SECURITY EQUITY FUND
INSTITUTIONAL CLASS
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 8th day of February 2008, between Security Equity
Fund, a Kansas corporation ("Company"), on behalf of Security Global
Institutional Fund, Security Mid Cap Value Institutional Fund and Security Small
Cap Value Fund (the "Funds"), and Security Distributors, Inc., a Kansas
corporation (the "Distributor").
WITNESSETH:
WHEREAS, the Company is engaged in business as an open-end, management
investment company registered under the federal Investment Company Act of 1940
(the "1940 Act");
WHEREAS, the Distributor is willing to act as principal underwriter for the
Company to offer for sale, sell and deliver after sale, the Institutional Shares
of each of the Funds (the "Institutional Class Shares") on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
set forth, the parties hereto agree as follows:
1. Employment of Distributor. The Company hereby employs the Distributor to
act as principal underwriter for the Company with respect to the Funds'
Institutional Class Shares and hereby agrees that during the term of this
Agreement, and any renewal or extension thereof, or until any prior
termination thereof, the Distributor shall have the exclusive right to
offer for sale and to distribute any and all of the Institutional Class
Shares issued or to be issued by the Company. The Distributor hereby
accepts such employment and agrees to act as the distributor of the
Institutional Class Shares issued or to be issued by the Company during the
period this Agreement is in effect and agrees during such period to offer
for sale such Institutional Class Shares as long as such Institutional
Class Shares remain available for sale by the Funds, unless the Distributor
is unable legally to make such offer for sale as the result of any law or
governmental regulation. The rights granted to the Distributor shall be
nonexclusive in that the Company reserves the right to sell its shares to
investors on the basis of applications received and accepted by the Company
or its agent or in connection with the merger or consolidation of any of
the Funds. It is recognized by the Company that the Funds' investment
adviser and/or its affiliates may use or allocate their past profits and
other resources to the Distributor in order to cover expenses incurred in
the distribution of Institutional Class Shares of the Funds.
2. Offering Price. Prior to the issuance of any Institutional Class Shares by
the Funds pursuant to any subscription tendered by or through the
Distributor and confirmed for sale to or through the Distributor, the
Distributor shall pay or cause to be paid to the custodian of the
applicable Fund(s) in cash, an amount equal to the net asset value of such
Institutional Class Shares at the time of acceptance of each such
subscription and confirmation by the Company of the sale of such
Institutional Class Shares. All
Institutional Class Shares shall be sold to the public only at their public
offering price at the time of such sale, and the Funds shall receive not
less than the full net asset value thereof. The Company reserves the right
to suspend the sale and issuance of Institutional Class Shares at any time.
3. Allocation of Expenses and Charges. While this Agreement is in effect, the
Funds shall pay all costs and expenses in connection with the registration
of their respective Institutional Class Shares under the Securities Act of
1933 (the "1933 Act"), including all expenses in connection with the
preparation and printing of any registration statement documents (including
prospectuses and statements of additional information) necessary for
registration thereunder but excluding any additional costs and expenses
incurred in furnishing the Distributor with prospectuses. The Funds will
pay all costs and expenses of printing and mailing prospectuses, statements
of additional information, reports and periodic statements to their
respective existing Institutional Class shareholders. The Funds also will
pay all costs, expenses and fees incurred in connection with the
qualification of their respective Institutional Class Shares under the
applicable Blue Sky laws of the states in which the Institutional Class
Shares are offered.
While this Agreement is in effect, the Distributor will pay or reimburse
the Funds for:
(a) All costs and expenses of printing and mailing prospectuses to
prospective Institutional Class shareholders and confirmations,
and all costs and expenses of preparing, printing and mailing
advertising material, sales literature, circulars, applications,
and other materials used or to be used in connection with the
offering for sale and the sale of their respective Institutional
Class Shares; and
(b) All clerical and administrative costs in processing the
applications for and in connection with the distribution of
Institutional Class Shares.
The Distributor agrees to submit to the Company for its prior approval all
advertising material, sales literature, circulars and any other material
which the Distributor proposes to use in connection with the offering for
sale of Institutional Class Shares.
4. Redemption of Institutional Class Shares. The Distributor, as agent of and
for the account of the Funds, may redeem Institutional Class Shares of the
Funds offered for resale to it at the net asset value of such Institutional
Class Shares (determined as provided in the then-current registration
statement of the Funds). To the extent authorized under applicable law,
including the 1940 Act, whenever the officers of the Company deem it
advisable for the protection of the shareholders of the Funds, they may
suspend or cancel such authority.
5. Distributor May Act as Broker and Receive Commissions. Notwithstanding any
other provisions of this Agreement, it is understood and agreed that the
Distributor may act as a broker, on behalf of the Funds, in the purchase
and sale of securities provided that any such transactions and any
commission paid in connection therewith shall comply in every respect with
the requirements of the 1940 Act and in particular with Section 17(e) of
that
Act and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder. The Distributor will not, or cause the Funds to
direct remuneration from commissions by the Funds for portfolio securities
transactions to a broker or dealer for promoting or selling shares of the
Funds.
6. Agreements Subject to Applicable Law and Regulations. The parties hereto
agree that all provisions of this Agreement will be performed in strict
accordance with the requirements of: the 1940 Act, the 1933 Act, the
Securities Exchange Act of 1934, the rules and regulations of the U.S.
Securities and Exchange Commission under said statutes, applicable state
Blue Sky laws and the rules and regulations thereunder, the rules of the
Financial Industry Regulatory Authority and the Articles of Incorporation
and Bylaws of the Company.
7. Duration and Termination of Agreement. For each Fund to which it applies,
this Agreement shall become effective upon its execution, and shall, unless
terminated as provided herein, continue in force for two years from that
date, and from year to year thereafter, provided that such continuance for
each successive year is specifically approved annually by either the Board
of Directors or by the vote of a majority of the outstanding voting
securities of the Institutional Class shares of the Funds and, in either
event, by the vote of a majority of the directors of the Company who are
not parties to this Agreement or interested persons of any such party, cast
in person at a meeting called for the purpose of voting upon such approval.
As used in the preceding sentence, the words "interested persons" shall
have the meaning set forth in Section 2(a)(19) of the 1940 Act.
This Agreement may be terminated at any time without the payment of any
penalty by the Company by giving the Distributor at least sixty (60) days'
previous written notice of such intention to terminate. This Agreement may
be terminated by the Distributor at any time by giving the Company at least
sixty (60) days' previous written notice of such intention to terminate.
This Agreement shall terminate automatically in the event of its
assignment. As used in the preceding sentence, the word "assignment" shall
have the meaning set forth in Section 2(a)(4) of the 1940 Act.
8. Construction of Agreement. No provision of this Agreement is intended to or
shall be construed as protecting the Distributor against any liability to
the Company or the Funds or to the Funds' shareholders to which the
Distributor would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties under this
Agreement or reckless disregard of its duties hereunder.
Terms or words used in the Agreement, which also occur in the Articles of
Incorporation or Bylaws of the Company, shall have the same meaning herein
as given to such terms or words in the Articles of Incorporation or Bylaws
of the Company.
9. Distributor an Independent Contractor. The Distributor shall be deemed to
be an independent contractor and, except as expressly provided or
authorized by the Company, shall have no authority to act for or represent
the Company.
10. Notice. Any notice required or permitted to be given hereunder to either of
the parties hereto shall be deemed to have been given if mailed by
certified mail in a postage-prepaid envelope addressed to the respective
party as follows, unless any such party has notified the other party hereto
that notices thereafter intended for such party shall be mailed to some
other address, in which event notices thereafter shall be addressed to such
party at the address designated in such request:
Security Equity Fund
One Security Benefit Place
Topeka, Kansas 66636-0001
Security Distributors, Inc.
One Security Benefit Place
Topeka, Kansas 66636-0001
11. Amendment of Agreement. No amendment to this Agreement shall be effective
until approved by (a) a majority of the Board of Directors of the Company
or a vote of the holders of a majority of the outstanding voting
securities of the Institutional Class shares of the Series, and (b) a
majority of the directors of the Company who are not parties to this
Agreement or interested persons of any such party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective corporate officers thereto duly authorized on the day, month
and year first above written.
SECURITY EQUITY FUND
BY: XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx, President
ATTEST:
XXX X. XXX
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Xxx X. Xxx, Secretary
SECURITY DISTRIBUTORS, INC.
BY: XXXX X. XXXX
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Xxxx X. Xxxx, President
ATTEST:
XXX X. XXX
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Xxx X. Xxx, Secretary
