EXPENSE LIMITATION AGREEMENT
THIS AGREEMENT, dated as of April 1, 2008, amended and restated
effective as of August 18, 2008, amended and restated effective as of November
21, 2008, amended and restated effective as of April 1, 2009, amended and
restated effective as of August 24, 2009, and amended and restated effective as
of November 10, 2009, 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, certain Funds wish to amend 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").
B. With respect to the Funds identified as Group 2 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 Operating
Expenses of a Group 1 Fund as of that day or month are less than the applicable
Group 1 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 Operating
Expenses of a Group 1 Fund, plus the amount so reimbursed by the Fund equals, as
of that day or month, the Group 1 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 Operating
Expenses of a Group 1 Fund during any fiscal year never exceeds the applicable
Group 1 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: Name:
Title: Vice President Title: Vice President
SECURITY LARGE CAP VALUE FUND SECURITY INCOME FUND
By: By:
Name: Name:
Title: Vice President Title: Vice President
SBL FUND
By:
Name:
Title: Vice President
SCHEDULE A
DATED NOVEMBER 10, 2009
Registered investment companies to which this Agreement applies, and their
respective Funds:
1. GROUP 1:
Security Equity Fund: Alpha Opportunity Fund (Class A, B, C and Institutional
Class), Select 25 Fund (Class A, B and C), and All Cap Value Fund (Class A, C
and Institutional Class), All Cap Growth Fund (Class A, C, and Institutional
Class), Small Cap Value Fund (Class A, C, and Institutional Class) and Global
Institutional Fund
Mid Cap Value Institutional Fund
Security Large Cap Value Fund: Large Cap Value Fund (Class A, B and C)
Large Cap Value Institutional Fund
Security Income Fund: U.S. Intermediate Bond Fund (Class A, B and C) and High
Yield Fund (Class A, B, C and Institutional Class)
SBL Fund: Alpha Opportunity Fund (Series Z), U.S. Intermediate Bond Fund (Series
E), Enhanced Index Fund (Series H) and All Cap Value Fund (Series O)
Group 1 Expense Limit:
FUND NAME AND SHARE CLASS EXPENSE LIMIT EFFECTIVE DATE EXPIRY DATE
------------------------- ------------- -------------- -----------
ALPHA OPPORTUNITY FUND
Class A 1.95% 8/18/2008 1/31/2010
Class B 2.70% 8/18/2008 1/31/2010
Class C 2.70% 8/18/2008 1/31/2010
Institutional Class 1.70% 8/18/2008 1/31/2010
EFFECTIVE 2/01/2010
Class A 2.11% 2/01/2010 1/31/2011
Class B 2.86% 2/01/2010 1/31/2011
Class C 2.86% 2/01/2010 1/31/2011
Institutional Class 1.86% 2/01/2010 1/31/2011
SELECT 25 FUND
Class A 1.35% 8/18/2008 1/31/2010
Class B 2.10% 8/18/2008 1/31/2010
Class C 2.10% 8/18/2008 1/31/2010
EFFECTIVE 2/01/2010
Class A 1.35% 2/01/2010 1/31/2011
Class B 2.10% 2/01/2010 1/31/2011
Class C 2.10% 2/01/2010 1/31/2011
MID CAP VALUE INSTITUTIONAL FUND 0.90% 8/24/2009 3/31/2011
ALL CAP VALUE FUND
Class A 1.35% 8/18/2008 1/31/2010
Class C 2.10% 8/18/2008 1/31/2010
Institutional Class 1.10% 8/18/2008 1/31/2010
EFFECTIVE 2/01/2010
Class A 1.27% 2/01/2010 1/31/2011
Class C 2.02% 2/01/2010 1/31/2011
Institutional Class 1.02% 2/01/2010 1/31/2011
LARGE CAP VALUE FUND
Class A 1.25% 8/18/2008 1/31/2010
Class B 2.00% 8/18/2008 1/31/2010
Class C 2.00% 8/18/2008 1/31/2010
EFFECTIVE 2/01/2010
Class A 1.15% 2/01/2010 1/31/2011
Class B 1.90% 2/01/2010 1/31/2011
Class C 1.90% 2/01/2010 1/31/2011
LARGE CAP VALUE INSTITUTIONAL FUND 0.98% 2/08/2008 1/31/2010
EFFECTIVE 2/01/2010 0.96% 2/01/2010 1/31/2011
ALL CAP GROWTH FUND
Class A 1.40% 11/21/2008 1/31/2011
Class C 2.15% 11/21/2008 1/31/2011
Institutional Class 1.15% 11/21/2008 1/31/2011
GLOBAL INSTITUTIONAL FUND 1.00% 8/24/2009 1/31/2011
SMALL CAP VALUE FUND
Class A 1.30% 8/24/2009 1/31/2011
Class C 2.05% 8/24/2009 1/31/2011
Institutional Class 1.05% 8/24/2009 1/31/2011
U.S. INTERMEDIATE BOND FUND
Class A 0.95% 8/18/2008 4/30/2010
Class B 1.70% 8/18/2008 4/30/2010
Class C 1.70% 8/18/2008 4/30/2010
EFFECTIVE 5/01/2010
Class A 1.00% 5/01/2010 4/30/2011
Class B 1.75% 5/01/2010 4/30/2011
Class C 1.75% 5/01/2010 4/30/2011
HIGH YIELD FUND
Class A 1.10% 8/18/2008 4/30/2010
Class B 1.85% 8/18/2008 4/30/2010
Class C 1.85% 8/18/2008 4/30/2010
Institutional Class 0.85% 2/18/2008 4/30/2010
EFFECTIVE 5/01/2010
Class A 1.16% 5/01/2010 4/30/2011
Class B 1.91% 5/01/2010 4/30/2011
Class C 1.91% 5/01/2010 4/30/2011
Institutional Class 0.91% 5/01/2010 4/30/2011
ALPHA OPPORTUNITY FUND (SERIES Z) 1.70% 8/18/2008 4/30/2010
EFFECTIVE 5/01/2010 2.35% 5/01/2010 4/30/2011
ALL CAP VALUE FUND (SERIES O) 0.85% 8/18/2008 4/30/2010
EFFECTIVE 5/01/2010 1.00% 5/01/2010 4/30/2011
U.S. INTERMEDIATE BOND FUND (SERIES E) 0.81% 5/01/2010 4/30/2011
ENHANCED INDEX FUND (SERIES H) 1.00% 5/01/2010 4/30/2011
2. GROUP 2 FUNDS:
SBL Fund: U.S. Intermediate Bond Fund (Series E) and Enhanced Index Fund
(Series H)
Group 2 Fee Waiver:
FUND NAME FEE WAIVER EFFECTIVE DATE EXPIRY DATE
--------- ---------- -------------- -----------
U.S. INTERMEDIATE BOND FUND (SERIES E) 0.15% 08/18/2008 4/30/2010
ENHANCED INDEX FUND (SERIES H) 0.25% 08/18/2008 4/30/2010
