EXPENSE LIMITATION/FEE WAIVER AGREEMENT
THIS AGREEMENT, dated as of April 1, 2008, and amended and restated
effective as of August 18, 2008 and amended and restated effective as of
November 21, 2008, is made and entered into by and between Security Investors,
LLC (the "Adviser") and each of the registered investment companies set forth on
Schedule A (each such company being referred to herein as a "Company"). This
Agreement shall apply to each investment portfolio of a Company as set forth in
Schedule A (each a "Fund" and collectively the "Funds").
WHEREAS, the Adviser has been appointed the investment adviser to the
Funds pursuant to agreements between each Company and the Adviser (each such
agreement an "Advisory Agreement"); and
WHEREAS, the parties desire to add new Funds to Schedule A; and
WHEREAS, certain Funds wish to change their existing arrangements with the
Adviser; and
WHEREAS, each Company, on its own behalf and on behalf of its investment
portfolios listed in Schedule A, and the Adviser desire to enter into the
arrangements described herein;
NOW, THEREFORE, it is agreed as follows:
1. A. With respect to the Funds identified as Group 1 Funds on Schedule A,
the Adviser hereby agrees, subject to Section 2 hereof, to reduce the fees
payable to it under the applicable Advisory Agreement (but not below zero) and
make any additional payments to the extent necessary to limit the ordinary
operating expenses (including Rule 12b-1 fees (if any), but exclusive of
brokerage costs, dividends on securities sold short, expenses of other
investment companies in which a Fund invests, interest, taxes, litigation,
indemnification, and extraordinary expenses (as determined under generally
accepted accounting principles)) ("Group 1 Operating Expenses") of each Group 1
Fund to an annual rate (as a percentage of the Fund's average daily net assets)
as set forth on Schedule A ("Group 1 Expense Limit") until (a) January 31, 2010
for the series of Security Equity Fund and Security Large Cap Value Fund and (b)
April 30, 2010 for the series of Security Income Fund and series of SBL Fund.
B. With respect to the Funds identified as Group 2 Funds on Schedule A,
the Adviser hereby agrees, subject to Section 2 hereof, to reduce the fees
payable to it under the applicable Advisory Agreement (but not below zero) and
make any additional payments to the extent necessary to limit the ordinary
operating expenses (including Rule 12b-1 fees (if any), but exclusive of
brokerage costs, dividends on securities sold short, expenses of other
investment companies in which a Fund invests, interest, taxes, litigation,
indemnification, and extraordinary expenses (as determined under generally
accepted accounting principles)) ("Group 2 Operating Expenses") of each Group 2
Fund to an annual rate (as a percentage of the Fund's average daily net assets)
as set forth on Schedule A ("Group 2 Expense Limit") until January 31, 2011.
C. With respect to the Funds identified as Group 3 Funds on Schedule A,
the Adviser hereby agrees to waive a portion of its fee under the Advisory
Agreement with respect to each Group 3 Fund as set forth on Schedule A until
April 30, 2010.
2. If on any day or month, the estimated annualized Group 1 or Group 2
Operating Expenses of a Group 1 or Group 2 Fund as of that day or month are less
than the applicable Group 1 or Group 2 Expense Limit as of that day or month,
the Adviser shall be entitled to reimbursement by such Fund as set forth below.
The applicable Fund shall reimburse fees waived or reduced and other payments
remitted by the Adviser to such Fund pursuant to either Section 1 hereof during
any of the previous thirty-six (36) months beginning with the effective date of
this Agreement (the "Reimbursement Amount"), to the extent that the annualized
Group 1 or Group 2 Operating Expenses of a Group 1 or Group 2 Fund, plus the
amount so reimbursed by the Fund equals, as of that day or month, the Group 1 or
Group 2 Expense Limit as set forth in Schedule A, provided however, that such
amount paid by the Fund to the Adviser will in no event exceed the total of the
Reimbursement Amount and will not include any amounts previously reimbursed by
the Fund. Any amounts reimbursed by the Fund to the Adviser under this Section 2
shall not include any additional charges or fees, such as interest on the
Reimbursement Amount. Amounts so reimbursed by the Fund shall be allocated to
the oldest Reimbursement Amount during the previous thirty-six (36) month period
until fully reimbursed and thereafter (i.e., after the oldest Reimbursement
Amount has been fully reimbursed by the Fund), to the next oldest Reimbursement
Amount, and so on. Periodic adjustments to the Reimbursement Amount and related
reimbursement may be made by the Fund as necessary to ensure that the amount of
Group 1 or Group 2 Operating Expenses of a Group 1 or Group 2 Fund during any
fiscal year never exceeds the applicable Group 1 or Group 2 Expense Limit for
such Fund during that fiscal year. In no event will a Fund be obligated to pay
any fees waived or deferred by the Adviser with respect to any other Fund.
3. (a) This Agreement shall in all cases be interpreted in a manner
consistent with the requirements of Revenue Procedure 96-47, 1996-2 CB 338, and
Revenue Procedure 99-40, I.R.B. 1999-46, 565 so as to avoid any possibility that
any Fund is deemed to have paid a preferential dividend. In the event of any
conflict between any term of this Agreement and the previous sentence, the
previous sentence shall control.
(b) In case a Fund has multiple classes of shares, any amount of fees
or expenses waived, paid or reimbursed pursuant to the terms of this Agreement
shall be allocated among the classes of shares of the Fund in accordance with
the terms of the Fund's multiple class plan pursuant to Rule 18f-3 under the
Investment Company Act of 1940 and in manner consistent with that Rule.
4. The parties agree that this Agreement shall supersede any prior expense
limitation agreement between a Company and the Adviser with respect to such
Company's Funds listed on Schedule A.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
SECURITY EQUITY FUND SECURITY INVESTORS, LLC
By: _______________________________ By: _______________________________
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Vice President Title: Vice President
SECURITY LARGE CAP VALUE FUND SECURITY INCOME FUND
By: _______________________________ By: _______________________________
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Vice President Title: Vice President
SBL FUND
By: _______________________________
Name: Xxxxx X. Xxxxxxx
Title: Vice President
SCHEDULE A
DATED NOVEMBER 21, 2008
Registered investment companies to which this Agreement applies, and their
respective Funds:
1. GROUP 1 FUNDS:
-----------------
Security Equity Fund: Alpha Opportunity Fund (Class A, B, C and Institutional
Class), Select 25 Fund (Class A, B and C) Mid Cap Value Institutional Fund,
Small Cap Value Fund (Class A, C and Institutional Class), Global Institutional
Fund and All Cap Value Fund (Class A, C and Institutional Class).
Security Large Cap Value Fund: Large Cap Value Fund (Class A, B and C) and Large
Cap Value Institutional Fund
Security Income Fund: Diversified Income Fund (Class A, B and C) and High Yield
Fund (Class A, B, C and Institutional Class)
SBL Fund: Alpha Opportunity Fund (Series Z) and All Cap Value Fund (Series O)
Group 1 Expense Limit:
FUND NAME AND SHARE CLASS EXPENSE LIMIT
------------------------- -------------
Alpha Opportunity Fund - Class A 1.95%
Alpha Opportunity Fund - Class B 2.70%
Alpha Opportunity Fund - Class C 2.70%
Alpha Opportunity Fund - Institutional Class 1.70%
Select 25 Fund - Class A 1.35%
Select 25 Fund - Class B 2.10%
Select 25 Fund - Class C 2.10%
Mid Cap Value Institutional Fund 1.10%
Small Cap Value Fund - Class A shares 1.55%
Small Cap Value Fund - Class C shares 2.30%
Small Cap Value Fund - Class I 1.30%
Global Institutional Fund 1.15%
All Cap Value Fund - Class A 1.35%
All Cap Value Fund - Class C 2.10%
All Cap Value Fund - Institutional Class 1.10%
Large Cap Value Fund - Class A 1.25%
Large Cap Value Fund - Class B 2.00%
Large Cap Value Fund - Class C 2.00%
Large Cap Value Institutional Fund 0.98%
Diversified Income Fund - Class A 0.95%
Diversified Income Fund - Class B 1.70%
Diversified Income Fund - Class C 1.70%
High Yield Fund - Class A 1.10%
High Yield Fund - Class B 1.85%
High Yield Fund - Class C 1.85%
High Yield Fund - Institutional Class 0.85%
Alpha Opportunity Fund (Series Z) 1.70%
All Cap Value Fund (Series O) 0.85%
2. GROUP 2 FUNDS:
-----------------
Security Equity Fund: All Cap Growth Fund (Class A, C and Institutional Class)
Group 2 Expense Limit:
FUND NAME AND SHARE CLASS EXPENSE LIMIT
------------------------- -------------
All Cap Growth Fund - Class A 1.40%
All Cap Growth Fund - Class C 2.15%
All Cap Growth Fund - Institutional Class 1.15%
3. GROUP 3 FUNDS:
SBL Fund: Diversified Income Fund (Series E) and Enhanced Index Fund (Series H)
Group 3 Fee Waiver:
FUND NAME FEE WAIVER
--------- ----------
Diversified Income Fund (Series E) 0.15%
Enhanced Index Fund (Series H) 0.25%
