. Such fees shall be calculated daily and payable
monthly. If this Agreement shall be effective for only a portion of a year,
then SMC'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.
For transfer agency services provided by SMC to Asset Allocation Series,
Asset Allocation Series shall pay a Maintenance Fee of $8.00 per account, a
Transaction Fee of $1.00 per account and a Dividend Fee of $1.00 per
account.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the
Investment Management and Services Agreement this 28th day of April, 1995.
SECURITY EQUITY FUND
By: Xxxx X. Xxxxxxx
------------------------------
Xxxx X. Xxxxxxx, President
ATTEST:
Xxx X. Xxx
-------------------------
Xxx X. Xxx, Secretary
SECURITY MANAGEMENT COMPANY
By: Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxx, President
ATTEST:
Xxx X. Xxx
-------------------------
Xxx X. Xxx, Secretary
AMENDMENT TO
INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
WHEREAS, Security Equity Fund (the "Fund") and Security Management Company
("SMC") are parties to an Investment Management and Services Agreement, dated
December 8, 1988, as amended (the "Agreement"), under which SMC agrees to
provide investment research and advice, general administrative, fund accounting,
transfer agency and dividend disbursing services to the Fund in return for the
compensation specified in the Agreement;
WHEREAS, on July 26, 1996, the Board of Directors of the Fund authorized the
Fund to offer its common stock in a new series designated as the Social
Awareness Series, in addition to its presently offered series of common stock of
Equity Series, Global Series, and Asset Allocation Series, with each series
representing separate interests in a separate portfolio of securities and other
assets;
WHEREAS, on July 26, 1996, the Board of Directors of the Fund further authorized
the Fund to offer shares of the Social Awareness Series in two classes,
designated Class A shares and Class B shares;
WHEREAS, on July 26, 1996, the Board of Directors of the Fund approved the
amendment of the Agreement to provide that SMC would provide investment advisory
and business management services to each class of common stock of the Social
Awareness Series of the Fund under the terms and conditions of the Agreement;
and
WHEREAS, this amendment to the Agreement is subject to the approval of the
initial shareholder of the Social Awareness Series;
NOW, THEREFORE BE IT RESOLVED, that the Fund and SMC hereby amend the Agreement,
effective October 30, 1996, to provide that SMC shall provide all investment
advisory services, general administrative, fund accounting, transfer agency and
dividend disbursing services to the Social Awareness Series of the Fund pursuant
to the terms set forth in the Agreement, as amended and as follows.
Paragraph 1 is deleted in its entirety and the following paragraph inserted in
lieu thereof:
1. EMPLOYMENT OF SMC.
The Fund hereby employs SMC to (a) act as investment adviser to the Fund with
respect to the investment of its assets and to supervise and arrange the
purchase of securities for 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; (b) to
provide the Fund with general administrative, fund accounting, transfer agency,
and dividend disbursing services described and set forth in Schedule A attached
hereto and made a part of this Agreement by reference; and (c) to arrange for,
and monitor, the provision to the Fund of all other services required by the
Fund, including but not limited to services of independent accountants, legal
counsel, custodial services and printing. SMC may, in accordance with all
applicable legal requirements, engage the services of other persons or entities,
regardless of any affiliation with SMC, to provide services to the Fund under
this Agreement. SMC shall bear the expense of providing such other services to
the Equity and Global Series. Asset Allocation Series and Social Awareness
Series shall bear the expense of such other services and all other expenses of
the Series. SMC agrees to maintain sufficient trained personnel and equipment
and supplies to perform its responsibilities under this Agreement and in
conformity with the current Prospectus of the Fund and such other reasonable
standards of performance as the Fund may from time to time specify and shall use
reasonable care in selecting and monitoring the performance of third parties,
who perform services for the Fund. SMC shall not guarantee the performance of
such persons.
Paragraphs 2(a) and (b) shall be deleted in their entirety and the following
paragraphs shall be inserted in lieu thereof:
(a) EXPENSES OF SMC. SMC shall pay all expenses in connection with the
performance of its services under this Agreement, including with respect to
the Equity and Global Series, all fees and charges of third parties
providing services to the Fund, whether or not such expenses are billed to
SMC or the Fund, except as provided otherwise herein.
(b) EXPENSES OF THE FUND. Anything in this Agreement to the contrary
notwithstanding, the Fund shall pay or reimburse SMC for the payment of the
following described expenses of the Fund whether or not billed to the Fund,
SMC 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 B Distribution Plan;
and, in addition to those expenses set forth above, Asset Allocation Series
and Social Awareness Series shall pay all expenses of the Series whether or
not billed to the Fund, SMC or any related entity, including, but not
limited to the following: Board of Directors' fees; legal, auditing and
accounting expenses; insurance premiums; broker's commissions; taxes and
governmental fees and any membership dues; fees of custodian; expenses of
obtaining quotations on the Fund's portfolio securities and pricing of the
Fund's shares; costs and expenses in connection with the registration of
the Fund's capital stock under the Securities Act of 1933 and qualification
of the Fund's capital stock under the Blue Sky laws of the states where
such stock is offered; costs and expenses in connection with the
registration of the Fund under the Investment Company Act of 1940 and all
periodic and other reports required thereunder; expenses of preparing,
printing and distributing reports, proxy statements, prospectuses,
statements of additional information, notices and distributions to
stockholders; costs of stockholder and other meetings; and expenses of
maintaining the Fund's corporate existence.
Paragraph 3(a) shall be deleted in its entirety and the following paragraph
inserted in lieu thereof:
3. COMPENSATION OF SMC.
(a) As compensation for the services to be rendered by SMC to Equity Series
and Global Series as provided for herein, for each of the years this
Agreement is in effect, the Fund shall pay SMC an annual fee equal to (1) 2
percent of the first $10 million of the average daily net assets, 1 1/2
percent of the next $20 million of the average daily net assets, and 1
percent of the remaining average daily net assets of the Equity Series of
the Fund for any fiscal year, and (2) 2 percent of the first $70 million of
the average daily net assets and 1 1/2 percent of the remaining average
daily net assets of the Global Series of the Fund for any fiscal year. Such
fees shall be determined daily and payable monthly. As compensation for the
investment advisory services to be rendered by SMC to Asset Allocation
Series and to Social Awareness Series, for each of the years this agreement
is in effect, each of the Asset Allocation Series and Social Awareness
Series shall pay SMC an annual fee equal to 1% of their respective average
daily net assets. Such fee shall be calculated daily and payable monthly.
As compensation for the administrative services to be rendered by SMC to
Asset Allocation Series, the Asset Allocation Series shall pay SMC an
annual fee equal to .045% of the average daily net assets of Asset
Allocation Series, plus the greater of .10% of its average daily net assets
or (i) $30,000 in the year ending April 29, 1996; (ii) $45,000 in the year
ending April 29, 1997, and (iii) $60,000 thereafter. Such fee shall be
calculated daily and payable monthly. As compensation for the
administrative services to be rendered by SMC to Social Awareness Series,
the Social Awareness Series shall pay SMC an annual fee equal to .09% of
the average daily net assets of the Social Awareness Series. Such fee shall
be calculated daily and payable monthly. If this Agreement shall be
effective for only a portion of a year, then SMC'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. For transfer agency
services provided by SMC to Asset Allocation Series and to Social Awareness
Series, each such Series shall pay a Maintenance Fee of $8.00 per account,
a Transaction Fee of $1.00 per account and a Dividend Fee of $1.00 per
account.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the
Investment Management and Services Agreement this 1st day of August, 1996.
SECURITY EQUITY FUND
By: Xxxx X. Xxxxxxx
---------------------------
Xxxx X. Xxxxxxx, President
ATTEST:
By: Xxx X. Xxx
-------------------------
Xxx X. Xxx, Secretary
SECURITY MANAGEMENT COMPANY
By: Xxxxx X. Xxxxxxx
---------------------------
Xxxxx X. Xxxxxxx, President
ATTEST:
By: Xxx X. Xxx
-------------------------
Xxx X. Xxx, Secretary
AMENDMENT TO
INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
WHEREAS, Security Equity Fund (the "Fund") and Security Management Company
("SMC") are parties to an Investment Management and Services Agreement, dated
December 8, 1988, as amended (the "Agreement"), under which SMC agrees to
provide investment research and advice, general administrative, fund accounting,
transfer agency and dividend disbursing services to the Fund in return for the
compensation specified in the Agreement;
WHEREAS, on October 31, 1996, the operations of SMC, a Kansas corporation, will
be transferred to Security Management Company, LLC ("SMC, LLC"), a Kansas
limited liability company; and
WHEREAS, SMC, LLC desires to assume all rights, duties and obligations of SMC
under the Agreement.
NOW THEREFORE, in consideration of the premises and mutual agreements made
herein, the parties hereto agree as follows:
1. The Agreement is hereby amended to substitute SMC, LLC for SMC, with the
same effect as though SMC, LLC were the originally named management
company, effective November 1, 1996;
2. SMC, LLC agrees to assume the rights, duties and obligations of SMC
pursuant to the terms of the Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Investment Management and Services Agreement this 1st day of November, 1996.
SECURITY EQUITY FUND SECURITY MANAGEMENT COMPANY, LLC
By: XXXX X. XXXXXXX By: XXXXX X. XXXXXXX
------------------------------ --------------------------------
Xxxx X. Xxxxxxx, President Xxxxx X. Xxxxxxx, President
ATTEST: ATTEST:
XXX X. XXX XXX X. XXX
------------------------------------ -------------------------------------
Xxx X. Xxx, Secretary Xxx X. Xxx, Secretary
AMENDMENT TO
INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
WHEREAS, Security Equity Fund (the "Fund") and Security Management Company, LLC
("SMC, LLC") are parties to an Investment Management and Services Agreement,
dated December 8, 1988, as amended (the "Agreement"), under which SMC, LLC
agrees to provide investment research and advice, general administrative, fund
accounting, transfer agency and dividend disbursing services to the Fund in
return for the compensation specified in the Agreement;
WHEREAS, on February 7, 1997, the Board of Directors of the Fund authorized the
Fund to offer its common stock in a new series designated as the Value Series,
in addition to its presently offered series of common stock of Equity Series,
Global Series, Asset Allocation Series, and Social Awareness Series, with each
series representing separate interests in a separate portfolio of securities and
other assets;
WHEREAS, on February 7, 1997, the Board of Directors of the Fund further
authorized the Fund to offer shares of the Value Series in two classes,
designated Class A shares and Class B shares;
WHEREAS, on February 7, 1997, the Board of Directors of the Fund approved the
amendment of the Agreement to provide that SMC, LLC would provide investment
advisory and business management services to each class of common stock of the
Value Series of the Fund under the terms and conditions of the Agreement; and
WHEREAS, this amendment to the Agreement is subject to the approval of the
initial shareholder of the Value Series;
NOW, THEREFORE BE IT RESOLVED, that the Fund and SMC, LLC hereby amend the
Agreement, effective April 30, 1997, to provide that SMC, LLC shall provide all
investment advisory services, general administrative, fund accounting, transfer
agency and dividend disbursing services to the Value Series of the Fund pursuant
to the terms set forth in the Agreement, as amended and as follows.
Paragraph 1 is deleted in its entirety and the following paragraph inserted in
lieu thereof:
1. EMPLOYMENT OF SMC, LLC.
The Fund hereby employs SMC, LLC to (a) act as investment adviser to the Fund
with respect to the investment of its assets and to supervise and arrange the
purchase of securities for 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; (b) provide
the Fund with general administrative, fund accounting, transfer agency, and
dividend disbursing services described and set forth in Schedule A attached
hereto and made a part of this Agreement by reference; and (c) arrange for, and
monitor, the provision to the Fund of all other services required by the Fund,
including but not limited to services of independent accountants, legal counsel,
custodial services and printing. SMC, LLC may, in accordance with all applicable
legal requirements, engage the services of other persons or entities, regardless
of any affiliation with SMC, LLC, to provide services to the Fund under this
Agreement. SMC, LLC shall bear the expense of providing such other services to
the Equity and Global Series. Asset Allocation Series, Social Awareness Series
and Value Series shall bear the expense of such other services and all other
expenses of the Series. SMC, LLC agrees to maintain sufficient trained personnel
and equipment and supplies to perform its responsibilities under this Agreement
and in conformity with the current Prospectus of the Fund and such other
reasonable standards of performance as the Fund may from time to time specify
and shall use reasonable care in selecting and monitoring the performance of
third parties, who perform services for the Fund. SMC, LLC shall not guarantee
the performance of such persons.
Paragraphs 2(a) and (b) shall be deleted in their entirety and the following
paragraphs shall be inserted in lieu thereof:
(a) EXPENSES OF SMC, LLC. SMC, LLC shall pay all expenses in connection
with the performance of its services under this Agreement, including with
respect to the Equity and Global Series, all fees and charges of third
parties providing services to the Fund, whether or not such expenses are
billed to SMC, LLC or the Fund, except as provided otherwise herein.
(b) EXPENSES OF THE FUND. Anything in this Agreement to the contrary
notwithstanding, the Fund shall pay or reimburse SMC, LLC for the payment
of the following described expenses of the Fund whether or not billed to
the Fund, SMC, LLC 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 B Distribution Plan;
and, in addition to those expenses set forth above, Asset Allocation
Series, Social Awareness Series and Value Series shall pay all expenses of
the Series whether or not billed to the Fund, SMC, LLC or any related
entity, including, but not limited to the following: Board of Directors'
fees; legal, auditing and accounting expenses; insurance premiums; broker's
commissions; taxes and governmental fees and any membership dues; fees of
custodian; expenses of obtaining quotations on the Fund's portfolio
securities and pricing of the Fund's shares; costs and expenses in
connection with the registration of the Fund's capital stock under the
Securities Act of 1933 and qualification of the Fund's capital stock under
the Blue Sky laws of the states where such stock is offered; costs and
expenses in connection with the registration of the Fund under the
Investment Company Act of 1940 and all periodic and other reports required
thereunder; expenses of preparing, printing and distributing reports, proxy
statements, prospectuses, statements of additional information, notices and
distributions to stockholders; costs of stockholder and other meetings; and
expenses of maintaining the Fund's corporate existence.
Paragraph 3(a) shall be deleted in its entirety and the following paragraph
inserted in lieu thereof:
3. COMPENSATION OF SMC, LLC.
(a) As compensation for the services to be rendered by SMC, LLC to Equity
Series and Global Series as provided for herein, for each of the years this
Agreement is in effect, the Fund shall pay SMC, LLC an annual fee equal to
(1) 2 percent of the first $10 million of the average daily net assets, 1
1/2 percent of the next $20 million of the average daily net assets, and 1
percent of the remaining average daily net assets of the Equity Series of
the Fund for any fiscal year, and (2) 2 percent of the first $70 million of
the average daily net assets and 1 1/2 percent of the remaining average
daily net assets of the Global Series of the Fund for any fiscal year. Such
fees shall be determined daily and payable monthly. As compensation for the
investment advisory services to be rendered by SMC, LLC to Asset Allocation
Series, Social Awareness Series and Value Series, for each of the years
this agreement is in effect, the Asset Allocation Series, Social Awareness
Series and Value Series shall each pay SMC, LLC an annual fee equal to 1%
of their respective average daily net assets. Such fee shall be calculated
daily and payable monthly. As compensation for the administrative services
to be rendered by SMC, LLC to Asset Allocation Series, the Asset Allocation
Series shall pay SMC, LLC an annual fee equal to .045% of the average daily
net assets of Asset Allocation Series, plus the greater of .10% of its
average daily net assets or (i) $30,000 in the year ended April 29, 1996;
(ii) $45,000 in the year ending April 29, 1997, and (iii) $60,000
thereafter. Such fees shall be calculated daily and payable monthly. As
compensation for the administrative services to be rendered by SMC, LLC to
Social Awareness Series and Value Series, each such Series shall pay SMC,
LLC an annual fee equal to .09% of their respective average daily net
assets. Such fees shall be calculated daily and payable monthly. If this
Agreement shall be effective for only a portion of a year, then SMC, LLC'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. For
transfer agency services provided by SMC, LCC to Asset Allocation Series,
Social Awareness Series, and Value Series, each such Series shall pay a
Maintenance Fee of $8.00 per account, a Transaction Fee of $1.00 per
account and a Dividend Fee of $1.00 per account.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the
Investment Management and Services Agreement this 12th day of March, 1997.
SECURITY EQUITY FUND
By: Xxxx X. Xxxxxxx
------------------------------
Xxxx X. Xxxxxxx, President
ATTEST:
By: Xxx X. Xxx
------------------------------
Xxx X. Xxx, Secretary
SECURITY MANAGEMENT COMPANY, LLC
By: Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx, President
ATTEST:
By: Xxx X. Xxx
------------------------------
Xxx X. Xxx, Secretary
AMENDMENT TO
INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
WHEREAS, Security Equity Fund (the "Fund") and Security Management Company, LLC
("SMC, LLC") are parties to an Investment Management and Services Agreement,
dated December 8, 1988, as amended (the "Agreement"), under which SMC, LLC
agrees to provide investment research and advice, general administrative, fund
accounting, transfer agency and dividend disbursing services to the Fund in
return for the compensation specified in the Agreement;
WHEREAS, on July 25, 1997, the Board of Directors of the Fund authorized the
Fund to offer its common stock in a new series designated as the Small Company
Series, in addition to its presently offered series of common stock of Equity
Series, Global Series, Asset Allocation Series, Social Awareness Series, and
Value Series, with each series representing separate interests in a separate
portfolio of securities and other assets;
WHEREAS, on July 25, 1997, the Board of Directors of the Fund further authorized
the Fund to offer shares of the Small Company Series in two classes, designated
Class A shares and Class B shares;
WHEREAS, on July 25, 1997, the Board of Directors of the Fund approved the
amendment of the Agreement to provide that SMC, LLC would provide investment
advisory and business management services to each class of common stock of the
Small Company Series of the Fund under the terms and conditions of the
Agreement; and
WHEREAS, this amendment to the Agreement is subject to the approval of the
initial shareholder of the Small Company Series;
NOW, THEREFORE BE IT RESOLVED, that the Fund and SMC, LLC hereby amend the
Agreement, effective October 15, 1997, to provide that SMC, LLC shall provide
all investment advisory services, general administrative, fund accounting,
transfer agency and dividend disbursing services to the Small Company Series of
the Fund pursuant to the terms set forth in the Agreement, as amended and as
follows.
Paragraph 1 is deleted in its entirety and the following paragraph inserted in
lieu thereof:
1. EMPLOYMENT OF SMC, LLC.
The Fund hereby employs SMC, LLC to (a) 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; (b) provide
the Fund with general administrative, fund accounting, transfer agency, and
dividend disbursing services described and set forth in Schedule A attached
hereto and made a part of this Agreement by reference; and (c) arrange for, and
monitor, the provision to the Fund of all other services required by the Fund,
including but not limited to services of independent accountants, legal counsel,
custodial services and printing. SMC, LLC may, in accordance with all applicable
legal requirements, engage the services of other persons or entities, regardless
of any affiliation with SMC, LLC, to provide services to the Fund under this
Agreement. SMC, LLC shall bear the expense of providing such other services to
the Equity and Global Series. Asset Allocation Series, Social Awareness Series,
Value Series and Small Company Series shall bear the expense of such other
services and all other expenses of the Series. SMC, LLC agrees to maintain
sufficient trained personnel and equipment and supplies to perform its
responsibilities under this Agreement and in conformity with the current
Prospectus of the Fund and such other reasonable standards of performance as the
Fund may from time to time specify and shall use reasonable care in selecting
and monitoring the performance of third parties, who perform services for the
Fund. SMC, LLC shall not guarantee the performance of such persons.
Paragraphs 2(a) and (b) shall be deleted in their entirety and the following
paragraphs shall be inserted in lieu thereof:
(a) EXPENSES OF SMC, LLC. SMC, LLC shall pay all expenses in connection
with the performance of its services under this Agreement, including
with respect to the Equity and Global Series, all fees and charges of
third parties providing services to the Fund, whether or not such
expenses are billed to SMC, LLC or the Fund, except as provided
otherwise herein.
(b) EXPENSES OF THE FUND. Anything in this Agreement to the contrary
notwithstanding, the Fund shall pay or reimburse SMC, LLC for the
payment of the following described expenses of the Fund whether or not
billed to the Fund, SMC, LLC 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 B Distribution
Plan;
and, in addition to those expenses set forth above, Asset Allocation
Series, Social Awareness Series, Value Series and Small Company Series
shall pay all expenses of the Series whether or not billed to the
Fund, SMC, LLC or any related entity, including, but not limited to
the following: Board of Directors' fees; legal, auditing and
accounting expenses; insurance premiums; broker's commissions; taxes
and governmental fees and any membership dues; fees of custodian;
expenses of obtaining quotations on the Fund's portfolio securities
and pricing of the Fund's shares; costs and expenses in connection
with the registration of the Fund's capital stock under the Securities
Act of 1933 and qualification of the Fund's capital stock under the
Blue Sky laws of the states where such stock is offered; costs and
expenses in connection with the registration of the Fund under the
Investment Company Act of 1940 and all periodic and other reports
required thereunder; expenses of preparing, printing and distributing
reports, proxy statements, prospectuses, statements of additional
information, notices and distributions to stockholders; costs of
stockholder and other meetings; and expenses of maintaining the Fund's
corporate existence.
Paragraph 3(a) shall be deleted in its entirety and the following paragraph
inserted in lieu thereof:
3. COMPENSATION OF SMC, LLC.
(a) As compensation for the services to be rendered by SMC, LLC to Equity
Series and Global Series as provided for herein, for each of the years this
Agreement is in effect, the Fund shall pay SMC, LLC an annual fee equal to
(1) 2 percent of the first $10 million of the average daily net assets, 1
1/2 percent of the next $20 million of the average daily net assets, and 1
percent of the remaining average daily net assets of the Equity Series of
the Fund for any fiscal year, and (2) 2 percent of the first $70 million of
the average daily net assets and 1 1/2 percent of the remaining average
daily net assets of the Global Series of the Fund for any fiscal year. Such
fees shall be determined daily and payable monthly. As compensation for the
investment advisory services to be rendered by SMC, LLC to Asset Allocation
Series, Social Awareness Series, Value Series and Small Company Series, for
each of the years this agreement is in effect, the Asset Allocation Series,
Social Awareness Series, Value Series and Small Company Series shall each
pay SMC, LLC an annual fee equal to 1% of their respective average daily
net assets. Such fee shall be calculated daily and payable monthly. As
compensation for the administrative services to be rendered by SMC, LLC to
Asset Allocation Series, the Asset Allocation Series shall pay SMC, LLC an
annual fee equal to .045% of the average daily net assets of Asset
Allocation Series, plus the greater of .10% of its average daily net assets
or (i) $30,000 in the year ended April 29, 1996; (ii) $45,000 in the year
ending April 29, 1997, and (iii) $60,000 thereafter. Such fees shall be
calculated daily and payable monthly. As compensation for the
administrative services to be rendered by SMC, LLC to Social Awareness
Series, Value Series and Small Company Series, each such Series shall pay
SMC, LLC an annual fee equal to .09% of their respective average daily net
assets. Such fees shall be calculated daily and payable monthly. If this
Agreement shall be effective for only a portion of a year, then SMC, LLC'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.
For transfer agency services provided by SMC, LCC to Asset Allocation
Series, Social Awareness Series, Value Series, and Small Company Series,
each such Series shall pay a Maintenance Fee of $8.00 per account, a
Transaction Fee of $1.00 per account and a Dividend Fee of $1.00 per
account.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the
Investment Management and Services Agreement this 15th day of September, 1997.
SECURITY EQUITY FUND
By: XXXX X. XXXXXXX
-----------------------------------
Xxxx X. Xxxxxxx, President
ATTEST:
By: XXX X. XXX
----------------------------------
Xxx X. Xxx, Secretary
SECURITY MANAGEMENT COMPANY, LLC
By: XXXXXXX X. XXXXXXXX
-----------------------------------
Xxxxxxx X. Xxxxxxxx, President
ATTEST:
By: XXX X. XXX
----------------------------------
Xxx X. Xxx, Secretary
AMENDMENT TO
INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
WHEREAS, Security Equity Fund (the "Fund") and Security Management Company, LLC
("SMC, LLC") are parties to an Investment Management and Services Agreement,
dated December 8, 1988, as amended (the "Agreement"), under which SMC, LLC
agrees to provide investment research and advice, general administrative, fund
accounting, transfer agency and dividend disbursing services to the Fund in
return for the compensation specified in the Agreement;
WHEREAS, on November 6, 1998, the Board of Directors of the Fund authorized the
Fund to offer its common stock in three new series designated as the
International Series, Enhanced Index Series and Select 25 Series, in addition to
its presently offered series of common stock of Equity Series, Global Series,
Asset Allocation Series, Social Awareness Series, Value Series and Small Company
Series, with each series representing separate interests in a separate portfolio
of securities and other assets;
WHEREAS, on November 6, 1998, the Board of Directors of the Fund further
authorized the Fund to offer shares of the International Series, Enhanced Index
Series and Select 25 Series in three classes, designated Class A shares, Class B
shares, and Class C shares;
WHEREAS, on November 6, 1998, the Board of Directors of the Fund approved the
amendment of the Agreement to provide that SMC, LLC would provide investment
advisory and business management services to each class of common stock of the
International Series, Enhanced Index Series and Select 25 Series of the Fund
under the terms and conditions of the Agreement; and
WHEREAS, on November 6, 1998, the Board of Directors of the Fund authorized the
Fund to offer shares of the Equity Series, Global Series, Asset Allocation
Series, Social Awareness Series, Value Series and Small Company Series in a new
class of shares designated as Class C shares; and
WHEREAS, this amendment to the Agreement is subject to the approval of the
initial shareholder of the International Series, Enhanced Index Series and
Select 25 Series and the initial shareholder of the Class C shares of the Equity
Series, Global Series, Asset Allocation Series, Social Awareness Series, Value
Series and Small Company Series;
NOW, THEREFORE BE IT RESOLVED, that the Fund and SMC, LLC hereby amend the
Agreement, effective January 28, 1999, to provide that SMC, LLC shall provide
all investment advisory services, general administrative, fund accounting,
transfer agency and dividend disbursing services to the International Series,
Enhanced Index Series and Select 25 Series of the Fund pursuant to the terms set
forth in the Agreement, as amended and as follows.
Paragraph 1 is deleted in its entirety and the following paragraph inserted in
lieu thereof:
1. EMPLOYMENT OF SMC, LLC.
The Fund hereby employs SMC, LLC to (a) 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; (b) provide
the Fund with general administrative, fund accounting, transfer agency, and
dividend disbursing services described and set forth in Schedule A attached
hereto and made a part of this Agreement by reference; and (c) arrange for, and
monitor, the provision to the Fund of all other services required by the Fund,
including but not limited to services of independent accountants, legal counsel,
custodial services and printing. SMC, LLC may, in accordance with all applicable
legal requirements, engage the services of other persons or entities, regardless
of any affiliation with SMC, LLC, to provide services to the Fund under this
Agreement. SMC, LLC shall bear the expense of providing such other services to
the Equity and Global Series. Asset Allocation Series, Social Awareness Series,
Value Series, Small Company Series, International Series, Enhanced Index Series
and Select 25 Series shall bear the expense of such other services and all other
expenses of the Series. SMC, LLC agrees to maintain sufficient trained personnel
and equipment and supplies to perform its responsibilities under this Agreement
and in conformity with the current Prospectus of the Fund and such other
reasonable standards of performance as the Fund may from time to time specify
and shall use reasonable care in selecting and monitoring the performance of
third parties, who perform services for the Fund. SMC, LLC shall not guarantee
the performance of such persons.
Paragraphs 2(a) and (b) shall be deleted in their entirety and the following
paragraphs shall be inserted in lieu thereof:
(a) EXPENSES OF SMC, LLC. SMC, LLC shall pay all expenses in connection
with the performance of its services under this Agreement, including with
respect to the Equity and Global Series, all fees and charges of third
parties providing services to the Fund, whether or not such expenses are
billed to SMC, LLC or the Fund, except as provided otherwise herein.
(b) EXPENSES OF THE FUND. Anything in this Agreement to the contrary
notwithstanding, the Fund shall pay or reimburse SMC, LLC for the payment
of the following described expenses of the Fund whether or not billed to
the Fund, SMC, LLC 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, Asset Allocation
Series, Social Awareness Series, Value Series, Small Company Series,
International Series, Enhanced Index Series and Select 25 Series shall pay
all expenses of the Series whether or not billed to the Fund, SMC, LLC or
any related entity, including, but not limited to the following: Board of
Directors' fees; legal, auditing and accounting expenses; insurance
premiums; broker's commissions; taxes and governmental fees and any
membership dues; fees of custodian; expenses of obtaining quotations on the
Fund's portfolio securities and pricing of the Fund's shares; costs and
expenses in connection with the registration of the Fund's capital stock
under the Securities Act of 1933 and qualification of the Fund's capital
stock under the Blue Sky laws of the states where such stock is offered;
costs and expenses in connection with the registration of the Fund under
the Investment Company Act of 1940 and all periodic and other reports
required thereunder; expenses of preparing, printing and distributing
reports, proxy statements, prospectuses, statements of additional
information, notices and distributions to stockholders; costs of
stockholder and other meetings; and expenses of maintaining the Fund's
corporate existence. Notwithstanding the foregoing, SMC, LLC shall pay all
expenses related to the initial registration and qualification of the Class
C shares of Asset Allocation Series, Social Awareness Series, Value Series,
Small Company Series, International Series, Enhanced Index Series and
Select 25 Series, under the Blue Sky laws of the states where such class of
stock is offered.
A new paragraph 2(c) shall be added to the Agreement as follows:
(c) EXPENSE CAP. For each of the Fund's full fiscal year this Agreement
remains in force, SMC, LLC 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 SMC LLC's compensation, exceeds the
amount set forth below (the "Expense Cap"), SMC, LLC will 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
will 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
International Series, Class A, B and C shares - 2.25%
Enhanced Index Series, Class A, B and C shares - 1.75%
Select 25 Series, Class A, B and C shares - 1.75%
Paragraph 3(a) and 3(b) shall be deleted in their entirety and the following
paragraphs inserted in lieu thereof:
3. COMPENSATION OF SMC, LLC.
(a) As compensation for the services to be rendered by SMC, LLC to Equity
Series and Global Series as provided for herein, for each of the years this
Agreement is in effect, the Fund shall pay SMC, LLC an annual fee equal to
(1) 2 percent of the first $10 million of the average daily net assets, 1
1/2 percent of the next $20 million of the average daily net assets, and 1
percent of the remaining average daily net assets of the Equity Series of
the Fund for any fiscal year, and (2) 2 percent of the first $70 million of
the average daily net assets and 1 1/2 percent of the remaining average
daily net assets of the Global Series of the Fund for any fiscal year. Such
fees shall be determined daily and payable monthly. As compensation for the
investment advisory services to be rendered by SMC, LLC to Asset Allocation
Series, Social Awareness Series, Value Series and Small Company Series, for
each of the years this Agreement is in effect, the Asset Allocation Series,
Social Awareness Series, Value Series and Small Company Series shall each
pay SMC, LLC an annual fee equal to 1% of their 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 SMC,
LLC to International Series for each of the years this Agreement is in
effect, the International Series shall pay SMC, LLC an annual fee equal to
1.10% 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 SMC, LLC to Enhanced Index Series and Select 25 Series
for each of the years this Agreement is in effect, the Enhanced Index
Series and Select 25 Series shall each pay SMC, LLC an annual fee equal to
.75% of their respective average daily net assets. Such fee shall be
calculated daily and payable monthly. As compensation for the
administrative services to be rendered by SMC, LLC to Asset Allocation
Series, the Asset Allocation Series shall pay SMC, LLC an annual fee equal
to .045% of the average daily net assets of Asset Allocation Series, plus
the greater of .10% of its average daily net assets or $60,000. As
compensation for the administrative services to be rendered by SMC, LLC to
International Series, the International Series shall pay SMC, LLC an annual
fee equal to .05% of the average daily net assets of International Series,
plus the greater of .10% of its average daily net assets or (i) $30,000 in
the year ended January 31, 2000; (ii) $45,000 in the year ending January
31, 2001 and (iii) $60,000 thereafter. Such fees shall be calculated daily
and payable monthly. As compensation for the administrative services to be
rendered by SMC, LLC to Social Awareness Series, Value Series, Small
Company Series, Enhanced Index Series and Select 25 Series, each such
Series shall pay SMC, LLC an annual fee equal to .09% of their respective
average daily net assets. Such fees shall be calculated daily and payable
monthly. If this Agreement shall be effective for only a portion of a year,
then SMC, LLC'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.
For transfer agency services provided by SMC, LCC to Asset Allocation
Series, Social Awareness Series, Value Series, Small Company Series,
International Series, Enhanced Index Series, and Select 25 Series, each
such Series shall pay a Maintenance Fee of $8.00 per account, a Transaction
Fee of $1.00 per account and a Dividend Fee of $1.00 per account.
(b) For each of the Fund's fiscal years this Agreement remains in force,
SMC 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 SMC'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, SMC 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 executed this Amendment to the
Investment Management and Services Agreement this 28th day of January, 1999.
SECURITY EQUITY FUND
By: XXXX X. XXXXXXX
-------------------------------------
Xxxx X. Xxxxxxx, President
ATTEST:
By: XXX X. XXX
-------------------------------
Xxx X. Xxx, Secretary
SECURITY MANAGEMENT COMPANY, LLC
By: XXXXX X. XXXXXXX
-------------------------------------
Xxxxx X. Xxxxxxx, President
ATTEST:
By: XXX X. XXX
-------------------------------
Xxx X. Xxx, Secretary
