TRANSFER AGENCY AGREEMENT
AGREEMENT made as of this 1st day of February, 2004, between Security
Equity Fund (the "Company"), a Kansas corporation having its principal place of
business at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx 00000, and Security
Management Company, LLC ("SMC"), a Kansas limited liability company, having its
principal place of business at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx 00000.
WHEREAS, the Company desires that SMC perform transfer agency services
for each series of the Company as now in existence and listed on Schedule A or
as hereafter may from time to time be created (individually referred to herein
as the "Fund" and collectively as the "Funds"); and
WHEREAS, SMC is willing to perform such services on the terms and
conditions set forth in this Agreement;
WHEREAS, SMC and the Company wish to enter into this Agreement in order
to set forth the terms under which SMC will perform the transfer agency services
set forth herein for the Company;
NOW, THEREFORE, in consideration of the covenants hereinafter
contained, the Company and SMC hereby agree as follows:
1. Services
SMC shall perform for the Company the transfer agent services set forth
in Schedule B hereto. SMC also agrees to perform for the Company such special
services incidental to the performance of the services enumerated herein as
agreed to by the parties from time to time. SMC shall perform such additional
services as are provided on an amendment to Schedule B hereof, in consideration
of such fees as the parties hereto may agree.
SMC may appoint in writing other parties qualified to perform transfer
agency services (individually, a "Sub-transfer Agent") to carry out some or all
of its responsibilities as transfer agent under this Agreement with respect to a
Fund; provided, however, that the Sub-transfer Agent shall be the agent of SMC
and not the agent of the Company or such Fund, and that SMC shall be fully
responsible for the acts of such Sub-transfer Agent and shall not be relieved of
any of its responsibilities hereunder by the appointment of such Sub-transfer
Agent.
2. Fees
The Company shall pay SMC for the services to be provided by SMC under
this Agreement in accordance with, and in the manner set forth in Schedule C
attached hereto. Fees for any additional services to be provided by SMC pursuant
to an amendment to Schedule B hereto shall be subject to mutual agreement at the
time such amendment to Schedule B is proposed.
3. Reimbursement of Expenses and Miscellaneous Service Fees
(a) In addition to paying SMC the fees set forth in Schedule C, the
Company agrees to reimburse SMC for SMC's reasonable out-of-pocket expenses (for
which no xxxx-up for SMC overhead expenses shall be included) in providing
services hereunder, including without limitation, the following:
(i) All freight and other delivery and bonding charges incurred by
SMC in delivering materials to and from the Company and in
delivering all materials to shareholders;
(ii) All direct telephone, telephone transmission and telecopy or
other electronic transmission expenses incurred by SMC in
communication with the Company, the Company's investment
adviser or custodian, dealers, shareholders or others as
required for SMC to perform the services to be provided
hereunder;
(iii) Sales taxes paid on behalf of the Company;
(iv) The cost of microfilm or microfiche or other electronic
retention of records or other materials;
(v) Courier (delivery expenses);
(vi) Check processing fees;
(vii) Records retention / storage fees;
(viii) Fulfillment;
(ix) XXX custody and other related fees;
(x) NSCC, networking and related costs and/or fees;
(xi) Sales taxes;
(xii) Costs of statements and confirmations including, but not
limited to, costs of printing and postage;
(xiii) Costs of tax forms;
(xiv) Costs of all other shareholder correspondence; and
(xv) Post office boxes
(xvi) Any expenses paid by SMC to a third-party administrator,
broker/dealer, bank, insurance company or other entity for
providing sub-transfer agency services to beneficial
shareholders of the Company where such shares are held in
omnibus accounts; and
2
(xvii) Systems development fees billed to SMC by the provider of
SMC's securityholder accounting system (the "Transfer Agency
System")
(b) In addition, SMC shall be entitled to receive the following fees:
(i) System development fees, billed at the rate of $150 per hour,
as approved by the Company, and all systems-related expenses,
agreed in advance, associated with the provision of special
reports and services pursuant to Item 7 of Schedule D attached
hereto;
(ii) Fees for development of custom interfaces, billed at a
mutually agreed upon rate;
(iii) Ad hoc reporting fees, billed at a mutually agreed upon rate;
(iv) Interactive Voice Response System fees, charged according to
SMC's standard rate schedule, and applicable to the level of
service (e.g., basic, transaction, premium) selected; and
Expenses associated with SMC's anti-fraud procedures and the
performance of delegated services under the written anti-money laundering
program ("AML Program") adopted by the Company.
4. Term
This Agreement shall become in effective upon its approval by a
majority of the Board, including a majority of the Board who are not parties to
this Agreement or interested persons of such party and shall continue in effect
for a period of two years from the date hereof, subject thereafter to being
continued in force and effect from year to year if specifically approved each
year by the Board. In addition to the foregoing, each renewal of this Agreement
must be approved by the vote of a majority of the Board 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 on such approval. Prior to voting on
any renewal of this Agreement, the Board may request and evaluate, and SMC shall
furnish, such information as may reasonably be necessary to enable the Board to
evaluate the terms of this Agreement. This Agreement may be terminated at any
time by either party, without cause, upon 90 days' written notice to the other,
and for cause upon 30 days' written notice by the party alleging cause.
For purposes of this Agreement, "cause" shall mean (a) a material
breach of this Agreement that has not been remedied for thirty (30) days
following written notice of such breach from the non-breaching party; (b) a
final, unappealable judicial, regulatory or administrative ruling or order in
which the party to be terminated (which, in the case of the Company, may be with
regard only to one or more Funds) has been found guilty of criminal or unethical
behavior in the conduct of its business; or (c) financial difficulties on the
part of the party to be terminated (which, in the case of the Company, may be
with
3
regard only to one or more Funds) which are evidenced by the authorization or
commencement of, or involvement by way of pleading, answer, consent or
acquiescence in, a voluntary or involuntary case under Title 11 of the United
States Code, as from time to time is in effect, or any applicable law, other
than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors. SMC shall not terminate this Agreement pursuant to clause (a) above
based solely upon the Company's failure to pay an amount to SMC which is the
subject of a good faith dispute, if (i) the Company is attempting in good faith
to resolve such dispute with as much expediency as may be possible under the
circumstances, and (ii) the Company continues to perform its obligations
hereunder in all other material respects (including paying all fees and expenses
not subject to reasonable dispute hereunder).
Notwithstanding the foregoing, following any such termination, in the
event that SMC in fact continues to perform any one or more of the services
contemplated by this Agreement (or any Schedule or exhibit hereto) with the
consent of the Company, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Fees and out-of-pocket expenses incurred by SMC but unpaid by
the Company upon such termination shall be immediately due and payable upon and
notwithstanding such termination. SMC shall be entitled to collect from the
Company, in addition to the fees and disbursements provided by Schedule C and
Section 3 hereof, the amount of all of SMC's reasonable cash disbursements in
connection with SMC's activities in effecting such termination, including
without limitation, the delivery to the Company and/or its distributor or
investment adviser and/or other parties of the Company's property, records,
instruments and documents.
5. Standard of Care; Uncontrollable Events; Limitation of Liability
SMC shall use reasonable professional diligence to ensure the accuracy
of all services performed under this Agreement, but shall not be liable to the
Company for any action taken or omitted by SMC in the absence of bad faith,
willful misfeasance, negligence or reckless disregard by it of its obligations
and duties. The duties of SMC shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against SMC
hereunder.
SMC shall maintain adequate and reliable computer and other equipment
necessary or appropriate to carry out its obligations under this Agreement. Upon
the Company's reasonable request, SMC shall provide supplemental information
concerning the aspects of its disaster recovery and business continuity plan
that are relevant to the services provided hereunder. Notwithstanding the
foregoing or any other provision of this Agreement, SMC assumes no
responsibility hereunder, and shall not be liable for, any damage, loss of data,
delay or any other loss whatsoever caused by events beyond its reasonable
control. Events beyond SMC's reasonable control include, without limitation,
force majeure events. Force majeure events include natural disasters, actions
4
or decrees of governmental bodies, and communication lines failures that are not
the fault of either party. In the event of force majeure, computer or other
equipment failures or other events beyond its reasonable control, SMC shall
follow applicable procedures in its disaster recovery and business continuity
plan and use all commercially reasonable efforts to minimize any service
interruption.
SMC shall provide the Company, at such times as the Company may
reasonably require, copies of reports rendered by independent public accountants
on the internal controls and procedures of SMC relating to the services provided
by SMC under this Agreement.
Notwithstanding anything in this Agreement to the contrary, in no event
shall SMC, its affiliates or any of its or their directors, officers, employees,
agents or subcontractors be liable for exemplary, punitive, special, incidental,
indirect or consequential damages, or lost profits, each of which is hereby
excluded by agreement of the parties regardless of whether such damages were
foreseeable or whether either party or any entity has been advised of the
possibility of such damages.
6. Legal Advice
SMC shall notify the Company at any time SMC believes that it is in
need of the advice of counsel (other than counsel in the regular employ of SMC
or any affiliated companies) with regard to SMC's responsibilities and duties
specific to the Company pursuant to this Agreement. After so notifying the
Company, SMC, at its discretion, shall be entitled to seek, receive and act upon
advice of legal counsel of its choosing, such advice to be at the expense of the
Company unless relating to a matter involving SMC's willful misfeasance, bad
faith, gross negligence or reckless disregard of SMC's responsibilities and
duties hereunder, and SMC shall in no event be liable to the Company or any Fund
or any shareholder or beneficial owner of the Company for any action reasonably
taken pursuant to such advice.
7. Instructions
Whenever SMC is requested or authorized to take action hereunder
pursuant to instructions from a shareholder, or a properly authorized agent of a
shareholder ("shareholder's agent"), concerning an account in a Fund, SMC shall
be entitled to rely upon any certificate, letter or other instrument or
communication (including electronic mail), reasonably believed by SMC to be
genuine and to have been properly made, signed or authorized by the shareholder
or shareholder's agent and shall be entitled to receive as conclusive proof of
any fact or matter required to be ascertained by it hereunder a certificate
signed by the shareholder or shareholder's agent.
As to the services to be provided hereunder, SMC may rely conclusively
upon the terms of the Prospectuses and Statement of Additional Information of
the Company relating to the relevant Funds to the extent that such services are
described therein unless SMC receives written instructions to the contrary in a
timely manner from the Company.
5
8. Indemnification
The Company agrees to indemnify and hold harmless SMC, its employees,
agents, directors, officers and nominees from and against any and all claims,
demands, actions and suits, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, counsel fees and other expenses of
every nature and character arising out of or in any way relating to SMC's
actions taken or omissions with respect to the performance of services under
this Agreement or based, if applicable, upon reasonable reliance on information,
records, instructions or requests given or made to SMC by the Company, the
investment adviser, fund accountant or custodian thereof; provided that this
indemnification shall not apply to actions or omissions of SMC in cases of its
own bad faith, willful misfeasance, negligence or reckless disregard by it of
its obligations and duties.
SMC shall indemnify, defend, and hold the Company harmless from and
against any and all claims, actions and suits and all losses, damages, costs,
charges, reasonable counsel fees and disbursements, payments, expenses and
liabilities (including reasonable investigation expenses) resulting directly and
proximately from SMC's willful misfeasance, bad faith or negligence in the
performance of its duties or by reason of reckless disregard of its obligations
and duties hereunder.
The indemnification rights hereunder shall include the right to
reasonable advances of defense expenses in the event of any pending or
threatened litigation with respect to which indemnification hereunder may
ultimately be merited. In order that the indemnification provisions contained
herein shall apply, however, it is understood that if in any case a party may be
asked to indemnify or hold the other party harmless, the indemnifying party
shall be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the indemnified party
will use all reasonable care to identify and notify the indemnifying party
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the indemnifying
party, but failure to do so in good faith shall not affect the rights hereunder
except to the extent the indemnifying party is materially prejudiced thereby. As
to any matter eligible for indemnification, an Indemnified Party shall act
reasonably and in accordance with good faith business judgment and shall not
effect any settlement or confess judgment without the consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or delayed.
The indemnifying party shall be entitled to participate at its own
expense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the indemnifying
party elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by it and reasonably satisfactory to the indemnified
party, whose approval shall not be unreasonably withheld. In the event that the
indemnifying party elects to assume the defense of any suit and retain counsel,
the indemnified party shall bear the fees and expenses of any additional counsel
retained by it. If the indemnifying party does not elect to assume the defense
of suit, it
6
will reimburse the indemnified party for the reasonable fees and expenses of any
counsel retained by the indemnified party. The indemnity and defense provisions
set forth herein shall indefinitely survive the termination of this Agreement.
9. Record Retention and Confidentiality
SMC shall keep and maintain on behalf of the Company all books and
records which the Company or SMC is, or may be, required to keep and maintain
pursuant to any applicable statutes, rules and regulations, including without
limitation Rules 31a-1 and 31a-2 under the Investment Company Act of 1940, as
amended (the "1940 Act"), relating to the maintenance of books and records in
connection with the services to be provided hereunder. SMC further agrees that
all such books and records shall be the property of the Company and to make such
books and records available for inspection by the Company or by the Securities
and Exchange Commission (the "Commission") at reasonable times. SMC shall
otherwise keep confidential all books and records relating to the Company and
its shareholders, except when (i) disclosure is required by law, (ii) SMC is
advised by counsel (including any counsel in its employment or the employment of
any affiliated companies) that it may incur liability for failure to make a
disclosure, (iii) SMC is requested to divulge such information by
duly-constituted authorities or court process, or (iv) SMC is requested to make
a disclosure by a shareholder or shareholder's agent with respect to information
concerning an account as to which such shareholder has either a legal or
beneficial interest or when requested by the Company or the dealer of record as
to such account.
10. Reports
SMC shall furnish to the Company and to its properly-authorized
auditors, investment advisers, examiners, distributors, dealers, underwriters,
salesmen, insurance companies and others designated by the Company in writing,
such reports at such times as are prescribed in Schedule D attached hereto, or
as subsequently agreed upon by the parties pursuant to an amendment to Schedule
D.
11. Rights of Ownership
All computer programs and procedures employed or developed by or on
behalf of SMC to perform services required to be provided bySMC under this
Agreement are the property of SMC. All records and other data except such
computer programs and procedures are the exclusive property of the Company and
all such other records and data shall be furnished to the Company in appropriate
form as soon as practicable after termination of this Agreement for any reason.
12. Return of Records
SMC may at its option at any time, and shall promptly upon the
Company's demand, turn over to the Company and cease to retain SMC's files,
records and documents created and maintained by SMC pursuant to this Agreement
which are no longer needed by SMC in the performance of its services or for its
legal protection. If not so turned over to the Company, such documents and
records shall be retained by SMC for
7
six years from the year of creation. At the end of such six-year period, such
records and documents shall be turned over to the Company unless the Company
authorizes in writing the destruction of such records and documents.
13. Bank Accounts
SMC is hereby granted such power and authority as may be necessary to
establish one or more bank accounts for the Company with such bank or banks as
are selected or approved by the Company, as may be necessary or appropriate from
time to time in connection with the services required to be performed hereunder.
The Company shall be deemed to be the customer of such Bank or Banks for all
purposes in connection with such accounts. To the extent that the performance of
such services hereunder shall require SMC to disburse amounts from such accounts
in payment of dividends, redemption proceeds or for other purposes hereunder,
the Company shall provide such bank or banks with all instructions and
authorizations necessary for SMC to effect such disbursements.
14. Representations and Warranties of the Company
The Company represents and warrants to SMC that: (a) each Fund which is
in existence as of the date of this Agreement has authorized unlimited shares,
and (b) this Agreement has been duly authorized by the Company and, when
executed and delivered by the Company, will constitute a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and remedies of
creditors and secured parties.
The Company also represents and warrants that (a) the Company has
adopted a written AML Program that has been submitted to SMC, (b) the AML
Program has been approved by the Company's Board of Directors (hereafter
referred to as the "Board"), (c) the delegation of certain services thereunder
to SMC, as provided in Section 17, is permitted under the Company's AML Program
and has been approved by the Board, and (d) the Company will submit any material
amendments to the AML Program to SMC for SMC's review and consent prior to
adoption.
15. Representations and Warranties of SMC
SMC represents and warrants that: (a) SMC has been in, and shall
continue to be in compliance in all material respects with all provisions of
law, including Section 17A(c) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), required in connection with the performance of its duties
under this Agreement; (b) the various procedures and systems which SMC has
implemented with regard to safekeeping from loss or damage attributable to fire,
theft or any other cause of the blank checks, records, and other data of the
Company and SMC's records, data, equipment, facilities and other property used
in the performance of its obligations hereunder are adequate and that it will
make such changes therein from time to time as are reasonably required for the
secure performance of its obligations hereunder; and (c) this Agreement has been
duly
8
authorized by SMC and, when executed and delivered by SMC, will constitute a
legal, valid and binding obligation of SMC, enforceable against SMC in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the right and
remedies of creditors and secured parties.
Except as expressly provided in this agreement, all representations and
warranties, including, without limitation, any warranties regarding quality,
suitability, merchantability, fitness for a particular purpose or otherwise
(irrespective of any course of dealing, custom or usage of trade) concerning the
services or any goods provided incidental to the services provided under this
agreement by SMC are completely disclaimed.
16. Insurance
SMC shall maintain a fidelity bond covering larceny and embezzlement
and an insurance policy with respect to directors and officers errors and
omissions coverage in amounts that are appropriate in light of its duties and
responsibilities hereunder. Upon the request of the Company, SMC shall provide
evidence that coverage is in place. SMC shall notify the Company should its
insurance coverage with respect to professional liability or errors and
omissions coverage be canceled. Such notification shall include the date of
cancellation and the reasons therefore. SMC shall notify the Company of any
material claims against it with respect to services performed under this
Agreement, whether or not they may be covered by insurance, and shall notify the
Company should the total outstanding claims made by SMC under its insurance
coverage materially impair, or threaten to materially impair, the adequacy of
its coverage.
17. Compliance with AML Laws
The Company acknowledges that it is a financial institution subject to
the law entitled United and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism ("U.S.A. Patriot") Act of 2001 and
the Bank Secrecy Act (collectively, the "AML Acts") and shall comply with the
AML Acts and applicable regulations adopted thereunder (collectively, the
"Applicable AML Laws") in all relevant respects, subject to the delegation of
certain responsibilities to SMC, as provided in the next paragraph below.
The Company hereby delegates to SMC the performance, on behalf of the
Company, of the anti-money laundering services set forth under Item 6 of
Schedule B as concerns the shareholder accounts maintained by SMC pursuant to
this Agreement. SMC agrees to the foregoing delegation and agrees to perform
such services in accordance with the Company's AML Program. In connection
therewith, SMC agrees to maintain policies and procedures, and related internal
controls, that are consistent with the Company's AML Program and the requirement
that the Company employ procedures reasonably designed to achieve compliance
with the Applicable AML Laws, including the requirement to have policies and
procedures that can be reasonably expected to detect and cause the reporting of
transactions under Section 5318 of the Bank Secrecy Act.
9
The Company agrees and acknowledges that, notwithstanding the
delegation provided for in the foregoing paragraph, the Company maintains full
responsibility for ensuring that its AML Program is, and shall continue to be,
reasonably designed to ensure compliance with the Applicable AML Laws, in light
of the particular business of the Company, taking into account factors such as
its size, location, activities and risks or vulnerabilities to money laundering.
In connection with the foregoing delegation, the Company also
acknowledges that the performance of the anti-money laundering services
enumerated in Item 6 of Schedule B involves the exercise of discretion which in
some circumstances may result in consequences to the Company and its
shareholders (such as in the case of the reporting of suspicious activities and
the freezing of shareholder accounts). In this regard, (i) under circumstances
in which the AML Program authorizes the taking of certain actions, SMC is
granted the discretion to take any such action as may be authorized under the
AML Program, and consultation with Company shall not be required in connection
therewith unless specifically required under the AML Program, and (ii) the
Company instructs [ ] that it may avail the Company of any safe harbor from
civil liability that may be available under Applicable AML Laws for making a
disclosure or filing a report thereunder.
18. Notices
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Company, to it at One Security Benefit
Place, Topeka, Kansas 66636, Attn: President; and if to SMC, to it at One
Security Benefit Place, Topeka, Kansas 66636, Attn: President, or at such other
address as such party may from time to time specify in writing to the other
party pursuant to this Section.
19. Assignment
This Agreement and the rights and duties hereunder shall not be
assignable by either of the parties hereto except by the specific written
consent of the other party. This Section 19 shall not limit or in any way affect
SMC's right to appoint a Sub-transfer Agent pursuant to Section 1 hereof. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
20. Governing Law
This Agreement shall be governed by and provisions shall be construed
in accordance with the laws of the State of Kansas and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of Kansas,
or any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
10
21. Activities of SMC
The services of SMC rendered to the Company hereunder are not to be
deemed to be exclusive. SMC is free to render such services to others and to
have other businesses and interests. It is understood that the Company's,
officers, employees and Shareholders of the Company are or may be or become
interested in SMC, as officers, employees or otherwise and that partners,
officers and employees of SMC and its counsel are or may be or become similarly
interested in the Company, and that SMC may be or become interested in the
Company as a Shareholder or otherwise
22. Privacy
Nonpublic personal financial information relating to consumers or
customers of the Company provided by, or at the direction of the Company to SMC,
or collected or retained by SMC in the course of performing its duties as
transfer agent, shall be considered confidential information. SMC shall not
give, sell or in any way transfer such confidential information to any person or
entity, other than affiliates of SMC except at the direction of the Company or
as required or permitted by law (including Applicable AML Laws). UMC represents,
warrants and agrees that it has in place and will maintain physical, electronic
and procedural safeguards reasonably designed to protect the security,
confidentiality and integrity of, and to prevent unauthorized access to or use
of records and information relating to consumers or customers of the Company.
Miscellaneous
(a) Paragraph headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(b) This Agreement constitutes the complete agreement of the parties
hereto as to the subject matter covered by this Agreement, and supercedes all
prior negotiations, understandings and agreements bearing upon the subject
matter covered herein.
(c) This Agreement may be executed in counterparts, each of which shall
be an original but all of which, taken together, shall constitute one and the
same agreement.
(d) No amendment to this Agreement shall be valid unless made in
writing and executed by both parties hereto.
(e) Every reference to a Fund will be deemed a reference solely to the
particular Fund. Under no circumstances shall the rights, obligations or
remedies with respect to a particular Fund constitute a right, obligation or
remedy applicable to any other Fund. In particular, and without otherwise
limiting the scope of this paragraph, SMC shall not have any right to set off
claims of a Fund by applying the property of any other Fund.
* * * * *
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
Security Management Company, LLC
By: XXXXX X. XXXXXXX
-----------------------------------
Name:
Title:
Security Equity Fund
By: XXXXX X. XXXXXXX
-----------------------------------
Name:
Title:
12
SCHEDULE A
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN SECURITY MANAGEMENT COMPANY, LLC
AND SECURITY EQUITY FUND
DATE: FEBRUARY 1, 2004
FUNDS
Equity Series, Alpha Opportunity Series, Global Series, Mid Cap Value Series,
Small Cap Growth Series, Enhanced Index Series, Select 25 Series, Large Cap
Growth Series and Social Awareness Series
13
SCHEDULE B
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN SECURITY MANAGEMENT COMPANY, LLC
AND SECURITY EQUITY FUND
DATE: FEBRUARY 1, 2004
TRANSFER AGENCY SERVICES
1. Shareholder Transactions
(a) Process shareholder purchase and redemption orders.
(b) Set up account information, including address, dividend
option, taxpayer identification numbers and wire instructions.
(c) Issue confirmations in compliance with Rule 10b-10 under the
Securities Exchange Act of 1934, as amended.
(d) Issue periodic statements for shareholders.
(e) Process transfers and exchanges.
(f) Process dividend payments, including the purchase of new
shares, through dividend reimbursement.
2. Shareholder Information Services
(a) Make information available to shareholder servicing unit and
other remote access units regarding trade date, share price,
current holdings, yields, and dividend information.
(b) Produce detailed history of transactions through duplicate or
special order statements upon request.
(c) Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to
current shareholders.
3. Compliance Reporting
(a) Provide reports to the Securities and Exchange Commission, the
National Association of Securities Dealers, and the States in
which the Fund is registered.
(b) Prepare and distribute appropriate Internal Revenue Service
forms for corresponding Fund and shareholder income and
capital gains.
(c) Issue tax withholding reports to the Internal Revenue Service.
14
4. Dealer/Load Processing (if applicable)
(a) Provide reports for tracking rights of accumulation and
purchases made under a Letter of Intent.
(b) Account for separation of shareholder investments from
transaction sale charges for purchase of Fund shares.
(c) Calculate fees due under 12b-1 plans for distribution and
marketing expenses.
(d) Track sales and commission statistics by dealer and provide
for payment of commissions on direct shareholder purchases in
a load Fund.
5. Shareholder Account Maintenance
(a) Maintain all shareholder records for each account in the
Company.
(b) Issue customer statements on scheduled cycle, providing
duplicate second and third party copies if required.
(c) Record shareholder account information changes.
(d) Maintain account documentation files for each shareholder.
6. Anti-Money Laundering Services
(a) Verify shareholder identity upon opening new accounts.
(b) Monitor, identify and report shareholder transactions and
identify and report suspicious activities that are required to
be so identified and reported, and provide other required
reports to the Securities and Exchange Commission, the U.S.
Treasury Department, the Internal Revenue Service or each
agency's designated agent, in each case consistent with the
Company's AML Program.
(c) Place holds on transactions in shareholder accounts or freeze
assets in shareholder accounts, as provided in the Company's
AML Program.
(d) Maintain all records or other documentation related to
shareholder accounts and transactions therein that are
required to be prepared and maintained pursuant to the
Company's AML Program, and make the same available for
inspection by (i) the Company, (ii) any auditor of the
Company's AML Program or related procedures, policies or
controls that has been designated by the Company in writing,
or (iii) regulatory or law enforcement authorities, and
otherwise make said records or other documents available at
the direction of the Company.
15
SCHEDULE C
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN SECURITY MANAGEMENT COMPANY, LLC
AND SECURITY EQUITY FUND
DATE: FEBRUARY 1, 2004
TRANSFER AGENT FEES
Each Series of Security Equity Fund agrees to pay SMC the following fees, or
$25,000 per year, whichever is greater:
1. Account Set-Up Charge - A fee of $4 to open an account on SMC's
transfer agency system to hold shares of the Funds.
2. Annual Maintenance Charge - An annual per account fee of (i) $8 per
open account for regular accounts, (ii) $6.50 per open account with
respect to accounts which are Matrix Level III pursuant to the National
Securities Clearing Corporation networking systems and (iii) $5 per
account for closed accounts that remain outstanding on SMC's transfer
agency system (regardless of whether such accounts are regular or
Matrix Level III).
3. Transaction Charge - A per transaction charge of (i) $1.10 per
transaction for regular accounts and (ii) $0.60 per transaction for
accounts which are Matrix Level III.
The fees described herein shall be calculated daily and payable to SMC by
Security Equity Fund monthly. If this Agreement is in effect for only a portion
of a month, the fee shall be prorated for such month.
16
SCHEDULE D
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN SECURITY MANAGEMENT COMPANY, LLC
AND SECURITY EQUITY FUND
DATE: FEBRUARY 1, 2004
REPORTS
1. Daily Shareholder Activity Journal
2. Daily Fund Activity Summary Report
(a) Beginning Balance
(b) Transactions
(c) Shareholder Transactions
(d) Reinvested Dividends
(e) Exchanges
(f) Adjustments
(g) Ending Balance
3. Daily Wire and Check Registers
4. Monthly Dealer Processing Reports
5. Monthly Dividend Reports
6. Sales Data Reports for Blue Sky Registration
7. Such special reports and additional information that the parties may agree
upon, from time to time.
17
FIRST AMENDMENT TO TRANSFER AGENCY AGREEMENT
THIS FIRST AMENDMENT to the Transfer Agency Agreement between Security
Equity Fund (the "Company"), a Kansas corporation having its principal place of
business at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx, 00000, and Security
Management Company, LLC ("SMC"), a Kansas limited liability company having its
principal place of business at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx 00000,
is made as of November 17, 2006.
WHEREAS, the parties have entered into the Transfer Agency Agreement
dated as of February 1, 2004 (the "Agreement") which is still in full force and
effect; and
WHEREAS, the parties desire to amend the Agreement to clarify that
reimbursement may be made with regard to expenses paid by SMC to a third-party
administrator, broker/dealer, bank, insurance company or other entity for
providing sub-transfer agency services to direct shareholders as well as
beneficial shareholders of the Company where such shares are held in omnibus
accounts;
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter contained, the Company and SMC hereby agree as follows:
Section 3(a)(xvi) of the Agreement is deleted in its entirety and
replaced with the following:
(xvi) Any expenses paid by SMC to a third-party administrator,
broker/dealer, bank, insurance company or other entity for
providing sub-transfer agency services to shareholders; and
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to the Agreement as of the day and year first above written.
Security Management Company, LLC
By: XXXXXXX X. XXXXX
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
Security Equity Fund
By: XXXXXXX X. XXXXX
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
FIRST AMENDMENT TO TRANSFER AGENCY AGREEMENT
THIS FIRST AMENDMENT to the Transfer Agency Agreement between Security
Equity Fund (the "Company"), a Kansas Corporation having its principal place of
business at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx, 00000, and Security
Management Company, LLC ("SMC"), a Kansas limited liability company having its
principal place of business at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx 00000,
is made as of November 17, 2006.
WHEREAS, the parties desire to amend the Agreement to clarify that
reimbursement may be made with regard to the expenses paid by SMC to a
third-party administrator, broker/dealer, bank, insurance company or other
entity for providing sub-transfer agency services to direct shareholders as well
as beneficial shareholders of the Company where such shares are held in omnibus
accounts;
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter contained, the Company and SMC hereby agree as follows:
Section 3(a)(xvi) of the Agreement is deleted in its entirety and
replaced with the following:
(xvi) Any expenses paid by SMC to a third-party administrator,
broker/dealer, bank, insurance company or other entity for
providing sub-transfer agency services to shareholders; and
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to the Agreement as of the day and year first above written.
Security Management Company, LLC
By: XXXXXXX X. XXXXX
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
Security Equity Fund
By: XXXXXXX X. XXXXX
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
SECOND AMENDMENT TO TRANSFER AGENCY AGREEMENT
THIS SECOND AMENDMENT to the Transfer Agency Agreement between Security
Equity Fund (the "Company"), a Kansas corporation having its principal place of
business at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx, 00000, and Security
Investors, LLC (the "Transfer Agent") (formerly, Security Management Company,
LLC), a Kansas limited liability company having its principal place of business
at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx 00000, is made as of February 8,
2008.
WHEREAS, the parties have entered into the Transfer Agency Agreement
dated as of February 1, 2004 (the "Agreement") which is still in full force and
effect; and
WHEREAS, on February 8, 2008, the Board of Directors authorized the
Company to offer common stock in three new series designated as Small Cap Value
Series, Mid Cap Value Institutional Fund and Global Institutional Fund and
approved an amendment to this Agreement to include the three new series;
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter contained, the Company and the Transfer Agent hereby agree as
follows:
Schedule A shall be deleted in its entirety and the attached Schedule A
inserted in lieu thereof:
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment to the Agreement as of the day and year first above written.
Security Investors, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Security Equity Fund
By: /s/Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
Title: President
SCHEDULE A
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN SECURITY INVESTORS, LLC
AND SECURITY EQUITY FUND
DATE: FEBRUARY 8, 2008
FUNDS
Equity Series, Alpha Opportunity Series, Global Series, Mid Cap Value Series,
Small Cap Growth Series, Select 25 Series, Small Cap Value Series, Mid Cap Value
Institutional Fund and Global Institutional Fund.
THIRD AMENDMENT TO TRANSFER AGENCY AGREEMENT
THIS THIRD AMENDMENT to the Transfer Agency Agreement between Security
Equity Fund (the "Company"), a Kansas corporation having its principal place of
business at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx, 00000, and Security
Investors, LLC (the "Transfer Agent") (formerly, Security Management Company,
LLC), a Kansas limited liability company having its principal place of business
at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx 00000, is made as of August 18,
2008.
WHEREAS, the parties have entered into the Transfer Agency Agreement
dated as of February 1, 2004 (the "Agreement") which is still in full force and
effect; and
WHEREAS, on May 9, 2008, the Board of Directors authorized the Company
to offer common stock in a new series designated as All Cap Value Series;
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter contained, the Company and the Transfer Agent hereby agree as
follows:
Schedule A shall be deleted in its entirety and the attached Schedule A
inserted in lieu thereof:
IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment to the Agreement as of the day and year first above written.
Security Investors, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Security Equity Fund
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
SCHEDULE A
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN SECURITY INVESTORS, LLC
AND SECURITY EQUITY FUND
DATE: MAY 9, 2008
FUNDS
Equity Series, Alpha Opportunity Series, Global Series, Mid Cap Value Series,
Small Cap Growth Series, Select 25 Series, Small Cap Value Series, All Cap Value
Series, Mid Cap Value Institutional Fund and Global Institutional Fund.
FOURTH AMENDMENT TO TRANSFER AGENCY AGREEMENT
THIS FOURTH AMENDMENT to the Transfer Agency Agreement between Security
Equity Fund (the "Company"), a Kansas corporation having its principal place of
business at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx, 00000, and Security
Investors, LLC (the "Transfer Agent") (formerly, Security Management Company,
LLC), a Kansas limited liability company having its principal place of business
at One Security Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx 00000, is made as of January 8,
2009.
WHEREAS, the parties have entered into the Transfer Agency Agreement
dated as of February 1, 2004 (the "Agreement") which is still in full force and
effect; and
WHEREAS, on November 21, 2008, the Board of Directors authorized the
Company to offer common stock in a new series designated as All Cap Growth
Series;
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter contained, the Company and the Transfer Agent hereby agree as
follows:
Schedule A shall be deleted in its entirety and the attached Schedule A
inserted in lieu thereof:
IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment to the Agreement as of the day and year first above written.
Security Investors, LLC
By: /s/XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Security Equity Fund
By: /s/XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
SCHEDULE A
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN SECURITY INVESTORS, LLC
AND SECURITY EQUITY FUND
DATE: NOVEMBER 21, 2008
FUNDS
Equity Series, Alpha Opportunity Series, Global Series, Mid Cap Value Series,
Small Cap Growth Series, Select 25 Series, Small Cap Value Series, All Cap Value
Series, All Cap Growth Series, Mid Cap Value Institutional Fund and Global
Institutional Fund.
