EXPENSE LIMITATION/FEE WAIVER AGREEMENT
THIS AGREEMENT, dated as of April 1, 2008, and amended and restated
effective as of August [18,] 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;
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 to waive a portion of its fee under the Advisory
Agreement with respect to each Group 2 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 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: Xxxxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: President Title: President
SECURITY LARGE CAP VALUE FUND SECURITY INCOME FUND
By: By:
------------------------------- ---------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: President Title: President
SBL FUND
By:
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
SCHEDULE A
DATED [AUGUST 18], 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 and C), Select 25 Fund
(Class A, B and C) Mid Cap Value Institutional Fund, Small Cap Value Fund (Class
A, B and I), Global Institutional Fund and All Cap Value Fund (Class A, B and
I).
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 I)
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%
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 B 2.10%
All Cap Value Fund - Class I 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 - Class I 0.85%
Alpha Opportunity Fund (Series Z) 1.70%
All Cap Value Fund (Series O) 0.85%
2. GROUP 2 FUNDS:
SBL Fund: Diversified Income Fund (Series E) and Enhanced Index Fund (Series H)
Group 2 Fee Waiver:
FUND NAME FEE WAIVER
Diversified Income Fund (Series E) 0.15%
Enhanced Index Fund (Series H) 0.25%
