SECURITY EQUITY FUND, PRE 14A, 1998-09-04

SECURITY EQUITY FUND
PRE 14A, 1998-09-04

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<PAGE>
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.___________)

Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|_| 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)

Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:

|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF
SECURITY EQUITY FUND, GLOBAL SERIES
TO BE HELD OCTOBER 28, 1998
700 SW HARRISON ST., TOPEKA, KANSAS 66636-0001
TELEPHONE 1-800-888-2461

TO THE STOCKHOLDERS OF
- SECURITY EQUITY FUND
o GLOBAL SERIES

Notice is hereby given that a special meeting of the stockholders of Global
Series (the "Series") of Security Equity Fund (the "Fund"), a Kansas
corporation, will be held at the offices of the Fund, Security Benefit Group
Building, 700 SW Harrison Street, Topeka, Kansas 66636-0001, on October 28, 1998
at 9:30 a.m. local time ("Meeting"), for the following purposes:

1. To approve a Sub-Advisory Contract, as exhibited in the attached proxy
statement, between the Fund's investment manager, Security Management
Company, LLC, and OppenheimerFunds, Inc.

2. a. To amend the Fund's fundamental investment limitation concerning
diversification.

b. To amend the Fund's fundamental investment limitation concerning
underwriting.

c. To amend the Fund's fundamental investment limitation concerning
borrowing.

d. To amend the Fund's fundamental investment limitation concerning
lending.

e. To eliminate the Fund's fundamental investment limitation concerning
margin purchases of securities and short sales.

f. To amend the Fund's fundamental investment limitation concerning
senior securities.

g. To eliminate the Fund's fundamental investment limitation concerning
investment in other investment companies.

h. To eliminate the Fund's fundamental investment limitation concerning
investment in companies with less than three years' operating
history.

i. To eliminate the Fund's fundamental investment limitation concerning
purchasing securities of an issuer in which the officers and
directors of the fund, investment manager or underwriter own more
than 5% of the outstanding securities of such issuer.

j. To amend the Fund's fundamental investment limitation regarding
owning, buying or selling real estate, commodities or commodities
contracts.

k. To eliminate the Fund's fundamental investment limitation concerning
warrants.

l. To eliminate the Fund's fundamental investment limitation concerning
restricted securities.

m. To eliminate the Fund's fundamental investment limitation concerning
investment in puts, calls, straddles or spreads.

n. To eliminate the Fund's fundamental investment limitation concerning
investment in oil, gas, mineral leases or other mineral exploration
development programs.

3. 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 August
31, 1998, as the record date for the determination of stockholders of the Series
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 WHICH 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
, 1998 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 AS EARLY AS POSSIBLE.
<PAGE>
SECURITY EQUITY FUND
o GLOBAL SERIES

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

SPECIAL MEETING OF STOCKHOLDERS, OCTOBER 28, 1998
PROXY STATEMENT

SOLICITATION AND REVOCATION OF PROXIES

The enclosed proxy is solicited by and on behalf of the Board of Directors of
Security Equity Fund (the "Fund") and is revocable by timely submission to the
Secretary of the Fund of another proxy or of notice of revocation in proper
written form, or by voting the shares in person at the Meeting. A second proxy
form may be obtained from the Secretary of Security Equity Fund. The cost of
soliciting proxies will be borne by Security Management Company, LLC, 700 SW
Harrison Street, Topeka, Kansas 66636-0001 ("SMC" or the "Investment Manager"),
which will be reimbursed by the Fund. SMC is the investment adviser and
administrator of the Fund. 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.
Proxies are expected to be mailed on or about September 25, 1998.

VOTING SECURITIES

Only stockholders of record of the Global Series (the "Series") of the Fund
at the close of business on August 31, 1998 are entitled to vote at the special
Meeting. On that date, the outstanding number of voting securities of the Series
was as follows: _______________ Class A shares and _______________ Class B
shares, all of which are common stock of the Fund of the par value of $0.25 per
share. Each share is entitled to one vote and Class A and Class B shares will be
voted together with respect to Proposals No. 1 and No.2.

Approval of the Sub-Advisory Contract, Proposal No. 1, and approval of
changes to the fundamental investment limitations, Proposal No. 2, requires the
affirmative majority vote of the outstanding shares of the common stock of the
Series.

A "majority vote" is defined as the vote of either 67 percent or more of
voting securities of the Series present at the meeting in person or by proxy, or
more than 50 percent of such outstanding voting securities, whichever is less.

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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, 1997 AND A
COPY OF THE SEMI-ANNUAL REPORT CONTAINING UNAUDITED FINANCIAL STATEMENTS FOR THE
PERIOD ENDED MARCH 31, 1998, TO A SHAREHOLDER UPON REQUEST. SUCH REQUESTS SHOULD
BE DIRECTED TO AMY LEE, SECRETARY OF THE FUND, BY WRITING THE FUND AT 700 SW
HARRISON ST., TOPEKA, KANSAS 66636-0001, OR BY CALLING THE FUND'S TOLL-FREE
TELEPHONE NUMBER 1-800-888-2461, EXTENSION 3127.
<PAGE>
The presence, in person or by proxy, of more than 50 percent of the
outstanding shares of the Series 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 proposal 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. An
abstention on any proposal, either by proxy or by vote in person at the Meeting,
will be counted for purposes of establishing a quorum, but has the same effect
as a negative vote.

In the event that a sufficient number of votes to approve a proposal is 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.

PROPOSAL NO. 1
APPROVAL OF A SUB-ADVISORY CONTRACT
BETWEEN SMC AND OPPENHEIMERFUNDS, INC.

The Series' stockholders are asked to approve a sub-advisory contract between
SMC and OppenheimerFunds, Inc. ("Oppenheimer" or the "Sub-Adviser"). If this
Proposal No. 1 is approved by the stockholders, Oppenheimer will provide
sub-advisory services to the Series pursuant to a sub-advisory contract between
SMC and Oppenheimer (the "Sub-Advisory Contract"). The Fund's Board of
Directors, including a majority of the disinterested Directors, approved the
Sub-Advisory Contract at a meeting held on July 24, 1998.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SERIES' STOCKHOLDERS VOTE FOR
APPROVAL OF THE SUB-ADVISORY CONTRACT.

EXISTING INVESTMENT ADVISORY CONTRACT

The Investment Manager has served as investment adviser of the Series since
its inception in accordance with the terms of an Investment Management and
Services Agreement dated December 8, 1988, as amended (the "Advisory Contract").
The Advisory Contract was approved initially by shareholders on December 8, 1988
and has not been submitted to shareholders for approval since that date. The
Advisory Contract was renewed by directors of the Fund (including a majority of
directors who are not parties to the contract or interested persons of any such
party) on December 1, 1997. The Advisory Contract will continue in effect until
January 1, 1999, and from year to year thereafter providing 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 contract
or interested persons of any such party) cast in person at a meeting
specifically called for voting on such renewal.

Under the Advisory Contract, the Investment Manager furnishes the Series with
investment research and advice and an investment program. In addition, the
Investment Manager provides for the compilation and maintenance of records
relating to its duties as required by the rules and regulations of the
Securities and Exchange Commission ("SEC"). Pursuant to the Advisory Contract,
the Investment Manager also performs administrative functions and the
bookkeeping, accounting and pricing functions for the Funds, and performs all
shareholder servicing functions, including transferring record ownership,
processing purchase and redemption transactions, answering inquiries, mailing
shareholder communications and acting as dividend disbursing agent. No brokerage
commissions were paid by the Fund to an affiliated broker for the year ended
December 31, 1997.

For its services, the Investment Manager receives from the Fund, on an annual
basis, 2 percent of the first $70 million of the average net assets and 1.5
percent of the remaining net assets, computed daily and payable monthly. The
Investment Manager received from the Fund advisory fees of $642,585 during the
fiscal year ended September 30, 1997.

The Advisory Contract provides that the aggregate annual expenses of every
character, exclusive of brokerage commissions, interest, taxes, extraordinary
expenses (such as litigation) and distribution fees paid under the Fund's Class
B Distribution Plan, but inclusive of the Investment Manager's compensation,
shall not exceed the most restrictive expense limitation imposed by any state in
which shares of the Fund are then qualified for sale. (The Investment Manager is
not aware of any state that currently imposes limits on the level of mutual fund
expenses.) The Investment Manager agrees to contribute such funds to the Fund or
to waive such portion of its compensation as may be necessary to insure that
total annual expenses will not exceed this amount.

The Advisory Contract may be terminated without penalty at any time upon
sixty 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 Fund, or by the
Investment Manager. The Contract is terminated automatically in the event of its
assignment (as such term is defined in the Investment Company Act of 1940).

EXISTING SUB-ADVISORY CONTRACT

The Investment Manager has entered into a Sub-Advisory Contract (the
"Existing Sub-Advisory Contract") with Lexington Global Asset Managers, Inc.
("Lexington") dated September 27, 1993. The Existing Sub-Advisory Contract was
initially approved by shareholders on October 1, 1993, and has not been
submitted to shareholders since that date.

Pursuant to the Existing Sub-Advisory Contract, Lexington provides, subject
to the Investment Manager's supervision, investment research and advice and an
investment program, including decisions regarding which securities to purchase
and sell and what portion of assets to hold uninvested. In addition, Lexington
arranges for the purchase and sale of securities and other investments held by
the Fund. For these sub-advisory services, Lexington receives from the
Investment Manager an amount equal to 0.50 percent on an annual basis of the
average net assets of the Series, calculated daily and payable monthly. During
the fiscal year ended September 30, 1997, the Investment Manger paid Lexington
$160,646 for sub-advisory services.

The Board of Directors of the Fund approved continuance of the Existing
Sub-Advisory Contract at the meeting of the Board held on December 1, 1997. The
directors at that meeting noted they would continue to monitor the Series'
performance under Lexington's investment management. At the Board of Directors
meeting held on July 24, 1998, the Board of Directors considered the
recommendation of the management of SMC that the Board of Directors terminate
the Existing Sub-Advisory Contract and consider approval of a proposed
sub-advisory agreement with Oppenheimer, as discussed below. The Board of
Directors voted unanimously to terminate the Existing Sub-Advisory Agreement
with Lexington, effective at the close of business on October 30, 1998.

PROPOSED SUB-ADVISORY CONTRACT

SMC proposes to enter into a sub-advisory contract ("Sub-Advisory Contract")
with Oppenheimer, a form of which is attached hereto as Exhibit "A". The
Sub-Advisory Contract was proposed by SMC and was unanimously approved by the
Board of Directors of the Fund (including a majority of such directors who are
not parties to such contract or interested persons of any such party) on July
24, 1998. SMC proposed the Sub-Advisory Contract because it believes that the
Sub-Adviser has expertise with respect to global securities that would be
valuable in managing the Series' investments.

Under the Sub-Advisory Contract, the Sub-Adviser would furnish the Series
those services currently provided by Lexington, including investment research
and advice in connection with the Series' investment in securities and effecting
purchases and sales of portfolio securities, subject to the policies and control
of the Board of Directors and the supervision of SMC. For its services, the
Sub-Adviser will receive from SMC an annual fee equal to a percentage of the
average daily closing value of the combined net assets of the Series and another
series managed by SMC, computed on a daily basis as follows: .35 percent of the
combined average daily net assets up to $300 million, plus .30 percent of such
assets over $300 million up to $750 million and .25% of such assets over $750
million. Such fee shall be payable monthly. Under the terms of the Sub-Advisory
Contract, the Sub-Adviser is not subject to any liability to the Fund or the
Investment Manager connected with any services rendered under the Sub-Advisory
Contract except by reason of willful misfeasance, bad faith, or gross negligence
in the performance of its duties or by reason of a breach of its duties under
the Sub-Advisory Contract.

The Sub-Adviser has agreed to pay its expenses in connection with providing
the sub-advisory services, including any expenses associated with preparing
reports for the Fund's Board of Directors and expenses of travel by employees of
the Sub-Adviser in connection with such reports as well as any expenses that it
may incur in communicating with SMC.

Approval of the Sub-Advisory Contract will not increase or decrease any fee
or expense paid by the Fund or its stockholders because all fees under the
Sub-Advisory Contract are paid by SMC. The fees earned by SMC for providing
advisory services to the Fund will be increased, however, because the fees of
the Sub-Adviser pursuant to the Sub-Advisory Contract are less than those paid
to Lexington pursuant to the Existing Sub-Advisory Contract.

During the fiscal year ended September 30, 1997, the Fund paid SMC a total of
$642,585 for services provided under the Advisory Contract. If the Sub-Advisory
Contract had been in effect during the 1997 fiscal year, SMC would have paid the
Sub-Adviser $111,659 for services provided under that contract compared to
$160,646 paid to Lexington during 1997.

It is expected that the Sub-Advisory Contract will become effective on
November 2, 1998, provided that on the Meeting date it is approved by a majority
vote of the holders of the outstanding voting securities of the Series. The
contract will continue in force until November 1, 1999, and from year to year
thereafter, provided such continuance is specifically approved by a majority of
the Board of Directors of the Fund (including a majority of such directors who
are not parties to the Sub-Advisory Contract or interested persons of any such
party). The Sub-Advisory Contract may be terminated without penalty upon sixty
days' written notice by either party or by vote of the Board of Directors or by
vote of a majority of the holders of the outstanding voting securities of the
Series. The Sub-Advisory Contract will automatically terminate in the event of
the termination of the Advisory Contract between SMC and the Fund or in the
event of its assignment.

In recommending the approval of the Sub-Advisory Contract to the stockholders
of the Series, the Board of Directors considered such factors as it deemed
reasonably necessary and appropriate, including (1) the nature and quality of
the services to be provided to the Series; (2) the fairness of the compensation
of the Sub-Adviser; (3) the financial soundness of the Sub-Adviser to render all
necessary services to the Series; (4) comparative industry advisory fee
structures and expense ratios for the Series including, specifically, the
relationship of the proposed advisory fee rates to those typically charged
similar mutual funds; (5) the performance of a similar portfolio managed by the
Sub-Adviser; and (6) the total fees paid by the Series, including 12b-1 plan
fees. The Board gave equal weight to each of the above factors when considering
approval of the contract. Based on the considerations above, the Board
determined that: (1) Oppenheimer has the expertise to provide high-quality
services to the Series; (2) the advisory fee rates paid by the Series and paid
by SMC under the Sub-Advisory Contract are fair, and similar to those typically
charged similar mutual funds; (3) the financial soundness of Oppenheimer is
sufficient for Oppenheimer to render all necessary services to be provided under
the Sub-Advisory Contract; and (4) approval of the Sub-Advisory Contract will
not change the total fees paid by the Series because SMC pays all fees under the
Sub-Advisory Contract.

The Board of Directors of the Fund unanimously recommends approval of the
Sub-Advisory Contract by a vote in favor of Proposal No. 1. In the event that
the proposed contract is not approved, the Board of Directors will meet to
consider whether to present another sub-advisory contract for approval.

THE PROSPECTIVE SUB-ADVISER

Oppenheimer (including subsidiaries) currently manage investment companies,
including other Oppenheimer funds, with assets of more than $90 billion as of
June 30, 1998, and with more than 4 million shareholder accounts. Oppenheimer is
a wholly-owned subsidiary of Oppenheimer Acquisition Corp. ("OAC"), a holding
company owned in part by senior officers of Oppenheimer and controlled by
Massachusetts Mutual Life Insurance Company ("MassMutual"). Oppenheimer and OAC
are located at Two World Trade Center, New York, New York 10048. MassMutual is
located at 1295 State Street, Springfield, Massachusetts 01111. OAC acquired
Oppenheimer on October 22, 1990. No institution or person holds 5% or more of
OAC's outstanding common stock except MassMutual. MassMutual has engaged in the
life insurance business since 1851.

The names and principal occupations of the executive officer and directors of
Oppenheimer are as follows:

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NAME AND ADDRESS* PRINCIPAL OCCUPATION
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Bridget A. Macaskill... President, Chief Executive Officer and Director
Donald W. Spiro........ Chairman Emeritus and Director
James C. Swain......... Vice Chairman
George Batejan......... Executive Vice President
O. Leonard Darling..... Executive Vice President
Craig Dinsell.......... Executive Vice President
Barbara Hennigar....... Executive Vice President
James Ruff............. Executive Vice President
Loretta McCarthy....... Executive Vice President
Nancy Sperte........... Executive Vice President
Andrew J. Donohue...... Executive Vice President, General Counsel and Director
Robert C. Doll......... Executive Vice President and Director
Jeremy Griffiths....... Executive Vice President and Chief Financial Officer
George C. Bowen........ Senior Vice President and Treasurer
Charles Albers......... Senior Vice President
Peter M. Antos......... Senior Vice President
Victor Babin........... Senior Vice President
Robert A. Densen....... Senior Vice President
Ronald H. Fielding..... Senior Vice President
Robert B. Grill........ Senior Vice President
Thomas W. Keffer....... Senior Vice President
John S. Kowalik........ Senior Vice President
David Negri............ Senior Vice President
Robert E. Patterson.... Senior Vice President
Russell Read........... Senior Vice President
Richard Rubinstein..... Senior Vice President
Arthur Steinmetz....... Senior Vice President
Ralph Stellmacher...... Senior Vice President
John Stoma............. Senior Vice President
Jerry A. Webman........ Senior Vice President
William L. Wilby....... Senior Vice President
Robert G. Zack......... Senior Vice President
Arthur J. Zimmer....... Senior Vice President
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*These officers are located at one of the four offices of Oppenheimer: Two World
Trade Center, New York, New York 10048; 6803 South Tucson Way, Englewood,
Colorado 80112; 350 Linden Oaks, Rochester, New York 14625 and One Financial
Plaza, 755 Main Street, Hartford, Connecticut 06103.
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No officer or director of the Fund is an officer, employee or director of the
Sub-Adviser. No officer or director of the Fund owns any securities of, or has
any other material direct or indirect interest in, the Sub-Adviser or any of its
affiliates. No director of the Fund has any direct or indirect material interest
in any material transactions since October 1, 1997, or in any material proposed
transactions, to which the Sub-Adviser, any parent or subsidiary of the
Sub-Adviser, or any subsidiary of the parent of such entities was or is to be a
party. There is no arrangement or understanding in connection with the
Sub-Advisory Contract with respect to the composition of the Board of Directors
of the Fund or of the Sub-Adviser, or with respect to the selection or
appointment of any person to any office of either such company.

The Sub-Adviser acts as adviser for the portfolios of registered investment
companies with investment objectives similar to the Fund's investment objective
of seeking long-term growth of capital primarily through investment in common
stocks and equivalents of companies domiciled in foreign countries and the
United States. Set forth below are the names of such funds, together with
information concerning the funds' net assets and the fees paid to the
Sub-Adviser for its services.

<TABLE>
<CAPTION>
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RELATIONSHIP NET ASSETS FEE WAIVERS OR
FUND NAME OF SUB-ADVISER AS OF 6-30-98 ANNUAL RATE OF COMPENSATION REIMBURSEMENTS
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<S> <C> <C> <C> <C>
Oppenheimer Quest Global Investment Adviser(1) $494.1 .75% on the first $400 million N/A
Value Fund, Inc. .70% on the next $400 million and
.65% on the net assets in excess
of $800 million
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Oppenheimer International Investment Adviser $390.9 .80% on the first $250 million N/A
Growth Fund .77% on the next $250 million
.75% on the next $500 million
.69% on the next $1 billion and
.67% on the net assets in excess
of $2 billion
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Oppenheimer Variable Investment Adviser $1,136.5 .75% on the first $200 million N/A
Accounts Funds/Oppenheimer .72% of the next $200 million
Global Securities Fund .69% of the next $200 million
.66% of the next $200 million
.60% of net assets in excess
of $800 million
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Oppenheimer Developing Investment Adviser $53.9 100% of the first $250 million N/A
Markets Fund .95% of the next $250 million
.90% of the next $500 million
.85% of net assets in excess
of $1 billion
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Oppenheimer International Investment Adviser $12.4 .80% of the first $250 million N/A
Small Company Fund .77% of the next $250 million
.75% of the next $500 million
.69% of the next $1 billion
.67% of net assets in excess
of $2 billion
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Panorama Series Fund, Inc./ Investment Adviser(2) $100.1 the annual rates are: N/A
International Equity 1.00% of the average daily net
Portfolio assets up to $250 million
.90% of average daily net
assets over $250 million
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Atlas Assets, Inc./Atlas Sub-Adviser $45.0 .35% of the first $50 million N/A
Global Growth Fund .30% of the next $50 million
.25% of net assets in excess
of $100 million
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1 The Sub-Adviser pays an annual fee to OpCap Advisors the "Sub-Adviser" for Oppenheimer Quest Global Value Fund, Inc. based on the
average daily net assets of Oppenheimer Quest Global Value Fund, Inc. ("Fund") equal to 40% of the advisory fee collected by the
Investment Adviser based on the net assets of the Fund as of November 22, 1995 (the "Base Amount") plus 30% of the investment
advisory fee collected by the Investment Adviser based on the net assets of the Fund that exceed that amount.

2 The Sub-Adviser pays an annual fee to Babson-Stewart Ivory International the "Sub-Adviser" for Panorama Series Fund,
Inc./International Equity Portfolio based on the average daily net assets of the International Equity Portfolio of Panorama
Series Fund, Inc.: .75% of the first $10 million, .625% of the next $15 million, .50% of the next $25 million and .375% of such
assets in excess of $50 million.
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</TABLE>

PROPOSAL NO. 2
TO APPROVE CHANGES TO THE FUNDAMENTAL INVESTMENT
LIMITATIONS OF THE FUND

Certain investment limitations of the Fund are matters of fundamental policy
and may not be changed without the approval of the Fund's shareholders. The
Investment Manager has recommended to the Board of Directors that certain
fundamental investment limitations of the Fund be amended or eliminated as set
forth below. The Investment Manager believes that the proposed changes reflect
more modern investment practices and will more closely conform the investment
policies of the Fund to those of other mutual funds managed by the Sub-Adviser.
The changes will allow the Sub-Adviser to manage the Fund's investments in a
more streamlined and efficient manner. The Investment Manager plans to make
conforming changes to the fundamental investment policies and limitations of the
other funds under its management to further streamline its investment and
compliance processes. The Board of Directors believes that the proposal is in
the best interests of the Fund's shareholders.

The Investment Manager believes that increased standardization of fundamental
investment policies and limitations will promote operational efficiencies and
facilitate monitoring of compliance with fundamental policies. Adoption of the
revised limitations, in some cases, also will give the Fund the flexibility to
change its investment methods in the future without a shareholder vote, provided
that the Board of Directors approves any such change. Set forth below are each
of the proposed changes. Shareholders have the option to approve all, some or
none of the proposed changes.

PROPOSAL NO. 2(A)
TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING DIVERSIFICATION

The Fund currently is subject to a fundamental limitation concerning the
diversification of its assets among issuers, and the Investment Manager
recommends a change in the fundamental limitation. The current and proposed
fundamental investment limitations are set forth below.

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CURRENT PROPOSED
- --------------------------------------------------------------------------------
Not to invest more than 5% of its Not to invest more than 5% of its
total assets in the securities of any total assets in the securities of any
one issuer. one issuer (other than obligations of,
or guaranteed by, the U.S. Government,
its agencies or instrumentalities);
provided that this limitation applies
only with respect to 75% of the Fund's
total assets.
- --------------------------------------------------------------------------------

The proposed fundamental investment limitation would conform the Fund's
investment limitation to Section 5(b)(1) of the Investment Company Act of 1940
and would allow the Fund to invest a greater percentage of its assets in a
single issuer. If the proposed investment limitation were adopted, the Fund
would be limited, with respect to 75% of its total assets, to investing no more
than 5% of its total assets in the securities of any one issuer. No such
limitation would apply, however, to the remaining 25% of the Fund's total
assets. The proposed fundamental investment limitation, if adopted, could
increase the risk to the Fund by permitting it to invest a greater percentage of
its assets in a single issuer and correspondingly to have greater exposure in
the event of adverse developments with respect to such an issuer.

The Board of Directors believes that adoption of the amended limitation is in
the best interests of shareholders because a standardized fundamental investment
limitation will facilitate investment compliance efforts and will give the Fund
the flexibility to take a larger position in the securities of a single issuer
if the Sub-Adviser believes that such a position is advisable and is consistent
with the investment objective and policies of the Fund. THE BOARD OF DIRECTORS
THEREFORE UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL NO. 2(A).

PROPOSAL NO. 2(B)
TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING UNDERWRITING

The Fund currently is subject to a fundamental investment limitation
concerning underwriting, and the Investment Manager recommends a change in the
fundamental limitation. The current and proposed fundamental investment
limitations are set forth below.

- --------------------------------------------------------------------------------
CURRENT PROPOSED
- --------------------------------------------------------------------------------
Not to underwrite securities of other Not to act as underwriter of
issuers, provided that this policy securities issued by others, except to
shall not be construed to prevent or the extent that the Fund may be
limit in any manner the right of the considered an underwriter within the
Fund to purchase securities for meaning of the Securities Act of 1933
investment purposes. in the disposition of restricted
securities.
- --------------------------------------------------------------------------------

The primary purpose of the proposed amendment is to clarify that the Fund is
not prohibited from selling restricted securities if, as a result of such sale,
the Fund is considered an underwriter under federal securities laws and to
revise the Fund's fundamental limitation on underwriting so that it conforms to
a limitation which is expected to become standard for all funds managed by the
Investment Manager. While the proposed change will have no current impact on the
Fund, adoption of the proposed standardized fundamental investment policy will
advance the goals of standardization discussed above. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL NO. 2(B). If this
Proposal No. 2(b) is approved by shareholders, the new fundamental underwriting
limitation cannot be changed without a future vote of shareholders.

PROPOSAL NO. 2(C)
TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING BORROWING

The Fund currently is subject to a fundamental investment limitation
concerning borrowing, and the Investment Manager recommends a change in the
fundamental investment limitation and adoption of an operating policy that may
be changed without a vote of shareholders. The current and proposed fundamental
investment limitations and proposed operating policy are set forth below.

- --------------------------------------------------------------------------------
CURRENT PROPOSED
- --------------------------------------------------------------------------------
Not to borrow money or securities for Not to borrow in excess of 33 1/3% of
any purposes except to the extent that its total assets.
borrowing up to 10% of the Fund's
total assets is permitted for As an operating policy, the Fund may
emergency purposes on a temporary not borrow money or securities for any
basis from banks and will not be made purposes except that borrowing up to
for investment purposes. The Fund may 10% of the Fund's total assets from
also obtain such short term credits as commercial banks is permitted for
are necessary for the clearance of emergency or temporary purposes.
portfolio transactions.
- --------------------------------------------------------------------------------

The primary purpose of the proposed change to the fundamental investment
limitation concerning borrowing is to conform it to a limitation that is
expected to become standard for all funds managed by the Investment Manager. If
the proposal is approved, the amended fundamental borrowing limitation cannot be
changed without a future vote of shareholders. The operating policy could be
changed upon the vote of the Board of Directors.

Adoption of the proposed amendment is not expected to affect the way the Fund
is managed, the investment performance of the Fund, or the securities or
instruments in which the Fund invests.

The increase in the permissible level of borrowing would allow the Board of
Directors to amend the operating policy in the future to allow the Fund to
engage in leveraging. Leveraging is a speculative investment technique which
consists of purchasing securities with borrowed funds. There are risks
associated with purchasing securities while borrowings are outstanding,
including a possible reduction of income and increased fluctuation of net asset
value per share. Interest on money borrowed is an expense the Fund would not
otherwise incur, so that it may have little or no net investment income during
periods of substantial borrowings. Borrowing for investment therefore increases
both investment opportunity and risk. While the Fund has no current intention to
purchase securities while borrowings equal to 5% of its total assets are
outstanding, the flexibility to do so may be beneficial to the Fund at a future
date.

The proposed change will have no current impact on the Fund. However,
adoption of a standardized fundamental investment policy will facilitate
investment compliance efforts and will enable the Fund to respond more promptly
if circumstances suggest such a change in the future. THE BOARD OF DIRECTORS
THEREFORE UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL NO. 2(C).

PROPOSAL NO. 2(D)
TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING LENDING

The Fund currently is subject to a fundamental investment limitation
concerning lending, and the Investment Manager recommends a change in the
fundamental investment limitation and adoption of an operating policy that may
be changed without a vote of shareholders. The current and proposed fundamental
investment limitations and proposed operating policy are set forth below.

- --------------------------------------------------------------------------------
CURRENT PROPOSED
- --------------------------------------------------------------------------------
Not to make loans to other persons No Fund may lend any security or make
other than the purchase of publicly any other loan if, as a result, more
distributed debt securities which are than 33 1/3% of the Fund's total
not considered loans or by entry into assets would be lent to other parties,
repurchase agreements. except (i) through the purchase of a
portion of an issue of debt securities
in accordance with its investment
objective and policies, or (ii) by
engaging in repurchase agreements with
respect to portfolio securities.

As an operating policy, the Fund does
not currently intend to lend assets
other than securities to other
parties. (This limitation does not
apply to purchases of debt securities
or to repurchase agreements.)
- --------------------------------------------------------------------------------

This proposal if adopted will affect the way in which the Fund is managed in
that it will allow the Fund to engage in securities lending. Securities loans
are made to broker-dealers or institutional investors or other persons, pursuant
to agreements requiring that the loans be continuously secured by collateral at
least equal at all times to the value of the securities lent marked to market on
a daily basis. The collateral received would consist of cash, U.S. government
securities, letters of credit or such other collateral as may be permitted under
the Fund's investment program. While the securities loans are outstanding, the
Fund would continue to receive the equivalent of the interest or dividends paid
by the issuer of the securities, as well as interest on the investment of the
collateral or a fee from the borrower. The Fund would have a right to call each
loan and obtain the securities within the period of time which coincides with
the normal settlement time period for purchases and sales of such securities in
their respective markets. The Fund would not have the right to vote securities
while they are being lent, but it would call a loan in anticipation of any
important vote.

The risks in lending portfolio securities, as with other extensions of
secured credit, consist of possible delay in receiving additional collateral or
in the recovery of the securities or possible loss of rights in the collateral
should the borrower fail financially. Loans would be made only to firms deemed
by the Investment Manager or Sub-Adviser to be of good standing and would not be
made unless, in the judgment of the Investment Manager or the Sub-Adviser, the
consideration to be earned from such loans would justify the risk.

In addition to the potential benefits of securities lending, the adoption of
standardized investment policies as proposed will advance the goals of
investment limitation standardization. THE BOARD OF DIRECTORS THEREFORE
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL NO. 2(D).

PROPOSAL NO. 2(E)
TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING MARGIN PURCHASES OF SECURITIES AND SHORT SALES

The Fund currently is subject to a fundamental investment limitation
concerning margin purchases of securities and short sales, and the Investment
Manager recommends that shareholders approve the elimination of this fundamental
investment limitation. If the proposal is approved, the Directors intend to
replace the current fundamental investment limitation with an operating policy
that could be changed without a vote of shareholders. The current fundamental
investment limitation and proposed operating policy are set forth below.

- --------------------------------------------------------------------------------
CURRENT PROPOSED
- --------------------------------------------------------------------------------
Not to buy securities on margin or As an operating policy, the Fund does
effect short sales of securities. not currently intend to sell
securities short, unless it owns or
has the right to obtain securities
equivalent in kind and amount to the
securities sold short, and provided
that transactions in futures contracts
and options are not deemed to
constitute selling securities short.
In addition, the Fund does not
currently intend to purchase
securities on margin, except that the
Fund may obtain such short-term
credits as are necessary for the
clearance of transactions, and
provided that margin payments in
connection with futures contracts and
options on futures contracts shall not
constitute purchasing securities on
margin
- --------------------------------------------------------------------------------

In a short sale, an investor sells a borrowed security and has a
corresponding obligation to the lender to return the identical security. In an
investment technique known as a short sale "against the box," an investor sells
short while owning the same securities in the same amount, or having the right
to obtain equivalent securities. The investor could have the right to obtain
equivalent securities, for example, through its ownership of warrants, options,
or convertible bonds.

Margin purchases involve the purchase of securities with money borrowed from
a broker. "Margin" is the cash or eligible securities that the borrower places
with a broker as collateral against the loan. The Fund's current fundamental
investment policy prohibits the Fund from purchasing securities on margin,
except to obtain such short-term credits as may be necessary for the clearance
of transactions. Policies of the SEC also allow mutual funds to purchase
securities on margin for initial and variation margin payments made in
connection with the purchase and sale of futures contracts and options on
futures contracts. With these exceptions, mutual funds are prohibited from
entering into most types of margin purchases by applicable policies of the
Securities and Exchange Commission. The proposed non-fundamental limitation
includes these exceptions.

Elimination of the Fund's fundamental investment policy on short selling and
margin purchases is unlikely to affect the Fund's investment techniques at this
time. If the proposal is approved, however, the Board of Directors would be able
to change the proposed operating policy in the future, without a vote of
shareholders. In the event of a change in state or federal regulatory
requirements, the Fund may alter its investment practices in the future. The
Board of Directors believes that efforts to standardize operating policies will
facilitate the Investment Manager's investment compliance and are in the best
interests of shareholders. THE BOARD OF DIRECTORS THEREFORE UNANIMOUSLY
RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL NO. 2(E).

PROPOSAL NO. 2(F)
TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING SENIOR SECURITIES

The Fund currently is subject to a fundamental investment limitation
concerning senior securities, and the Investment Manager recommends that
shareholders approve the amendment of this fundamental investment limitation.
The current and proposed fundamental investment limitations are set forth below.

- --------------------------------------------------------------------------------
CURRENT PROPOSED
- --------------------------------------------------------------------------------
Not to issue senior securities. Not to issue senior securities, except
as permitted under the Investment
Company Act of 1940.
- --------------------------------------------------------------------------------

The primary purpose of this proposed change is to revise the Fund's
fundamental investment limitation to conform to a limitation that is expected to
become standard for all funds managed by the Investment Manager. If the proposal
is adopted, the new limitation concerning senior securities could not be changed
without a vote of shareholders.

The proposed limitation allows the Fund to issue senior securities to the
full extent permitted under the 1940 Act. Although the definition of "senior
security" involves complex statutory and regulatory concepts, a senior security
is generally an obligation of a fund that has claim to the fund's assets or
earnings that takes precedence over the claims of the fund's shareholders. The
1940 Act generally prohibits mutual funds from issuing senior securities;
however, mutual funds are permitted to engage in certain types of transactions
that might be considered "senior securities" provided certain conditions are
satisfied. For example, a transaction which obligates a fund to pay money at a
future date, such as the purchase of securities to be settled on a date that is
further in the future that the normal settlement period, may be considered a
"senior security." A mutual fund is permitted to enter into this type of
transaction if it maintains a segregated account containing liquid securities in
an amount equal to its obligation to pay cash for the securities at a future
date. The Fund utilizes transactions that may be considered "senior securities"
only in accordance with applicable requirements under the 1940 Act.

Adoption of the proposed limitation on senior securities is not expected to
affect the way in which the Fund is managed, its investment performance or the
securities or instruments in which the Fund invests. The Board of Directors
believes, however, that adoption of a standardized fundamental investment
limitation is in the best interests of shareholders because it will facilitate
the Investment Manager's compliance efforts. In addition, the Board believes
that the proposed limitation will allow the Fund to respond to developments in
the mutual fund industry and the 1940 Act which may make the use of senior
securities advantageous. THE BOARD OF DIRECTORS THEREFORE UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE FOR PROPOSAL NO. 2(F).

PROPOSAL NO. 2(G)
TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING INVESTMENT IN OTHER INVESTMENT COMPANIES

The Fund currently is subject to a fundamental investment limitation
concerning investment in securities of other investment companies, and the
Investment Manager recommends that shareholders approve the elimination of this
fundamental investment limitation. If the proposal is approved, the Directors
intend to replace the current fundamental investment limitation with an
operating policy which could be changed without a vote of shareholders. The
current fundamental investment limitation and proposed operating policy are set
forth below.

- --------------------------------------------------------------------------------
CURRENT PROPOSED
- --------------------------------------------------------------------------------
Not to invest in the securities of As an operating policy, the Fund may
other investment companies. not, except in connection with a
merger, consolidation, acquisition, or
reorganization, invest in the
securities of other investment
companies, including investment
companies advised by the Investment
Manager, if, immediately after such
purchase or acquisition, more than 10%
of the value of the Fund's total
assets would be invested in such
securities.
- --------------------------------------------------------------------------------

Elimination of the above fundamental limitation is not expected to have a
significant impact on the Fund's investment practices, because the Fund
currently does not expect to invest in shares of other investment companies.
However, investment in shares of money market funds may from time to time offer
a convenient way to invest the Fund's idle cash. To the extent that the Fund
invests in shares of other investment companies, it will have the effect of
requiring shareholders to pay the operating expenses of two mutual funds. THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL
NO. 2(G).

PROPOSAL NO. 2(H)
TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING INVESTMENT IN COMPANIES WITH
LESS THAN THREE YEARS' OPERATING HISTORY

The Fund currently is subject to a fundamental investment limitation
concerning investment in companies having a record of less than three years'
continuous operation, and the Investment Manager recommends that shareholders
approve the elimination of this fundamental investment limitation. If the
proposal is approved, the Directors intend to replace the current fundamental
investment limitation with an operating policy which could be changed without a
vote of shareholders. The current fundamental investment limitation and proposed
operating policy are set forth below.

Adoption of the proposed standardized operating policy would facilitate the
Investment Manager's compliance program and would enable the Fund to respond
more promptly if purchase of the securities of unseasoned issuers becomes more
desirable in the future. THE BOARD OF DIRECTORS THEREFORE UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE FOR PROPOSAL NO. 2(H).

PROPOSAL NO. 2(I)
TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING PURCHASING SECURITIES OF AN ISSUER IN WHICH THE OFFICERS
AND DIRECTORS OF THE FUND, INVESTMENT MANAGER OR UNDERWRITER
OWN MORE THAN 5% OF THE OUTSTANDING SECURITIES OF SUCH ISSUER

The Fund currently is subject to a fundamental investment limitation
concerning purchasing the securities of an issuer if the officers and directors
of the Fund, Investment Manager or Underwriter own 1/2 of 1% of such securities,
or if all such persons together own more than 5% of such securities. The
Investment Manager recommends that shareholders approve the elimination of this
fundamental investment limitation.

This limitation was originally adopted to address state or "Blue Sky"
requirements in connection with the registration of shares of the Fund for sale.
The Fund is no longer subject to such requirements. The Investment Manager
recommends that this fundamental investment limitation be eliminated because,
while it has not precluded investments in the past, its elimination could
increase the Fund's flexibility when choosing investments in the future. THE
BOARD OF DIRECTORS THEREFORE UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THIS PROPOSAL NO. 2(I).

PROPOSAL NO. 2(J)
TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION
REGARDING OWNING, BUYING OR SELLING REAL ESTATE,
COMMODITIES OR COMMODITIES CONTRACTS

The Fund currently is subject to a fundamental investment limitation
concerning investment in real estate, commodities or commodities contracts and
the Investment Manager recommends a change in the fundamental investment
limitation. The current and proposed fundamental investment limitations are set
forth below.

- --------------------------------------------------------------------------------
CURRENT PROPOSED
- --------------------------------------------------------------------------------
Not to own, buy or sell real estate, Not to purchase or sell physical
commodities or commodity contracts. commodities, except that the Fund may
enter into futures contracts and
options thereon. Not to purchase or
sell real estate unless acquired as a
result of ownership of securities or
other instruments (but this shall not
prevent the Fund from investment in
securities or other instruments backed
by real estate or securities of
companies engaged in the real estate
business).
- --------------------------------------------------------------------------------

The Fund has interpreted the fundamental policy limitation concerning
commodities to allow investment in financial futures contracts and options
thereon. The proposed amendment of this fundamental policy limitation modernizes
the language to reflect this interpretation but does not change the Fund's
approach to investing in commodities. The Fund does not intend to engage in the
buying or selling of physical commodities such as pork, corn and wheat futures
or related commodity contracts other than financial instruments.

The Fund similarly has interpreted this fundamental investment limitation to
allow the purchase of securities or other instruments backed by real estate or
securities of companies engaged in the real estate business. The proposed
investment limitation makes explicit this interpretation and also specifically
permits the Fund to sell real estate acquired as a result of ownership of
securities or other instruments. The Investment Manager considers direct
ownership of real estate as a result of ownership of securities or other
instruments to be a remote possibility. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL NO. 2(J).

PROPOSAL NO. 2(K)
TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING WARRANTS

The Fund currently is subject to a fundamental investment limitation
concerning warrants, and the Investment Manager recommends that shareholders
approve the elimination of this fundamental investment limitation. If the
proposal is approved, the Directors intend to replace the current fundamental
investment limitation with an operating policy which could be changed without a
vote of shareholders. The current fundamental investment limitation and proposed
operating policy are set forth below.

- --------------------------------------------------------------------------------
CURRENT PROPOSED
- --------------------------------------------------------------------------------
Not to invest in warrants unless As an operating policy, the Fund does
acquired as a unit or attached to not currently intend to purchase
other securities. warrants, valued at the lower of cost
or market, in excess of 10% of the
Fund's net assets. Included in that
amount but not to exceed 2% of net
assets, are warrants of which the
underlying securities are not traded
on principal domestic or foreign
exchanges. Warrants acquired by the
Fund in units or attached to
securities are not subject to these
restrictions.
- --------------------------------------------------------------------------------

Warrants entitle the holder to purchase the issuer's stock at a specific
price for a specific period of time. The price of a warrant tends to be more
volatile than, and does not always track, the price of the underlying stock.
Warrants are issued with expiration dates. Once a warrant expires, it has no
value in the market.

The Investment Manager recommends elimination of the fundamental investment
limitation and adoption of the operating policy to give the Fund the flexibility
to invest in warrants. The Investment Manager believes that such flexibility is
beneficial to the Fund. THE BOARD OF DIRECTORS THEREFORE UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE FOR PROPOSAL NO. 2(K).

PROPOSAL NO. 2(L)
TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING RESTRICTED SECURITIES

The Fund currently is subject to a fundamental investment limitation
concerning restricted securities, and the Investment Manager recommends that
shareholders approve the elimination of this fundamental investment limitation.
If the proposal is approved, the Directors intend to replace the current
fundamental investment limitation with an operating policy which could be
changed without a vote of shareholders. The current fundamental investment
limitation and proposed operating policy are set forth below.

Restricted securities may be sold only in privately negotiated transactions
or in a public offering with respect to which a registration statement is in
effect under the 1933 Act. Where registration is required, the Fund may be
obligated to pay all or part of the registration expenses and a considerable
period of time may elapse between the time of the decision to sell and the time
the Fund may be permitted sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to develop,
the Fund might obtain a less favorable price than prevailed when it decided to
sell.

The Fund's current fundamental limitation limits investment in restricted
securities to 10% of its total assets. The Board of Directors believes that the
proposed operating policy is in the best interests of shareholders because of
the benefits of standardized limitations and the flexibility to respond more
promptly if increased investment in restricted securities would be beneficial to
the Fund in the future.

The Board of Directors proposes to limit investment in restricted securities
to those securities that are eligible for resale pursuant to Rule 144A. This
rule permits certain qualified institutional buyers, such as the Fund, to trade
in privately placed securities even though such securities are not registered
under the 1933 Act. The Sub-Adviser under the direction of the Board of
Directors will determine whether securities purchased under Rule 144A are
illiquid and therefore subject to the Fund's restriction of investing no more
than _____ percent of its net assets in illiquid securities. Increased
investment in restricted securities could have the effect of increasing the
amount of the Fund's assets invested in illiquid securities. FOR THE REASONS
DISCUSSED ABOVE, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR PROPOSAL NO. 2(L).

PROPOSAL NO. 2(M)
TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING INVESTMENT IN PUTS, CALLS, STRADDLES OR SPREADS

The Fund currently is subject to a fundamental investment limitation
concerning investment in puts, calls, straddles, spreads or a combination
thereof, and the Investment Manager recommends that shareholders approve the
elimination of this fundamental investment limitation. If the proposal is
approved, the Directors intend to replace the current fundamental investment
limitation with an operating policy which could be changed without a vote of
shareholders. The current fundamental investment limitation and proposed
operating policy are set forth below.

- --------------------------------------------------------------------------------
CURRENT PROPOSED
- --------------------------------------------------------------------------------
Not to invest more than 2% of its As an operating policy, the Fund may
total assets in puts, calls, buy and sell exchange-traded and
straddles, spreads, or any combination over-the-counter put and call options,
thereof. including index options, securities
options, currency options and options
on futures, provided that a call or
put may be purchased only if after
such purchase, the value of all call
and put options held by the Fund will
not exceed 5% of the Fund's total
assets. The Fund may write only
covered put and call options. The Fund
does not currently intend to engage in
spread or straddle transactions.
- --------------------------------------------------------------------------------

A call option on a security gives the purchaser of the option, in return for
a premium paid to the writer (seller), the right to buy the underlying security
at the exercise price at any time during the option period. Upon exercise by the
purchaser, the writer (seller) of a call option has the obligation to sell the
underlying security at the exercise price. When the Fund purchases a call
option, it will pay a premium to the party writing the option and a commission
to the broker selling the option. If the option is exercised by the Fund, the
amount of the premium and the commission paid may be greater than the amount of
the brokerage commission that would be charged if the security were to be
purchased directly. By writing a call option, the Fund assumes the risk that it
may be required to deliver the security having a market value higher than its
market value at the time the option was written. The Fund will write call
options in order to obtain a return on its investments from the premiums
received and will retain the premiums whether or not the options are exercised.
Any decline in the market value of the Fund's portfolio securities will be
offset to the extent of the premiums received (net of transaction costs). If an
option is exercised, the premium received on the option will effectively
increase the exercise price.

The Fund will write only covered call options. This means that the Fund will
own the security or currency subject to the option or an option to purchase the
same underlying security or currency, having an exercise price equal to or less
than the exercise price of the "covered" option, or will establish and maintain
with its custodian for the term of the option, an account consisting of cash or
liquid securities having a value equal to the fluctuating market value of the
optioned securities or currencies. During the option period, the writer of a
call option has given up the opportunity for capital appreciation above the
exercise price should the market price of the underlying security increase, but
has retained the risk of loss should the price of the underlying security
decline. Writing call options also involves the risk relating to the Fund's
ability to close out options it has written.

A put option on a security gives the purchaser of the option, in return for
premium paid to the writer (seller), the right to sell the underlying security
at the exercise price at any time during the option period. Upon exercise by the
purchaser, the writer of a put option has the obligation to purchase the
underlying security at the exercise price. The Fund will write only covered put
options, which means that the Fund will maintain in a segregated account cash or
liquid securities in an amount not less than the exercise price or the Fund will
own an option to sell the underlying security or currency subject to the option
having an exercise price equal to or greater than the exercise price of the
"covered" option at all times in which the put option is outstanding. By writing
a put option, the Fund will assume the risk that it may be required to purchase
the underlying security at a price in excess of its current market value.

Options can be highly volatile and could result in reduction of the Fund's
total return, and the Fund's attempt to use such investments for hedging
purposes may not be successful. Losses from options could be significant if the
Fund were unable to close out its position due to distortions in the market or
lack of liquidity.

The use of options involves investment risks and transaction costs to which
the Fund would not be subject absent the use of options. If the Investment
Manager or Sub-Adviser seeks to protect the Fund against potential adverse
movements in the securities, foreign currency or interest rate markets using
options, and such markets do not move in a direction adverse to the Fund, the
Fund could be left in a less favorable position than if such strategies had not
been used. Risks inherent in the use of options include: (a) the risk that
interest rates, securities prices and currency markets will not move in the
directions anticipated; (b) imperfect correlation between the price of options
and movements in the prices of the securities or currencies being hedged; (c)
the fact that skills needed to use options strategies are different from those
needed to select portfolio securities; (d) the possible absence of a liquid
secondary market for any particular instrument at any time; and (e) the possible
need to defer closing out certain hedged positions to avoid adverse tax
consequences. The Fund's ability to terminate option positions established in
the over-the-counter market may be more limited than in the case of
exchange-traded options and may also involve the risk that securities dealers
participating in such transactions would fail to meet their obligations to the
Fund.

The Board of Directors has considered the risks associated with investment in
options and believes that the use of options may be beneficial to the Fund under
certain circumstances. The Board of Directors further believes that adoption of
standardized operating policies will contribute to the overall objectives of
standardization. THE BOARD OF DIRECTORS THEREFORE UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL NO. 2(M).

PROPOSAL NO. 2(N)
TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING INVESTMENT IN OIL, GAS, MINERAL LEASES
OR OTHER MINERAL EXPLORATION DEVELOPMENT PROGRAMS

The Fund currently is subject to a fundamental investment limitation
concerning investment in oil, gas, mineral leases or other mineral exploration
development programs, and the Investment Manager recommends that shareholders
approve the elimination of this fundamental investment limitation. If the
proposal is approved, the Directors intend to replace the current fundamental
investment limitation with an operating policy which could be changed without a
vote of shareholders. The current fundamental investment limitation and proposed
operating policy are set forth below.

- --------------------------------------------------------------------------------
CURRENT PROPOSED
- --------------------------------------------------------------------------------

Not to invest in limited partnerships As an operating policy, the Fund does
or similar interests in oil, gas, not currently intend to invest in oil,
mineral leases or similar mineral gas, mineral leases or other mineral
exploration development programs; exploration or development programs.
provided, however that the Fund may
invest in the securities of other
corporations whose activities include
such exploration and development.
- --------------------------------------------------------------------------------

The proposed change would have no current impact on the Fund. Adoption of a
standardized operating policy would, however, facilitate the Investment Manger's
compliance efforts and would enable to the Fund to respond more promptly in the
future. THE BOARD OF DIRECTORS THEREFORE UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL NO. 2(N).

Conclusion. The Board of Directors believes that all of the proposed changes
to the fundamental investment limitations of the Fund, as set forth in Proposal
No. 2, are in the best interests of shareholders and unanimously recommends
voting FOR all of the changes set forth in Proposal No. 2. Each change that is
approved by shareholders will become effective upon the conclusion of the
Meeting and the investment limitations will be as described above and set forth
in Exhibit C. For any change that is not approved, the Fund's current investment
limitation, as set forth in the applicable sub-portion of Proposal 2, will
remain unchanged.

MORE INFORMATION ABOUT THE INVESTMENT MANAGER AND DISTRIBUTOR

Security Distributors, Inc. ("SDI"), 700 SW Harrison Street, Topeka, Kansas
66636-0001, is principal underwriter of the Fund. SDI is a wholly-owned
subsidiary of Security Benefit Group, Inc. which is a wholly-owned subsidiary of
Security Benefit Life Insurance Company ("SBL"). The Investment Manager is also
a wholly-owned subsidiary of SBL. For the fiscal year ended September 30, 1997,
the Fund paid no sales commissions to SDI.

The principal occupations, and positions with SMC and the Fund, of the
principal executive officer and each officer and director of SMC are as follows:

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS* PRINCIPAL OCCUPATION POSITION WITH SMC POSITION WITH FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James R. Schmank** President and Managing Member Representative of SMC President and Managing Vice President
Member Representative and Director
- ------------------------------------------------------------------------------------------------------------------------------------
John D. Cleland Senior Vice President and Managing Member Senior Vice President President and
Representative of SMC and Managing Member Director
Representative
- ------------------------------------------------------------------------------------------------------------------------------------
Donald A. Chubb, Jr. Business broker, Griffith & Blair Realtors None Director
2222 SW 29th Street
Topeka, KS 66611
- ------------------------------------------------------------------------------------------------------------------------------------
Penny A. Lumpkin Vice President, Palmer Companies (Wholesalers, None Director
3616 Canterbury Town Road Retailers and Developers) and Bellairre Shopping
Topeka, KS 66610 Center (Leasing and Shopping Center Management);
Secretary-Treasurer, Palmer News, Inc. (Wholesale
Distributors)
- ------------------------------------------------------------------------------------------------------------------------------------
Mark L. Morris, Jr. Retired; Former General Partner, Mark Morris None Director
5500 SW 7th Street Associates (Veterinary Research and Education)
Topeka, KS 66606
- ------------------------------------------------------------------------------------------------------------------------------------
Maynard F. Oliverius President and Chief Executive Officer, Stormont-Vail None Director
1500 SW 10th Avenue Health Care
Topeka, KS 66604
- ------------------------------------------------------------------------------------------------------------------------------------
Mark E. Young Vice President, SMC; Second Vice President, Security Vice President Vice President
Benefit Group, Inc. and Security Benefit Life
Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
Jane A. Tedder Vice President and Senior Economist, SMC; Vice Vice President and Vice President
President, Security Benefit Group, Inc. and Senior Economist
Security Benefit Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
Amy J. Lee Secretary, SMC; Vice President, Associate General Secretary Secretary
Counsel and Assistant Secretary, Security Benefit
Group, Inc. and Security Benefit Life Insurance
Company
- ------------------------------------------------------------------------------------------------------------------------------------
Terry A. Milberger Senior Vice President and Senior Portfolio Manager, Senior Vice President Vice President
SMC; Senior Vice President, Security Benefit Group, and Senior Portfolio
Inc. and Security Benefit Life Insurance Company Manager
- ------------------------------------------------------------------------------------------------------------------------------------
Cindy L. Shields Vice President and Portfolio Manager, SMC; Assistant Vice President and Vice President
Vice President, Security Benefit Group, Inc. and Portfolio Manager
Security Benefit Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
James P. Schier Assistant Vice President and Portfolio Manager, SMC; Assistant Vice Vice President
Assistant Vice President, Security Benefit Group, Inc. President and
and Security Benefit Life Insurance Company Portfolio Manager
- ------------------------------------------------------------------------------------------------------------------------------------
Steven M. Bowser Second Vice President and Portfolio Manager, SMC; Second Vice President Vice President
Second Vice President, Security Benefit Group, and Portfolio Manager
Inc. and Security Benefit Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
David Eshnaur Assistant Vice President and Portfolio Manager, SMC; Assistant Vice Vice President
Assistant Vice President, Security Benefit Group, Inc. President and
and Security Benefit Life Insurance Company Portfolio Manager
- ------------------------------------------------------------------------------------------------------------------------------------
Brenda M. Harwood Assistant Vice President and Treasurer, SMC; Assistant Vice Treasurer
Assistant Vice President, Security Benefit Group, Inc. President and
and Security Benefit Life Insurance Company Treasurer
- ------------------------------------------------------------------------------------------------------------------------------------
Christopher D. Swickard Assistant Secretary, SMC; Assistant Vice President and Assistant Secretary Assistant
Assistant Counsel, Security Benefit Group, Inc. and Secretary
Security Benefit Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
*All located at 700 Harrison, Topeka, KS 66636 unless otherwise noted.
**Principal executive officer
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following chart shows the shares of common stock of the Fund beneficially
owned by directors and executive officers of the Fund.

- --------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY
NAME AND POSITION* OWNED AS OF JUNE 30, 1998 PERCENTAGE OF CLASS
- --------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B
------- ------- ------- -------
All directors and executive
officers as a group 8,279.5 None .54% 0
- --------------------------------------------------------------------------------
*No director or "named executive officer" of the Fund beneficially owned any
shares of common stock of the Fund as of June 30, 1998, except as shown in the
above chart.
- --------------------------------------------------------------------------------

STOCKHOLDER PROPOSALS

Unless otherwise required under the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
stockholders. Stockholder proposals must be received at least 120 days prior to
the next meeting of stockholders, whenever held.

OTHER MATTERS

The audited financial statements of the Fund are found in the Annual Report
for the fiscal year ended September 30, 1997, which was mailed to stockholders
on or about December 1, 1997.

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.

By order of the Board of Directors of
Security Equity Fund,
AMY J. LEE
Secretary
<PAGE>
EXHIBIT A

SUB-ADVISORY AGREEMENT

THIS AGREEMENT is made and entered into on this ____ day of
_____________________, 1998 between SECURITY MANAGEMENT COMPANY, LLC (the
"Adviser"), a Kansas limited liability company, registered under the Investment
Advisers Act of 1940, as amended (the "Investment Advisers Act"), and
OPPENHEIMERFUNDS, INC. (the "Subadviser"), a Colorado corporation registered
under the Investment Advisers Act.

WITNESSETH:

WHEREAS, Security Equity Fund (the "Fund"), a Kansas corporation, is
registered with the Securities and Exchange Commission (the "Commission") as an
open-end management investment company under the Investment Company Act of 1940,
as amended (the "Investment Company Act");

WHEREAS, Security Equity Fund has, pursuant to an Advisory Agreement with the
Adviser (the "Advisory Agreement"), retained the Adviser to act as investment
adviser for and to manage its assets;

WHEREAS, the Advisory Agreement permits the Adviser to delegate certain of
its duties under the Advisory Agreement to other investment advisers, subject to
the requirements of the Investment Company Act; and

WHEREAS, the Adviser desires to retain the Subadviser as subadviser for the
Global Series (the "Fund") to act as investment adviser for and to manage the
Fund's Investments (as defined below) and the Subadviser desires to render such
services.

NOW, THEREFORE, the Adviser and Subadviser do mutually agree and promise as
follows:

1. APPOINTMENT AS SUBADVISER. The Adviser hereby retains the Subadviser to
act as investment adviser for and to manage certain assets of the Fund subject
to the supervision of the Adviser and the Board of Directors of the Fund and
subject to the terms of this Agreement; and the Subadviser hereby accepts such
employment. In such capacity, the Subadviser shall be responsible for the Fund's
Investments. The Subadviser shall not be responsible for any services to the
Fund or to bear any expenses other than those delineated in this Agreement.

2. DUTIES OF SUBADVISER.

(a) INVESTMENTS. The Subadviser is hereby authorized and directed and
hereby agrees, subject to the stated investment policies and restrictions of
the Fund as set forth in its prospectus and statement of additional
information as currently in effect and as supplemented or amended from time
to time (collectively referred to hereinafter as the "Prospectus") and
subject to the directions of the Adviser and the Fund's Board to purchase,
hold and sell investments for the account of the Fund (hereinafter
"Investments") and to monitor on a continuous basis the performance of such
Investments. The Subadviser shall give the Fund the benefit of its best
efforts in rendering its services as Subadviser. The Subadviser may contract
with or consult with such banks, other securities firms, brokers or other
parties, without additional expense to the Fund, as it may deem appropriate
regarding investment advice, research and statistical data, clerical
assistance or otherwise.

(b) BROKERAGE. The Subadviser is authorized, subject to the supervision
of the Adviser and the Fund's Board to establish and maintain accounts on
behalf of the Fund with, and place orders for the purchase and sale of the
Fund's Investments with or through, such persons, brokers or dealers as
Subadviser may select which may include, to the extent permitted by the
Adviser and Security Equity Fund, brokers or dealers affiliated with the
Subadviser, and negotiate commissions to be paid on such transactions. The
Subadviser agrees that in placing such orders it shall attempt to obtain best
execution, provided that, the Subadviser may, on behalf of the Fund, pay
brokerage commissions to a broker which provides brokerage and research
services to the Subadviser in excess of the amount another broker would have
charged for effecting the transaction, provided (i) the Subadviser determines
in good faith that the amount is reasonable in relation to the value of the
brokerage and research services provided by the executing broker in terms of
the particular transaction or in terms of the Subadviser's overall
responsibilities with respect to the Fund and the accounts as to which the
Subadviser exercises investment discretion, (ii) such payment is made in
compliance with Section 28(e) of the Securities Exchange Act of 1934, as
amended, and any other applicable laws and regulations, and (iii) in the
opinion of the Subadviser, the total commissions paid by the Fund will be
reasonable in relation to the benefits to the Fund over the long term. In
reaching such determination, the Subadviser will not be required to place or
attempt to place a specific dollar value on the brokerage and/or research
services provided or being provided by such broker. It is recognized that the
services provided by such brokers may be useful to the Subadviser in
connection with the Subadviser's services to other clients. On occasions when
the Subadviser deems the purchase or sale of a security to be in the best
interests of a Fund as well as other clients of the Subadviser, the
Subadviser, to the extent permitted by applicable laws and regulations, may,
but shall be under no obligation to, aggregate the securities to be sold or
purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of securities
so sold or purchased, as well as the expenses incurred in the transaction,
will be made by the Subadviser in the manner the Subadviser considers to be
the most equitable and consistent with its fiduciary obligations to the Fund
and to such other clients. The Subadviser will report on such allocations at
the request of the Adviser, the Fund or the Fund's Board providing such
information as the number of aggregated trades to which the Fund was a party,
the broker(s) to whom such trades were directed and the basis of the
allocation for the aggregated trades. Subject to the foregoing provisions of
this subsection 2(b), the Subadviser may also consider sales of fund shares
and shares of other investment companies managed by the Subadviser or its
affiliates as a factor in the selection of brokers or dealers for the Fund's
portfolio transactions.

(c) SECURITIES TRANSACTIONS. The Subadviser and any affiliated person of
the Subadviser will not purchase securities or other instruments from or sell
securities or other instruments to the Fund ("Principal Transactions");
PROVIDED, HOWEVER, the Subadviser may enter into a Principal Transaction with
the Fund if (i) the transaction is permissible under applicable laws and
regulations, including, without limitation, the Investment Company Act and
the Investment Advisers Act and the rules and regulations promulgated
thereunder, and (ii) the transaction or category of transactions receives the
express written approval of the Adviser.

The Subadviser agrees to observe and comply with Rule 17j-1 under the
Investment Company Act and its Code of Ethics, as the same may be amended
from time to time. The Subadviser agrees to provide the Adviser and the Fund
with a copy of such Code of Ethics.

(d) BOOKS AND RECORDS. The Subadviser will maintain all books and records
required to be maintained pursuant to the Investment Company Act and the
rules and regulations promulgated thereunder solely with respect to
transactions made by it on behalf of the Fund including, without limitation,
the books and records required by Subsections (b)(1), (5), (6), (7), (9),
(10) and (11) and Subsection (f) of Rule 31a-1 under the Investment Company
Act and shall timely furnish to the Adviser all information relating to the
Subadviser's services hereunder needed by the Adviser to keep such other
books and records of the Fund required by Rule 31a-1 under the Investment
Company Act. The Subadviser will also preserve all such books and records for
the periods prescribed in Rule 31a-2 under the Investment Company Act, and
agrees that such books and records shall remain the sole property of the Fund
and shall be immediately surrendered to the Fund upon request. The Subadviser
further agrees that all books and records maintained hereunder shall be made
available to the Fund or the Adviser at any time upon reasonable request and
notice, including telecopy, during any business day.

(e) INFORMATION CONCERNING INVESTMENTS AND SUBADVISER. From time to time
as the Adviser or the Fund may request, the Subadviser will furnish the
requesting party reports on portfolio transactions and reports on Investments
held in the portfolio, all in such detail as the Adviser or the Fund may
reasonably request. The Subadviser will make available its officers and
employees to meet with the Fund's Board of Directors at the Fund's principal
place of business on due notice (but no more than once in any 12-month
period) to review the Investments of the Fund.

The Subadviser will also provide such information as is customarily
provided by a subadviser and may be required for the Fund or the Adviser to
comply with their respective obligations under applicable laws, including,
without limitation, the Internal Revenue Code of 1986, as amended (the
"Code"), the Investment Company Act, the Investment Advisers Act, the
Securities Act of 1933, as amended (the "Securities Act") and any state
securities laws, and any rule or regulation thereunder.

(f) CUSTODY ARRANGEMENTS. The Subadviser shall provide the Fund's
custodian, on each business day with information relating to all transactions
concerning the Fund's assets.

(g) COMPLIANCE WITH APPLICABLE LAWS AND GOVERNING DOCUMENTS. In all
matters relating to the performance of this Agreement, the Subadviser and its
directors, officers, partners, employees and interested persons shall act in
conformity with the Fund's Articles of Incorporation, By-Laws, and currently
effective registration statement and with the written instructions and
directions of the Fund's Board and the Adviser, and shall comply with the
requirements of the Investment Company Act, the Investment Advisers Act, the
Commodity Exchange Act, the rules thereunder, and all other applicable
federal and state laws and regulations.

In carrying out its obligations under this Agreement, the Subadviser
shall ensure that the Fund complies with all applicable statutes and
regulations necessary to qualify the Fund as a Regulated Investment Company
under Subchapter M of the Code (or any successor provision), and shall notify
the Adviser immediately upon having a reasonable basis for believing that the
Fund has ceased to so qualify or that it might not so qualify in the future.

The Adviser has furnished the Subadviser with copies of each of the
following documents and will furnish the Subadviser at its principal office
all future amendments and supplements to such documents, if any, as soon as
practicable after such documents become available: (i) the Articles of
Incorporation of the Fund, (ii) the By-Laws of the Fund, (iii) the Fund's
registration statement under the Investment Company Act and the Securities
Act of 1933, as amended, as filed with the Commission, and (iv) any written
instructions of the Security Equity Fund Board and the Adviser.

(h) VOTING OF PROXIES. The Subadviser shall direct the custodian as to
how to vote such proxies as may be necessary or advisable in connection with
any matters submitted to a vote of shareholders of securities held by the
Fund.

3. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the
Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Fund or the Adviser in any way or
otherwise be deemed an agent of the Fund or the Adviser.

4. COMPENSATION. The Adviser shall pay to the Subadviser, for the services
rendered hereunder, an annual fee equal to a percentage of the average daily
closing value of the combined net assets of the Fund and Series D of SBL Fund,
computed on a daily basis and payable monthly, as follows: 0.35 percent of such
assets up to $300 million, plus 0.30 percent of such assets over $300 million up
to $750 million and 0.25 percent of such assets over $750 million. If this
Agreement shall be effective for only a portion of a year, then the Subadviser's
compensation for said year shall be prorated for such portion. For purposes of
this paragraph 4, the value of the net assets of the Fund shall be computed in
the same manner at the end of the business day as the value of such net assets
is computed in connection with the determination of the net asset value of the
Fund's shares as described in the Fund's Prospectus. Payment of the Subadviser's
compensation for the preceding month shall be made as promptly as possible after
the end of each month.

5. EXPENSES. The Subadviser shall bear all expenses incurred by it in
connection with its services under this Agreement and will, from time to time,
at its sole expense employ or associate itself with such persons as it believes
to be particularly fitted to assist it in the execution of its duties hereunder.
However, the Subadviser shall not assign or delegate any of its investment
management duties under this Agreement without the approval of the Adviser and
the Fund's Board.

6. REPRESENTATIONS AND WARRANTIES OF SUBADVISER. The Subadviser represents
and warrants to the Adviser and the Fund as follows:

(a) The Subadviser is registered as an investment adviser under the
Investment Advisers Act;

(b) The Subadviser will immediately notify the Adviser of the occurrence
of any event that would disqualify the Subadviser from serving as an
investment adviser of an investment company pursuant to Section 9(a) of the
Investment Company Act;

(c) The Subadviser has registered as a commodities trading advisor under
the CEA with the Commodity Futures Trading Commission (the "CFTC");

(d) The Subadviser is a corporation duly organized and validly existing
under the laws of the State of Colorado with the power to own and possess its
assets and carry on its business as it is now being conducted;

(e) The execution, delivery and performance by the Subadviser of this
Agreement are within the Subadviser's powers and have been duly authorized by
all necessary action on the part of its shareholders, and no action by or in
respect of, or filing with, any governmental body, agency or official is
required on the part of the Subadviser for the execution, delivery and
performance by the Subadviser of this Agreement, and the execution, delivery
and performance by the Subadviser of this Agreement do not contravene or
constitute a default under (i) any provision of applicable law, rule or
regulation, (ii) the Subadviser's governing instruments, or (iii) any
agreement, judgment, injunction, order, decree or other instrument binding
upon the Subadviser;

(f) This Agreement is a valid and binding agreement of the Subadviser;

(g) The Form ADV of the Subadviser previously provided to the Adviser is
a true and complete copy of the form filed with the Commission and the
information contained therein is accurate and complete in all material
respects as of its filing date, and does not omit to state any material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading;

7. NON-EXCLUSIVITY. The services of the Subadviser with respect to the Fund
are not deemed to be exclusive, and the Subadviser and its officers shall be
free to render investment advisory and administrative or other services to
others (including other investment companies) and to engage in other activities.

8. REPRESENTATIONS AND WARRANTIES OF ADVISER. The Adviser represents and
warrants to the Subadviser as follows:

(a) The Adviser is registered as an investment adviser under the
Investment Advisers Act;

(b) The Adviser has filed a notice of exemption pursuant to Rule 4.14
under the CEA with the Commodity Futures Trading Commission (the "CFTC") and
the National Futures Association;

(c) The Adviser is a limited liability company duly organized and validly
existing under the laws of the State of Kansas with the power to own and
possess its assets and carry on its business as it is now being conducted;

(d) The execution, delivery and performance by the Adviser of this
Agreement and the Advisory Agreement are within the Adviser's powers and have
been duly authorized by all necessary action on the part of its members, and
no action by or in respect of, or filing with, any governmental body, agency
or official is required on the part of the Adviser for the execution,
delivery and performance by the Adviser of this Agreement, and the execution,
delivery and performance by the Adviser of this Agreement do not contravene
or constitute a default under (i) any provision of applicable law, rule or
regulation, (ii) the Adviser's governing instruments, or (iii) any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Adviser;

(e) This Agreement and the Advisory Agreement are valid and binding
agreements of the Adviser;

(f) The Form ADV of the Adviser previously provided to the Subadviser is
a true and complete copy of the form filed with the Commission and the
information contained therein is accurate and complete in all material
respects and does not omit to state any material fact necessary in order to
make the statements made, in light of the circumstances under which they were
made, not misleading;

(g) The Adviser acknowledges that it received a copy of the Subadviser's
Form ADV at least 48 hours prior to the execution of this Agreement.

9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE INFORMATION.
All representations and warranties made by the Subadviser and the Adviser
pursuant to Sections 6 and 7 hereof shall survive for the duration of this
Agreement and the parties hereto shall promptly notify each other in writing
upon becoming aware that any of the foregoing representations and warranties are
no longer true.

10. LIABILITY AND INDEMNIFICATION.

(a) LIABILITY. In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Subadviser or a breach of its duties hereunder,
the Subadviser shall not be subject to any liability to the Adviser, Security
Equity Fund, or the Fund or any of the Fund's shareholders, and, in the
absence of willful misfeasance, bad faith or gross negligence on the part of
the Adviser or a breach of its duties hereunder, the Adviser shall not be
subject to any liability to the Subadviser, for any act or omission in the
case of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of Investments;
PROVIDED, HOWEVER, that nothing herein shall relieve the Adviser and the
Subadviser from any of their respective obligations under applicable law,
including, without limitation, the federal and state securities laws and the
CEA.

(b) INDEMNIFICATION. The Subadviser shall indemnify the Adviser, Security
Equity Fund and the Fund, and their respective officers and directors, for
any liability and expenses, including attorneys' fees, which may be sustained
by the Adviser, Security Equity Fund or the Fund, as a result of the
Subadviser's willful misfeasance, bad faith, gross negligence, breach of its
duties hereunder or violation of applicable law, including, without
limitation, the federal and state securities laws or the CEA. The Adviser
shall indemnify the Subadviser and its officers and directors, for any
liability and expenses, including attorneys' fees, which may be sustained as
a result of the Adviser's, Security Equity Fund's or the Fund's willful
misfeasance, bad faith, gross negligence, breach of its duties hereunder or
violation of applicable law, including, without limitation, the federal and
state securities laws or the CEA.

11. DURATION AND TERMINATION.

(a) DURATION. This Agreement shall become effective upon the date first
above written, provided that this Agreement shall not take effect with
respect to Security Equity Fund unless it has first been approved (i) by a
vote of a majority of those directors of Security Equity Fund who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and
(ii) by vote of a majority of Security Equity Fund's outstanding voting
securities. This Agreement shall continue in effect for a period of two years
from the date hereof, subject thereafter to being continued in force and
effect from year to year with respect to the Fund if specifically approved
each year by either (i) the Board of Directors of Security Equity Fund, or
(ii) by the affirmative vote of a majority of the Fund's outstanding voting
securities. In addition to the foregoing, each renewal of this Agreement with
respect to the Fund must be approved by the vote of a majority of Security
Equity Fund's directors who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose
of voting on such approval. Prior to voting on the renewal of this Agreement,
the Board of Directors of the Fund may request and evaluate, and the
Subadviser shall furnish, such information as may reasonably be necessary to
enable the Fund's Board of Directors to evaluate the terms of this Agreement.

(b) TERMINATION. Notwithstanding whatever may be provided herein to the
contrary, this Agreement may be terminated at any time, without payment of
any penalty:

(i) By vote of a majority of the Board of Directors of Security
Equity Fund, or by vote of a majority of the outstanding voting
securities of the Fund, or by the Adviser, in each case, upon sixty (60)
days' written notice to the Subadviser;

(ii) By the Adviser upon breach by the Subadviser of any
representation or warranty contained in Section 6 hereof, which shall not
have been cured during the notice period, upon twenty (20) days written
notice;

(iii) By the Adviser immediately upon written notice to the
Subadviser if the Subadviser becomes unable to discharge its duties and
obligations under this Agreement; or

(iv) By the Subadviser upon 180 days written notice to the Adviser
and the Fund.

This Agreement shall not be assigned (as such term is defined in the
Investment Company Act) without the prior written consent of the parties
hereto. This Agreement shall terminate automatically in the event of its
assignment without such consent or upon the termination of the Advisory
Agreement.

12. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Fund pursuant to the Advisory Agreement
and shall oversee and review the Subadviser's performance of its duties under
this Agreement. The Adviser shall remain responsible for, among other things,
providing the following services with respect to the Fund:

(a) The Adviser shall provide the Subadviser, or shall cause the Fund's
Custodian to provide to the Subadviser, on each business day as of time
deadline to be mutually agreed upon, a report or a computer download in a
mutually acceptable software program and format, detailing the Fund's
portfolio holdings, uninvested cash, current valuations and other information
requested by the Subadviser to assist it in carrying out its duties under
this Agreement, as of the close of the prior business day. In performing its
obligations under this Agreement, the Subadviser may rely upon the
information provided to it by or on behalf of the Adviser or the Fund's
Custodian.

(b) Composition of periodic reports with respect to the Fund's operations
for shareholders of the Fund, composition of proxy materials for meetings of
the Fund's shareholders and the composition of such registration statements
as may be required by Federal and state securities laws for the continuous
public offering and sale of shares of the Fund, as well as the determination
of the net asset value of shares of the Fund.

13. AMENDMENT. This Agreement may be amended by mutual consent of the
parties, provided that the terms of each such amendment with respect to the Fund
shall be approved by the Board of Directors of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund.

14. NOTICE. Any notice that is required to be given by the parties to each
other (or to the Fund) under the terms of this Agreement shall be in writing,
delivered, or mailed postpaid to the other party, or transmitted by facsimile
with acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:

(a) If to the Subadviser:

OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Attention: Andrew J. Donohue
Facsimile: (212) 321-1159

(b) Copy to:

OppenheimerFunds, Inc.
6801 Tucson Way
Englewood, CO 80112
Attention: Treasurer
Facsimile: (303) 768-2849

James R. Schmank
President
Security Management Company, LLC
700 SW Harrison
Topeka, Kansas 66636-0001
Attention: James R. Schmank
Facsimile: (785) 431-3080

(d) If to Security Equity Fund:

Amy J. Lee
Secretary
Security Equity Fund
700 SW Harrison
Topeka, Kansas 66636-0001
Attention: Amy J. Lee, Secretary
Facsimile: (785) 431-3080

15. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Kansas.

16. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which shall together constitute one and the same instrument.

17. CAPTIONS. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.

18. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision or applicable law, the remainder of the Agreement
shall not be affected adversely and shall remain in full force and effect.

19. CERTAIN DEFINITIONS.

(a) "BUSINESS DAY." As used herein, business day means any customary
business day in the United States on which the New York Stock Exchange is
open.

(b) MISCELLANEOUS. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the Investment Company Act shall be resolved by
reference to such term or provision of the Investment Company Act and to
interpretations thereof, if any, by the U.S. courts or, in the absence of any
controlling decisions of any such court, by rules, regulation or order of the
Commission validly issued pursuant to the Investment Company Act.
Specifically, as used herein, "investment company," "affiliated person,"
"interested person," "assignment," "broker," "dealer" and "affirmative vote
of the majority of the Fund's outstanding voting securities" shall all have
such meaning as such terms have in the Investment Company Act. The term
"investment adviser" shall have such meaning as such term has in the
Investment Advisers Act and the Investment Company Act, and in the event of a
conflict between such Acts, the most expansive definition shall control. In
addition, where the effect of a requirement of the Investment Company Act
reflected in any provision of this Agreement is relaxed by a rule, regulation
or order of the Commission, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule, regulation
or order.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.

SECURITY MANAGEMENT COMPANY, LLC

By: ______________________________
Name: James R. Schmank
Title: President

Attest: ______________________________
Name: Amy J. Lee
Title: Secretary

OPPENHEIMERFUNDS, INC.

By: ______________________________
Name:
Title:

Attest: ______________________________
Name:
Title:
<PAGE>
[SBG LOGO]
The Security Benefit Group of Companies
700 SW Harrison St.
Topeka, Kansas 66636-0001

GLOBAL SERIES OF SECURITY EQUITY FUND
Special Meeting of Shareholders
October 28, 1998

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

GLOBAL SERIES OF SECURITY EQUITY FUND

held by the undersigned at the Special Meeting of Shareholders of the
Fund to be held at 9:30 AM, local time, on October 28, 1998, at
Security Benefit Group Building, 700 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.

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.

PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X]

KEEP THIS PORTION FOR YOUR RECORDS
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
DETACH AND RETURN THIS PORTION ONLY

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

For address changes and/or comments, please check [ ]
this box and write them on the back where indicated.

Vote On Proposals
FOR AGAINST ABSTAIN

1. Approval of the Sub-Advisory Contract between
SMC and OppenheimerFunds, Inc. [ ] [ ] [ ]

2. a. Approval of the proposed amendment to the
Fund's fundamental investment limitation
concerning diversification. [ ] [ ] [ ]

2. b. Approval of the proposed amendment to the
Fund's fundamental investment limitation
concerning underwriting. [ ] [ ] [ ]

2. c. Approval of the proposed amendment to the
Fund's fundamental investment limitation
concerning borrowing. [ ] [ ] [ ]

2. d. Approval of the proposed amendment to the
Fund's fundamental investment limitation
concerning lending. [ ] [ ] [ ]

2. e. Approval of the elimination of the Fund's
fundamental investment limitation concerning
margin purchases of securities and short
sales. [ ] [ ] [ ]

2. f. Approval of the proposed amendment to the
Fund's fundamental investment limitation
concerning senior securities. [ ] [ ] [ ]

2. g. Approval of the elimination of the Fund's
fundamental investment limitation concerning
investment in other investment companies. [ ] [ ] [ ]

2. h. Approval of the elimination of the Fund's
fundamental investment limitation concerning
investment in companies with less than three
years' operating history. [ ] [ ] [ ]

2. i. Approval of the elimination of the Fund's
fundamental investment limitation concerning
purchasing securities of an issuer in which
the officers and directors of the Fund,
Investment Manager or Underwriter own more
than 5% of the outstanding securities of
such issuer. [ ] [ ] [ ]

2. j. Approval of the proposed amendment to the
Fund's fundamental investment limitation
regarding owning, buying or selling real
estate commodities or commodities contracts. [ ] [ ] [ ]

2. k. Approval of the elimination of the Fund's
fundamental investment limitation concerning
warrants. [ ] [ ] [ ]

2. l. Approval of the elimination of the Fund's
fundamental investment limitation concerning
restricted securities. [ ] [ ] [ ]

2. m. Approval of the elimination of the Fund's
fundamental investment limitation concerning
investment in puts, calls, straddles or
spreads. [ ] [ ] [ ]

2. n. Approval of the elimination of the Fund's
fundamental investment limitation concerning
investment in oil, gas, mineral leases or
other mineral exporation development
programs. [ ] [ ] [ ]

___________________________________________ _________________________________
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date

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