EXPENSE LIMITATION AGREEMENT
THIS AGREEMENT, dated as of April 1, 2008, amended and restated effective as of August 10, 2011, 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. With respect to the Funds identified 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))
(“Operating Expenses”), of each Fund to an annual rate (as a percentage of the Fund’s average daily net assets) as set forth on Schedule A (“Expense Limit”).
2. If on any day or month, the estimated annualized Operating Expenses of a Fund as of that day or month are less than the applicable 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 Operating Expenses of a Fund, plus the amount so reimbursed by the Fund equals, as of that day or month, the 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 Operating Expenses of a Fund during any fiscal year never exceeds the applicable 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.
[Signatures on following page]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
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Security Equity Fund
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Security Investors, LLC
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By: /s/ Xxx X. Xxx
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By: /s/ Xxx X. Xxx
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Name: Xxx X. Xxx
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Name: Xxx X. Xxx
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Title: Vice President
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Title: Vice President
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Security Large Cap Value Fund
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Security Income Fund
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By: /s/ Xxx X. Xxx
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By: /s/ Xxx X. Xxx
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Name: Xxx X. Xxx
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Name: Xxx X. Xxx
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Title: Vice President
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Title: Vice President
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SBL Fund
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By: /s/ Xxx X. Xxx
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Name: Xxx X. Xxx
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Title: Vice President
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SCHEDULE A
Dated August 10, 2011
Registered investment companies to which this Agreement applies, and their respective Funds:
Security Equity Fund: Alpha Opportunity Fund (Classes A, B, and C, and Institutional Class), Large Cap Concentrated Growth Fund (Classes A, B, and C and Institutional Class), and All Cap Value Fund (Classes A and C, and Institutional Class), All Cap Growth Fund (Classes A and C, and Institutional Class), Small Cap Value Fund (Classes A and C, and Institutional Class), Large Cap Core Fund (Institutional Class), Small Cap Growth Fund (Institutional Class), MSCI EAFE Equal Weight Fund (Classes A, C, and Institutional Class)
Mid Cap Value Institutional Fund
Security Mid Cap Growth Fund: Mid Cap Growth Fund (Institutional Class)
Security Large Cap Value Fund: Large Cap Value Fund (Classes A, B, and C)
Large Cap Value Institutional Fund
Security Income Fund: U.S. Intermediate Bond Fund (Classes A, B, and C and Institutional Class), High Yield Fund (Classes A, B, C, and Institutional) and Municipal Fund (Classes A, C and Institutional)
SBL Fund: Alpha Opportunity Fund (Series Z), U.S. Intermediate Bond Fund (Series E), All Cap Value Fund (Series O) and Managed Asset Allocation Fund (Series N)
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Fund Name and Share Class
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Expense Limit
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Effective Date
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Expiry Date
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Alpha Opportunity Fund
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Class A
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2.11%
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2/01/2011
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1/31/2012
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Class B
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2.86%
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2/01/2011
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1/31/2012
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Class C
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2.86%
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2/01/2011
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1/31/2012
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Institutional Class
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1.86%
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2/01/2011
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1/31/2012
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Large Cap Concentrated Growth Fund
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Class A
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1.35%
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2/01/2011
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1/31/2012
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Class B
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2.10%
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2/01/2011
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1/31/2012
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Class C
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2.10%
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2/01/2011
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1/31/2012
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Institutional Class
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1.10%
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2/01/2011
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1/31/2012
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Mid Cap Value Institutional Fund
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0.90%
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2/01/2011
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3/31/2012
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Fund Name and Share Class
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Expense Limit
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Effective Date
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Expiry Date
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All Cap Value Fund
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Class A
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1.27%
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2/01/2011
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1/31/2012
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Class C
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2.02%
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2/01/2011
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1/31/2012
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Institutional Class
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1.02%
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2/01/2011
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1/31/2012
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Large Cap Value Fund
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Class A
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1.15%
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2/01/2011
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1/31/2012
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Class B
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1.90%
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2/01/2011
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1/31/2012
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Class C
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1.90%
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2/01/2011
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1/31/2012
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Large Cap Value Institutional Fund
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0.96%
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2/01/2011
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1/31/2012
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All Cap Growth Fund
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Class A
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1.40%
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2/01/2011
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1/31/2012
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Class C
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2.15%
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2/01/2011
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1/31/2012
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Institutional Class
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1.15%
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2/01/2011
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1/31/2012
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MSCI EAFE Equal Weight Fund (formerly Global Fund)
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Class A
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1.61%
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4/29/2011
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1/31/2013
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Class C
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2.36%
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4/29/2011
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1/31/2013
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Institutional Class
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1.36%
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4/29/2011
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1/31/2013
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Small Cap Value Fund
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Class A
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1.30%
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2/01/2011
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1/31/2012
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Class C
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2.05%
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2/01/2011
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1/31/2012
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Institutional Class
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1.05%
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2/01/2011
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1/31/2012
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Large Cap Core Fund
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Institutional Class
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1.18%
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5/01/2011
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4/30/2012
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Small Cap Growth Fund
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Institutional Class
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2.01%
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5/01/2011
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4/30/2012
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Mid Cap Growth Fund
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Institutional Class
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1.42%
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5/01/2011
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4/30/2012
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U.S. Intermediate Bond Fund
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Class A
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1.00%
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5/01/2011
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4/30/2012
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Class B
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1.75%
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5/01/2011
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4/30/2012
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Class C
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1.75%
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5/01/2011
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4/30/2012
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Institutional Class
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0.75%
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5/01/2011
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4/30/2012
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Fund Name and Share Class
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Expense Limit
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Effective Date
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Expiry Date
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High Yield Fund
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Class A
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1.16%
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5/01/2011
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4/30/2012
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Class B
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1.91%
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5/01/2011
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4/30/2012
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Class C
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1.91%
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5/01/2011
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4/30/2012
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Institutional Class
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0.91%
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5/01/2011
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4/30/2012
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Municipal Fund
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Class A
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0.80%
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11/01/2011
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11/30/2012
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Class C
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1.55%
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11/01/2011
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11/30/2012
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Institutional Class
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0.55%
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11/01/2011
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11/30/2012
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Alpha Opportunity Fund (Series Z)
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2.35%
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5/01/2011
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4/30/2012
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All Cap Value Fund (Series O)
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1.00%
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5/01/2011
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4/30/2012
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U.S. Intermediate Bond Fund (Series E)
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0.81%
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5/01/2011
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4/30/2012
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Managed Asset Allocation Fund (Series N)
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1.04%
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5/01/2012
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05/31/2013
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