Proxy Statement

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RqSEDTtUpmuCNZHfrQfM39AKOzAEmCh9IbYjnP5kr4cOx3KDDOizP+tY/XB7z3mQ /TWIJ/fKx430jimNjjyFyg== 0000088525-02-000016.txt : 20020414 0000088525-02-000016.hdr.sgml : 20020414 ACCESSION NUMBER: 0000088525-02-000016 CONFORMED SUBMISSION TYPE: PRE 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020417 FILED AS OF DATE: 20020208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SECURITY EQUITY FUND CENTRAL INDEX KEY: 0000088525 IRS NUMBER: 486104426 STATE OF INCORPORATION: KS FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: PRE 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-01136 FILM NUMBER: 02532173 BUSINESS ADDRESS: STREET 1: SECURITY MANAGEMENT COMPANY, LLC STREET 2: 700 SW HARRISON STREET CITY: TOPEKA STATE: KS ZIP: 66636-0001 BUSINESS PHONE: 7854313127 MAIL ADDRESS: STREET 1: SECURITY MANAGEMENT COMPANY, LLC STREET 2: 700 SW HARRISON STREET CITY: TOPEKA STATE: KS ZIP: 66636-0001 PRE 14A 1 ef-proxy.htm PRELIMINARY PROXY STATEMENT Proxy Statement

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.______)

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[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12

SECURITY EQUITY FUND
(Name of Registrant as Specified In Its Charter)

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[SBG LOGO]
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Security Benefit Life Insurance Company 700 SW Harrison St.
Security Benefit Group, Inc. Topeka, Kansas 66636-0001
Security Distributors, Inc. (785) 431-3000
Security Management Company, LLC

Dear Shareholder:

I am writing to inform you of the upcoming special meeting of stockholders of
Security Equity Fund to be held on Wednesday, April 17, 2002. Several issues
affecting the fund will be on the agenda. At this meeting you are being asked to
vote on important proposals affecting your fund. WE ASK YOU TO READ THE ENCLOSED
INFORMATION CAREFULLY AND VOTE YOUR SHARES. YOUR VOTE IS EXTREMELY IMPORTANT.

The issues to be considered at the special meeting are:

PROPOSAL NO. 1 - TO APPROVE AN AMENDMENT TO THE FUND'S INVESTMENT MANAGEMENT AND
SERVICES AGREEMENT. Stockholders of the Global and Equity Series of the fund are
voting on an amendment to the fund's Investment Management and Services
Agreement with Security Management Company, LLC ("SMC"). The amendment would
provide for SMC to receive a separate fee from the Series for investment
advisory, general administrative and accounting, and transfer agency services.

PROPOSAL NO. 2 - TO APPROVE ADOPTION OF A CLASS A DISTRIBUTION PLAN. We are
asking the Class A and Class B shareholders of the Equity, Global, Mid Cap Value
and Social Awareness Series of the fund to approve adoption of a Class A
Distribution Plan for those Series of the fund.

PROPOSAL NO. 3 - TO APPROVE A CHANGE IN THE SELECT 25 SERIES OF THE FUND FROM A
DIVERSIFIED TO A NON-DIVERSIFIED FUND. The stockholders of Select 25 Series are
asked to approve a proposal that would allow Select 25 Series to be managed as a
non-diversified fund.

The Board of Directors of the fund has unanimously approved the proposals and
recommends that you vote "FOR" them. To vote, simply complete, sign and send us
the enclosed proxy card in the envelope provided. Alternatively, you may
register your vote on the Internet at www.proxyvote.com. If you have any
questions concerning the issues to be voted on or need assistance completing
your proxy card, please contact us at 1-800-888-2461.

We appreciate your consideration of these important proposals. Thank you for
investing with the Security Funds.

Sincerely,

JAMES R. SCHMANK

James R. Schmank
President
Security Management Company, LLC

NOTICE OF
SPECIAL MEETING OF STOCKHOLDERS OF
SECURITY EQUITY FUND(R)- EQUITY SERIES, GLOBAL SERIES,
MID CAP VALUE SERIES, SOCIAL AWARENESS SERIES AND SELECT 25 SERIES
TO BE HELD APRIL 17, 2002
700 SW HARRISON ST., TOPEKA, KANSAS 66636-0001
TELEPHONE 1-800-888-2461

TO THE STOCKHOLDERS OF
> SECURITY EQUITY FUND

Notice is hereby given that a special meeting of the stockholders of the
Equity Series, Global Series, Mid Cap Value Series, Social Awareness Series and
Select 25 Series of Security Equity Fund (the "Fund"), a Kansas corporation,
will be held at the offices of Security Equity Fund, Security Benefit Group
Building, 700 SW Harrison Street, Topeka, Kansas 66636-0001, on April 17, 2002
at 9:30 a.m. local time ("Meeting"), for the following purposes:

1. To approve an amendment to the Fund's Investment Management and Services
Agreement, on behalf of Equity and Global Series, with Security
Management Company, LLC.

2. To approve adoption of a Class A Distribution Plan for the Equity,
Global, Mid Cap Value and Social Awareness Series of the Fund pursuant to
Rule 12b-1 under the Investment Company Act of 1940.

3. To approve a proposal to change Select 25 Series from a diversified to a
non-diversified fund.

4. To transact such other business as may properly come before the Meeting
or any adjournments thereof, and to adjourn the Meeting from time to
time.

The Board of Directors of the Fund has fixed the close of business on
February 19, 2002, as the record date for the determination of stockholders of
the Fund entitled to notice of and to vote at the Meeting.

THERE IS ENCLOSED A PROXY FORM SOLICITED BY THE BOARD OF DIRECTORS OF
SECURITY EQUITY FUND. ANY FORM OF PROXY THAT IS EXECUTED AND RETURNED,
NEVERTHELESS MAY BE REVOKED PRIOR TO ITS USE. ALL SUCH PROXIES PROPERLY EXECUTED
AND RECEIVED IN TIME WILL BE VOTED AT THE MEETING.

By order of the Board of Directors of
Security Equity Fund,
Topeka, Kansas AMY J. LEE
March [ ], 2002 Secretary
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IMPORTANT: STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT IN PERSON AT THE MEETING
ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) TO THE
FUND, OR OTHERWISE VOTE THEIR SHARES, AS EARLY AS POSSIBLE.

SECURITY EQUITY FUND
MEMBER OF THE SECURITY BENEFIT GROUP OF COMPANIES
700 SW HARRISON STREET, TOPEKA, KANSAS 66636-0001

SPECIAL MEETING OF STOCKHOLDERS, APRIL 17, 2002
PROXY STATEMENT
MARCH [ ], 2002

The enclosed proxy is solicited by and on behalf of the Board of Directors of
the Fund. The Board of Directors is soliciting proxies from stockholders of the
Fund with respect to the proposals set forth in the accompanying notice. We
expect to mail proxies to the Fund's stockholders on or about March __, 2002.

Stockholders of each Series will vote separately with respect to Proposal
Nos. 1, 2 and 3 as set forth in the table below.

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PROPOSAL SERIES/CLASS AFFECTED
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1. To approve an amendment to the Fund's
Investment Management and Services Equity and Global
Agreement with Security Management Series of the Fund
Company, LLC.
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2. To approve a Class A Distribution Class A Shares and Class B
Plan pursuant to Rule 12b-1 under Shares of Equity, Global,
the Investment Company Act of 1940. Mid Cap Value and Social
Awareness Series of the Fund
- --------------------------------------------------------------------------------
3. To approve a proposal to change
Select 25 Series from a diversified Select 25 Series of the Fund
to a non-diversified fund.
- --------------------------------------------------------------------------------

PROPOSAL NO. 1
APPROVAL OF AMENDMENT OF THE FUND'S
INVESTMENT MANAGEMENT AND SERVICES AGREEMENT

The Board of Directors of the Fund recommends approval of an amendment (the
"Amendment") to the Fund's current Investment Management and Services Agreement
(the "Agreement"), on behalf of Equity and Global Series, with the Fund's
investment manager, Security Management Company, LLC ("SMC" or the "Investment
Manager"). If approved by stockholders, the Amendment would: (1) change the
investment advisory fee for each of the Equity and Global Series of the Fund;
(2) impose a separate fee for administrative, accounting, transfer agency and
dividend disbursing services provided to the Equity Series and Global Series of
the Fund; and (3) provide for each of Equity Series and Global Series to pay all
of its expenses, which are currently paid by SMC.
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THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF THE ANNUAL REPORT CONTAINING
AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001, TO A
STOCKHOLDER UPON REQUEST. SUCH REQUESTS SHOULD BE DIRECTED TO THE FUND, BY
WRITING THE FUND AT 700 SW HARRISON STREET, TOPEKA, KANSAS 66636-0001, OR BY
CALLING THE FUND'S TOLL-FREE TELEPHONE NUMBER 1-800-888-2461, EXTENSION 3127.

DESCRIPTION OF EXISTING AGREEMENT AND PROPOSED AMENDMENT

SMC currently serves as the investment manager of the Equity Series and
Global Series of the Fund pursuant to the terms of the Agreement, which is dated
January 31, 1989. The Board of Directors of the Fund last approved the Agreement
on November 1, 2001. Fund stockholders last approved the Agreement on January
26, 2000, in connection with an amendment to permit SMC, with Board approval, to
enter into or amend sub-advisory agreements without stockholder approval and in
connection with the Fund's adoption of a Brokerage Enhancement Plan.

Under the Agreement, SMC provides investment advisory services, general
administrative, fund accounting, transfer agency and dividend disbursing
services and arranges for provision to the Equity Series and Global Series of
all other required services, including services of independent accountants,
legal counsel, custodial services and printing, all for a single fee. In
addition, SMC pays all expenses in connection with the performance of services
provided or procured under the Agreement, including with respect to the Equity
Series and the Global Series, all fees and charges of third parties providing
services to the Series.

As compensation for services provided to the Equity Series, the Fund pays SMC
an annual fee equal to (i) 2% of the first $10 million of the average daily net
assets, (ii) 1 1/2% of the next $20 million of the average daily net assets, and
(iii) 1% of the remaining average daily net assets of the Equity Series of the
Fund. For Global Series, the Fund pays an annual fee equal to (i) 2% of the
first $70 million of the average daily net assets, and (ii) 1 1/2% of the
remaining average daily net assets of the Global Series of the Fund. Such fees
are determined daily and payable monthly. In the fiscal year ended September 30,
2001, SMC received from the Fund fees of $8,523,319 with respect to the Equity
Series, and $1,648,290 with respect to the Global Series. No brokerage
commissions were paid by the Fund to an affiliated broker for the fiscal year
ended September 30, 2001.

Unless superseded by the proposed Amendment, the Agreement will continue in
effect until January 1, 2003, and from year to year thereafter, provided such
continuance is specifically approved by the vote of a majority of the Board of
Directors of the Fund (including a majority of such Directors who are not
parties to the Agreement or interested persons of any such party (the
"Independent Directors")) cast in person at a meeting specifically called for
voting on such renewal.

Under the terms of the Agreement, SMC is not subject to any liability for any
errors of judgment or mistake of law or for any loss sustained by reason of the
adoption of any investment policy so long as such recommendation shall have been
made with due care and in good faith. Nothing in the Agreement, however, shall
protect SMC against any liability to the Fund or its stockholders 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 the Agreement.

The Agreement may be terminated with respect to a Series without penalty at
any time upon 60 days' notice by the Board of Directors of the Fund, by vote of
the holders of a majority of the outstanding voting securities of the Series, or
by SMC. The Agreement is terminated automatically in the event of its assignment
(as such term is defined in the Investment Company Act of 1940 (the "1940
Act")).

PROPOSED AMENDMENT

SMC proposes to amend the Agreement with the Fund. The form of the Amendment,
which is attached hereto as Exhibit A, was proposed by SMC and was approved by
the Board of Directors of the Fund (including a majority of the Independent
Directors) on February 1, 2002. Other than as described below, there are no
material differences between the current Agreement and the proposed Amendment.
It is expected that the Amendment will become effective May 1, 2002 with respect
to each of Equity Series and Global Series, provided that it is approved by
stockholders of the respective Series at the Meeting. The Board also has made
the effectiveness of the Amendment with respect to each of the Equity Series and
the Global Series contingent upon approval of Proposal No. 2 by the stockholders
of the Series. If Proposal No. 1 or No. 2 is not approved, the current Agreement
will continue in effect in accordance with its terms.

The Amendment provides for SMC to receive a separate fee for providing
investment advisory services and general administrative, fund accounting,
transfer agency and dividend disbursing services. If the Amendment is approved,
the fee for advisory services will be an annual fee equal to 0.75% of the
average daily net assets of the Equity Series and 1.00% of the average daily net
assets of the Global Series. The fee for administrative services will be an
annual fee equal to 0.09% of the average daily net assets of the Equity Series
and 0.045% of the average daily net assets of the Global Series, plus a global
administration fee equal on an annual basis to the greater of (1) 0.10% of the
Global Series' average daily net assets, or (2) $60,000. For transfer agency
services, SMC will charge a maintenance fee of $8.00 per stockholder account and
a transaction fee of $1.00 per stockholder transaction, including dividends. The
amount of aggregate transfer agency fees will be paid by the Fund rather than
deducted from individual stockholder accounts.

Additional information about SMC, the Fund's investment manager,
administrator and transfer agent, as well as its managing members, officers and
affiliates, is presented in Exhibit B.

REASONS FOR THE PROPOSED AMENDMENT

The proposed new fee structure for the Equity Series and Global Series is
intended to bring the Series' fee arrangements in line with the other series of
the Fund, as well as the mutual fund industry, where most funds charge a
separate fee for investment advisory, administrative and transfer agency
services. SMC believes that the proposed fee arrangement will make it easier for
the Fund's stockholders to compare the Equity Series' and Global Series' fees
for advisory and other services to the fees of other comparable mutual funds.
SMC further believes that the new arrangement makes it possible to better match
the services provided by SMC and the fees attributable to those services.

FEES AND EXPENSES

The Amendment would affect the fees and expenses of the Equity Series and
Global Series as demonstrated by the chart below. The chart sets forth the fees
and expenses of each Series under the current Agreement during the fiscal year
ended September 30, 2001 and, on a pro forma basis, what the fees and expenses
would have been during the same period if the Amendment had been in place.

----------------------------------------------------------------
CURRENT PROPOSED PERCENTAGE
NAME OF FUND FEE STRUCTURE FEE STRUCTURE DIFFERENCE
----------------------------------------------------------------
Equity Series $8,523,319* $7,617,786 -10.62%*
8,250,936** -7.67%**
----------------------------------------------------------------
Global Series 1,648,290* 1,170,135 -29.01%*
1,496,221** -21.79%**
----------------------------------------------------------------
*Gross fees (before deducting expenses of the Series borne by
SMC).
**Net fees (after deducting expenses of the Series borne by
SMC).
----------------------------------------------------------------

The following table sets forth information concerning each of Equity and
Global Series' fees and expenses by class as a percentage of average net assets
for the fiscal year ended September 30, 2001 under the current Agreement and
assuming the Amendment and proposed Class A Distribution Plan had been in place
during the same period.

FEES AND EXPENSES OF THE SERIES

STOCKHOLDER FEES (fees paid directly from your investment). This table
describes the fees and expenses that you may pay if you buy and hold shares of
the Series.

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CLASS A CLASS B CLASS C CLASS S
SHARES SHARES(1) SHARES SHARES
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Maximum Sales Charge Imposed 5.75% None None None
on Purchases (as a percentage
of offering price)
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Maximum Deferred Sales Charge
(as a percentage of original
purchase price or redemption None(2) 5%(3) 1%(4) 6%(5)
proceeds, whichever is lower)
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1 Class B shares convert tax-free to Class A shares automatically after eight
years.
2 Purchases of Class A shares in amounts of $1,000,000 or more are not subject
to an initial sales load; however, a deferred sales charge of 1% is imposed
in the event of redemption within one year of purchase.
3 5% during the first year, decreasing to 0% in the sixth and following years.
4 A deferred sales charge of 1% is imposed in the event of redemption within
one year of purchase.
5 6% during the first year, decreasing to 0% in the eighth and following years.
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ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets).

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CLASS A CLASS B CLASS C CLASS S
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EQUITY SERIES (UNDER CURRENT AGREEMENT)
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Management fee........................ 1.02% 1.02% 1.02% 1.03%
Distribution (12b-1) fees............. 0.00% 1.00% 1.00% 1.00%
Other expenses........................ 0.00% 0.00% 0.00% 0.00%
TOTAL ANNUAL FUND OPERATING EXPENSES.. 1.02% 2.02% 2.02% 2.03%
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EQUITY SERIES (UNDER PROPOSED AMENDMENT)
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Management fee........................ 0.75% 0.75% 0.75% 0.75%
Distribution (12b-1) fees............. 0.25%1 1.00% 1.00% 1.00%
Other expenses........................ 0.20% 0.20% 0.20% 0.20%
TOTAL ANNUAL FUND OPERATING EXPENSES.. 1.20%3 1.95% 1.95% 1.95%
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GLOBAL SERIES (UNDER CURRENT AGREEMENT)
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Management fee........................ 1.90% 1.90% 1.91% 1.92%
Distribution (12b-1) fees............. 0.00% 1.00%(2) 1.00% 1.00%
Other expenses........................ 0.00% 0.00% 0.00% 0.00%
TOTAL ANNUAL FUND OPERATING EXPENSES.. 1.90% 2.90% 2.91% 2.92%
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GLOBAL SERIES (UNDER PROPOSED AMENDMENT)
- --------------------------------------------------------------------------------
Management fee........................ 1.00% 1.00% 1.00% 1.00%
Distribution (12b-1) fees............. 0.25%(1) 1.00% 1.00% 1.00%
Other expenses........................ 0.53% 0.53% 0.53% 0.53%
TOTAL ANNUAL FUND OPERATING EXPENSES.. 1.78%(3) 2.53% 2.53% 2.53%
- --------------------------------------------------------------------------------
1 Distribution Fees applicable if the Class A Distribution Plan is approved by
stockholders of the respective Series.
2 The Distributor waived deduction of part of the Class B Distribution fee
during fiscal year 2001. After the waiver, the Class B Distribution fee was
0.49%, and the actual expense ratio for the Global Series, Class B shares was
2.39%.
3 Total annual fund operating expenses assuming approval of Proposal No. 1, the
proposed new fee structure, and Proposal No. 2, the proposed Class A
Distribution Plan.
- --------------------------------------------------------------------------------

EXAMPLES: These Examples assume that you invest $10,000 in a Series for the
time periods indicated and that your investment has a 5% return each year. The
tables first show an expense example for each class assuming that the Series'
total operating expenses remain at current levels. The table then shows the
effect on expenses if the proposed Amendment and Class A Distribution Plan are
approved and implemented. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:

You would pay the following expenses if you redeemed your shares at the end
of each period.

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FUND NAME/CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------
EQUITY SERIES - A
Current Agreement $673 $ 881 $1,106 $1,751
Proposed Amendment 690 934 1,197 1,946
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EQUITY SERIES - B
Current Agreement 705 934 1,288 2,090
Proposed Amendment 698 912 1,252 2,080
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EQUITY SERIES - C
Current Agreement 305 634 1,088 2,348
Proposed Amendment 298 612 1,052 2,275
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EQUITY SERIES - S
Current Agreement 806 1,137 1,393 2,358
Proposed Amendment 798 1,112 1,352 2,275
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GLOBAL SERIES - A
Current Agreement 757 1,138 1,542 2,669
Proposed Amendment 745 1,103 1,484 2,549
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GLOBAL SERIES - B
Current Agreement 742 1,045 1,475 2,478
Proposed Amendment 756 1,088 1,545 2,682
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GLOBAL SERIES - C
Current Agreement 394 901 1,533 3,233
Proposed Amendment 356 788 1,345 2,866
--------------------------------------------------------------------
GLOBAL SERIES - S
Current Agreement 895 1,404 1,838 3,242
Proposed Amendment 856 1,288 1,645 2,866
--------------------------------------------------------------------

You would pay the following expenses if you did not redeem your shar

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FUND NAME/CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------
EQUITY SERIES - A
Current Agreement $673 $ 881 $1,106 $1,751
Proposed Amendment 690 934 1,197 1,946
--------------------------------------------------------------------
EQUITY SERIES - B
Current Agreement 205 634 1,088 2,090
Proposed Amendment 198 612 1,052 2,080
--------------------------------------------------------------------
EQUITY SERIES - C
Current Agreement 205 634 1,088 2,348
Proposed Amendment 198 612 1,052 2,275
--------------------------------------------------------------------
EQUITY SERIES - S
Current Agreement 206 637 1,093 2,358
Proposed Amendment 198 612 1,052 2,275
--------------------------------------------------------------------
GLOBAL SERIES - A
Current Agreement 757 1,138 1,542 2,669
Proposed Amendment 745 1,103 1,484 2,549
--------------------------------------------------------------------
GLOBAL SERIES - B
Current Agreement 293 898 1,528 2,987
Proposed Amendment 256 788 1,345 2,682
--------------------------------------------------------------------
GLOBAL SERIES - C
Current Agreement 294 901 1,533 3,233
Proposed Amendment 256 788 1,345 2,866
--------------------------------------------------------------------
GLOBAL SERIES - S
Current Agreement 295 904 1,538 3,242
Proposed Amendment 256 788 1,345 2,866
--------------------------------------------------------------------

BOARD CONSIDERATION OF THE AMENDMENT

The Board, including the Independent Directors, unanimously voted to approve
the Amendment and to recommend to stockholders of the respective Series that
they vote to approve the Amendment.

At its February 1, 2002 meeting, the Board of Directors of the Fund
requested, received and considered information from SMC relevant to the proposed
Amendment, including (1) a comparison of the current and proposed fee
structures; (2) overall expense ratios under the current and proposed
arrangements; (3) industry data on expenses; (4) information regarding the
nature, extent and quality of the services expected to be provided to the Series
by SMC; (5) SMC's past investment performance with respect to the Series; (6)
the costs of services to be provided by SMC; (7) other sources of revenue
accruing to SMC and its affiliates as a result of its relationship with each
Series, including any intangible benefits that accrue to SMC and its affiliates;
and (8) the profitability of SMC. The Board carefully evaluated this
information, and was advised by legal counsel with respect to its deliberations.

In unanimously approving the Amendment and recommending its approval by the
stockholders of the Equity and Global Series, the Directors, including the
Independent Directors, took into account all factors that they deemed relevant
and reached the following conclusions: (1) the existing fee structure of the
Equity Series and Global Series is not typical in the mutual fund industry, and
the Amendment would bring the fee structure into line with industry practice;
(2) the proposed fee structure would make it easier for stockholders and
investors to compare the Equity Series' and Global Series' fees for advisory and
other services to the fees of other comparable mutual funds; (3) the proposed
fee structure would allow the Directors to better match the services provided by
SMC and the fees attributable to those services, making it easier for the
Directors to monitor the reasonableness of SMC's compensation for advisory and
other services; (4) the proposed fee structure is consistent with the fee
structure of other funds in the Security Funds complex; (5) the aggregate fees
for investment advisory, general administrative, fund accounting, transfer
agency and dividend disbursing services under the proposed fee structure would
be slightly lower than such fees under the current arrangement; and (6)
compensation to be paid SMC under the Amendment is fair and reasonable with
regard to each of Equity Series and Global Series in light of the services to be
provided and the anticipated costs of those services, and is comparable to
management fees paid by comparable funds. Based on the foregoing considerations,
and such other factors as the Board considered to be relevant, the Board
determined that the Amendment is in the best interests of the respective Series
and their stockholders and authorized submission of the proposal to stockholders
of the Series, although the Board determined to make implementation of the
Amendment contingent with respect to each Series upon approval of a Class A
Distribution Plan by the Class A stockholders of the Series. Accordingly, if
Proposal No. 1 is approved by the stockholders of a Series, the Board will not
implement the Amendment unless the Class A stockholders of that Series also
approve Proposal No. 2.

THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT
YOU VOTE FOR PROPOSAL NO. 1. UNMARKED PROXIES WILL BE SO VOTED.

PROPOSAL NO. 2
APPROVAL OF CLASS A DISTRIBUTION PLAN

INTRODUCTION

At a meeting held on February 1, 2002, the Board of Directors approved as in
the best interests of each of the Equity Series, Global Series, Mid Cap Value
Series and Social Awareness Series (collectively, the "Series" for purposes of
Proposal No. 2) and the Class A stockholders of each Series a Distribution Plan,
effective February 1, 2002, under which the Fund may use up to 0.25% of the
average daily net assets attributable to Class A shares of the Series to pay
for, among other things, the promotion and distribution of the Series' Class A
shares and the provision of services to the beneficial owners of Class A shares.
The proposed Distribution Plan is comparable to plans that currently are in
place with respect to the Class A shares of the other series of the Fund. The
Board's approval of the Distribution Plan with respect to the Class A shares of
each of the Equity Series and Global Series is not contingent upon approval of
Proposal No. 1 by the stockholders of those Series; if Proposal No. 1 is not
approved with respect to those Series, the Distribution Plan will be implemented
if approved by Class A stockholders of those Series.

As discussed in more detail below, the Directors approved the Distribution
Plan because they believe that it offers several potential benefits to the
Series and Class A stockholders despite the increase in the Series' operating
expenses. In particular, the Distribution Plan will finance an array of
services, described in more detail below, that Class A stockholders may consider
to be helpful. In addition, the Distribution Plan should assist the Series in
competing for investor dollars in a highly competitive marketplace. A greater
degree of competitiveness may result in greater assets in the Series (and
greater retention of assets), which benefits the Series and Class A stockholders
by offering the potential for increased investment opportunities and portfolio
diversification, more efficient portfolio management and more complete
investment of the Series' portfolios, reduced per share expenses by spreading
fixed costs across a larger asset base, and mitigation of dissipating assets
(with a corresponding increase in per share expenses) in the event of market
declines.

The Board recommends that the Class A stockholders approve the proposed
Distribution Plan, a form of which is attached as Exhibit C.

DESCRIPTION OF THE DISTRIBUTION PLAN

The proposed Distribution Plan authorizes payments from assets attributable
to Class A shares for a variety of services with respect to Class A shares,
including any type of activity that is primarily intended to result in the sale
of the Class A shares, as determined by the Board, as well as related
stockholder services authorized by the Board. The Distribution Plan relies on
the provisions of Rule 12b-1 under the 1940 Act, to the extent applicable, to
make these payments.

The proposed Distribution Plan authorizes payments as compensation or
reimbursement for a wide variety of services including, without limitation, the
following:

1. Preparation, printing and distribution of the prospectus and statement of
additional Information and any supplement thereto used in connection with
the offering of the Series' shares to the public;

2. Printing of additional copies of reports and other communications which were
prepared by the Fund for distribution to existing stockholders for use by
the Series' Distributor as sales literature;

3. Preparation, printing and distribution of any other sales literature used in
connection with the offering of the Series' shares to the public;

4. Expenses incurred in advertising, promoting and selling shares of the Series
to the public;

5. Any stockholder service fees paid by the Distributor to securities dealers
or other entities that have executed an Agreement with the Distributor.
Stockholder service fees shall include fees for account maintenance and
personal service to stockholders, including, but not limited to, answering
routine customer inquiries regarding the Fund, assisting customers in
changing dividend options, account designations and addresses, and in
enrolling into any of several special investment plans offered in connection
with the purchase of the Series' Class A shares, assisting in the
establishment and maintenance of customer accounts and records and in the
processing of purchase and redemption transactions, investing dividends and
capital gains distributions automatically in shares, providing
sub-administration and/or sub-transfer agency services for the benefit of
the Fund and providing such other services as the Fund or the customer may
reasonably request;

6. Commissions to sales personnel for selling shares of the Series and interest
expenses related thereto; and

7. Expenses incurred in promoting sales of shares of the Series by securities
dealers, including the costs of preparation of materials for presentations,
travel expenses, costs of entertainment, and other expenses incurred in
connection with promoting sales of Series shares by dealers.

The Fund's Distributor, Security Distributors, Inc. ("SDI"), may also use
amounts generated under the Plan to defray legal and administrative costs
associated with implementation of the Plan.

The proposed Distribution Plan authorizes payment of compensation or
reimbursement in an amount up to 0.25%, on an annual basis, of the average daily
net assets attributable to Class A shares. Payments under the Distribution Plan
may be made directly by the Fund, or indirectly through the Fund's Distributor.
In accordance with Conduct Rule 2830 of the National Association of Securities
Dealers, Inc. (a broker-dealer self-regulatory organization), the entire payment
under the Distribution Plan may constitute a "service fee," as that term is
defined in that Conduct Rule. Payments generally will be accrued daily and paid
monthly, or at such other intervals as the Board may determine. As required by
applicable law, the Board will review, at least quarterly, written reports
concerning the amounts expended under the Distribution Plan and the purposes for
which the expenditures were made.

The following table sets forth information concerning the fees and expenses
of Mid Cap Value and Social Awareness Series' Class A shares as a percentage of
average net assets for the fiscal year ended September 30, 2001 under each
Series' current fee structure and assuming the proposed Class A Distribution
Plan had been in place during the same period. (Information concerning Equity
and Global Series' fees and expenses is set forth above under "Fees and Expenses
of the Series," which begins on page 4.)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets).

- --------------------------------------------------------------------------------
CLASS A
- --------------------------------------------------------------------------------
MID CAP VALUE SERIES (UNDER CURRENT FEE STRUCTURE)
- --------------------------------------------------------------------------------
Management fee....................................................... 1.00%
Distribution (12b-1) fees............................................ 0.00%
Other expenses....................................................... 0.30%
TOTAL ANNUAL FUND OPERATING EXPENSES................................. 1.30%
- --------------------------------------------------------------------------------
MID CAP VALUE SERIES (UNDER PROPOSED FEE STRUCTURE)
- --------------------------------------------------------------------------------
Management fee....................................................... 1.00%
Distribution (12b-1) fees............................................ 0.25%(1)
Other expenses....................................................... 0.30%
TOTAL ANNUAL FUND OPERATING EXPENSES................................. 1.55%
- --------------------------------------------------------------------------------
SOCIAL AWARENESS SERIES (UNDER CURRENT FEE STRUCTURE)
- --------------------------------------------------------------------------------
Management fee....................................................... 1.00%
Distribution (12b-1) fees............................................ 0.00%
Other expenses....................................................... 0.43%
TOTAL ANNUAL FUND OPERATING EXPENSES................................. 1.43%
- --------------------------------------------------------------------------------
SOCIAL AWARENESS SERIES (UNDER PROPOSED FEE STRUCTURE)
- --------------------------------------------------------------------------------
Management fee....................................................... 1.00%
Distribution (12b-1) fees............................................ 0.25%(1)
Other expenses....................................................... 0.43%
TOTAL ANNUAL FUND OPERATING EXPENSES................................. 1.68%
- --------------------------------------------------------------------------------
1 Distribution Fees applicable if the Class A Distribution Plan is approved by
stockholders of the respective Series.
- --------------------------------------------------------------------------------

EXAMPLES: These Examples assume that you invest $10,000 in a Series for the
time periods indicated and that your investment has a 5% return each year. The
tables first show an expense example for Class A shares assuming that the
Series' total operating expenses remain at current levels. The table then shows
the effect on expenses if the proposed Class A Distribution Plan is approved and
implemented. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

You would pay the following expenses if you redeemed your shares at the end
of each period.

---------------------------------------------------------------------------
Fund Name/Class 1 Year 3 Years 5 Years 10 Years
---------------------------------------------------------------------------
MID CAP VALUE SERIES - A
Current Fee Structure $700 $ 963 $1,247 $2,053
Proposed Fee Structure 724 1,036 1,371 2,314
---------------------------------------------------------------------------
SOCIAL AWARENESS SERIES - A
Current Fee Structure 712 1,001 1,312 2,190
Proposed Fee Structure 736 1,074 1,435 2,448
---------------------------------------------------------------------------

You would pay the following expenses if you did not redeem your shares.

The Distribution Plan provides that it must initially be approved, and is
subject to renewal on an annual basis, by the Board, including approval by a
majority of the Directors who are not "interested persons" of the Fund for
regulatory purposes and who do not have any direct or indirect financial
interest in the operation of the Distribution Plan or any related agreement (the
"Plan Directors"). In addition, the Distribution Plan requires that its
provisions relating to payment for services that are primarily intended to
result in the sale of Class A shares be approved with respect to each Series by
a vote of at least a "majority of the outstanding voting securities" of the
Class A shares of the Series. This standard is described in more detail below
under "VOTING INFORMATION - Required Vote." Plan Directors must approve any
material amendments to the Distribution Plan, and Class A stockholders must
approve any amendment that would materially increase the amount to be spent for
services and activities that are primarily intended to result in the sale of
Class A shares. The Distribution Plan also may be terminated with respect to a
Series at any time by the vote of a majority of Plan Directors, or by a vote of
a majority of the outstanding voting securities of the Class A shares of that
Series.

Because Class B shares convert to Class A shares on the eighth anniversary of
purchase, Class B shareholders are also entitled to vote on approval of the
Distribution Plan. If a "majority of the outstanding voting securities" of the
Class B shares of the Series do not approve the Distribution Plan, but the
Distribution Plan is approved by the Class A shares, the Class B shares will
convert to a separate class of shares that is on the same terms as Class A
shares before implementing the Distribution Plan.

The attached form of the Distribution Plan qualifies in its entirety the
foregoing description of that Plan.

BOARD CONSIDERATION OF THE DISTRIBUTION PLAN

The Board has concluded that the Distribution Plan is reasonably likely to
benefit the Fund, the Series and the Class A stockholders of the Series.
Accordingly, the Directors, including the Plan Directors, have unanimously
approved the Distribution Plan with respect to Class A shares and the payment of
fees accrued thereunder pending stockholder approval, and have authorized the
submission of the Distribution Plan to Class A stockholders of the Series for
their approval.

The Board requested information from Fund management to determine whether it
was appropriate to approve the Distribution Plan and to recommend its approval
by Class A stockholders of the Series. The Board carefully evaluated this
information, and was advised by legal counsel with respect to its deliberations.

The Directors decided to approve the Distribution Plan and recommend that
Class A stockholders approve the Plan on the basis of the following
considerations, among others:

1. The Distribution Plan will permit the financing of a broad array of
activities and services that are a potential source of benefit to Class A
investors, and which frequently are available to retail investors in mutual
funds;

2. The financing of a broad array of activities and services may make the Class
A shares a more attractive investment alternative in a very competitive
marketplace. Increased competitiveness may result in increased assets (and
increased retention of assets), which can benefit the Series and investors
in the Series by potentially increasing investment opportunities and
diversification, permitting more efficient portfolio management and more
complete investment of the Series' portfolios, reducing per share expenses
by spreading fixed costs [that are not covered under the Investment
Management and Services Agreement] across a larger asset base, and
mitigating dissipation of assets (with a corresponding increase in per share
expenses) in the event of market declines;

3. The Distribution Plan may open up new distribution channels for selling
Class A shares, such as financial intermediaries relying on ongoing payments
of distribution and/or service fees. Increased opportunities for
distribution may help maintain and increase asset levels, which, as
discussed above, can benefit Class A investors;

4. The Distribution Plan may provide greater incentive to SDI and others to
incur promotional expenses on behalf of Class A shares, which may assist in
asset growth;

5. The absence of any means to finance promotional activities may make the
Class A shares a less desirable investment option, which may lead to a
dissipation of assets to the detriment of the Fund, the Series and Class A
investors;

6. The fees that may be paid under the Distribution Plan are appropriate and
reasonable in light of the services financed under the Distribution Plan,
and are consistent with industry standards regarding payment for these
activities and services; and

7. The Distribution Plan provides a high degree of certainty regarding
compliance with applicable regulations relating to payments for the services
and activities financed by the Distribution Plan, as it explicitly is
subject to the substantive and procedural requirements of Rule 12b-1.

Based on its review of the information requested and provided, the Board
determined that the Distribution Plan was reasonably likely to benefit the Fund,
the Series and Class A stockholders, and was consistent with the best interests
of the Series and Class A investors. Accordingly, in light of the above
considerations and such other factors and information it considered relevant,
the Board unanimously approved the Distribution Plan and recommended the
Distribution Plan's approval by Class A stockholders of the Series.

THE BOARD, INCLUDING THE PLAN DIRECTORS, UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR PROPOSAL NO. 2. UNMARKED PROXIES WILL BE SO VOTED.

PROPOSAL NO. 3
APPROVAL OF CHANGE FROM DIVERSIFIED
TO NON-DIVERSIFIED FUND

Select 25 Series seeks long-term growth of capital, which it provides by
focusing its investments in a core position of 20-30 common stocks of growth
companies which have exhibited consistent above average earnings and/or revenue
growth. Select 25 Series currently is managed as a diversified fund as defined
in the 1940 Act. This means that, with respect to 75% of its total assets,
Select 25 Series will not invest more than 5% of its total assets in the
securities of a single issuer or own more than 10% of the outstanding voting
securities of a single issuer.

At a meeting held on February 1, 2002, the Board of Directors approved a
recommendation by SMC that Select 25 Series be managed as a non-diversified
fund. "Non-diversified" means that the proportion of the Select 25 Series'
assets that may be invested in the securities of a single issuer is not limited
by the 1940 Act. However, to meet federal tax requirements for qualification as
a regulated investment company, a non-diversified management investment company
may have: (1) no more than 25% of its total assets invested in the securities of
any one issuer (other than U.S. government securities or shares of other
regulated investment companies); and (2) with respect to 50% of its total
assets, must not invest more than 5% of its total assets in the securities of a
single issuer and must not own more than 10% of outstanding voting securities of
a single issuer.

Because the proposal constitutes a change to a fundamental investment policy
of the Select 25 Series, stockholder approval is required for the change.

SMC has recommended the change to allow the Series to hold larger positions
in a smaller number of securities than a diversified fund. While non-diversified
fund can be expected to be more volatile than a diversified fund, SMC believes
that the objective of the Series can best be served by taking larger positions
in a smaller number of securities.

An investment in a fund that is non-diversified potentially entails greater
risk than an investment in a diversified fund. When a fund is non-diversified,
there is a higher limit on the percentage of assets that can be invested in any
single issuer. A higher percentage of investments among fewer issuers may result
in greater volatility in the total market value and share price of the Select 25
Series'. In addition, a single security's increase or decrease in value may have
a greater impact on the Select 25 Series' net asset value and total return.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR PROPOSAL NO. 3. UNMARKED
PROXIES WILL BE SO VOTED.

OTHER MATTERS

The Board of Directors of the Fund is not aware of any other matters to come
before the Meeting or any adjournments thereof other than those specified
herein. If any other matters should come before the Meeting, it is intended that
the persons named as proxies in the enclosed form(s) of proxy, or their
substitutes, will vote the proxy in accordance with their best judgment on such
matters.

VOTING INFORMATION

Each share of stock is entitled to one vote, and stockholders of each Series
(or class thereof) will vote separately with respect to each proposal on which
they are entitled to vote. Only Fund stockholders of record at the close of
business on February 19, 2002 (the "Record Date"), are entitled to vote at the
Meeting. On that date, the outstanding number of shares entitled to vote on the
proposals of each of Equity Series, Global Series, Mid Cap Value Series, Social
Awareness Series and Select 25 Series of the Fund was as follows:

------------------------------------------------------------------------
SHARES OUTSTANDING
--------------------------------------------
SERIES OF COMMON STOCK CLASS A CLASS B ALL CLASSES COMBINED
------------------------------------------------------------------------
Equity Series
------------------------------------------------------------------------
Global Series
------------------------------------------------------------------------
Mid Cap Value Series
------------------------------------------------------------------------
Social Awareness Series
------------------------------------------------------------------------
Select 25 Series
------------------------------------------------------------------------

As of the Record Date, the following persons owned beneficially more than 5%
of a Series, or of a class thereof:

- ----------------------------------------------------------------------------------------
% OF
SERIES'/CLASS'
NUMBER OF OUTSTANDING
SERIES/CLASS NAME* SHARES OWNED SHARES
- ----------------------------------------------------------------------------------------
Equity Security Benefit Life Insurance Co.
---------------------------------------------------------------------
Security Benefit Life Ins. Co. Trste.
Agent for Security Benefit Life
- ----------------------------------------------------------------------------------------
Global Security Benefit Group, Inc.
- ----------------------------------------------------------------------------------------
Mid Cap Value
- ----------------------------------------------------------------------------------------
Social Awareness
- ----------------------------------------------------------------------------------------
Select 25
- ----------------------------------------------------------------------------------------
*All located at 700 SW Harrison Street, Topeka, Kansas 66636-0001 unless otherwise
noted.
- ----------------------------------------------------------------------------------------

The following chart shows the shares of common stock of the Series
beneficially owned, as a group, by the Directors and the chief executive officer
of the Fund as of December 31, 2001:

The following chart shows the shares of common stock of the Series beneficially
owned, individually, by the Directors and the chief executive officer of the
Fund as of December 31, 2001:

- --------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY
OWNED BY ALL DIRECTORS AND CHIEF PERCENTAGE
EXECUTIVE OFFICER INDIVIDUALLY OF CLASS
-----------------------------------------------------
SERIES CLASS A CLASS A
- --------------------------------------------------------------------------------
Equity Series John D. Cleland - 19,904.275 shares 0.023%
James R. Schmank - 57,810.977 shares 0.067%
Penny A. Lumpkin - 2,105.839 shares 0.002%
Donald A. Chubb, Jr. - 3,462.110 shares 0.006%
- --------------------------------------------------------------------------------
John D. Cleland - 2,083.735 shares 0.043%
James R. Schmank - 11,244.149 shares 0.234%
Global Series Penny A. Lumpkin - 1,893.851 shares 0.039%
Donald A. Chubb, Jr. - 691.097 shares 0.014%
- --------------------------------------------------------------------------------
John D. Cleland - 6,905.068 shares 0.218%
Mid Cap Value Series James R. Schmank - 7,784.815 shares 0.245%
Penny A. Lumpkin - 346.047 shares 0.011%
- --------------------------------------------------------------------------------
Small Cap Growth Series John D. Cleland - 4,697.917 shares 0.290%
James R. Schmank - 4,486.242 shares 0.277%
- --------------------------------------------------------------------------------
John D. Cleland - 11,006.499 shares 0.580%
James R. Schmank - 6,681.677 shares 0.352%
Select 25 Series Penny A. Lumpkin - 848.176 shares 0.045%
Donald A. Chubb, Jr. - 4,424.071 0.233%
- --------------------------------------------------------------------------------
Large Cap Growth Series James R. Schmank - 651.152 shares 0.129%
- --------------------------------------------------------------------------------
Technology Series John D. Cleland - 7,500.000 shares 0.726%
James R. Schmank - 2,821.611 shares 0.273%
- --------------------------------------------------------------------------------
Total Return Series Donald A. Chubb, Jr. - 961.458 shares 0.289%
- --------------------------------------------------------------------------------
No Director or "named executive officer" of the Fund beneficially owned any
shares of common stock of the Series as of December 31, 2001, except as shown in
the above chart.
- --------------------------------------------------------------------------------

You may vote in person at the Meeting, by telephone, by Internet, or by
returning your completed proxy card in the postage-paid envelope provided.
Details can be found on the enclosed proxy insert. Do not return your proxy card
if you are voting by telephone or Internet. You may revoke your proxy by
submitting another proxy or a notice of revocation of your proxy in proper form
to the Secretary of the Fund, or by voting the shares in person at the Meeting.
However, attendance in person at the Meeting, by itself, will not revoke a
previously tendered proxy. A second proxy form may be obtained from the
Secretary of the Fund.

The presence, in person or by proxy, of more than 50% of the outstanding
shares of each Fund that are entitled to vote on a proposal will be sufficient
to establish a quorum for the conduct of business at the Meeting. Shares held by
stockholders present in person or represented by proxy at the Meeting will be
counted both for the purpose of determining the presence of a quorum and for
calculating the votes cast on the proposals before the Meeting. Shares
represented by timely and properly executed proxies will be voted as specified.
Executed proxies that are unmarked will be voted in favor of the proposals
presented at the Meeting.

If a proxy represents a broker "non-vote" (that is, a proxy from a broker or
nominee indicating that such a person has not received instructions from the
beneficial owner or other person entitled to vote shares of the Fund on a
particular matter with respect to which the broker or nominee has discretionary
power) or is marked with an abstention (collectively "abstentions"), the Fund's
shares represented thereby will be considered to be present at the Meeting for
purposes of determining the existence of a quorum for the transaction of
business. Abstentions, however, will have the effect of a "no" vote for the
purpose of obtaining requisite approval for the proposals described herein and
any other proposal that may come before the Meeting.

In the event that a sufficient number of votes to approve a proposal were not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of voting instructions, or for any
other purpose. A vote may be taken on any proposal prior to an adjournment if
sufficient votes have been received for approval. Any adjournment will require
the affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. Unless otherwise instructed, proxies will be voted in favor
of any adjournment. At any subsequent reconvening of the Meeting, proxies
(unless previously revoked) will be voted in the same manner as they would have
been voted at the Meeting.

REQUIRED VOTE

Each proposal must be approved by the vote of a "majority of outstanding
voting securities," as defined in the 1940 Act, of each Series that are entitled
to vote on the proposal, which requires the approval of the lesser of (a) 67% or
more of the Series' shares that are present or represented by proxy at the
Meeting, if the holders of more than 50% of the outstanding shares of the Series
that are entitled to vote are present in person or represented by proxy at the
Meeting, or (b) more than 50% of all outstanding shares of the Series that are
entitled to vote.

PROXY SOLICITATION

SMC will bear the cost of soliciting proxies. In addition to solicitations by
mail, some of the Investment Manager's officers and employees, without extra
remuneration, may conduct additional solicitation by telephone, telegraph and
personal interviews. To ensure that sufficient shares of common stock are
represented at the Meeting to permit approval of the proposals set forth herein,
the Fund may retain the services of a proxy solicitor to assist in soliciting
proxies for a fee, plus reimbursement of out-of-pocket expenses.

STOCKHOLDER PROPOSALS

Unless otherwise required under the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of stockholders. Stockholders
wishing to submit proposals for inclusion in a proxy statement for a subsequent
stockholders' meeting should send their written proposals to the Secretary of
the Fund at the address set forth on the cover of this proxy statement.

Proposals must be received a reasonable time prior to the date of a meeting
of stockholders to be considered for inclusion in the proxy materials for a
meeting. Timely submission of a proposal does not, however, necessarily mean
that the proposal will be included. Persons named as proxies for any subsequent
stockholders' meeting will vote in their discretion with respect to proposals
submitted on an untimely basis.

By order of the Board of Directors of
Security Equity Fund,
AMY J. LEE
Secretary

EXHIBIT A
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AND SERVICES AGREEMENT

This Agreement, made and entered into this 27th day of January, 2000, and
amended and restated effective as of the 1st day of May, 2002, by and between
SECURITY EQUITY FUND, a Kansas corporation (hereinafter referred to as the
"Fund"), and SECURITY MANAGEMENT COMPANY, LLC, a Kansas limited liability
company (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

WHEREAS, 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 for the purchase of securities of the Fund and the
sales 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) 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) arrange for, and monitor, 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. The Fund shall bear the expense of such other
services and all other expenses of the Fund. 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, except as provided
otherwise 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;

(iv) any extraordinary expenses approved by the Board of Directors
of the Fund; and

(v) distribution fees paid under the Fund's Class A, Class B, Class
C and Class S Distribution Plans;

and, in addition to those expenses set forth above, the Fund shall pay
all of its expenses whether or not billed to the Fund, SMC or any
related entity, including, but not limited to the following: Board of
Directors' fees; legal, auditing and accounting expenses; insurance
premiums; broker's commissions; taxes and governmental fees and any
membership dues; fees of custodian; expenses of obtaining quotations
on the Fund's portfolio securities and pricing of the Fund's shares;
costs and expenses in connection with the registration of the Fund's
capital stock under the Securities Act of 1933 and qualification of
the Fund's capital stock under the Blue Sky laws of the states where
such stock is offered; costs and expenses in connection with the
registration of the Fund under the 1940 Act and all periodic and other
reports required thereunder; expenses of preparing, printing and
distributing reports, proxy statements, prospectuses, statements of
additional information, notices and distributions to stockholders;
costs of stockholder and other meetings; and expenses of maintaining
the Fund's corporate existence.

(c) EXPENSE CAP. For each of the Fund's full fiscal years that this
Agreement remains in force, SMC agrees that if total annual expenses
of each Series of the Fund identified below, exclusive of interest,
taxes, extraordinary expenses (such as litigation), brokerage fees and
commissions, and 12b-1 fees paid under a Fund's Class A, Class B,
Class C or Class S Distribution Plans, but inclusive of SMC's
compensation, exceeds the amount set forth below (the "Expense Cap"),
SMC shall contribute to such Series such funds or waive such portion
of its fee, adjusted monthly, as may be required to insure that the
total annual expenses of the Series shall not exceed the Expense Cap.
If this Agreement shall be effective for only a portion of a Series'
fiscal year, then the maximum annual expenses shall be prorated for
such portion.

EXPENSE CAP

International Series, Class A, B, C and S shares - 2.25%
Enhanced Index Series, Class A, B, C and S shares - 1.75%
Select 25 Series, Class A, B, C and S shares - 1.75%

3. COMPENSATION OF SMC.

(a) As compensation for the investment advisory services to be rendered by
SMC to Global Series, Social Awareness Series, Mid Cap Value Series,
Small Cap Growth Series, Large Cap Growth Series and Technology
Series, for each of the years this Agreement is in effect, each of the
foregoing Series shall pay SMC an annual fee equal to 1.00% of its
respective average daily net assets. Such fee shall be calculated
daily and payable monthly. As compensation for the investment advisory
services to be rendered by SMC to International Series for each of the
years this Agreement is in effect, the International Series shall pay
SMC an annual fee equal to 1.10% of its average daily net assets. Such
fee shall be calculated daily and payable monthly. As compensation for
the investment advisory services to be rendered by SMC to Equity
Series, Total Return Series, Enhanced Index Series and Select 25
Series for each of the years this Agreement is in effect, each of the
foregoing Series shall pay SMC an annual fee equal to 0.75% of its
respective average daily net assets. Such fee shall be calculated
daily and payable monthly. As compensation for the administrative
services to be rendered by SMC to Global, International and Technology
Series, each of the foregoing Series shall pay SMC an annual fee equal
to 0.045% of its average daily net assets, plus the greater of 0.10%
of its average daily net assets or $60,000. Such fees shall be
calculated daily and payable monthly. As compensation for the
administrative services to be rendered by SMC to each of the other
Series of the Fund, each such Series shall pay SMC an annual fee equal
to 0.09% of its average daily net assets. Such fees shall be
calculated daily and payable monthly. If this Agreement shall be
effective for only a portion of a year, then SMC's compensation for
said year shall be prorated for such portion. For purposes of this
Section 3, the value of the net assets of each Series 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.

For transfer agency services provided by SMC to each Series of the
Fund, each Series shall pay a Maintenance Fee of $8.00 per account, a
Transaction Fee of $1.00 per transaction per account and a Dividend
Fee of $1.00 per dividend per account. For the purpose of calculating
the Maintenance, Transaction and Dividend Fees applicable to each
Series, SMC may count as a shareholder account each person that holds
a beneficial interest in an omnibus account maintained on SMC's
transfer agency system by a third-party administrator, broker/dealer,
bank, insurance company or other entity; provided that SMC is paying
such third-party administrator, broker/dealer, bank, insurance company
or other entity sub-administrative, sub-accounting and/or sub-transfer
agency fees for keeping individual shareholder records in connection
with an investment in the Fund.

(b) For each of the Fund's fiscal years this Agreement remains in force,
SMC agrees that if total annual expenses of any Series of the Fund,
exclusive of interest and taxes, extraordinary expenses (such as
litigation) and distribution fees paid under the Fund's Class A, Class
B, Class C and Class S Distribution Plans, but inclusive of SMC's
compensation, exceed any expense limitation imposed by state
securities law or regulation in any state in which shares of such
Series of the Fund are then qualified for sale, as such regulations
may be amended from time to time, SMC will contribute to such Series
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 Series' 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
a Series shall not be deemed to be expenses within the meaning of this
paragraph (b).

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) SUBADVISERS. Subject to the provisions of the 1940 Act and any
applicable exemptions thereto, SMC is authorized, but is under no
obligation, to enter into sub-advisory agreements (the "Sub-Advisory
Agreements") with one or more subadvisers (each a "Subadviser") to
provide investment advisory services to any series of the Fund. Each
Subadviser shall have investment discretion with respect to the assets
of the series assigned to that Subadviser by SMC. Consistent with the
provisions of the 1940 Act and any applicable exemption thereto, SMC
may enter into Sub-Advisory Agreements or amend Sub-Advisory
Agreements without the approval of the shareholders of the effected
series.

(i) Transactions in portfolio securities shall be effected by SMC,
through brokers or otherwise (including affiliated brokers), 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.

(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 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 SMC
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.

(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 Section 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 or 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 agreement, to an affiliated company, whether or not by formal
written agreement, or to any third party, provided that such
arrangement with a third party has been approved by the Board of
Directors of the Fund. 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 their own accounts or for the accounts of others for whom they 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 May 1, 2002, provided that on or before that date it has been
approved by the holders of a majority of the outstanding voting securities
of each series of the Fund. This Agreement shall continue in force until
May 1, 2004, and for successive 12-month periods thereafter, unless
terminated, provided each such continuance is specifically approved at
least annually by (a) the vote of a majority of the entire Board of
Directors of the Fund, and the vote of a majority of the directors of the
Fund who are not parties to this Agreement or interested persons (as such
terms are defined in the Investment Company Act of 1940) of any such party
cast in person at a meeting of such directors called for the purpose of
voting upon such approval, or (b) by the vote of the holders of a majority
of the outstanding voting securities of each series of the Fund (as defined
in the 1940 Act). In the event a majority of the outstanding shares of one
series vote for continuance of the Agreement, it will be continued for that
series even though the Agreement is not approved by either a majority of
the outstanding shares of any other series or by a majority of outstanding
shares of the Fund.

Upon this Agreement becoming effective, any previous Agreement between the
Fund and SMC providing for investment advisory, administrative and/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 as to any series of the Fund
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 applicable series 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 EQUITY FUND

By
-------------------------------
Title: President

ATTEST:

- ---------------------------------------
Secretary

SECURITY MANAGEMENT COMPANY, LLC

By
-------------------------------
Title: President

ATTEST:

- ---------------------------------------
Secretary

SCHEDULE A
INVESTMENT ADVISORY, ADMINISTRATIVE SERVICES
AND TRANSFER AGENCY AGREEMENT

SCHEDULE OF ADMINISTRATIVE AND FUND ACCOUNTING FACILITIES AND SERVICES

Security Management Company, LLC agrees to provide the Fund the following
administrative facilities and services.

1. FUND AND PORTFOLIO ACCOUNTING

a. Maintain Fund General Ledger and Journal.

b. Prepare and record disbursements for direct Fund expenses.

c. Prepare daily money transfers.

d. Reconcile all Fund bank and custodian accounts.

e. Assist 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 1940 Act 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. Report to the Audit Committee of the Board of Directors.

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 1940 Act 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
provision of the 1940 Act and the Securities Act of 1933.

SCHEDULE OF SHARE TRANSFER AND DIVIDEND DISBURSING SERVICES

Security Management Company, LLC agrees to provide the Fund the following
transfer agency and dividend disbursing services.

1. Maintain shareholder accounts, including processing of new accounts.

2. Post address changes and perform other file maintenance for shareholder
accounts.

3. Post 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; and
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. Issue all checks and stop and replace lost checks.

8. Draft clearing services.

a. Maintain signature cards and appropriate corporate resolutions.

b. Compare 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. Receive checks presented for payment and liquidate shares after
verifying account balance.

d. Order checks in quantity specified by the Fund for the shareholder.

9. Mail confirmations, checks and/or certificates resulting from transaction
requests to shareholders.

10. Perform 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; and
e. Daily confirmations.

11. Answer all service-related telephone inquiries from shareholders and
others, including:

a. General and policy inquiries (research and resolve problems);
b. Fund yield inquiries;
c. Shareholder processing requests and account maintenance changes by
telephone as described above;
d. Pending requests to correspondence;
e. On-line statistical performance of unit; and
f. 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; and
f. Correspondence control.

13. Maintain and retrieve all required past history for shareholders and
provide research capabilities as follows:

a. Monitor daily all processing activity to verify back-up documentation;
b. Provide exception reports;
c. Provide microfilming services; and
d. Provide storage, retrieval and archive services.

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 escheatment requirements.

Approved: Fund SMC
----------------------------- -----------------------------

EXHIBIT B

MORE INFORMATION ABOUT THE INVESTMENT MANAGER AND DISTRIBUTOR

SDI is principal underwriter of the Fund. SDI is a wholly-owned subsidiary of
Security Benefit Group, Inc. ("SBG"), a holding company wholly owned by Security
Benefit Life Insurance Company ("SBL"). SMC is a limited liability company owned
by its members, SBL and SBG. SBL is wholly owned by Security Benefit Corp.
(except for shares held by the Directors of SBL as required by Kansas law) and
Security Benefit Corp. is wholly owned by Security Benefit Mutual Holding
Company. The address of each of the foregoing companies is 700 SW Harrison
Street, Topeka, Kansas 66636-0001. For the fiscal year ended September 30, 2001,
SDI received $26,607.00 in Class A sales commissions.

The principal occupation and position with SMC and the Fund, of each officer
and managing member representative of SMC are as follows:

EXECUTIVE OFFICERS OF THE FUND

- ------------------------------------------------------------------------------------------
POSITION POSITION
NAME, AGE AND ADDRESS* PRINCIPAL OCCUPATION WITH SMC WITH FUND
- ------------------------------------------------------------------------------------------
James R. Schmank, 48** President and Managing Member President and President
Representative, SMC; Senior Vice Managing Member and Director
President, Security Benefit Representative
Group, Inc. and Security Benefit
Life Insurance Company
- ------------------------------------------------------------------------------------------
John D. Cleland, 65 Senior Vice President and Managing Senior Vice Chairman of
Managing Member Representative, President and the Board
SMC; Senior Vice President, Managing Member and Director
Security Benefit Group, Inc. and Representative
Security Benefit Life Insurance
Company
- ------------------------------------------------------------------------------------------
Terry A. Milberger, 53 Senior Vice President and Senior Senior Vice Vice
Portfolio Manager, SMC; Senior President President
Vice President, Security Benefit and Senior
Group, Inc. and Security Benefit Portfolio
Life Insurance Company Manager
- ------------------------------------------------------------------------------------------
Amy J. Lee, 40 Secretary, SMC; Vice President, Secretary Secretary
Associate General Counsel and
Assistant Secretary, Security
Benefit Group, Inc. and Security
Benefit Life Insurance Company
- ------------------------------------------------------------------------------------------
Brenda M. Harwood, 38 Assistant Vice President and Assistant Vice Treasurer
Treasurer, SMC; Assistant Vice President and
President, Security Benefit Treasurer
Group, Inc. and Security Benefit
Life Insurance Company
- ------------------------------------------------------------------------------------------
Cindy L. Shields, 34 Vice President and Senior Vice President Vice
Portfolio Manager, SMC; Vice and Senior President
President and Senior Portfolio Portfolio
Manager, Security Benefit Group, Manager
Inc. and Security Benefit Life
Insurance Company
- ------------------------------------------------------------------------------------------
James P. Schier, 44 Vice President and Senior Vice President Vice
Portfolio Manager, SMC; Vice and Senior President
President and Senior Portfolio Portfolio
Manager, Security Benefit Group, Manager
Inc. and Security Benefit Life
Insurance Company
- ------------------------------------------------------------------------------------------
Christopher D. Assistant Secretary, SMC; Second Assistant Assistant
Swickard, 36 Vice President and Assistant Secretary Secretary
Counsel, Security Benefit Group,
Inc. and Security Benefit Life
Insurance Company
- ------------------------------------------------------------------------------------------
*All located at 700 SW Harrison Street, Topeka, KS 66636-0001 unless otherwise noted.
**Principal executive officer
- ------------------------------------------------------------------------------------------

SMC acts as investment adviser for certain other mutual funds with investment
objectives similar to the investment objectives of Equity Series and Global
Series. Set forth below are the names of the applicable Series, the name of the
other similar mutual fund, information concerning the similar funds' net assets
as of September 30, 2001 and the fees paid to SMC for its services to the other
mutual fund (none of which were waived or reimbursed by SMC):

- --------------------------------------------------------------------------------
ANNUAL RATE OF
NET ASSETS OF COMPENSATION
SERIES OF THE FUND NAME OF SIMILAR FUND SIMILAR FUND FOR SIMILAR FUND
- --------------------------------------------------------------------------------
Equity Series SBL Fund, Series A $715,420,171 0.75%
- --------------------------------------------------------------------------------
Global Series SBL Fund, Series D $385,843,225 1.00%
- --------------------------------------------------------------------------------

EXHIBIT C

CLASS A DISTRIBUTION PLAN
SECURITY EQUITY FUND

MAY 1, 2002

This Distribution Plan (the "Plan") constitutes the plan adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), to the extent applicable, on behalf of the Class A shares of each series
of the Security Equity Fund (the "Fund") set forth on Schedule A, attached
hereto, as such schedule may be amended from time to time (the "Series").

1. THE PLAN. This Plan provides for the financing by the Fund of the services
and activities described in Section 2 (hereinafter called "distribution
services") on behalf of the Class A shares of each Series. The principal
purpose of this Plan is to enable the Fund to supplement expenditures by
Security Distributors, Inc., the Distributor of its shares (the
"Distributor"), for distribution services with respect to the Class A shares
of the Series.

The Board of Directors, in considering whether the Fund should implement the
Plan, has requested and evaluated such information as it deemed necessary to
make an informed determination as to whether the Plan should be implemented
and has considered such pertinent factors as it deemed necessary to form the
basis for a decision to use assets of the Series for such purposes.

In voting to approve the implementation of the Plan, the Directors have
concluded, in the exercise of their reasonable business judgment and in
light of their respective fiduciary duties, that there is a reasonable
likelihood that the Plan will benefit each of the Series and their
respective shareholders.

2. DISTRIBUTION SERVICES.

(a) The Fund may make payments under this Plan, or any agreement relating
to this Plan ("Agreement"), in connection with any distribution
services, including, but not limited to, the following distribution
services:

(i) Preparation, printing and distribution of the Prospectus and
Statement of Additional Information and any supplement thereto
used in connection with the offering of the Series' shares to
the public;

(ii) Printing of additional copies of reports and other
communications which were prepared by the Fund for distribution
to existing shareholders for use by the Distributor as sales
literature;

(iii) Preparation, printing and distribution of any other sales
literature used in connection with the offering of the Series'
shares to the public;

(iv) Expenses incurred in advertising, promoting and selling shares
of the Series to the public;

(v) Payment or reimbursement of legal and administrative costs
associated with implementing the Plan;

(vi) Any Shareholder Service Fees paid by the Distributor to
securities dealers or other entities that have executed an
Agreement with the Distributor. Shareholder Service Fees shall
include fees for account maintenance and personal service to
shareholders, including, but not limited to, answering routine
customer inquiries regarding the Fund, assisting customers in
changing dividend options, account designations and addresses,
and in enrolling into any of several special investment plans
offered in connection with the purchase of the Series' Class A
shares, assisting in the establishment and maintenance of
customer accounts and records and in the processing of purchase
and redemption transactions, investing dividends and capital
gains distributions automatically in shares, providing
sub-administration and/or sub-transfer agency services for the
benefit of the Fund and providing such other services as the
Fund or the customer may reasonably request;

(vii) Commissions to sales personnel for selling shares of the Series
and interest expenses related thereto; and

(viii) Expenses incurred in promoting sales of shares of the Series by
securities dealers, including the costs of preparation of
materials for presentations, travel expenses, costs of
entertainment, and other expenses incurred in connection with
promoting sales of Series shares by dealers.

(b) Any payments for distribution services shall be made pursuant to an
Agreement. As required by the Rule, each Agreement relating to the
implementation of this Plan shall be in writing and subject to approval
and termination pursuant to the provisions of Section 6 of this Plan.
However, this Plan shall not obligate the Fund or any other party to
enter into such Agreement.

3. AGREEMENT WITH DISTRIBUTOR. All payments to the Distributor pursuant to this
Plan shall be subject to and be made in compliance with a written agreement
between the Fund and the Distributor containing a provision that the
Distributor shall furnish the Fund with quarterly written reports of the
amounts expended and the purposes for which such expenditures were made, and
such other information relating to such expenditures or to the other
distribution services undertaken or proposed to be undertaken by the
Distributor during such fiscal year under its Distribution Agreement with
the Fund as the Fund may reasonably request.

4. LIMITATIONS ON COVERED EXPENSES. Each Series may pay as compensation for
distribution services provided under Section 2 of this Plan (including
Shareholder Service Fees), or as reimbursement for distribution services
rendered and/or expenses borne, in any fiscal year of the Series a fee equal
to one-quarter of one percent (0.25%) of the Series' average daily net
assets for such fiscal year. Except as provided in the next sentence, the
payments to be paid pursuant to this Plan shall be calculated and accrued
daily and paid monthly or at such other intervals as the Directors shall
determine, subject to any applicable restriction imposed by rules of the
National Association of Securities Dealers, Inc. The Distributor may pay to
the other party to any Agreement a Shareholder Service Fee payable (a) for
the first year, initially, in any amount equal to 0.25% annually of the
aggregate net asset value of the shares purchased by such other party's
customers or clients, and (b) for each year thereafter, quarterly, in
arrears in an amount equal to such percentage (not in excess of .000685% per
day or 0.25% annually) of the aggregate net asset value of the shares held
by such other party's customers or clients at the close of business each day
as determined from time to time by the Distributor.

Payment of fees as compensation or reimbursement for any distribution
service shall not: (1) duplicate payments for the same service under any
other agreement or plan applicable to a Series; or (2) constitute an
admission that such distribution service is a Rule 12b-1
distribution-related service. In accordance with Conduct Rule 2830 of the
National Association of Securities Dealers, Inc., as amended from time to
time, the entire fee payable under the Plan may constitute a "service fee"
as that term is defined in Conduct Rule 2830.

5. INDEPENDENT DIRECTORS. While this Plan is in effect, the selection and
nomination of Independent Directors of the Fund shall be committed to the
discretion of the Independent Directors. Nothing herein shall prevent the
involvement of others in such selection and nomination if the final decision
on any such selection and nomination is approved by a majority of the
Independent Directors.

6. EFFECTIVENESS, CONTINUATION, TERMINATION AND AMENDMENT. This Plan and each
Agreement shall go into effect when approved.

(a) By vote of the Fund's Directors, including the affirmative vote of a
majority of the Independent Directors, cast in person at a meeting
called for the purpose of voting on the Plan or the Agreement; and

(b) If adopted with respect to a Series after any public offering of the
Series' Class A shares or the sale of the Series' Class A shares to
persons who are not affiliated persons of the Fund, affiliated persons
of such persons, promoters of the Fund, or affiliated persons of such
persons, the Plan (solely with respect to Rule 12b-1
distribution-related activities and/or services) must be approved by a
vote of a majority of the outstanding voting securities of the Class A
shares of the Series.

This Plan and any Agreements relating to the implementation of this Plan
shall, unless terminated as hereinafter provided, continue in effect from
year to year only so long as such continuance is specifically approved at
least annually by vote of the Fund's Directors, including the affirmative
vote of a majority of its Independent Directors, cast in person at a meeting
called for the purpose of voting on such continuance. This Plan and any
Agreements relating to the implementation of this Plan may be terminated
with respect to a Series, in the case of the Plan, at any time or, in the
case of any Agreements, upon not more than sixty (60) days' written notice
to any other party to the Agreement by vote of a majority of the Independent
Directors or by the vote of the holders of a majority of the outstanding
voting securities of the Class A shares of such Series. Any Agreement shall
terminate automatically in the event it is assigned. Any material amendment
to this Plan shall require approval by vote of the Fund's Directors,
including the affirmative vote of a majority of the Independent Directors,
cast in person at a meeting called for the purpose of voting on such
amendment. The Plan shall not be amended to materially increase the amount
spent for Rule 12b-1 distribution-related activities or services with
respect to a Series without approval by a vote of a majority of the
outstanding voting securities of the Class A shares of the Series.

In the event this Plan should be terminated by the shareholders or Directors
of the Fund, the payments paid to the Distributor pursuant to the Plan up to
the date of termination shall be retained by the Distributor. Any expenses
incurred by the Distributor in excess of those payments will be the sole
responsibility of the Distributor.

7. RECORDS. The Fund shall preserve copies of this Plan and any Agreements and
all reports made pursuant to Section 3 hereof, for a period of not less than
six (6) years from the date of this Plan, any such Agreement or any such
report, as the case may be, the first two years in an easily accessible
place.

8. DEFINITIONS. As used in the Plan, (a) the term "Independent Directors" shall
mean those Directors of the Fund who are not interested persons of the Fund
and have no direct or indirect financial interest in the operation of the
Plan or any Agreement, (b) the term "Rule 12b-1 distribution-related" shall
mean primarily intended to result in the sale of Class A shares of a Series
for purposes of Rule 12b-1, (c) the terms "affiliated person", "assignment",
"interested person", "promoter" and "majority of the outstanding voting
securities" shall have the respective meanings specified in the 1940 Act and
the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.

February 1, 2002

SCHEDULE A

1. Equity Series
2. Global Series
3. Mid Cap Value Series
4. Social Awareness Series

www.securitybenefit.com
[SBG LOGO]
The Security Benefit
Group of Companies
700 SW Harrison St.
Topeka, Kansas 66636-0001

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF
SELECT 25 SERIES OF SECURITY EQUITY FUND
TO BE HELD APRIL 17, 2002
700 SW HARRISON ST., TOPEKA, KANSAS 66636-0001
TELEPHONE 1-800-888-2461

The undersigned hereby appoints John D. Cleland, Donald A. Chubb, Jr., and James
R. Schmank, and each of them, with full power of substitution, as proxies of the
undersigned to vote at the above-stated meeting, and at all adjournments
thereof, all shares of

SELECT 25 SERIES OF SECURITY EQUITY FUND

held by the undersigned at the Special Meeting of Stockholders of the Fund to be
held at 9:30 AM, local time, on April 17, 2002, at Security Benefit Group
Building, 700 SW Harrison Street, Topeka, Kansas 66636-0001, and at any
adjournment thereof, in the manner directed below with respect to the matters
referred to in the proxy statement for the meeting, receipt of which is hereby
acknowledged, and in the proxies' discretion, upon such other matters as may
properly come before the meeting or any adjournment thereof.

In order to avoid the additional expense of further solicitation to your Fund,
we strongly urge you to review, complete, and return your ballot as soon as
possible. Your vote is important regardless of the number of shares you own. The
Board of Directors recommends a vote for each of the following proposals. These
voting instructions will be voted as specified and in the absence of
specification will be treated as granting authority to vote "FOR" each proposal.

TO VOTE BY TELEPHONE

1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the proxy card and follow the
simple instructions.

TO VOTE BY INTERNET

1) Read the Proxy Statement and have the proxy card below at hand.
2) Go to Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the proxy card and follow the
simple instructions.

TO VOTE BY MAIL

1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.

TO VOTE, MARK BLOCKS BELOW IN
BLUE OR BLACK INK AS FOLLOWS: SCURTY KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- --------------------------------------------------------------------------------
SELECT 25 SERIES OF SECURITY EQUITY FUND

IMPORTANT: STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT IN PERSON AT THE MEETING
ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) TO THE
FUND, OR OTHERWISE VOTE THEIR SHARES, AS EARLY AS POSSIBLE.

VOTE ON PROPOSALS
FOR AGAINST ABSTAIN

1. To approve a proposal to change Select 25 Series
from a diversified to a non-diversified fund. |_| |_| |_|

To transact such other business as may properly come before the Meeting or
any adjournments thereof, and to adjourn the Meeting from time to time.

By order of the Board of Directors of
Security Equity Fund,
Topeka, Kansas AMY J. LEE
March ____, 2002 Secretary

NOTE: Please sign exactly as the name appears on this card. EACH joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such. If
a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.

- ------------------------------------------- ---------------------------------
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date

- --------------------------------------------------------------------------------

www.securitybenefit.com
[SBG LOGO]
The Security Benefit
Group of Companies
700 SW Harrison St.
Topeka, Kansas 66636-0001

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF
EQUITY SERIES OF SECURITY EQUITY FUND
TO BE HELD APRIL 17, 2002
700 SW HARRISON ST., TOPEKA, KANSAS 66636-0001
TELEPHONE 1-800-888-2461

EQUITY SERIES OF SECURITY EQUITY FUND

TO VOTE BY TELEPHONE

1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the proxy card and follow the
simple instructions.

TO VOTE BY INTERNET

TO VOTE BY MAIL

1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.

TO VOTE, MARK BLOCKS BELOW IN
BLUE OR BLACK INK AS FOLLOWS: SCURT2 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- --------------------------------------------------------------------------------
EQUITY SERIES OF SECURITY EQUITY FUND

VOTE ON PROPOSALS
FOR AGAINST ABSTAIN

1. To approve an amendment to the Fund's Investment
Management and Services Agreement, on behalf of
Equity Series, with Security Management Company,
LLC. |_| |_| |_|

2. To approve adoption of a Class A Distribution
Plan for the Equity Series of the Fund. |_| |_| |_|

To transact such other business as may properly come before the Meeting or
any adjournments thereof, and to adjourn the Meeting from time to time.

By order of the Board of Directors of
Security Equity Fund,
Topeka, Kansas AMY J. LEE
March ____, 2002 Secretary

- ------------------------------------------- ---------------------------------
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date

- --------------------------------------------------------------------------------

www.securitybenefit.com
[SBG LOGO]
The Security Benefit
Group of Companies
700 SW Harrison St.
Topeka, Kansas 66636-0001

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF
GLOBAL SERIES OF SECURITY EQUITY FUND
TO BE HELD APRIL 17, 2002
700 SW HARRISON ST., TOPEKA, KANSAS 66636-0001
TELEPHONE 1-800-888-2461

GLOBAL SERIES OF SECURITY EQUITY FUND

TO VOTE BY TELEPHONE

1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the proxy card and follow the
simple instructions.

TO VOTE BY INTERNET

TO VOTE BY MAIL

1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.

TO VOTE, MARK BLOCKS BELOW IN
BLUE OR BLACK INK AS FOLLOWS: SCURT3 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- --------------------------------------------------------------------------------
GLOBAL SERIES OF SECURITY EQUITY FUND

VOTE ON PROPOSALS
FOR AGAINST ABSTAIN

1. To approve an amendment to the Fund's Investment
Management and Services Agreement, on behalf of
Global Series, with Security Management Company,
LLC. |_| |_| |_|

2. To approve adoption of a Class A Distribution
Plan for the Global Series of the Fund. |_| |_| |_|

To transact such other business as may properly come before the Meeting or
any adjournments thereof, and to adjourn the Meeting from time to time.

By order of the Board of Directors of
Security Equity Fund,
Topeka, Kansas AMY J. LEE
March ____, 2002 Secretary

- ------------------------------------------- ---------------------------------
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date

- --------------------------------------------------------------------------------

www.securitybenefit.com
[SBG LOGO]
The Security Benefit
Group of Companies
700 SW Harrison St.
Topeka, Kansas 66636-0001

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF
MID CAP VALUE SERIES OF SECURITY EQUITY FUND
TO BE HELD APRIL 17, 2002
700 SW HARRISON ST., TOPEKA, KANSAS 66636-0001
TELEPHONE 1-800-888-2461

MID CAP VALUE SERIES OF SECURITY EQUITY FUND

TO VOTE BY TELEPHONE

1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the proxy card and follow the
simple instructions.

TO VOTE BY INTERNET

TO VOTE BY MAIL

1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.

TO VOTE, MARK BLOCKS BELOW IN
BLUE OR BLACK INK AS FOLLOWS: SCURT4 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- --------------------------------------------------------------------------------
MID CAP VALUE SERIES OF SECURITY EQUITY FUND

VOTE ON PROPOSALS
FOR AGAINST ABSTAIN

1. To approve adoption of a Class A Distribution
Plan for the Mid Cap Value Series of the Fund. |_| |_| |_|

To transact such other business as may properly come before the Meeting or
any adjournments thereof, and to adjourn the Meeting from time to time.

By order of the Board of Directors of
Security Equity Fund,
Topeka, Kansas AMY J. LEE
March ____, 2002 Secretary

- ------------------------------------------- ---------------------------------
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date

- --------------------------------------------------------------------------------

www.securitybenefit.com
[SBG LOGO]
The Security Benefit
Group of Companies
700 SW Harrison St.
Topeka, Kansas 66636-0001

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF
SOCIAL AWARENESS SERIES OF SECURITY EQUITY FUND
TO BE HELD APRIL 17, 2002
700 SW HARRISON ST., TOPEKA, KANSAS 66636-0001
TELEPHONE 1-800-888-2461

SOCIAL AWARENESS SERIES OF SECURITY EQUITY FUND

TO VOTE BY TELEPHONE

1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the proxy card and follow the
simple instructions.

TO VOTE BY INTERNET

TO VOTE BY MAIL

1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.

TO VOTE, MARK BLOCKS BELOW IN
BLUE OR BLACK INK AS FOLLOWS: SCURT5 KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- --------------------------------------------------------------------------------
SOCIAL AWARENESS SERIES OF SECURITY EQUITY FUND

VOTE ON PROPOSALS
FOR AGAINST ABSTAIN

1. To approve adoption of a Class A Distribution
Plan for the Social Awareness Series of the
Fund. |_| |_| |_|

To transact such other business as may properly come before the Meeting or
any adjournments thereof, and to adjourn the Meeting from time to time.

By order of the Board of Directors of
Security Equity Fund,
Topeka, Kansas AMY J. LEE
March ____, 2002 Secretary

- ------------------------------------------- ---------------------------------
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date

- --------------------------------------------------------------------------------

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