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SECURITY GROWTH AND INCOME FUND
BROKERAGE ENHANCEMENT PLAN
WHEREAS, Security Growth and Income Fund (the "Fund") engages in business as an
open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act");
WHEREAS, shares of common stock of the Fund are authorized to be issued in
multiple series, but are currently issued in only a single series;
WHEREAS in the event the Fund issues its shares in more than a single series in
the future (the "Series"), such Series can be added to this Plan by listing such
Series on a Schedule and attaching the same hereto;
WHEREAS, shares of common stock of the Fund are divided into multiple classes of
shares, and this Plan applies to the Fund as a whole and the effect of the Plan
does not vary based upon a class of shares;
WHEREAS, the Fund employs Security Distributors, Inc. (the "Distributor") as
distributor of the securities of which the Fund is the issuer;
WHEREAS, the Board of Directors of the Fund (the "Board") has determined that,
subject to the requirement to seek best price and execution, it is appropriate
and desirable for the Fund to use certain brokerage commissions generated on the
purchase and sale of portfolio securities to finance activities that are
primarily intended to result in the sale of its shares (the "Brokerage
Enhancement Plan" or the "Plan");
WHEREAS, any benefits that may be obtained from brokerage commissions are assets
of the Fund, and the Fund wishes, pursuant to Rule 12b-1 under the Act, to
utilize such assets in furtherance of the distribution of the Fund's shares; and
WHEREAS, the Board has determined that, to the extent that the use of these
benefits earned by a Series under this Plan results in the increased
distribution of the Fund's shares, a benefit in the form of potential economies
of scale should inure to that Series and to the other Series offered by the
Fund;
NOW, THEREFORE, this Brokerage Enhancement Plan is adopted by the Fund on behalf
of the Series, if any, in accordance with Rule 12b-l under the Act, on the
following terms and conditions:
1. The Fund is authorized to enter into agreements or arrangements pursuant to
which the Fund may direct Security Management Company, LLC ("SMC"), in its
capacity as the Fund's investment adviser, and each of the sub-advisors, if
any, retained by SMC (and approved by the Fund) to manage certain of the
Series (each a "Sub-Advisor"), acting as agents for the Fund or its Series:
a. To place orders for the purchase or sale of portfolio securities with
the Distributor or other introducing broker-dealers who will receive a
portion of the brokerage commission paid by the Fund or its Series from
broker-dealers executing such portfolio transactions for the benefit of
the Fund or its Series ("Brokerage Payments") that can be used directly
or indirectly to finance the distribution of the Fund's shares; or
b. To allocate transactions for the purchase or sale of portfolio
securities or other assets to broker-dealers, and receive, in addition
to execution of the brokerage transaction, credits, benefits or other
services from the broker-dealer ("Brokerage Credits") that can be used
directly or indirectly to promote the distribution of the Fund's
shares;
in each case, provided that SMC or the Sub-Advisor must reasonably believe
that the Distributor or broker-dealer (or the clearing broker of either)
will execute the transaction in a manner consistent with standards of best
execution, as described in the Registration Statement for the Fund, as
amended from time to time.
2. The Fund is authorized to expend Brokerage Credits and Brokerage Payments
to compensate the Distributor and other broker-dealers for the cost and
expense of certain distribution-related activities or to procure from, or
otherwise induce, the Distributor and other broker-dealers to provide
services, where such activities or services are intended to promote the
sale of the Fund's shares. Such activities or services may be provided by
the Distributor or broker-dealer to which a purchase or sale transaction
has been allocated (the directed broker-dealer) or by another broker-dealer
or other party at the direction of the Distributor or directed
broker-dealer. The activities or services which may be procured with
Brokerage Credits and Brokerage Payments include, but are not limited to
(i) developing, preparing, printing, and mailing of advertisements, sales
literature and other promotional material describing and/or relating to the
Fund or its Series; (ii) printing and mailing of Fund prospectuses,
statements of additional information, any supplements thereto and
shareholder reports for existing and prospective shareholders; (iii)
holding or participating in seminars and sales meetings designed to promote
the distribution of shares of the Fund or its Series, including materials
intended either for broker-dealer only use or for retail use; (iv)
providing information about the Fund, its Series, or mutual funds in
general, to registered representatives of broker-dealers; (v) providing
assistance to broker-dealers that are conducting due diligence on the Fund
or its Series; (vi) payment or reimbursement of legal and administrative
costs associated with implementing the Plan; (vii) marketing fees requested
by broker-dealers who sell shares of the Fund; (viii) obtaining information
and providing explanations to shareholders regarding the Fund's or its
Series' investments and policies and other information about the Fund and
its Series, including the performance of the Fund or its Series; (ix)
training sales personnel; (x) personal service and/or maintenance of the
shareholder accounts; (xi) payment of commissions to broker-dealers who
sell shares of the Fund and (xii) financing any other activity that is
intended to result in the sale of Fund shares.
3. The Fund may direct the Distributor to take appropriate actions to effect
the purposes of this Plan, including, but not limited to, (a) directing on
behalf of the Fund or a Series and subject to the standards described
above, SMC or a Sub-Advisor to allocate transactions for the purchase or
sale of portfolio securities in the manner described in the Plan; (b)
compensating a broker-dealer for the cost and expense of certain
distribution-related activities or procuring from a broker-dealer or
otherwise inducing a broker-dealer to provide services, where such
activities or services are intended to promote the sale of shares of the
Fund or a Series, all on behalf of the Fund or a Series. Subject to the
standards set forth in Section 1, and subject to applicable law, SMC and a
Sub-Advisor may also direct brokerage transactions to a broker-dealer that
is an affiliated person of the Distributor, SMC or a Sub-Advisor. Provided
that any Brokerage Credits or Brokerage Payments directly or indirectly
inure to the benefit of those Series which generated the particular
Brokerage Credit or Brokerage Payment, any such credits or payments may
also inure to the benefit of other Series of the Fund.
4. This Plan shall not take effect with respect to a Series until it has been
approved by (a) a vote of a majority of the outstanding voting securities
of that Series; and, together with any related agreements, has been
approved by (a) the Fund's Board of Directors, and (b) those Directors of
the Fund who are not "interested persons" of the Fund (as defined in the
Act) and who have no direct or indirect financial interest in the operation
of this Plan or any agreements related to it (the "Rule 12b-l Directors"),
cast in person at a meeting (or meetings) called, at least in part, for the
purpose of voting on this Plan and such related agreements. If additional
Series of the Fund are established, this Plan shall not take effect with
respect to such Series until the Plan, together with any related
agreements, has been approved by votes of a majority of both (a) the Fund's
Board of Directors and (b) the Rule 12b-1 Directors cast in person at a
meeting called, at least in part, for the purpose of voting on such
approval.
5. After approval as set forth in paragraph 4, and any other approvals
required pursuant to the Act and Rule 12b-1 thereunder, this Plan shall
take effect at the time specified by the Fund's Board of Directors, or, if
no such time is specified by the Directors, at the time that all approvals
necessary have been obtained. The Plan shall continue in full force and
effect as to a Series for so long as such continuance is specifically
approved at least annually by votes of a majority of both (a) the Board of
Directors and (b) the Rule 12b-1 Directors of the Fund, cast in person at a
meeting called, at least in part, for the purpose of voting on this Plan.
6. The Distributor shall provide to the Directors of the Fund a written report
of the amounts expended or benefits received and the purposes for which
such expenditures were made at such frequency as may be required under Rule
12b-1 of the Act.
7. This Plan may be terminated as to the Fund or a Series at any time, without
payment of any penalty, by vote of the Directors of the Fund, by vote of a
majority of the Rule 12b-l Directors, or by a vote of a majority of the
outstanding voting securities of the Series on not more than 30 days'
written notice to any other party to the Plan. In addition, all Agreements
shall provide that such Agreement shall terminate automatically in the
event of its assignment.
8. This Plan may not be amended in any material respect unless such amendment
is approved by a vote of a majority of both (a) the Fund's Board of
Directors and (b) the Rule 12b-1 Directors cast in person at a meeting
called, at least in part, for the purpose of voting on such approval. The
Plan may not be amended to increase materially the amount to be spent for
distribution unless such amendment is approved by a majority of the
outstanding voting securities of the pertinent Series and by a majority of
both (a) the Fund's Board of Directors and (b) the Rule 12b-1 Directors
cast in person at a meeting called, at least in part, for the purpose of
voting on such approval; provided however, that increases in amounts spent
for distribution by virtue of a greater amount of Brokerage Credits or
Brokerage Payments generated by the Fund shall not be deemed to constitute
a material increase in the amount to be spent for distribution.
9. While this Plan is in effect, the selection and nomination of Directors who
are not "interested persons" (as defined in the Act) of the Fund shall be
committed to the discretion of the Directors who are not interested
persons.
10. The Fund shall preserve copies of this Plan and related agreements for a
period of not less than six years from the date of termination of the Plan
or related agreements, the first two years in an easily accessible place;
and shall preserve all reports made pursuant to paragraph 6 hereof for a
period of not less than six, the first two years in an easily accessible
place.
11. The provisions of this Plan are severable as to each Series, and any action
to be taken with respect to this Plan shall be taken separately for each
Series affected by the matter.
Date: January 27, 2000
