INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
This Agreement, made and entered into this 29th day of March, 1989, by and
between SECURITY INVESTMENT FUND, a Kansas corporation (hereinafter referred to
as the "Fund"), and SECURITY MANAGEMENT COMPANY, a Kansas corporation
(hereinafter referred to as "SMC").
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end, management
investment company registered under the Investment Company Act of 1940 ("1940
Act"); and
WHERE, SMC is willing to provide investment research and advice, general
administrative, fund accounting, transfer agency, and dividend disbursing
services to the Fund on the terms and conditions hereinafter set forth and to
arrange for the provision of all other services (except for those services
specifically excluded in this Agreement) required by the Fund, including
custodial, legal, auditing and printing;
NOW THEREFORE, in consideration of the premises and mutual agreements made
herein, the parties agree as follows:
1. EMPLOYMENT OF SMC. The Fund hereby employs SMC to (a) act as
investment adviser to the Fund with respect to the investment of its
assets and to supervise and arrange the purchase of securities for the
Fund and the sale of securities held in the portfolio of the Fund,
subject always to the supervision of the Board of Directors of the
Fund (or a duly appointed committee thereof), during the period and
upon and subject to the terms and conditions described herein; (b) to
provide the Fund with general administrative, fund accounting,
transfer agency, and dividend disbursing services described and set
forth in Schedule A attached hereto and made a part of this Agreement
by reference; and (c) to arrange for, monitor, and bear the expense
of, the provision to the Fund of all other services required by the
Fund, including but not limited to services of independent
accountants, legal counsel, custodial services and printing. SMC may,
in accordance with all applicable legal requirements, engage the
services of other persons or entities, regardless of any affiliation
with SMC, to provide services to the Fund under this Agreement. SMC
agrees to maintain sufficient trained personnel and equipment and
supplies to perform its responsibilities under this Agreement and in
conformity with the current Prospectus of the Fund and such other
reasonable standards of performance as the Fund may from time to time
specify and shall use reasonable care in selecting and monitoring the
performance of third parties, who perform services for the Fund. SMC
shall not guarantee the performance of such persons.
SMC hereby accepts such employment and agrees to perform the services
required by this Agreement for the compensation herein provided.
2. ALLOCATION OF EXPENSES AND CHARGES.
(A) EXPENSES OF SMC. SMC shall pay all expenses in connection with
the performance of its services under this Agreement, including
all fees and charges of third parties providing services to the
Fund, whether or not such expenses are billed to SMC or the Fund,
except as otherwise provided herein.
(B) EXPENSES OF THE FUND. Anything in this Agreement to the contrary
notwithstanding, the Fund shall pay, or reimburse SMC for the
payment of, the following described expenses of the Fund whether
or not billed to the Fund, SMC or any related entity;
(i) brokerage fees and commissions;
(ii) taxes;
(iii) interest expenses; and
(iv) any extraordinary expenses approved by the
Board of Directors of the Fund.
3. COMPENSATION OF SMC.
(a) In consideration of the services to be rendered by SMC pursuant
to this Agreement, the Fund shall pay SMC an annual fee equal to
2% of the first $10 million of the average net assets of the
Fund, and 1 1/2% of the next $20 million of the average net
assets, and 1% of the remaining average net assets of the Fund
for any fiscal year, determined and payable monthly. If this
Agreement shall be effective for only a portion of a year in
which a fee is owed, then SMC's compensation for the year shall
be prorated for such portion. For purposes of this Section 3, the
value of the net assets of the Fund shall be computed in the same
manner as the value of such net assets is computed in connection
with the determination of the net asset value of the shares of
the Fund as described in the Fund's Prospectus and Statement of
Additional Information.
(b) For each of the Fund's full fiscal years during which this
Agreement remains in force, SMC agrees that if the total annual
expenses of the Fund, exclusive of those expenses listed in
paragraph 2(b) of this Agreement, but inclusive of SMC's
compensation, exceed any expense limitation imposed by state
securities law or regulation in any state in which shares of the
Fund are then qualified for sale, as such regulations may be
amended from time to time, SMC will contribute to the Fund such
funds or waive that portion of its fee on a monthly basis as may
be necessary to insure that its total expenses will not exceed
any state limitation. If this paragraph of the Agreement shall be
effective for only a portion of one of the Fund's fiscal years,
then the maximum annual expenses shall be prorated for such
portion.
4. INVESTMENT ADVISORY DUTIES.
(A) INVESTMENT ADVICE. SMC shall regularly provide the Fund with
investment research, advice and supervision, continuously furnish
an investment program, recommend which securities shall be
purchased and sold and what portion of the assets of the Fund
shall be held uninvested and arrange for the purchase of
securities
and other investments for the Fund and the sale of securities and
other investments held in the portfolio of the Fund. All
investment advice furnished by SMC to the Fund under this
paragraph 4 shall at all times conform to any requirements
imposed by the provisions of the Fund's Articles of Incorporation
and Bylaws, the 1940 Act, the Investment Advisors Act of 1940 and
the rules and regulations promulgated thereunder, and other
applicable provisions of law, and the terms of the registration
statements of the Fund under the Securities Act of 1933 ("1933
Act") and/or the 1940 Act, as may be applicable at the time, all
as from time to time amended. SMC shall advise and assist the
officers or other agents of the Fund in taking such steps as are
necessary or appropriate to carry out the decisions of the Board
of Directors of the Fund (and any duly appointed committee
thereof) with regard to the foregoing matters and the general
account of the Fund's business.
(B) PORTFOLIO TRANSACTIONS AND BROKERAGE.
(i) Transactions in portfolio securities shall be effected by
SMC, through brokers or otherwise, in the manner permitted
in this paragraph 4 and in such manner as SMC shall deem
to be in the best interests of the Fund after
consideration is given to all relevant factors.
(ii) In reaching a judgment relative to the qualification of a
broker to obtain the best execution of a particular
transaction, SMC may take into account all relevant
factors and circumstances, including the size of any
contemporaneous market in such securities; the importance
to the Fund of speed and efficiency of execution; whether
the particular transaction is part of a larger intended
change of portfolio position in the same securities; the
execution capabilities required by the circumstances of
the particular transaction; the capital required by the
transaction; the overall capital strength of the broker;
the broker's apparent knowledge of or familiarity with
sources from or to whom such securities may be purchased
or sold; as well as the efficiency, reliability and
confidentiality with which the broker has handled the
execution of prior similar transactions.
(iii) Subject to any statements concerning the allocation of
brokerage contained in the Fund's Prospectus or Statement
of Additional Information, SMC is authorized to direct the
execution of portfolio transactions for the Fund to
brokers who furnish investment information or research
service to the SMC. Such allocations shall be in such
amounts and proportions as SMC may determine. If the
transaction is directed to a broker providing brokerage
and research services to SMC, the commission paid for such
transaction may be in excess of the commission another
broker would have charged for effecting that transaction,
if SMC shall have determined in good faith that the
commission is reasonable in relation to the value of the
brokerage and research services provided, viewed in terms
of either that particular transaction or the overall
responsibilities of SMC with respect to all accounts as to
which it now or hereafter exercises investment discretion.
For purposes of the immediately preceding sentence,
"providing brokerage and research services" shall have the
meaning generally given such terms or similar terms under
Section 28(e)(3) of the Securities Exchange Act of 1934,
as amended.
(iv) In the selection of a broker for the execution of any
transaction not subject to fixed commission rates, SMC
shall have no duty or obligation to seek advance
competitive bidding for the most favorable negotiated
commission rate to be applicable to such transaction, or
to select any broker solely on the basis of its purported
or "posted" commission rates.
(v) In connection with transactions on markets other than
national or regional securities exchanges, the Fund will
deal directly with the selling principal or market maker
without incurring charges for the services of a broker on
its behalf unless, in the best judgment of SMC, better
price or execution can be obtained by utilizing the
services of a broker.
(C) SMC NOT TO RECEIVE COMMISSIONS. In connection with the purchase
or sale of portfolio securities for the account of the Fund,
neither SMC nor any officer or director of SMC shall act as
principal or receive any compensation from the Fund other than
its compensation as provided for in Section 3 above. If SMC, or
any "affiliated person" (as defined in the 0000 Xxx) receives any
cash, credits, commissions or tender fees from any person in
connection with transactions in portfolio securities of the Fund
(including but not limited to the tender or delivery of any
securities held in such portfolio), SMC shall immediately pay
such amount to the Fund in cash or as a credit against any then
earned but unpaid management fees due by the Fund to SMC.
(D) LIMITATION OF LIABILITY OF SMC WITH RESPECT TO RENDERING
INVESTMENT ADVISORY SERVICES. So long as SMC shall give the Fund
the benefit of its best judgment and effort in rendering
investment advisory services hereunder, SMC shall not be liable
for any errors of judgment or mistake of law, or for any loss
sustained by reason of the adoption of any investment policy or
the purchase, sale or retention of any security on its
recommendation, whether or not such recommendation shall have
been based upon its own investigation and research or upon
investigation and research made by any other individual, firm or
corporation, if such recommendation shall have been made and such
other individual, firm or corporation shall have been selected
with due care and in good faith. Nothing herein contained shall,
however, be construed to protect SMC against any liability to the
Fund or its shareholders by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties
under this paragraph 4. As used in this paragraph 4, "SMC" shall
include directors, officers and employees of SMC, as well as that
corporation itself.
5. ADMINISTRATIVE AND TRANSFER AGENCY SERVICES.
(A) RESPONSIBILITIES OF SMC. SMC will provide the Fund with general
administrative, fund accounting, transfer agency, and dividend
disbursing services described and set
forth in Schedule A attached hereto and made a part of this
Agreement by reference. SMC agrees to maintain sufficient trained
personnel and equipment and supplies to perform such services in
conformity with the current Prospectus of the Fund and such other
reasonable standards of performance as the Fund may from time to
time specify, and otherwise perform such services in an accurate,
timely, and efficient manner.
(B) INSURANCE. The Fund and SMC agree to procure and maintain,
separately or as joint insureds with themselves, their directors,
employees, agents and others, and other investment companies for
which SMC acts as investment adviser and transfer agent, a policy
or policies of insurance against loss arising from breaches of
trust, errors and omissions, and a fidelity bond meeting the
requirements of the 1940 Act, in the amounts and with such
deductibles as may be agreed upon from time to time. SMC shall be
solely responsible for the payment of premiums due for such
policies.
(C) REGISTRATION AND COMPLIANCE.
(i) SMC represents that as of the date of this Agreement it is
registered as a transfer agent with the Securities and
Exchange Commission ("SEC") pursuant to Subsection 17A of
the Securities and Exchange Act of 1934 and the rules and
regulations thereunder, and agrees to maintain said
registration and comply with all of the requirements of
said Act, rules and regulations so long as this Agreement
remains in force.
(ii) The Fund represents that it is a diversified management
investment company registered with the SEC in accordance
with the 1940 Act and the rules and regulations
thereunder, and authorized to sell its shares pursuant to
said Act, the 1933 Act and the rules and regulations
thereunder.
(D) LIABILITY AND INDEMNIFICATION WITH RESPECT TO RENDERING
ADMINISTRATIVE AND TRANSFER AGENCY SERVICES. SMC shall be liable
for any actual losses, claims, damages or expenses (including any
reasonable counsel fees and expenses) resulting from SMC's bad
faith, willful misfeasance, reckless disregard of its obligations
and duties, negligence or failure to properly perform any of its
responsibilities or duties under this Paragraph 5. SMC shall not
be liable and shall be indemnified and held harmless by the Fund,
for any claim, demand or action brought against it arising out
of, or in connection with:
(i) The bad faith, willful misfeasance, reckless disregard of
its duties or negligence by the Board of Directors of the
Fund, or SMC's acting upon any instructions properly
executed and authorized by the Board of Directors of the
Fund;
(ii) SMC acting in reliance upon advice given by independent
counsel retained by the Board of Directors of the Fund.
In the event that SMC requests the Fund to indemnify or hold it
harmless hereunder, SMC shall use its best efforts to inform the
Fund of the relevant facts concerning the matter in question. SMC
shall use reasonable care to identify and promptly notify the
Fund concerning any matter which presents, or appears likely to
present, a claim for indemnification against the Fund.
The Fund shall have the election of defending SMC against any
claim which may be the subject of indemnification hereunder. In
the event the Fund so elects, it will so notify SMC and thereupon
the Fund shall take over defenses of the claim, and if so
requested by the Fund, SMC shall incur no further legal or other
claims related thereto for which it would be entitled to
indemnity hereunder provided, however, that nothing herein
contained shall prevent SMC from retaining, at its own expense,
counsel to defend any claim. Except with the Fund's prior
consent, SMC shall in no event confess any claim or make any
compromise in any matter in which the Fund will be asked to
indemnify or hold SMC harmless hereunder.
PUNITIVE DAMAGES. SMC shall not be liable to the Fund, or
any third party, for punitive, exemplary, indirect,
special or consequential damages (even if SMC has been
advised of the possibility of such damage) arising from
its obligations and the services provided under this
paragraph 5, including but not limited to loss of profits,
loss of use of the shareholder accounting system, cost of
capital and expenses of substitute facilities, programs or
services.
FORCE MAJEURE. Anything in this paragraph 5 to the
contrary notwithstanding, SMC shall not be liable for
delays or errors occurring by reason of circumstances
beyond its control, including but not limited to acts of
civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, earthquake, acts of
God, insurrection, war, riot, failure of communication or
interruption.
(E) DELEGATION OF DUTIES. SMC may, at its discretion, delegate,
assign, or subcontract any of the duties, responsibilities and
services governed by this paragraph 5, to its parent company,
Security Benefit Group, Inc. or any of its affiliates, whether or
not by formal written agreement. SMC shall, however, retain
ultimate responsibility to the Fund, and shall implement such
reasonable procedures as may be necessary, for assuring that any
duties, responsibilities or services so assigned, subcontracted
or delegated are performed in conformity with the terms and
conditions of this Agreement.
6. OTHER ACTIVITIES NOT RESTRICTED. Nothing in this Agreement shall
prevent SMC or any officer thereof from acting as investment adviser,
administrator or transfer agent for any other person, firm or
corporation, nor shall it in any way limit or restrict SMC or any of
its directors, officers, stockholders or employees from buying,
selling, or trading any securities for its own accounts or for the
accounts of others for whom it may be acting; provided, however, that
SMC expressly represents that it will undertake no activities
which, in its judgment, will conflict with the performance of its
obligations to the Fund under this Agreement. The Fund acknowledges
that SMC acts as investment adviser, administrator and transfer agent
to other investment companies, and it expressly consents to SMC acting
as such; provided, however, that if in the opinion of SMC, particular
securities are consistent with the investment objectives of, and
desirable purchases or sales for the portfolios of one or more of such
other investment companies or series of such companies at
approximately the same time, such purchases or sales will be made on a
proportionate basis if feasible, and if not feasible, then on a
rotating or other equitable basis.
7. AMENDMENT. This Agreement and the schedules forming a part hereof may
be amended at any time, without shareholder approval to the extent
permitted by applicable law, by a writing signed by each of the
parties hereto. Any change in the Fund's registration statements or
other documents of compliance or in the forms relating to any plan,
program or service offered by its current Prospectus which would
require a change in SMC's obligations hereunder shall be subject to
SMC's approval, which shall not be unreasonably withheld.
8. DURATION AND TERMINATION OF AGREEMENT. This Agreement shall become
effective on March 31, 1989, provided that on March 29, 1989, it is
approved by a majority of the holders of the outstanding voting
securities of the Fund. This Agreement shall continue in effect until
March 1, 1990, and for successive 12-month periods thereafter, unless
terminated, provided that each such continuance is specifically
approved at least annually by (a) the vote of the majority of the
entire Board of Directors of the Fund, and the vote of the majority of
those directors who are not parties to this Agreement or interested
persons (as such terms are defined in the 0000 Xxx) of any such party
cast in person at a meeting called for the purpose of voting on such
approval, or (b) by the vote of a majority of the outstanding voting
securities of the Fund (as defined in the 1940 Act).
Upon this Agreement becoming effective, any previous Agreement between
the Fund and SMC providing for investment advisory, administrative or
transfer agency services shall concurrently terminate, except that
such termination shall not affect any fees accrued and guarantees of
expenses with respect to any period prior to termination.
This Agreement may be terminated at any time without payment of any
penalty, by the Fund upon the vote of a majority of the Fund's Board
of Directors or, by a majority of the outstanding voting securities of
the Fund, or by SMC, in each case on sixty (60) days' written notice
to the other party. This Agreement shall automatically terminate in
the event of its assignment (as such term is defined in the 1940 Act).
9. SEVERABILITY. If any clause or provision of this Agreement is
determined to be illegal, invalid or unenforceable under present or
future laws effective during the term hereof, then such clause or
provision shall be considered severed herefrom and the remainder of
this Agreement shall continue in full force and effect.
10. APPLICABLE LAW. This Agreement shall be subject to and construed in
accordance with the laws of the State of Kansas.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereto duly authorized on the
day, month and year first above written.
SECURITY INVESTMENT FUND
By XXXXXXX X. XXXXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President
(Corporate Seal)
ATTEST:
XXX X. XXX
-------------------
Secretary
SECURITY MANAGEMENT COMPANY
By XXXXXXX X. XXXXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxxxx
(Corporate Seal)
ATTEST:
XXX X. XXX
-------------------
Secretary
SCHEDULE A
INVESTMENT ADVISORY, ADMINISTRATIVE SERVICES
AND TRANSFER AGENCY AGREEMENT
SCHEDULE OF ADMINISTRATIVE AND FUND ACCOUNTING FACILITIES AND SERVICES
Security Management Company agrees to provide the Fund the following
administrative facilities and services.
1. FUND AND PORTFOLIO ACCOUNTING
a. Maintenance of Fund General Ledger and Journal.
b. Preparing and recording disbursements for direct Fund expenses.
c. Preparing daily money transfers.
d. Reconciliation of all Fund bank and custodian accounts.
e. Assisting Fund independent auditors as appropriate.
f. Prepare daily projection of available cash balances.
g. Record trading activity for purposes of determining net asset values
and daily dividend.
h. Prepare daily portfolio evaluation report to value portfolio
securities and determine daily accrued income.
i. Determine the daily net asset value per share.
j. Determine the daily, monthly, quarterly, semiannual or annual dividend
per share.
k. Prepare monthly, quarterly, semiannual and annual financial
statements.
l. Provide financial information for reports to the Securities and
Exchange Commission in compliance with the provisions of the
Investment Company Act of 1940 and the Securities Act of 1933, the
Internal Revenue Service and any other regulatory agencies as
required.
m. Provide financial, yield, net asset value, etc. information to NASD
and other survey and statistical agencies as instructed by the Fund.
n. Reports to the Audit Committee of the Board of Directors, if
applicable.
2. LEGAL
a. Provide registration and other administrative services necessary to
qualify the shares of the Fund for sale in those jurisdictions
determined from time to time by the Fund's Board of Directors
(commonly known as "Blue Sky Registration").
b. Provide registration with and reports to the Securities and Exchange
Commission in compliance with the provisions of the Investment Company
Act of 1940 and the Securities Act of 1933.
c. Prepare and review Fund Prospectus and Statement of Additional
Information.
d. Prepare proxy statements and oversee proxy tabulation for annual
meetings.
e. Prepare Board materials and maintain minutes of the Board meetings.
f. Draft, review and maintain contractual agreements between Fund and
Investment Adviser, Custodian, Distributor and Transfer Agent.
g. Oversee printing of proxy statements, financial reports to
shareholders, prospectuses and Statements of Additional Information.
h. Provide legal advice and oversight regarding shareholder transactions,
administrative services, compliance with contractual agreements and
the provisions of the 1940 and 1933 Acts.
SCHEDULE OF SHARE TRANSFER AND DIVIDEND DISBURSING SERVICES
Security Management Company agrees to provide the Fund the following
transfer agency and dividend disbursing services:
1. Maintenance of shareholder accounts, including processing of new accounts.
2. Posting address changes and other file maintenance for shareholder
accounts.
3. Posting all transactions to the shareholder file, including:
a. Direct purchases
b. Wire order purchases
c. Direct redemptions
d. Wire order redemptions
e. Draft redemptions
f. Direct exchanges
g. Transfers
h. Certificate issuances
i. Certificate deposits
4. Monitor fiduciary processing, insuring accuracy and deduction of fees.
5. Prepare daily reconciliations of shareholder processing to money movement
instructions.
6. Handle bounced check collections. Immediately liquidate shares purchased
and return to the shareholder the check and confirmation of the
transaction.
7. Issuing all checks and stopping and replacing lost checks.
8. Draft clearing services.
a. Maintenance of signature cards and appropriate corporate resolutions
b. Comparison of the signature on the check to the signatures on the
signature card for the purpose of paying the face amount of the check
only
c. Receiving checks presented for payment and liquidating shares after
verifying account balance
d. Ordering checks in quantity specified by the Fund for the shareholder
9. Mailing confirmations, checks and/or certificates resulting from
transaction requests to shareholders.
10. Performing all of the Fund's other mailings, including:
a. Dividend and capital gain distributions
b. Semiannual and annual reports
c. 1099/year-end shareholder reporting
d. Systematic withdrawal plan payments
e. Daily confirmations
11. Answering all service related telephone inquiries from shareholders and
others, including:
a. General and policy inquiries (research and resolve problems)
b. Fund yield inquiries
c. Taking shareholder processing requests and account maintenance changes
by telephone as described above
d. Submit pending requests to correspondence
e. Monitor on-line statistical performance of unit
f. Develop reports on telephone activity
12. Respond to written inquiries (research and resolve problems), including:
a. Initiate shareholder account reconciliation proceeding when
appropriate
b. Notify shareholder of bounced investment checks
c. Respond to financial institutions regarding verification of deposit
d. Initiate proceedings regarding lost certificates
e. Respond to complaints and log activities
f. Correspondence control
13. Maintaining and retrieving all required past history for shareholders and
provide research capabilities as follows:
a. Daily monitoring of all processing activity to verify back-up
documentation
b. Provide exception reports
c. Microfilming
d. Storage, retrieval and archive
14. Prepare materials for annual meetings.
a. Address and mail annual proxy and related material
b. Prepare and submit to Fund an affidavit of mailing
c. Furnish certified list of shareholders (hard copy or microfilm) and
inspectors of elections
15. Report and remit as necessary for state escheat requirements.
Approved: Fund X. X. XXXXXXXX SMC X. X. XXXXXXXX
---------------------- --------------------------
AMENDMENT TO INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
WHEREAS, Security Growth and Income Fund (formerly Security Investment Fund)
(the "Fund") and Security Management Company ("SMC") are parties to an
Investment Management and Services Agreement dated March 29, 1989 (the
"Agreement"), under which SMC agrees to provide investment research and advice,
general administrative, fund accounting, transfer agency and dividend disbursing
services to the Fund in return for the compensation specified in the Agreement;
WHEREAS, effective October 19, 1993, the Fund will offer its shares in two
classes, Class A shares which are currently being offered, and a new class,
Class B shares;
WHEREAS, the Fund has adopted a Distribution Plan with respect to its Class B
shares and, as a result, such shares are subject to distribution fees to which
Class A shares are not subject;
WHEREAS, the distribution fees associated with Class B shares require the
amendment of the Agreement relative to that class of shares;
WHEREAS, on October 1, 1993, the initial Class B shareholder of the Fund
approved such amendment to this Agreement;
WHEREAS, the changes to the Agreement which are contemplated by this Amendment
do not affect the interests of Class A shareholders of the Fund;
NOW, THEREFORE, the Fund and SMC hereby amend the Investment Management and
Services Agreement, dated December 8, 1988, effective October 1, 1993, as
follows:
A. SMC agrees to provide investment research and advice, general
administrative, fund accounting, transfer agency and dividend disbursing
services to the Fund pursuant to the terms and conditions set forth in the
Agreement, as amended in Section B below.
B. Paragraph 2(b) of the Agreement shall be deleted in its entirety and the
following paragraph inserted in lieu thereof:
(b) EXPENSES OF THE FUND. Anything in this Agreement to the contrary
notwithstanding, the Fund shall pay, or reimburse SMC for the payment
of, the following described expenses of the Fund whether or not billed
to the Fund, SMC or any related entity;
(i) brokerage fees and commissions;
(ii) taxes;
(iii) interest expenses;
(iv) any extraordinary expenses approved by the Board of Directors
of the Fund; and
(v) distribution fees paid under the Fund's Class B
Distribution Plan.
C. Paragraph 3(b) shall be deleted in its entirety and the following paragraph
inserted in lieu thereof:
(b) For each of the Fund's fiscal years this Agreement remains in force,
SMC agrees that if total annual expenses of the Fund, exclusive of
interest and taxes, extraordinary expenses (such as litigation) and
distribution fees paid under the Fund's Class B Distribution Plan, but
inclusive of SMC's compensation, exceed any expense limitation imposed
by state securities law or regulation in any state in which shares of
the Fund are then qualified for sale, as such regulations may be
amended from time to time, SMC will contribute to the Fund such funds
or waive such portion of its fee, adjusted monthly, as may be
requisite to insure that such annual expenses will not exceed any such
limitation. If this Agreement shall be effective for only a portion of
any fiscal year, then the maximum annual expenses shall be prorated
for such portion. Brokerage fees and commissions incurred in
connection with the purchase or sale of any securities by the Fund
shall not be deemed to be expenses within the meaning of this
paragraph (b).
IN WITNESS WHEREOF, the parties hereto have made this Amendment to the
Investment Management and Services Agreement this 1st day of October 1993.
SECURITY GROWTH AND INCOME FUND
By: X. X. XXXXXXXX
-------------------------------
ATTEST:
XXX X. XXX
--------------------------------
Xxx X. Xxx, Secretary
SECURITY MANAGEMENT COMPANY
By: X. X. XXXXXXXX
-------------------------------
ATTEST:
XXX X. XXX
--------------------------------
Xxx X. Xxx, Secretary
AMENDMENT TO
INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
WHEREAS, Security Growth and Income Fund (formerly Security Investment Fund)
(the "Fund") and Security Management Company ("SMC") are parties to an
Investment Management and Services Agreement, dated March 29, 1989, as amended
(the "Agreement"), under which SMC agrees to provide investment research and
advice, general administrative, fund accounting, transfer agency and dividend
disbursing services to the Fund in return for the compensation specified in the
Agreement;
WHEREAS, on October 31, 1996, the operations of SMC, a Kansas corporation, will
be transferred to Security Management Company, LLC ("SMC, LLC"), a Kansas
limited liability company; and
WHEREAS, SMC, LLC desires to assume all rights, duties and obligations of SMC
under the Agreement.
NOW THEREFORE, in consideration of the premises and mutual agreements made
herein, the parties hereto agree as follows:
1. The Agreement is hereby amended to substitute SMC, LLC for SMC, with the
same effect as though SMC, LLC were the originally named management
company, effective November 1, 1996;
2. SMC, LLC agrees to assume the rights, duties and obligations of SMC
pursuant to the terms of the Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Investment Management and Services Agreement this 1st day of November, 1996.
SECURITY GROWTH AND INCOME FUND SECURITY MANAGEMENT COMPANY, LLC
By: XXXX X. XXXXXXX By: XXXXX X. XXXXXXX
----------------------------------- ------------------------------
Xxxx X. Xxxxxxx, President Xxxxx X. Xxxxxxx, President
ATTEST: ATTEST:
XXX X. XXX XXX X. XXX
----------------------------- ---------------------------------
Xxx X. Xxx, Secretary Xxx X. Xxx, Secretary
