SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this 23rd day of October, 1998
between SECURITY MANAGEMENT COMPANY, LLC (the "Adviser"), a Kansas limited
liability company, registered under the Investment Advisers Act of 1940, as
amended (the "Investment Advisers Act"), and OPPENHEIMERFUNDS, INC. (the
"Subadviser"), a Colorado corporation registered under the Investment Advisers
Act.
WITNESSETH:
WHEREAS, SBL Fund, a Kansas corporation, is registered with the Securities
and Exchange Commission (the "Commission") as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "Investment
Company Act");
WHEREAS, SBL Fund has, pursuant to an Advisory Agreement with the
Adviser (the "Advisory Agreement"), retained the Adviser to act as investment
adviser for and to manage its assets;
WHEREAS, the Advisory Agreement permits the Adviser to delegate certain of
its duties under the Advisory Agreement to other investment advisers, subject to
the requirements of the Investment Company Act; and
WHEREAS, the Adviser desires to retain the Subadviser as subadviser for
Series D (the "Fund") of SBL Fund to act as investment adviser for and to manage
the Fund's Investments (as defined below) and the Subadviser desires to render
such services.
NOW, THEREFORE, the Adviser and Subadviser do mutually agree and promise as
follows:
1. APPOINTMENT AS SUBADVISER. The Adviser hereby retains the Subadviser to
act as investment adviser for and to manage certain assets of the Fund subject
to the supervision of the Adviser and the Board of Directors of SBL Fund and
subject to the terms of this Agreement; and the Subadviser hereby accepts such
employment. In such capacity, the Subadviser shall be responsible for the Fund's
Investments. The Subadviser shall not be responsible for any services to the
Fund or to bear any expenses other than those delineated in this Agreement.
2. DUTIES OF SUBADVISER.
(a) INVESTMENTS. The Subadviser is hereby authorized and directed and
hereby agrees, subject to the stated investment policies and
restrictions of the Fund as set forth in its prospectus and statement of
additional information as currently in effect and as supplemented or
amended from time to time (collectively referred to hereinafter as the
"Prospectus") and subject to the directions of the Adviser and SBL
Fund's Board to purchase, hold and sell investments for the account of
the Fund (hereinafter "Investments") and to monitor on a continuous
basis the performance of such Investments. The Subadviser shall give the
Fund the benefit of its best efforts in rendering its services as
Subadviser. The Subadviser may contract with or consult with such banks,
other securities firms, brokers or other parties, without additional
expense to the Fund, as it may deem appropriate regarding investment
advice, research and statistical data, clerical assistance or otherwise.
(b) BROKERAGE. The Subadviser is authorized, subject to the
supervision of the Adviser and SBL Fund's Board to establish and
maintain accounts on behalf of the Fund with, and place orders for the
purchase and sale of the Fund's Investments with or through, such
persons, brokers or dealers as Subadviser may select which may include,
to the extent permitted by the Adviser and SBL Fund, brokers or dealers
affiliated with the Subadviser, and negotiate commissions to be paid on
such transactions. The Subadviser agrees that in placing such orders it
shall attempt to obtain best execution, provided that, the Subadviser
may, on behalf of the Fund, pay brokerage commissions to a broker which
provides brokerage and research services to the Subadviser in excess of
the amount another broker would have charged for effecting the
transaction, provided (i) the Subadviser determines in good faith that
the amount is reasonable in relation to the value of the brokerage and
research services provided by the executing broker in terms of the
particular transaction or in terms of the Subadviser's overall
responsibilities with respect to the Fund and the accounts as to which
the Subadviser exercises investment discretion, (ii) such payment is
made in compliance with Section 28(e) of the Securities Exchange Act of
1934, as amended, and any other applicable laws and regulations, and
(iii) in the opinion of the Subadviser, the total commissions paid by
the Fund will be reasonable in relation to the benefits to the Fund over
the long term. In reaching such determination, the Subadviser will not
be required to place or attempt to place a specific dollar value on the
brokerage and/or research services provided or being provided by such
broker. It is recognized that the services provided by such brokers may
be useful to the Subadviser in connection with the Subadviser's services
to other clients. On occasions when the Subadviser deems the purchase or
sale of a security to be in the best interests of the Fund as well as
other clients of the Subadviser, the Subadviser, to the extent permitted
by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities to be sold or purchased in order
to obtain the most favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of securities so sold or
purchased, as well as the expenses incurred in the transaction, will be
made by the Subadviser in the manner the Subadviser considers to be the
most equitable and consistent with its fiduciary obligations to the Fund
and to such other clients. The Subadviser will report on such
allocations at the request of the Adviser, SBL Fund or SBL Fund's Board
providing such information as the number of aggregated trades to which
the Fund was a party, the broker(s) to whom such trades were directed
and the basis of the allocation for the aggregated trades. Subject to
the foregoing provisions of this subsection 2(b), the Subadviser may
also consider sales of fund shares and shares of other investment
companies managed by the Subadviser or its affiliates as a factor in the
selection of brokers or dealers for the Fund's portfolio transactions.
(c) SECURITIES TRANSACTIONS. The Subadviser and any affiliated person
of the Subadviser will not purchase securities or other instruments from
or sell securities or other instruments to the Fund ("Principal
Transactions"); PROVIDED, HOWEVER, the Subadviser may enter into a
Principal Transaction with the Fund if (i) the transaction is
permissible under applicable laws and regulations, including, without
limitation, the Investment Company Act and the Investment Advisers Act
and the rules and regulations promulgated thereunder, and (ii) the
transaction or category of transactions receives the express written
approval of the Adviser.
The Subadviser agrees to observe and comply with Rule 17j-1 under
the Investment Company Act and its Code of Ethics, as the same may be
amended from time to time. The Subadviser agrees to provide the Adviser
and SBL Fund with a copy of such Code of Ethics.
(d) BOOKS AND RECORDS. The Subadviser will maintain all books and
records required to be maintained pursuant to the Investment Company Act
and the rules and regulations promulgated thereunder solely with respect
to transactions made by it on behalf of the Fund including, without
limitation, the books and records required by Subsections (b)(1), (5),
(6), (7), (9), (10) and (11) and Subsection (f) of Rule 31a-1 under the
Investment Company Act and shall timely furnish to the Adviser all
information relating to the Subadviser's services hereunder needed by
the Adviser to keep such other books and records of the Fund required by
Rule 31a-1 under the Investment Company Act. The Subadviser will also
preserve all such books and records for the periods prescribed in part
(e) of Rule 31a-2 under the Investment Company Act, and agrees that such
books and records shall remain the sole property of the Fund and shall
be immediately surrendered to the Fund upon request. The Subadviser
further agrees that all books and records maintained hereunder shall be
made available to the Fund or the Adviser at any time upon reasonable
request and notice, including telecopy, during any business day.
(e) INFORMATION CONCERNING INVESTMENTS AND SUBADVISER. From time to
time as the Adviser or the Fund may request, the Subadviser will furnish
the requesting party reports on portfolio transactions and reports on
Investments held in the portfolio, all in such detail as the Adviser or
SBL Fund may reasonably request. The Subadviser will make available its
officers and employees to meet with SBL Fund's Board of Directors at SBL
Fund's principal place of business on due notice (but no more than once
in any 12-month period) to review the Investments of the Fund.
The Subadviser will also provide such information as is
customarily provided by a subadviser and may be required for the Fund or
the Adviser to comply with their respective obligations under applicable
laws, including, without limitation, the Internal Revenue Code of 1986,
as amended (the "Code"), the Investment Company Act, the Investment
Advisers Act, the Securities Act of 1933, as amended (the "Securities
Act") and any state securities laws, and any rule or regulation
thereunder.
(f) CUSTODY ARRANGEMENTS. The Subadviser shall provide the Fund's
custodian, on each business day with information relating to all
transactions concerning the Fund's assets.
(g) COMPLIANCE WITH APPLICABLE LAWS AND GOVERNING DOCUMENTS. In all
matters relating to the performance of this Agreement, the Subadviser
and its directors, officers, partners, employees and interested persons
shall act in conformity with SBL Fund's Articles of Incorporation,
By-Laws, and currently effective registration statement and with the
written instructions and directions of SBL Fund's Board and the Adviser,
and shall comply with the requirements of the Investment Company Act,
the Investment Advisers Act, the Commodity Exchange Act, the rules
thereunder, and all other applicable federal and state laws and
regulations.
In carrying out its obligations under this Agreement, the
Subadviser shall ensure that the Fund complies with all applicable
statutes and regulations necessary to qualify the Fund as a Regulated
Investment Company under Subchapter M of the Code (or any successor
provision), and shall notify the Adviser immediately upon having a
reasonable basis for believing that the Fund has ceased to so qualify or
that it might not so qualify in the future.
In carrying out its obligations under this Agreement, the
Subadviser shall invest the assets of Series D in such a manner as to
ensure that the Fund complies with the diversification provisions of
Section 817(h) of the Code (or any successor provision) and the
regulations issued thereunder relating to the diversification
requirements for variable insurance contracts and any prospective
amendments or other modifications to Section 817 or regulations
thereunder. Subadviser shall notify the Adviser immediately upon having
a reasonable basis for believing that the Fund has ceased to comply and
will take all reasonable steps to adequately diversify the Fund so as to
achieve compliance within the grace period afforded by Regulation
1.817-5.
The Adviser has furnished the Subadviser with copies of each of
the following documents and will furnish the Subadviser at its principal
office all future amendments and supplements to such documents, if any,
as soon as practicable after such documents become available: (i) the
Articles of Incorporation of SBL Fund, (ii) the By-Laws of SBL Fund,
(iii) SBL Fund's registration statement under the Investment Company Act
and the Securities Act of 1933, as amended, as filed with the
Commission, and (iv) any written instructions of the SBL Fund Board and
the Adviser.
(h) VOTING OF PROXIES. The Subadviser shall direct the custodian as to
how to vote such proxies as may be necessary or advisable in connection
with any matters submitted to a vote of shareholders of securities held
by the Fund.
3. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the
Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent SBL Fund or the Adviser in any way or
otherwise be deemed an agent of SBL Fund or the Adviser.
4. COMPENSATION. The Adviser shall pay to the Subadviser, for the services
rendered hereunder, an annual fee equal to a percentage of the average daily
closing value of the combined net assets of the Fund and Global Series of
Security Equity Fund, computed on a daily basis and payable monthly, as follows:
0.35 percent of such assets up to $300 million, plus 0.30 percent of such assets
over $300 million up to $750 million and 0.25 percent of such assets over $750
million. If this Agreement shall be effective for only a portion of a year, then
the Subadviser's compensation for said year shall be prorated for such portion.
For purposes of this paragraph 4, the value of the net assets of the Fund shall
be computed in the same manner at the end of the business day as the value of
such net assets is computed in connection with the determination of the net
asset value of the Fund's shares as described in the Fund's Prospectus. Payment
of the Subadviser's compensation for the preceding month shall be made as
promptly as possible after the end of each month.
5. EXPENSES. The Subadviser shall bear all expenses incurred by it in
connection with its services under this Agreement and will, from time to time,
at its sole expense employ or associate itself with such persons as it believes
to be particularly fitted to assist it in the execution of its duties hereunder.
However, the Subadviser shall not assign or delegate any of its investment
management duties under this Agreement without the approval of the Adviser and
SBL Fund's Board.
6. REPRESENTATIONS AND WARRANTIES OF SUBADVISER. The Subadviser represents
and warrants to the Adviser and the Fund as follows:
(a) The Subadviser is registered as an investment adviser under the
Investment Advisers Act;
(b) The Subadviser will immediately notify the Adviser of the
occurrence of any event that would disqualify the Subadviser from
serving as an investment adviser of an investment company pursuant to
Section 9(a) of the Investment Company Act;
(c) The Subadviser has registered as a commodities trading advisor
under the CEA with the Commodity Futures Trading Commission (the
"CFTC");
(d) The Subadviser is a corporation duly organized and validly
existing under the laws of the State of Colorado with the power to own
and possess its assets and carry on its business as it is now being
conducted;
(e) The execution, delivery and performance by the Subadviser of this
Agreement are within the Subadviser's powers and have been duly
authorized by all necessary action on the part of its shareholders, and
no action by or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Subadviser for the
execution, delivery and performance by the Subadviser of this Agreement,
and the execution, delivery and performance by the Subadviser of this
Agreement do not contravene or constitute a default under (i) any
provision of applicable law, rule or regulation, (ii) the Subadviser's
governing instruments, or (iii) any agreement, judgment, injunction,
order, decree or other instrument binding upon the Subadviser;
(f) This Agreement is a valid and binding agreement of the Subadviser;
(g) The Form ADV of the Subadviser previously provided to the Adviser
is a true and complete copy of the form filed with the Commission and
the information contained therein is accurate and complete in all
material respects as of its filing date, and does not omit to state any
material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading;
7. NON-EXCLUSIVITY. The services of the Subadviser with respect to the Fund
are not deemed to be exclusive, and the Subadviser and its officers shall be
free to render investment advisory and administrative or other services to
others (including other investment companies) and to engage in other activities.
8. REPRESENTATIONS AND WARRANTIES OF ADVISER. The Adviser represents and
warrants to the Subadviser as follows:
(a) The Adviser is registered as an investment adviser under the
Investment Advisers Act;
(b) The Adviser has filed a notice of exemption pursuant to Rule 4.14
under the CEA with the Commodity Futures Trading Commission (the "CFTC")
and the National Futures Association;
(c) The Adviser is a limited liability company duly organized and
validly existing under the laws of the State of Kansas with the power to
own and possess its assets and carry on its business as it is now being
conducted;
(d) The execution, delivery and performance by the Adviser of this
Agreement and the Advisory Agreement are within the Adviser's powers and
have been duly authorized by all necessary action on the part of its
members, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the
Adviser for the execution, delivery and performance by the Adviser of
this Agreement, and the execution, delivery and performance by the
Adviser of this Agreement do not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation, (ii) the
Adviser's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Adviser;
(e) This Agreement and the Advisory Agreement are valid and binding
agreements of the Adviser;
(f) The Form ADV of the Adviser previously provided to the Subadviser
is a true and complete copy of the form filed with the Commission and
the information contained therein is accurate and complete in all
material respects as of its filing date and does not omit to state any
material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading;
(g) The Adviser acknowledges that it received a copy of the
Subadviser's Form ADV at least 48 hours prior to the execution of this
Agreement.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE INFORMATION.
All representations and warranties made by the Subadviser and the Adviser
pursuant to Sections 6 and 8 hereof shall survive for the duration of this
Agreement and the parties hereto shall promptly notify each other in writing
upon becoming aware that any of the foregoing representations and warranties are
no longer true.
10. LIABILITY AND INDEMNIFICATION.
(a) LIABILITY. In the absence of willful misfeasance, bad faith or
gross negligence on the part of the Subadviser or a breach of its duties
hereunder, the Subadviser shall not be subject to any liability to the
Adviser, SBL Fund, or the Fund or any of the Fund's shareholders, and,
in the absence of willful misfeasance, bad faith or gross negligence on
the part of the Adviser or a breach of its duties hereunder, the Adviser
shall not be subject to any liability to the Subadviser, for any act or
omission in the case of, or connected with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale
of Investments; PROVIDED, HOWEVER, that nothing herein shall relieve the
Adviser and the Subadviser from any of their respective obligations
under applicable law, including, without limitation, the federal and
state securities laws and the CEA. The Subadviser shall not be liable to
the Adviser, SBL Fund or the Fund for any losses that may be sustained
as a result of delays in or inaccuracy of information about the Fund
provided to the Subadviser by or on behalf of the Adviser or the Fund's
Custodian.
(b) INDEMNIFICATION. The Subadviser shall indemnify the Adviser, SBL
Fund and the Fund, and their respective officers and directors, for any
liability and expenses, including attorneys' fees, which may be
sustained by the Adviser, SBL Fund or the Fund, as a result of the
Subadviser's willful misfeasance, bad faith, gross negligence, breach of
its duties hereunder or violation of applicable law, including, without
limitation, the federal and state securities laws or the CEA. The
Adviser shall indemnify the Subadviser and its officers and directors,
for any liability and expenses, including attorneys' fees, which may be
sustained as a result of the Adviser's, SBL Fund's or the Fund's willful
misfeasance, bad faith, gross negligence, breach of its duties hereunder
or violation of applicable law, including, without limitation, the
federal and state securities laws or the CEA.
11. DURATION AND TERMINATION.
(a) DURATION. This Agreement shall become effective upon the date
first above written, provided that this Agreement shall not take effect
with respect to SBL Fund unless it has first been approved (i) by a vote
of a majority of those directors of SBL Fund 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, and (ii) by
vote of a majority of SBL Fund's outstanding voting securities. This
Agreement 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 with respect to the Fund if specifically approved each
year by either (i) the Board of Directors of SBL Fund, or (ii) by the
affirmative vote of a majority of the Fund's outstanding voting
securities. In addition to the foregoing, each renewal of this Agreement
with respect to the Fund must be approved by the vote of a majority of
SBL Fund's directors 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 the renewal of
this Agreement, the Board of Directors of the Fund may request and
evaluate, and the Subadviser shall furnish, such information as may
reasonably be necessary to enable the Fund's Board of Directors to
evaluate the terms of this Agreement.
(b) TERMINATION. Notwithstanding whatever may be provided herein to
the contrary, this Agreement may be terminated at any time, without
payment of any penalty:
(i) By vote of a majority of the Board of Directors of SBL
Fund, or by vote of a majority of the outstanding voting
securities of the Fund, or by the Adviser, in each case,
upon sixty (60) days' written notice to the Subadviser;
(ii) By the Adviser upon breach by the Subadviser of any
representation or warranty contained in Section 6 hereof,
which shall not have been cured during the notice period,
upon twenty (20) days written notice;
(iii) By the Adviser immediately upon written notice to the
Subadviser if the Subadviser becomes unable to discharge
its duties and obligations under this Agreement; or
(iv) By the Subadviser upon 180 days written notice to the
Adviser and the Fund.
This Agreement shall not be assigned (as such term is defined in
the Investment Company Act) without the prior written consent of the
parties hereto. This Agreement shall terminate automatically in the
event of its assignment without such consent or upon the termination of
the Advisory Agreement.
12. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to the
Advisory Agreement and shall oversee and review the Subadviser's performance of
its duties under this Agreement. The Adviser shall remain responsible for, among
other things, providing the following services with respect to the Fund:
(a) The Adviser shall provide the Subadviser, or shall cause the
Fund's Custodian to provide to the Subadviser, on each business day as
of a time deadline to be mutually agreed upon, a report or a computer
download in a mutually acceptable software program and format, detailing
the Fund's portfolio holdings, uninvested cash, current valuations and
other information requested by the Subadviser to assist it in carrying
out its duties under this Agreement, as of the close of the prior
business day. In performing its obligations under this Agreement, the
Subadviser may rely upon the information provided to it by or on behalf
of the Adviser or the Fund's Custodian.
(b) Composition of periodic reports with respect to the Fund's
operations for shareholders of the Fund, composition of proxy materials
for meetings of the Fund's shareholders and the composition of such
registration statements as may be required by Federal and state
securities laws for the continuous public offering and sale of shares of
the Fund, as well as the determination of the net asset value of shares
of the Fund.
13. AMENDMENT. This Agreement may be amended by mutual consent of the
parties, provided that the terms of each such amendment with respect to the Fund
shall be approved by the Board of Directors of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund.
14. NOTICE. Any notice that is required to be given by the parties to each
other (or to the Fund) under the terms of this Agreement shall be in writing,
delivered, or mailed postpaid to the other party, or transmitted by facsimile
with acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Subadviser:
OppenheimerFunds, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Copy to:
OppenheimerFunds, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to the Adviser:
Security Management Company, LLC
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(d) If to SBL Fund:
SBL Fund
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▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇, Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
15. GOVERNING LAW; JURISDICTION. Except as indicated in Section 19(b) of
this Agreement, this Agreement shall be governed by and construed in accordance
with the internal laws of the State of Kansas.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall together constitute one and the same
instrument.
17. CAPTIONS. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
18. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision or applicable law, the remainder of the Agreement
shall not be affected adversely and shall remain in full force and effect.
19. CERTAIN DEFINITIONS.
(a) "BUSINESS DAY." As used herein, business day means any customary
business day in the United States on which the New York Stock Exchange
is open.
(b) MISCELLANEOUS. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the Investment Company Act shall be resolved
by reference to such term or provision of the Investment Company Act and
to interpretations thereof, if any, by the U.S. courts or, in the
absence of any controlling decisions of any such court, by rules,
regulation or order of the Commission validly issued pursuant to the
Investment Company Act. Specifically, as used herein, "investment
company," "affiliated person," "interested person," "assignment,"
"broker," "dealer" and "affirmative vote of the majority of the Fund's
outstanding voting securities" shall all have such meaning as such terms
have in the Investment Company Act. The term "investment adviser" shall
have such meaning as such term has in the Investment Advisers Act and
the Investment Company Act, and in the event of a conflict between such
Acts, the most expansive definition shall control. In addition, where
the effect of a requirement of the Investment Company Act reflected in
any provision of this Agreement is relaxed by a rule, regulation or
order of the Commission, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.
SECURITY MANAGEMENT COMPANY, LLC
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Attest: ▇▇▇ ▇. ▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇
Title: Secretary
OPPENHEIMERFUNDS, INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Attest: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Pursuant to the agreement (the "Agreement") dated October 23, 1998 by and
between Security Management Company LLC (the "Advisor") and OppenheimerFunds,
Inc. (the "Subadvisor"), the Advisor notifies the Subadvisor as follows:
1. The Subadvisor's appointment as subadvisor for SBL Fund, Series D (the
"Fund") pursuant to the Agreement takes effect as of the close of business on
October 30, 1998.
2. The Advisor shall provide to the Subadvisor, from October 30, 1998 to June
30, 1999, with reports of daily trades in the form attached hereto as Exhibit A,
and the other reports on Exhibit B, for the Fund's portfolio. Such reports shall
be provided following the close of each business day, and other reports shall be
provided on a periodic basis as reasonably requested by the Subadvisor.
SECURITY MANAGEMENT COMPANY, LLC
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
Accepted on behalf of
OPPENHEIMERFUNDS, INC.
By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
DAILY TRADES SECURITY EQUITY GLOBAL
10/27/98 thru 10/28/98
OUTSTANDING
ISSUER SECURITY NUMBER SECURITY DESCRIPTION COUNTRY OF RISK INCOME/EXPENSE SHARES/PAR ASSET GROUP CATEGORY LEVEL 1
------ --------------- -------------------- --------------- -------------- -------------- ------------ ----------------
BUY
308251 308251306 CONOCO, INC. UNITED STATES OIL - DOMESTIC 191,456,000.00 COMMON STOCK COMMON STOCKS
EXHIBIT B
REPORT FREQUENCY
Trades Report every business day
Invest One Parm 4% Report Monday of every week
Invest One Spectra 25% Report Monday of every week
Invest One Spectra 65% Report 1st business day of every month
Invest One Spectra Portfolio Holdings Report 1st business day of every month