SECURITY EQUITY FUND
PRE 14A, 1999-12-01
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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 ANNUAL MEETING OF STOCKHOLDERS OF
                              SECURITY EQUITY FUND
                           TO BE HELD JANUARY 26, 2000
                 700 SW HARRISON ST., TOPEKA, KANSAS 66636-0001
                            TELEPHONE 1-800-888-2461


TO THE STOCKHOLDERS OF
   >  SECURITY EQUITY FUND

   Notice is hereby given that an annual meeting of the stockholders of Security
Equity Fund (the "Fund"), a Kansas  corporation,  will be held at the offices of
Security Equity Fund,  Security Benefit Group Building,  700 SW Harrison Street,
Topeka,  Kansas  66636-0001,  on  January  26,  2000 at  9:30  a.m.  local  time
("Meeting"), for the following purposes:

   1.  To elect six  directors  to serve on the Board of  Directors  of the Fund
       until the next annual meeting,  or until their successors shall have been
       duly elected and qualified.

   2.  To  ratify or reject  the  selection  of the firm of Ernst & Young LLP as
       independent accountants for the Fund's fiscal year 2000.

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

       b.  To amend the  Fund's  fundamental  investment  limitation  concerning
           share ownership of any one issuer.

       c.  To eliminate the Fund's fundamental  investment limitation concerning
           investing for control of portfolio companies.

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

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

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

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

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

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

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

       k.  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.

       l.  To eliminate the Fund's fundamental  investment limitation concerning
           the  officers or directors of the Fund,  the  Underwriter  or Manager
           purchasing shares of the Fund, except at current net asset value.

       m.  To amend the  Fund's  fundamental  investment  limitation  concerning
           buying or selling real estate.

       n.  To amend the  Fund's  fundamental  investment  limitation  concerning
           buying or selling commodities or commodity contracts.

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

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

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

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

   4.  To approve or  disapprove  an  arrangement  and new  investment  advisory
       contract that would permit Security Management  Company,  LLC, the Fund's
       investment  adviser,   with  Board  approval,  to  enter  into  or  amend
       sub-advisory agreements without stockholder approval.

   5.  To approve or  disapprove a Brokerage  Enhancement  Plan pursuant to Rule
       12b-1  under the  Investment  Company Act of 1940,  and a new  investment
       advisory contract that would permit the implementation of the Plan.

   6.  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  Security  Equity  Fund has  fixed  the close of
business on November  30,  1999,  as the record  date for the  determination  of
stockholders of the Fund entitled to notice of and to vote at the Meeting.

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

                                           By order of the Board of Directors of
                                                           Security Equity Fund,
Topeka, Kansas                                                        AMY J. LEE
December _____, 1999                                                   Secretary
- --------------------------------------------------------------------------------
IMPORTANT: STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT IN PERSON AT THE MEETING
ARE REQUESTED TO MARK,  DATE,  SIGN AND RETURN THE ENCLOSED PROXY CARD(S) TO THE
FUND, OR OTHERWISE VOTE THEIR SHARES, AS EARLY AS POSSIBLE.
<PAGE>
SECURITY EQUITY FUND
MEMBER OF THE SECURITY BENEFIT GROUP OF COMPANIES
700 SW HARRISON STREET, TOPEKA, KANSAS 66636-0001


                ANNUAL MEETING OF STOCKHOLDERS, JANUARY 26, 2000
                                 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"). You may vote in person at the annual Meeting,
by telephone,  by Internet,  or by returning  your  completed  proxy card in the
postage-paid  envelope  provided.  Details  can be found on the  enclosed  proxy
insert.  Do not  return  your  proxy  card if you are  voting  by  telephone  or
Internet.  You may revoke your proxy by submitting  another proxy or a notice of
revocation  of your proxy in proper  form to the  Secretary  of the Fund,  or by
voting the shares in person at the Meeting.  A second proxy form may be obtained
from the Secretary of the 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 each
Series of the Fund,  except  Equity and  Global  Series.  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.  To ensure  that  sufficient  shares  of common  stock are
represented at the Meeting to permit approval of the proposals set forth herein,
the Fund may retain the services of a proxy  solicitor  to assist in  soliciting
proxies for a fee, plus  reimbursement  of out-of-pocket  expenses.  Proxies are
expected  to be mailed to the Fund's  stockholders  on or about  December  ____,
1999.

                                VOTING SECURITIES

   Only Fund  stockholders  of record at the close of business  on November  30,
1999, are entitled to vote at the annual Meeting.  On that date, the outstanding
number of voting  securities  of each Series of common stock of the Fund (each a
"Series" and collectively the "Series") was as follows:
- --------------------------------------------------------------------------------
THE FUND WILL FURNISH,  WITHOUT CHARGE,  A COPY OF THE ANNUAL REPORT  CONTAINING
AUDITED FINANCIAL  STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999, TO A
STOCKHOLDER  UPON  REQUEST.  SUCH  REQUESTS  SHOULD BE DIRECTED TO THE FUND,  BY
WRITING THE FUND AT 700 SW HARRISON STREET,  TOPEKA,  KANSAS  66636-0001,  OR BY
CALLING THE FUND'S TOLL-FREE TELEPHONE NUMBER 1-800-888-2461, EXTENSION 3127.
<PAGE>
          -----------------------------------------------------------
          SERIES OF COMMON STOCK            SHARES OUTSTANDING
          -----------------------------------------------------------
                                      CLASS A     CLASS B     CLASS C
          Equity Series
          Global Series
          Total Return Series
          Social Awareness Series
          Value Series
          Small Company Series
          Enhanced Index Series
          International Series
          Select 25 Series
          -----------------------------------------------------------
          As  of  the  Record  Date,  the  following   persons  owned
          beneficially more than 5% of a Series.
          -----------------------------------------------------------

          -----------------------------------------------------------
                                                         % OF SERIES'
                                         NUMBER OF       OUTSTANDING
                SERIES         NAME     SHARES OWNED        SHARES
          -----------------------------------------------------------
          Equity
          Global
          Total Return
          Social Awareness
          Value
          Small Company
          Enhanced Index
          International
          Select 25
          -----------------------------------------------------------

   Each  Series of the Fund's  common  stock has a par value of $1.00 per share.
Each  share is  entitled  to one vote and  shares  of the  Series  will be voted
together  with  respect to Proposal  Nos. 1 and 2. Shares of each Series will be
voted  separately  with respect to Proposal Nos. 3, 4, and 5 as set forth in the
table below.

- --------------------------------------------------------------------------------
                PROPOSAL                               SERIES AFFECTED
- --------------------------------------------------------------------------------
1.   To elect  six (6)  directors  to the Board of     All Series of the Fund
     Directors.
- --------------------------------------------------------------------------------
2.   To ratify or reject the  selection of Ernst &     All Series of the Fund
     Young LLP as  independent  accountants of the
     Fund for fiscal year 2000
- --------------------------------------------------------------------------------
3a.  To amend the  Fund's  fundamental  investment     All Series of the Fund,
     limitation concerning diversification.            except Global, Enhanced
                                                       Index, International and
                                                       Select 25
- --------------------------------------------------------------------------------
3b.  To amend the  Fund's  fundamental  investment     All Series of the Fund
     limitation  concerning share ownership of any
     one issuer.
- --------------------------------------------------------------------------------
3c.  To   eliminate    the   Fund's    fundamental     All Series of the Fund
     investment  limitation  concerning  investing
     for control of portfolio companies.
- --------------------------------------------------------------------------------
3d.  To amend the  Fund's  fundamental  investment     All Series of the Fund,
     limitation concerning underwriting.               except Global, Enhanced
                                                       Index, International and
                                                       Select 25
- --------------------------------------------------------------------------------
3e.  To amend the  Fund's  fundamental  investment     All Series of the Fund,
     limitation concerning borrowing.                  except Global, Enhanced
                                                       Index, International and
                                                       Select 25
- --------------------------------------------------------------------------------
3f.  To amend the  Fund's  fundamental  investment     All Series of the Fund,
     limitation concerning lending.                    except Global, Enhanced
                                                       Index, International and
                                                       Select 25
- --------------------------------------------------------------------------------
3g.  To   eliminate    the   Fund's    fundamental     All Series of the Fund,
     investment  limitation concerning short sales     except Global, Enhanced
     and margin purchases of securities.               Index, International,
                                                       Select 25 and Small
                                                       Company
- --------------------------------------------------------------------------------
3h.  To amend the  Fund's  fundamental  investment     Only Equity Series
     limitation concerning senior securities.          of the Fund
- --------------------------------------------------------------------------------
3i.  To   eliminate    the   Fund's    fundamental     Only Equity Series
     investment  limitation  concerning investment     of the Fund
     in other investment companies.
- --------------------------------------------------------------------------------
3j.  To   eliminate    the   Fund's    fundamental     Only Equity Series
     investment  limitation  concerning investment     of the Fund
     in  companies  with  less than  three  years'
     operating history.
- --------------------------------------------------------------------------------
3k.  To   eliminate    the   Fund's    fundamental     All Series of the Fund,
     investment  limitation  concerning purchasing     except Global, Enhanced
     securities of an issuer in which the officers     Index, International,
     and directors of the Fund, investment manager     Select 25 and Small
     or  underwriter  own  more  than  5%  of  the     Company
     outstanding securities of such issuer.
- --------------------------------------------------------------------------------
3l.  To   eliminate    the   Fund's    fundamental     All Series of the Fund
     investment limitation concerning the officers
     or directors of the Fund, the  Underwriter or
     Investment  Manager  purchasing shares of the
     Fund, except at current net asset value.
- --------------------------------------------------------------------------------
3m.  To amend the  Fund's  fundamental  investment     All Series of the Fund,
     limitation  concerning buying or selling real     except Global, Enhanced
     estate.                                           Index, International and
                                                       Select 25
- --------------------------------------------------------------------------------
3n.  To amend the  Fund's  fundamental  investment     All Series of the Fund,
     limitation    concerning    commodities    or     except Global, Enhanced
     commodity contracts.                              Index, International and
                                                       Select 25
- --------------------------------------------------------------------------------
3o.  To   eliminate    the   Fund's    fundamental     Only Equity Series
     investment  limitation  concerning investment     of the Fund
     in warrants.
- --------------------------------------------------------------------------------
3p.  To   eliminate    the   Fund's    fundamental     Only Equity Series
     investment  limitation  concerning restricted     of the Fund
     securities.
- --------------------------------------------------------------------------------
3q.  To   eliminate    the   Fund's    fundamental     Only Equity Series
     investment  limitation  concerning investment     of the Fund
     in puts, calls, straddles or spreads.
- --------------------------------------------------------------------------------
3r.  To   eliminate    the   Fund's    fundamental     All Series of the Fund,
     investment  limitation  concerning investment     except Global, Enhanced
     in oil, gas,  mineral leases or other mineral     Index, International,
     exploration development programs.                 Select 25 and Small
                                                       Company
- --------------------------------------------------------------------------------
4.   To approve or disapprove an  arrangement  and     All Series of the Fund
     new investment  advisory  contract that would
     permit Security Management Company,  LLC, the
     Fund's   investment   adviser,   with   Board
     approval, to enter into or amend sub-advisory
     agreements without stockholder approval.
- --------------------------------------------------------------------------------
5.   To  approve   or   disapprove   a   Brokerage     All Series of the Fund
     Enhancement Plan pursuant to Rule 12b-1 under
     the Investment Company Act of 1940, and a new
     investment   advisory   contract  that  would
     permit the implementation of the Plan.
- --------------------------------------------------------------------------------

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

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

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

                                 PROPOSAL NO. 1
                              ELECTION OF DIRECTORS

   The Board of  Directors  has  proposed a slate of six persons for election as
directors  of the Fund,  each to hold office  until the next annual  meeting (if
any) or until his or her successor is duly elected and  qualified.  Each nominee
is currently a director of the Fund and has  consented to his or her  nomination
and agreed to serve if  elected.  Each  director  was  elected by  stockholders,
except James R. Schmank,  who was elected by the other directors on December 10,
1997, and Maynard F.  Oliverius,  who was so elected on February 6, 1998. If any
of the nominees is not available for election,  the persons named as proxies (or
their  substitutes) may vote for other persons in their  discretion.  Management
has no reason to believe that any nominee will be unavailable for election.

   The  names of the  nominees  to the  Fund's  Board  of  Directors  and  their
respective offices and principal occupations are set forth below.

                    NOMINEES TO THE FUND'S BOARD OF DIRECTORS

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
                                                      FUND SHARES BENEFICIALLY OWNED,      ALL OTHER SECURITY FUNDS'
                                                          DIRECTLY OR INDIRECTLY,            SHARES OWNED DIRECTLY
NAME, AGE, ADDRESS,                                          AS OF 11/30/99                      AS OF 11/30/99           DATE FIRST
POSITION ON FUND BOARD                                -------------------------------    -----------------------------     BECAME A
AND PRINCIPAL OCCUPATIONS                              FUND                    SHARES    FUND                   SHARES     DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                     <C>       <C>                    <C>          <C>
DONALD A. CHUBB, JR., 53,                              Equity                            Growth and Income                   1994
2222 SW 29th Street,                                                                     Ultra
Topeka, Kansas 66611,                                                                    Corporate Bond
POSITION ON FUND BOARD: Director of the Fund                                             Cash
PRINCIPAL OCCUPATIONS: Business broker, Griffith &                                       Global
Blair Realtors. Prior to 1997, President, Neon                                           Total Return
Tube Light Company, Inc.                                                                 Select 25
                                                                                         SBL Fund - Series A
                                                                                         SBL Fund - Series B
                                                                                         SBL Fund - Series S
- ------------------------------------------------------------------------------------------------------------------------------------
JOHN D. CLELAND*, 63,                                  Equity                            Ultra                               1991
700 SW Harrison Street,                                                                  Cash
Topeka, Kansas 66636-0001,                                                               Value
POSITION ON FUND BOARD: President and Director of                                        Small Company
the Fund                                                                                 Select 25
PRINCIPAL OCCUPATIONS: Senior Vice President and                                         Growth and Income
Managing Member Representative, Security
Management Company, LLC; Senior Vice President,
Security Benefit Group, Inc. and Security Benefit
Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
PENNY A. LUMPKIN, 60,                                  Equity                            Growth and Income                   1993
3616 Canterbury Town Road,                                                               Ultra
Topeka, Kansas 66610,                                                                    Growth
POSITION ON FUND BOARD: Director of the Fund                                             Cash
PRINCIPAL OCCUPATIONS: President, Vivians                                                Municipal Bond
(Corporate Sales); Vice President, Palmer                                                Global
Companies (Wholesalers, Retailers and Developers);                                       Value
Vice President, Bellairre Shopping Center (Leasing                                       SBL Fund - Series B
and Shopping Center Management)                                                          U.S. Government
                                                                                         Corporate Bond
- ------------------------------------------------------------------------------------------------------------------------------------
MARK L. MORRIS, JR., DVM, 65,                          Equity                            Ultra                               1991
5500 SW 7th Street,                                                                      Corporate Bond
Topeka, Kansas 66606,                                                                    Growth and Income
POSITION ON FUND BOARD: Director of the Fund
PRINCIPAL OCCUPATIONS: Retired. Independent
Investor, Morris Co. (Personal Investments)
- ------------------------------------------------------------------------------------------------------------------------------------
MAYNARD F. OLIVERIUS, 56,                              Equity                            Ultra                               1998
1500 SW 10th Avenue,                                                                     Cash
Topeka, Kansas 66604,                                                                    SBL Fund - Series A
POSITION ON FUND BOARD: Director of the Fund                                             Growth and Income
PRINCIPAL OCCUPATIONS: President and Chief
Executive Officer, Stormont-Vail Health Care
- ------------------------------------------------------------------------------------------------------------------------------------
JAMES R. SCHMANK*, 46,                                 Equity                            Growth and Income                   1997
700 SW Harrison Street,                                                                  Ultra
Topeka, Kansas 66636-0001,                                                               High Yield
POSITION ON FUND BOARD: Vice President and                                               Global
Director of the Fund                                                                     Select 25
PRINCIPAL OCCUPATIONS: President and Managing                                            Value
Member Representative of Security Management                                             Small Company
Company, LLC; Senior Vice President, Security                                            Cash
Benefit Group, Inc. and Security Benefit Life
Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*Nominees who are considered  "interested  persons" of Security Management Company, LLC by reason of their respective positions with
 Security Management Company, LLC, the Fund's investment adviser, and Security Distributors, Inc., the Fund's principal underwriter.
</FN>
- ----------------------------------------------------------------------------------------------------------
</TABLE>

   The directors are  responsible  for general  oversight of the Fund's business
and for  assuring  that  the  Fund  is  managed  in the  best  interests  of its
stockholders.  The Board of Directors held six meetings  during fiscal year 1999
and each  director  standing for  reelection  has attended all of the  meetings,
except Mr.  Cleland and Ms.  Lumpkin who have attended five of the six meetings.
The Board of Directors  currently has one committee,  the Joint Audit Committee,
which also serves as the Nominating Committee.

   The following directors are members of the Fund's Joint Audit Committee:  Ms.
Lumpkin, Chairperson; Dr. Morris; and Mr. Chubb. The Joint Audit Committee holds
at least one regular  meeting each year,  at which time it meets with the Fund's
independent  accountants to review: (1) the services provided;  (2) the findings
of the most recent audit; (3) management's  response to the findings of the most
recent  audit;  (4) the scope of the audit  performed;  and (5) any questions or
concerns about the Fund's operations. The Joint Audit Committee met once in 1998
and has met twice so far in 1999. All members of the committee  participated  in
the meetings.

   The Nominating  Committee meets on an as-needed  basis. The committee did not
meet in fiscal  year  1999.  The  purpose  of the  committee  is to  review  and
recommend to the full Board of Directors  candidates for election as independent
directors to fill vacancies on the Fund's Board.  The Nominating  Committee will
consider  written  recommendations  from  stockholders  for  possible  nominees.
Stockholders should submit their written recommendations to the Secretary of the
Fund.

   The Fund's directors,  except Mr. Cleland and Mr. Schmank who are "interested
persons" of the Investment Manager,  receive from the Fund an annual retainer of
$1,667 and a fee of $1,000 per meeting,  plus reasonable  travel costs, for each
meeting of the Board of Directors attended. In addition, those directors who are
members of the Fund's joint audit committee  receive a fee of $1,000 per meeting
and  reasonable  travel  costs for each  meeting of the Fund's  audit  committee
attended.  The meeting fee  (including the audit  committee  meeting) and travel
costs  are paid  proportionately  by each of the 35 funds to which  the  Adviser
provides  investment  advisory  services   (collectively,   the  "Security  Fund
Complex") based on each fund's relative net assets.

   The Fund does not pay any fees to, or reimburse  expenses  of, its  directors
who are considered "interested persons" of the Investment Manager. The aggregate
compensation  paid by the Fund to each of the  directors  during the fiscal year
ended  September  30,1999,  and the aggregate  compensation  paid to each of the
directors during fiscal year 1999 by the Security Fund Complex, are set forth in
the accompanying chart. Each of the directors is a director of each of the other
registered investment companies in the Security Fund Complex.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
                                          PENSION OR RETIREMENT
                          AGGREGATE        BENEFITS ACCRUED AS        ESTIMATED       TOTAL COMPENSATION
                         COMPENSATION     PART OF FUND EXPENSES        ANNUAL         FROM THE SECURITY
NAME OF DIRECTOR         ------------     ---------------------     BENEFITS UPON       FUND COMPLEX,
OF THE FUND              EQUITY FUND           EQUITY FUND           RETIREMENT       INCLUDING THE FUNDS
- ---------------------------------------------------------------------------------------------------------
<S>                         <C>                     <C>                  <C>                <C>
Donald A. Chubb, Jr.        $2,249                  $0                   $0                 $27,000
John D. Cleland                  0                   0                    0                       0
Penny A. Lumpkin             2,166                   0                    0                  26,000
Mark L. Morris, Jr.          2,249                   0                    0                  27,000
Maynard Oliverius*           2,166                   0                    0                  26,000
James R. Schmank                 0                   0                    0                       0
- -----------------------------------------------------------------------------------------------------------
</TABLE>

                                  REQUIRED VOTE

   In the  election  of  directors,  each  stockholder  is entitled to vote that
number  of  shares  owned as of the  record  date  multiplied  by the  number of
directors  to be  elected.  A  stockholder  may cast all such votes for a single
director or distribute them among two or more  directors.  This method of voting
for the election of directors is commonly known as "cumulative voting."

   A plurality of the combined votes cast at the meeting by the  stockholders of
all Series of the Fund is sufficient to approve the election of a director.  THE
BOARD OF DIRECTORS  RECOMMENDS THAT STOCKHOLDERS VOTE FOR ALL OF THE NOMINEES TO
THE FUND'S BOARD OF DIRECTORS.

                                 PROPOSAL NO. 2
                      SELECTION OF INDEPENDENT ACCOUNTANTS

   The  selection  by the Fund's Board of Directors of the firm of Ernst & Young
LLP as the independent accountants for the Fund for the fiscal year end is to be
submitted for  ratification  or rejection by stockholders at the annual meeting.
The firm of Ernst & Young LLP,  including a predecessor  firm,  Arthur Young and
Company, has served the Fund as independent accountants since its inception. The
independent  accountants have no direct or material indirect  financial interest
in the Fund.  Representatives  of the firm of Ernst & Young LLP are not expected
to be present at the annual  meeting.  Approval of this  Proposal No. 2 requires
the affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THIS PROPOSAL.

                                 PROPOSAL NO. 3
    TO APPROVE CHANGES TO THE FUNDAMENTAL INVESTMENT LIMITATIONS OF THE FUND

   Certain  investment  limitations  of each  Series of the Fund are  matters of
fundamental  policy and may not be changed  without the  approval of the Series'
stockholders.  The Investment  Manager has recommended to the Board of Directors
that  certain  fundamental  investment  limitations  of the Series 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 Series to those of other mutual funds managed by
the Investment Manager.  The changes will allow the Investment Manager to manage
each  Series'  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 Series'
stockholders.

   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 Series the flexibility to
change its investment methods in the future without a stockholder vote, provided
that the Board of Directors approves any such change. Set forth below is each of
the proposed changes.  Stockholders have the option to approve all, some or none
of the proposed changes.

                                PROPOSAL NO. 3(A)
    TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING DIVERSIFICATION

   Each  Series of the Fund is  currently  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 (the proposed
fundamental  limitation  is  currently  in place  for  Global,  Enhanced  Index,
International, and Select 25 Series of the Fund).

- --------------------------------------    --------------------------------------
                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;  provided,  however,  that    one issuer (other than obligations of,
for Total  Return,  Social  Awareness,    or guaranteed by, the U.S. Government,
Value and Small Company  Series,  this    its  agencies  or  instrumentalities);
limitation  applies  only with respect    provided that this limitation  applies
to 75% of its total assets.               only with  respect to 75% of a Series'
                                          total assets.
- --------------------------------------    --------------------------------------

     The proposed fundamental  investment  limitation would conform each Series'
investment  limitation to Section 5(b)(1) of the Investment  Company Act of 1940
and would  allow each Series of the Fund to invest a greater  percentage  of its
assets in a single issuer. If the proposed investment limitation were adopted, a
Series 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 Series'  total
assets.  The  proposed  fundamental  investment  limitation,  if adopted,  could
increase the risk to a Series 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 Series interpret this proposed limitation to require that any positions
in a single issuer in excess of 5%, in total must not exceed 25%, of the Series'
total assets.  For example, a Series would not invest 30% of its total assets in
the  securities  of a single  issuer on the basis that 25% was  allocated to the
non-diversified  25% of total assets and 5% was allocated to the diversified 75%
of total assets.

     The Board of Directors  believes that adoption of the amended limitation is
in the  best  interests  of  stockholders  because  a  standardized  fundamental
investment  limitation will facilitate  investment  compliance  efforts and will
give the Series the flexibility to take a larger position in the securities of a
single  issuer  if the  Investment  Manager  believes  that such a  position  is
advisable and is consistent  with the  investment  objective and policies of the
Series.  While the Series have no present intention of taking large positions in
the securities of a single issuer, the flexibility to do so may be beneficial to
the  Series at a future  date.  THE  BOARD OF  DIRECTORS  THEREFORE  UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL NO. 3(A).

                                PROPOSAL NO. 3(B)
                 TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION
                  CONCERNING SHARE OWNERSHIP OF ANY ONE ISSUER

   Each  Series of the Fund  currently  is subject to a  fundamental  investment
limitation  concerning limits on investment in the outstanding voting securities
of any one  issuer,  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  purchase  more than 10% of the    Not to  purchase a  security  if, as a
outstanding  voting  securities of any    result,  with  respect  to  75% of the
one issuer.                               value of a Series' total assets,  more
                                          than  10%  of the  outstanding  voting
                                          securities of any issuer would be held
                                          by the Series (other than  obligations
                                          issued  or   guaranteed  by  the  U.S.
                                          Government,     its     agencies    or
                                          instrumentalities).
- --------------------------------------    --------------------------------------

   The proposed  fundamental  investment  limitation  would  conform the Series'
investment  limitation to Section 5(b)(1) of the Investment  Company Act of 1940
and would  allow each Series of the Fund to invest a greater  percentage  of its
assets in a single issuer. If the proposed investment limitation were adopted, a
Series would be limited,  with respect to 75% of its total assets, to purchasing
no more than 10% of the outstanding voting securities of any one issuer. No such
limitation  would apply,  however,  to the  remaining  25% of the Series'  total
assets.  The  proposed  fundamental  investment  limitation,  if adopted,  could
increase the risk to the Series 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.  While the
Series have no present  intention  of  investing  greater  percentages  of their
assets in any single issuer,  the  flexibility to do so may be beneficial to the
Series at a future date.

   The Board of Directors believes that adoption of the amended limitation is in
the best interests of stockholders because a standardized fundamental investment
limitation  will  facilitate  investment  compliance  efforts  and will give the
Series the  flexibility to take a larger  position in the securities of a single
issuer if the Investment  Manager believes that such a position is advisable and
is consistent  with the  investment  objective  and policies of the Series.  THE
BOARD OF DIRECTORS THEREFORE  UNANIMOUSLY  RECOMMENDS THAT STOCKHOLDERS VOTE FOR
PROPOSAL NO. 3(B).

                                PROPOSAL NO. 3(C)
               TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
             CONCERNING INVESTING FOR CONTROL OF PORTFOLIO COMPANIES

   Each  Series of the Fund  currently  is subject to a  fundamental  investment
limitation  concerning  investing  for  control  of  portfolio  companies.   The
Investment  Manager  recommends   eliminating  the  fundamental  limitation  and
replacing  it with an  operating  policy  that may be changed  by the  directors
without a vote of stockholders.  The current fundamental limitation and proposed
operating policy are set forth below.

- --------------------------------------    --------------------------------------
                CURRENT                                  PROPOSED
- --------------------------------------    --------------------------------------
Not to  purchase  securities  for  the    As an operating policy, the Series may
purpose of exercising control over the    not  invest  in   companies   for  the
issuers thereof.                          purpose of  exercising  management  or
                                          control.
- --------------------------------------    --------------------------------------

   Elimination of this fundamental  investment  limitation is unlikely to affect
the Series'  investment  techniques as it has no present  intention of investing
for  control  of  portfolio  companies.  The Board of  Directors  believes  that
eliminating  this  fundamental  limitation  and  replacing  it with an operating
policy  is in  the  best  interests  of  stockholders,  because  a  standardized
fundamental investment limitation will facilitate investment compliance efforts.
THE BOARD OF DIRECTORS THEREFORE  UNANIMOUSLY  RECOMMENDS THAT STOCKHOLDERS VOTE
FOR PROPOSAL NO. 3(C).

                                PROPOSAL NO. 3(D)
     TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING UNDERWRITING

   Each  Series of 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 (the proposed fundamental investment
limitation is currently in place for the Global, Enhanced Index,  International,
and Select 25 Series of the Fund).

- --------------------------------------    --------------------------------------
                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  a  Series  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 change is to clarify that the Series are
not prohibited from selling restricted  securities if, as a result of such sale,
a Series would be  considered an  underwriter  under  federal  securities  laws.
Approval of this Proposal may subject the Series to additional risk of liability
in that  underwriters  have  heightened  obligations to purchasers in connection
with  sales of  securities.  The  Series do not  intend to invest in  restricted
securities  in a manner  that would  cause a Series to be deemed an  underwriter
and, as a result,  consider the risk to be remote.  A secondary  purpose of this
Proposal is to revise the Series' fundamental limitation on underwriting so that
it conforms to a  limitation  that is expected to become  standard for all funds
managed  by the  Investment  Manager.  While the  proposed  change  will have no
current impact on the Series, adoption of the proposed standardized  fundamental
investment limitation will advance the goals of standardization discussed above.
THE BOARD OF DIRECTORS THEREFORE  UNANIMOUSLY  RECOMMENDS THAT STOCKHOLDERS VOTE
FOR PROPOSAL NO. 3(D).

                                PROPOSAL NO. 3(E)
       TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING BORROWING

   Each  Series of 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  stockholders.  The current and  proposed
fundamental  investment  limitations and proposed operating policy are set forth
below (the proposed fundamental  investment limitation is currently in place for
the Global, Enhanced Index,  International and Select 25 Series of the Fund; and
the proposed operating policy is currently in place for the Global Series of the
Fund).

- --------------------------------------    --------------------------------------
                CURRENT                                  PROPOSED
- --------------------------------------    --------------------------------------
With respect to Equity Series,  not to    Not to  borrow in excess of 33 1/3% of
borrow  money  or  securities  for any    a Series' total assets.
purpose  except  to  the  extent  that
borrowing  up to 10%  of  the  Series'    As an operating policy, the Series may
total   assets   is   permitted    for    not borrow money or securities for any
emergency   purposes  on  a  temporary    purposes  except that  borrowing up to
basis  from banks and will not be made    10% of a  Series'  total  assets  from
for investment purposes. Total Return,    commercial   banks  is  permitted  for
Social  Awareness,   Value  and  Small    emergency or temporary purposes.
Company  Series  may  borrow  up to 33
1/3% of total  assets  and may  borrow
for emergency, temporary or investment
purposes  from a variety  of  sources,
including  banks.  Each of the  Series
may  also   obtain   such   short-term
credits  as  are   necessary  for  the
clearance of 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  stockholders.  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
Series are managed, the investment  performance of the Series, or the securities
or instruments in which the Series invest.

   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 Series to
engage in  leveraging.  Leveraging is a speculative  investment  technique  that
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 Series 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 Series have no current intention
of purchasing  securities  while  borrowings equal to 5% of its total assets are
outstanding,  the  flexibility  to do so may be  beneficial  to the  Series at a
future date.

   The  proposed  change  will have no current  impact on the  Series.  However,
adoption  of  a  standardized  fundamental  investment  policy  will  facilitate
investment  compliance  efforts  and will  enable  the  Series to  respond  more
promptly if  circumstances  suggest  such a change in the  future.  THE BOARD OF
DIRECTORS THEREFORE  UNANIMOUSLY  RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL
NO. 3(E).

                                PROPOSAL NO. 3(F)
        TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING LENDING

   Each  Series of 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  stockholders.  The  current  and  proposed
fundamental  investment  limitations and proposed operating policy are set forth
below (the proposed fundamental  investment limitation is currently in place for
the Global, Enhanced Index, International, and Select 25 Series of the Fund).

- --------------------------------------    --------------------------------------
                CURRENT                                  PROPOSED
- --------------------------------------    --------------------------------------
Not to make  loans  to  other  persons    Not to lend any  security  or make any
other   than  for  the   purchase   of    other loan if, as a result,  more than
publicly  distributed  debt  which are    33  1/3%  of a  Series'  total  assets
not considered loans, or by entry into    would be lent to other parties, except
repurchase agreements.                    (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 Series do
                                          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 would affect the way in which the Series are managed
in that it would allow the Series 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 Series'  investment  program.  While the  securities
loans are  outstanding,  the Series 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
Series would have a right to call each loan and obtain the securities within the
period of time  that  coincides  with the  normal  settlement  time  period  for
purchases and sales of such securities in their respective  markets.  The Series
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 the Series'  sub-adviser to be of good standing and
would not be made unless, in the judgment of the Investment  Manager or relevant
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 STOCKHOLDERS VOTE FOR PROPOSAL NO. 3(F).

                                PROPOSAL NO. 3(G)
          TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
      SHORT SALES AND MARGIN PURCHASES OF SECURITIES RESTRICTED SECURITIES

   Each Series of the Fund, except Global, Enhanced Index, International, Select
25, and Small Company Series,  currently is subject to a fundamental  investment
limitation  concerning  margin  purchases  of  securities  and  short  sales  of
securities.  The Investment  Manager  recommends that  stockholders  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
stockholders.   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 Series of
effect  short  sales  of   securities;    the Fund do not  currently  intend  to
provided,  however,  that Total Return    sell  securities  short,   unless  the
Fund,  Social Awareness Fund and Value    Series owns or has the right to obtain
Fund  may  make  margin   deposits  in    securities   equivalent  in  kind  and
connection   with    transactions   in    amount to the  securities  sold short,
options,   futures,   and  options  on    and  provided  that   transactions  in
futures.                                  futures  contracts and options are not
                                          deemed    to    constitute     selling
                                          securities  short.  In  addition,  the
                                          Series  of the  Fund do not  currently
                                          intend  to  purchase   securities   on
                                          margin,   except  that  a  Series  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 Series  current  fundamental
investment  limitation prohibits a Series from purchasing  securities on margin.
Policies of the Securities and Exchange  Commission  (SEC) 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 SEC.
The proposed non-fundamental operating policy includes these exceptions.

   Elimination  of the  Series'  fundamental  investment  limitation  on  margin
purchases  and  short  sales  is  unlikely  to  affect  the  Series'  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  stockholders.  In the  event of a change in state or  federal
regulatory  requirements,  a Series may change 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  interest  of  stockholders.  THE  BOARD  OF  DIRECTORS  THEREFORE
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL NO. 3(G).

                                PROPOSAL NO. 3(H)
                 TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION
                          CONCERNING SENIOR SECURITIES

   Each  Series of the Fund  currently  is subject to a  fundamental  investment
limitation  concerning senior securities,  and the Investment Manager recommends
that  stockholders   approve  the  amendment  of  this  fundamental   investment
limitation.  The current and proposed fundamental investment limitations are set
forth below (the  proposed  fundamental  investment  limitation  is currently in
place for all Series of the Fund, except Equity Series).

- --------------------------------------    --------------------------------------
                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  Series'
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 stockholders.

   The proposed  limitation  allows the Series to issue senior securities to the
full extent permitted under the Investment Company Act of 1940 (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  stockholders.  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 than 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 Series would utilize  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 Series is managed, its investment performance or the
securities or  instruments in which the Series  invests.  The Board of Directors
believes,  however,  that  adoption  of a  standardized  fundamental  investment
limitation is in the best interests of  stockholders  because it will facilitate
the Investment  Manager's  compliance efforts.  In addition,  the Board believes
that the proposed limitation will allow the Series 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 STOCKHOLDERS VOTE FOR PROPOSAL NO. 3(H).

                                PROPOSAL NO. 3(I)
               TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
               CONCERNING INVESTMENT IN OTHER INVESTMENT COMPANIES

   Equity Series of the Fund  currently is subject to a  fundamental  investment
limitation  concerning  investment in securities of other investment  companies,
and the Investment Manager recommends that stockholders  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  stockholders.  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 Series may
other investment companies.               not,   except  in  connection  with  a
                                          merger, consolidation, acquisition, or
                                          reorganization,    invest    in    the
                                          securities    of   other    investment
                                          companies,  except in compliance  with
                                          the Investment Company Act of 1940.
- --------------------------------------    --------------------------------------

   Elimination  of the above  fundamental  limitation  is not expected to have a
significant  impact on the  Series'  investment  practices,  because  the Series
currently  does not  expect to invest in shares of other  investment  companies.
However, investment in shares of money market mutual funds may from time to time
offer a convenient way to invest the Series' idle cash. To the extent that the a
Series invests in shares of other investment companies,  it will have the effect
of requiring stockholders to pay the operating expenses of two mutual funds. THE
BOARD OF DIRECTORS  UNANIMOUSLY  RECOMMENDS THAT  STOCKHOLDERS VOTE FOR PROPOSAL
NO. 3(I).

                                PROPOSAL NO. 3(J)
          TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
      INVESTMENT IN COMPANIES WITH LESS THAN THREE YEARS' OPERATING HISTORY

   Equity Series of 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
stockholders 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 stockholders.  The current fundamental  investment  limitation
and proposed operating policy are set forth below.

- --------------------------------------    --------------------------------------
                CURRENT                                  PROPOSED
- --------------------------------------    --------------------------------------
Not to  invest in  companies  having a    As an operating policy, the Series may
record  of  less  than  three   years'    not invest in  securities of an issuer
continuous   operation,    which   may    that,  together with any  predecessor,
include the  operations of predecessor    has been in  operation  for less  than
companies.                                three years if, as a result, more than
                                          5% of the total  assets of the  Series
                                          would   then  be   invested   in  such
                                          securities.
- --------------------------------------    --------------------------------------

   Adoption of the proposed  standardized  operating policy would facilitate the
Investment  Manager's  compliance program and would enable the Series 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 STOCKHOLDERS VOTE FOR PROPOSAL NO. 3(J).

                                PROPOSAL NO. 3(K)
          TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
     PURCHASING SECURITIES OF AN ISSUER IN WHICH THE OFFICERS AND DIRECTORS
          OWN MORE THAN 5% OF THE OUTSTANDING SECURITIES OF SUCH ISSUER

   Each Series of the Fund, except Global, Enhanced Index, International, Select
25 and Small Company  Series,  currently is subject to a fundamental  investment
limitation concerning purchasing the securities of an issuer if the officers and
directors of the Fund,  Underwriter,  or Investment Manager own more than 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  stockholders  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 Series for
sale.  The Series are 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 Series' flexibility when choosing  investments in the future.
THE BOARD OF DIRECTORS THEREFORE  UNANIMOUSLY  RECOMMENDS THAT STOCKHOLDERS VOTE
FOR PROPOSAL NO. 3(K).

                                PROPOSAL NO. 3(L)
            TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATION
                CONCERNING THE OFFICERS OR DIRECTORS OF THE FUND,
                 THE UNDERWRITER OR MANAGER PURCHASING SHARES OF
                   THE FUND, EXCEPT AT CURRENT NET ASSET VALUE

   Each  Series of the Fund  currently  is subject to a  fundamental  investment
limitation  concerning  officers and directors of the Fund,  the  Underwriter or
Manager  purchasing  shares of the Fund,  except at current net asset value. The
current fundamental  investment limitation is as follows: "Not to allow officers
or directors of the Fund,  the  Underwriter  or  Investment  Manager to purchase
shares of the Fund except for investment at current net asset value."

   The Investment  Manager  recommends  eliminating this fundamental  limitation
primarily in the interests of making it conform to limitations that are expected
to  become  standard  for all  funds  managed  by the  Investment  Manager.  The
Investment  Manager  further  believes that this  limitation is not necessary as
purchases of the Fund at other than the current net asset value,  next  computed
after receipt of an order to purchase,  are not permitted  under the  Investment
Company  Act of 1940.  As a  result,  eliminating  this  fundamental  investment
limitation is unlikely to affect the Fund's  operations.  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
stockholders.  THE BOARD OF  DIRECTORS  THEREFORE  UNANIMOUSLY  RECOMMENDS  THAT
STOCKHOLDERS VOTE FOR PROPOSAL NO. 3(L).

                                PROPOSAL NO. 3(M)
                 TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION
                    CONCERNING BUYING OR SELLING REAL ESTATE

   Each  Series of the Fund  currently  is subject to a  fundamental  investment
limitation  concerning  investment in real estate,  and the  Investment  Manager
recommends a change in the fundamental  investment  limitation.  The current and
proposed  fundamental  investment  limitations are set forth below (the proposed
fundamental investment limitation is currently in place for the Global, Enhanced
Index, International, and Select 25 Series of the Fund).

- --------------------------------------    --------------------------------------
                CURRENT                                  PROPOSED
- --------------------------------------    --------------------------------------
Not to own,  buy or sell real  estate.    Not to  purchase  or sell real  estate
(This  policy shall not prevent any of    unless   acquired   as  a  result   of
the   Series   from    investing    in    ownership  of   securities   or  other
securities or other instruments backed    instruments   (but   this   shall  not
by real  estate  or in  securities  of    prevent a Series  from  investment  in
companies  engaged in the real  estate    securities or other instruments backed
business.)                                by  real  estate  or   securities   of
                                          companies  engaged in the real  estate
                                          business).
- --------------------------------------    --------------------------------------

   The Series have 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 Series 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  THEREFORE
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL NO. 3(M).

                                PROPOSAL NO. 3(N)
                 TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION
                 CONCERNING COMMODITIES OR COMMODITIES CONTRACTS

   Each  Series of the Fund  currently  is subject to a  fundamental  investment
limitation concerning investment in commodities or commodity contracts,  and the
Investment Manager recommends a change in the fundamental investment limitation.
The current and proposed fundamental  investment limitations are set forth below
(the proposed  fundamental  investment  limitation is currently in place for the
Global, Enhanced Index, International, and Select 25 Series of the Fund).

- --------------------------------------    --------------------------------------
                CURRENT                                  PROPOSED
- --------------------------------------    --------------------------------------
Not to own, buy or sell commodities or    Not  to  purchase  or  sell   physical
commodity contracts.                      commodities,  except  that the  Series
                                          may enter into futures  contracts  and
                                          options thereon.
- --------------------------------------    --------------------------------------

   The Series have  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 Series'
approach to investing in commodities.  The Series do 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 BOARD OF
DIRECTORS THEREFORE  UNANIMOUSLY  RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL
NO. 3(N).

                                PROPOSAL NO. 3(O)
            TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATION
                       CONCERNING INVESTMENT IN WARRANTS.

   Equity Series of the Fund  currently is subject to a  fundamental  investment
limitation  concerning  warrants,  and the Investment  Manager  recommends  that
stockholders approve 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 stockholders.  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 Series may
acquired  as a  unit  or  attached  to    not  invest  more than 5% of the value
other securities.                         of  the   Series'   total   assets  in
                                          warrants,  valued at the lower of cost
                                          or market. Included within that amount
                                          (but not to  exceed 2% of the value of
                                          the  Series'   total  assets)  may  be
                                          warrants  which are not  listed on the
                                          New York or American Stock  Exchanges.
                                          Warrants  acquired  by the  Series  in
                                          units or attached to securities may be
                                          deemed to be without value.
- --------------------------------------    --------------------------------------

   Elimination of this fundamental  investment  limitation is unlikely to affect
the  Fund's  investment  techniques  at this  time.  If  approved,  the Board of
Directors, however, could amend the operating policy in the future to permit the
Fund to invest a  greater  portion  of its  assets in  warrants.  Investment  in
warrants  is  pure  speculation  in that  they  have no  voting  rights,  pay no
dividends,  and have no rights  with  respect to the  assets of the  corporation
issuing them.  Warrants basically are options to purchase equity securities at a
specific  price  valid  for a  specific  period of time.  They do not  represent
ownership of the  securities but only the right to buy them. A warrant ceases to
have value if it is not exercised prior to its expiration date.

   The Investment  Manager  recommends  eliminating this fundamental  limitation
primarily  in the  interests of making the Fund's  limitations  conform to those
that are  expected to become  standard for all funds  managed by the  Investment
Manager. The Board of Directors believes that efforts to standardize  investment
limitations will facilitate the Investment Manager's  investment  compliance and
are in the best  interests of  stockholders.  THE BOARD OF  DIRECTORS  THEREFORE
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL NO. 3(O).

                                PROPOSAL NO. 3(P)
               TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
                        CONCERNING RESTRICTED SECURITIES

   Equity Series of the Fund  currently is subject to a  fundamental  investment
limitation  concerning  restricted   securities,   and  the  Investment  Manager
recommends  that  stockholders  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  stockholders.  The current  fundamental
investment limitation and proposed operating policy are set forth below.

- --------------------------------------    --------------------------------------
                CURRENT                                  PROPOSED
- --------------------------------------    --------------------------------------
Not to  invest  more  than  10% of its    As an operating policy, the Series may
total assets in restricted securities.    not invest  more than 10% of its total
                                          assets   in   securities   which   are
                                          restricted as to disposition under the
                                          federal  securities laws,  except that
                                          the Series may purchase without regard
                                          to    this    limitation    restricted
                                          securities   which  are  eligible  for
                                          resale pursuant to Rule 144A under the
                                          Securities  Act  of  1933  (the  "1933
                                          Act").
- --------------------------------------    --------------------------------------

   The Series' current  fundamental  limitation  limits investment in restricted
securities.  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
Series 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 Series may be permitted  to sell a security  under an effective
registration statement. If, during such a period, adverse market conditions were
to develop,  the Series might obtain a less favorable  price than prevailed when
it decided to sell.

   THE BOARD OF DIRECTORS  BELIEVES THAT THE PROPOSED OPERATING POLICY IS IN THE
BEST  INTERESTS  OF  STOCKHOLDERS   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 SERIES IN THE FUTURE.  The
Board of Directors proposes to limit investment in restricted  securities to 10%
of the Series' total assets, provided that there would be no limit on investment
in  securities  that are  eligible for resale  pursuant to Rule 144A.  Rule 144A
permits certain qualified  institutional buyers, such as the Series, to trade in
privately placed securities even though such securities are not registered under
the 1933  Act.  The  Investment  Manager  under  the  direction  of the Board of
Directors  would  determine  whether  securities  purchased  under Rule 144A are
illiquid and therefore  subject to the Series'  restriction of investing no more
than 15% of its total assets in illiquid  securities.  Increased  investment  in
restricted  securities  could  have the effect of  increasing  the amount of the
Series'  assets  invested  in  illiquid  securities.   THE  BOARD  OF  DIRECTORS
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL NO. 3(P).

                                PROPOSAL NO. 3(Q)
               TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
           CONCERNING INVESTMENT IN PUTS, CALLS, STRADDLES OR SPREADS

   Equity Series of 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 stockholders
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 stockholders. 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 Series 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 a Series will
                                          not  exceed  5% of the  Series'  total
                                          assets.  The  Series  may  write  only
                                          covered put and call options.
- --------------------------------------    --------------------------------------

   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 a Series  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 Series,  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 Series 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 Series  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  Series'  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 Series will write only covered call  options.  This means that the Series
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 Series'
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 Series will write only covered
put options,  which means that a Series will  maintain in a  segregated  account
cash or liquid  securities in an amount not less than the exercise  price or the
Series 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 Series 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 Series'
total  return,  and the  Series'  attempt to use such  investments  for  hedging
purposes may not be successful.  Losses from options could be significant if the
Series 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 Series  would not be subject  absent the use of options.  If the  Investment
Manager seeks to protect the Series against  potential  adverse movements in the
securities, currency or interest rate markets using options, and such markets do
not move in a  direction  adverse to the Series,  the Series  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 Series' 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 Series
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 STOCKHOLDERS VOTE FOR PROPOSAL NO. 3(Q).

                                PROPOSAL NO. 3(R)
               TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION
              CONCERNING INVESTMENT IN OIL, GAS, MINERAL LEASES OR
                 OTHER MINERAL EXPLORATION DEVELOPMENT PROGRAMS

   Each Series of the Fund, except Global, Enhanced Index, International, Select
25, and Small Company Series,  currently is subject to a fundamental  investment
limitation concerning investment in limited partnerships or similar interests in
oil, gas, mineral leases or mineral exploration or development programs, and the
Investment Manager recommends that stockholders  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  stockholders.  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 Series do
or  similar  interests  in  oil,  gas,    not currently intend to invest in oil,
mineral   leases   or  other   mineral    gas,  mineral  leases or other mineral
exploration    development   programs;    exploration or development programs.
provided, however, that the Series may
invest  in  the  securities  of  other
corporations  whose activities include
such exploration and development.
- --------------------------------------    --------------------------------------

   The proposed  change  would not  currently  affect the Series.  Adoption of a
standardized   operating  policy  would,  however,   facilitate  the  Investment
Manager's  compliance  efforts  and would  enable  the  Series to  respond  more
promptly in the future. THE BOARD OF DIRECTORS THEREFORE UNANIMOUSLY  RECOMMENDS
THAT STOCKHOLDERS VOTE FOR PROPOSAL NO. 3(R).

                                  REQUIRED VOTE

   Each of Proposal  Nos.  3(a)  through  3(r) will be adopted with respect to a
Series of the Fund if it is approved  by the vote of a majority  of  outstanding
shares of that Series,  as defined in the 1940 Act. A "majority vote" is defined
as the lesser of (a) a vote of 67% or more of the Series  shares  whose  holders
are present or  represented  by proxy at the meeting if the holders of more than
50% of all  outstanding  Series shares are present in person or  represented  by
proxy at the meeting,  or (b) a vote of more than 50% of all outstanding  Series
shares.

   Each change that is approved by stockholders  will become  effective upon the
conclusion of the Meeting and the  investment  limitations  will be as described
above and set forth in  Exhibit  A. For any  change  that is not  approved  by a
majority vote of a Series shares, the Series' current investment limitation,  as
set forth in the applicable  sub-portion  of Proposal 3, would remain  unchanged
with respect to that Series.  The Board of  Directors  believes  that all of the
proposed changes to the fundamental investment limitations of the Series, as set
forth in Proposal No. 3, are in the best interests of stockholders. THE BOARD OF
DIRECTORS  UNANIMOUSLY  RECOMMENDS  VOTING FOR ALL OF THE  CHANGES  SET FORTH IN
PROPOSAL NO. 3.

                                 PROPOSAL NO. 4
             APPROVAL OF AN ARRANGEMENT AND NEW INVESTMENT ADVISORY
          CONTRACT THAT WOULD PERMIT SECURITY MANAGEMENT COMPANY, LLC,
            WITH BOARD APPROVAL, TO ENTER INTO OR AMEND SUB-ADVISORY
                     AGREEMENTS WITHOUT STOCKHOLDER APPROVAL

   The Board of Directors of the Fund recommends the approval of an arrangement,
along with a new Investment  Advisory Contract,  that together would permit SMC,
subject to Board approval,  to enter into and/or amend  sub-advisory  agreements
without obtaining the approval of Fund stockholders.

   The  Fund  currently  issues  its  shares  in nine  separate  series  (each a
"Series").  If the proposal were approved,  SMC on behalf of the Fund,  would be
provided  with  greater  flexibility  in  retaining  the services of one or more
sub-advisers,  replacing  sub-advisers  or  materially  amending  the terms of a
sub-advisory  contract;  including  the Fund's  sub-advisers  for the  following
Series:

            -------------------------------------------------------
                  SERIES                     SUB-ADVISER
            -------------------------------------------------------
                                   OppenheimerFunds, Inc.
            Global                 Two World Trade Center
                                   New York, New York 10048
            -------------------------------------------------------
                                   Bankers Trust Company
            Enhanced Index and     One Bankers Trust Plaza
            International          New York, New York 10006
            -------------------------------------------------------
                                   Strong Capital Management, Inc.
            Small Company          900 Heritage Reserve
                                   Menomonee Falls, Wisconsin 53051
            -------------------------------------------------------

   SMC has engaged each of the above-named  Sub-Advisers  to provide  investment
advisory  services  to the Fund  pursuant  to  sub-advisory  agreements  entered
individually with each  Sub-Adviser.  SMC has no present intention to change any
of the Series' sub-advisers or its current sub-advisory agreements.

   Section 15(a) of the 1940 Act requires  that all contracts  pursuant to which
persons  serve as  investment  advisers to  investment  companies be approved by
stockholders. As interpreted, this requirement would apply to the appointment of
sub-advisers  to the Fund,  should SMC and the Board determine to appoint one or
more  sub-advisers  in the future.  In order to obtain  stockholder  approval in
accordance  with  Section  15(a) of the 1940 Act, the Fund would have to prepare
and  distribute  proxy  materials  and hold a special  meeting of  stockholders,
causing  it  to  incur  costs  and  delays  in   implementing   contracts   with
sub-advisers.  The United States Securities and Exchange Commission (the "SEC"),
however,  has  granted  conditional  exemptions  from the  stockholder  approval
requirements.  SMC and the  Fund  have  applied  for such an  exemption.  If the
exemption is granted and the proposal is approved,  any  sub-advisory  agreement
entered into would  continue to require the approval of a majority of the Board,
including a majority of the  Directors who are not  "interested  persons" of the
Fund or SMC  (as  defined  in the  1940  Act).  Thus,  the  Board  could,  if it
determined  it to be in the  best  interests  of the  Fund  and  its  investors,
authorize SMC to hire or replace one or more  sub-advisers,  or change the terms
of sub-advisory agreements without the approval of stockholders.

   The Board has approved the  submission  of an  application  to the SEC for an
order exempting the Fund from the requirement of the 1940 Act that  stockholders
approve sub-advisory agreements or amendments thereto. On November 30, 1999, the
Board met to consider  placing this  proposal on the agenda for the  stockholder
meeting. After consideration of information about the proposal that was provided
by SMC (including the information contained in the exemptive  application),  the
Board concluded that the proposal is reasonable,  fair, and in the best interest
of the Fund and its stockholders.  Accordingly,  the Board unanimously  approved
the  proposal  and voted to recommend  its  approval by  stockholders.  As noted
above,  this  proposal  also  involves  the  consideration  of a new  Investment
Advisory  Contract  between  the Fund and SMC.  Proposal  No.  5, the  Brokerage
Enhancement  Plan, if approved,  would also  necessitate  certain changes to the
existing  investment  advisory  contract.  Refer to Proposal  No. 5 for specific
changes which would be made to the  Investment  Advisory  Contract in connection
with the Brokerage  Enhancement Plan. The new contract  recognizes the fact that
SMC may , with Board approval,  retain the services of one or more sub-advisers,
replace  sub-advisers  or amend  sub-advisory  contracts as contemplated in this
proposal. The new Investment Advisory Contract does NOT provide for any increase
in the  investment  advisory fee paid to SMC.  The  existing and new  Investment
Advisory  Contracts  are  described  in more  detail  below  under the  headings
"Existing  Investment Advisory Contract" and "New Investment Advisory Contract,"
respectively.

   The Board now  seeks the  approval  of Fund  stockholders  which  would:  (i)
authorize  SMC on behalf of the Fund to enter into  sub-advisory  agreements  or
amend such agreements without obtaining stockholder  approval;  and (ii) approve
the new  Investment  Advisory  Contract  between the Fund,  with  respect to all
Series,  except  Capital  Preservation  Series,  and SMC.  The Fund's use of the
authority  that would be granted by this proposal is  contingent  upon the SEC's
issuance of an order permitting the Fund to do so.

                      BOARD CONSIDERATION OF PROPOSAL NO. 4

   At its November 30, 1999 meeting,  the Board considered  various  information
provided  by  SMC,   including  the  information   contained  in  the  exemptive
application submitted to the SEC. Based on this information, the Board concluded
that  approval  of the  proposal  is in the best  interests  of the Fund and its
investors.  Among the things considered by the Board in reaching this conclusion
was that (i) the  proposal  would  permit  each  Series of the Fund,  other than
Equity and Global Series,  to avoid the costs and would permit all Series of the
Fund to avoid the administrative burden and delays that would be incurred if the
Fund was compelled to conduct a proxy  solicitation  each time SMC and the Board
determine to hire a sub-adviser or amend a sub-advisory  agreement;  (ii) to the
extent that SMC retains the services of a sub-adviser on behalf of the Fund, the
sub-adviser plays a role analogous to that of an individual  portfolio  manager,
thus making  approval  of the  sub-advisory  agreement  less  important  to Fund
stockholders;  and (iii) the proposal  would maintain  important  safeguards and
protections for Fund  stockholders.  The information  considered by the Board is
discussed in greater detail below.

   Currently,  in order to  approve  a  sub-advisory  agreement  (including  the
requirement to re-approve a sub-advisory agreement that has been terminated as a
result of an  "assignment"),  to substitute one sub-adviser  for another,  or to
amend  a  sub-advisory   agreement,   the  Fund  must  obtain  the  approval  of
stockholders.  Seeking  this  approval  imposes  costs on the Fund  (except with
respect to the Equity and Global  Series where the cost is borne by SMC)..  Some
of these costs include printing costs for the proxy statements, proxy cards, and
return envelopes; postage (including return postage); tabulation of proxy cards;
if  necessary,  solicitation  and other  expenses  incurred in order to obtain a
quorum; and the costs of the meeting itself.  Accordingly,  the Board considered
that  the  proposal  would  permit  the  Fund to  minimize  these  expenses  and
administrative  burdens. With respect to the Equity and Global Series, the Board
considered  the fact that approval of the proposal would relieve those Series of
the  administrative  burden of calling  and  holding a  stockholder  meeting and
soliciting stockholders in order to obtain a quorum.

   In addition, under the current arrangement,  once SMC and the Board determine
that using the services of one or more sub-advisers (or replacing or eliminating
a  sub-adviser,  or amending a  sub-advisory  agreement  once a  sub-adviser  is
retained) is in the best interest of  stockholders,  a delay may occur until the
Fund can obtain the necessary approval of stockholders.  Typically,  it requires
approximately  three  months  to  prepare  a  proxy  solicitation,  send  it  to
stockholders, receive and tabulate the result, and hold the meeting. During this
period,  the Fund  loses the  benefit  of the  addition  or  replacement  of the
sub-adviser,  or the amendment to the  sub-advisory  agreement.  Approval of the
proposal would permit the Board and SMC to reduce or eliminate this delay.

   The second factor  considered by the Board was the fact that, to the extent a
Fund uses the services of one or more sub-advisers, the sub-adviser plays a role
analogous  to that of an  individual  portfolio  manager  employed  by a typical
mutual fund's  investment  adviser,  making approval of sub-advisory  agreements
less  important.  In the case of a mutual fund that does not use a  sub-adviser,
the fund's investment adviser provides  corporate  management and administrative
services,  along with portfolio management services.  Typically,  the investment
adviser  chooses an individual or individuals on its staff to perform the actual
day-to-day  management  of  the  portfolio.   Although  the  investment  adviser
discloses to stockholders the individual's identity, the company is not required
to,  and  does  not,  submit  approval  of  the  choice  of  individual  to  the
stockholders.  Rather,  accountability  lies with the investment adviser itself,
which  has  the   responsibility  of  monitoring  the  individual's   investment
performance  and replacing the individual if doing so is in the best interest of
stockholders.

   Under a structure  where  sub-advisers  are used, the  sub-adviser  takes the
place of the individual  portfolio manager.  The investment adviser has ultimate
accountability for the performance of the sub-advisers. The Board believes that,
should the Fund use the services of a sub-adviser,  stockholders will expect SMC
to select and retain  sub-advisers who successfully  meet the Fund's  objectives
and policies and replace those who do not. The Board further  believes  that, in
such cases,  stockholders  will  determine  to rely on SMC's  ability to select,
monitor, and terminate sub-advisers.

   The third  factor  considered  by the Board was that the  proposal  preserves
certain  protections  and  safeguards  for the  Fund and its  stockholders.  For
example,  although the  proposal  would  authorize  SMC on behalf of the Fund to
enter  into or amend  sub-advisory  agreements,  any  change  in the  investment
advisory  contract  between the Fund and SMC , or the replacement of SMC itself,
would  continue  to  require  approval  of  Fund   stockholders.   In  addition,
stockholders  would  receive the same  information  about  sub-advisers  as they
currently would. In the event SMC, with the approval of the Board, determines to
use the services of a sub-adviser  or to replace a  sub-adviser  ,  stockholders
would receive,  within ninety days of the change, the same information about the
sub-adviser and  sub-advisory  agreement they would receive in a proxy statement
if their approval were required.

                                 APPROVAL BY SEC

   As noted above,  the Board has approved the  submission of an  application to
the SEC for an order of exemption from certain  requirements  of the 1940 Act in
order  to  permit  the  Fund  to use  the  authority  to  enter  into  or  amend
sub-advisory  agreements  as  contemplated  by  this  proposal.  Any use of that
authority is contingent  upon  obtaining  the requested  order from the SEC. The
application  for  exemption  contains  conditions  to which the  order  would be
subject.  The conditions are set forth in Exhibit B. It is possible that the SEC
may require certain changes to the application or impose  additional  conditions
prior to granting  the order.  The Fund will agree to such  changes if the Board
and  SMC  determine  that  it is in the  best  interests  of the  Fund  and  its
stockholders  to do so. It is also possible that the SEC may refuse to grant the
order entirely,  although the SEC has granted similar exemptions to other mutual
fund companies under similar  circumstances in the past. In that case, the Board
will take what further  actions it deems to be in the best interests of the Fund
and its stockholders.

                                  REQUIRED VOTE

   The  proposal  will be adopted  with respect to a Series of the Fund if it is
approved  by the vote of a majority of  outstanding  shares of that  Series,  as
defined in the 1940 Act, which is the lesser of (a) a vote of 67% or more of the
Series shares whose holders are present or  represented  by proxy at the meeting
if the holders of more than 50% of all outstanding  Series shares are present in
person or represented by proxy at the meeting, or (b) a vote of more than 50% of
all outstanding Series shares.  THE BOARD OF DIRECTORS  RECOMMENDS THAT YOU VOTE
FOR PROPOSAL NO. 4.

                      EXISTING INVESTMENT ADVISORY CONTRACT

   SMC  currently  serves as the  investment  adviser  to the Series of the Fund
pursuant to the terms of an  Investment  Advisory  Contract  dated  January 31 ,
1989,  as amended (the  "Existing  Contract").  The  Existing  Contract was last
approved by the Board of Directors of the Fund on November 30, 1999 and was last
approved by Fund  stockholders on December 8, 1988 and was last approved by Fund
stockholders on the following dates:

      -------------------------------------------------------------------
                           SERIES                              DATE
      -------------------------------------------------------------------
      Equity .........................................   December 8, 1988
      Global .........................................   October 1, 1993
      Total Return ...................................   April 18, 1995
      Social Awareness ...............................   October 31, 1996
      Value ..........................................   April 29, 1997
      Small Company ..................................   October 14, 1997
      Enhanced Index, International, and Select 25 ...   January 27, 1999
      -------------------------------------------------------------------

   The Existing  Contract has not been  submitted to  stockholders  for approval
since  the  dates  referenced  above.  Unless  superseded  by the  proposed  new
Investment  Advisory  Contract,  in  connection  with  either  this  Proposal or
Proposal No. 5, the Existing  Contract  will continue in effect until January 1,
2001,  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 Existing  Contract,  SMC furnishes the Equity Series and the Global
Series of the Fund with investment research and advice and an investment program
as well as general administrative, fund accounting, transfer agency and dividend
disbursing  services,  services  of  independent  accountants,   legal  counsel,
custodial  services and printing (the "Bundled  Services") all for a single fee.
With respect to the other Series of the Fund, SMC provides investment  research,
investment advice and an investment program (collectively,  "Investment Advice")
for  one  fee,  and  charges  another  fee  for  general  administrative,   fund
accounting,  transfer agency and dividend disbursing services. In addition, with
respect  to all  Series  of the  Fund  SMC  provides  for  the  compilation  and
maintenance  of  records  relating  to its duties as  required  by the rules and
regulations  of the SEC.  Under the terms of the Existing  Contract,  SMC is not
subject to any liability for any errors of judgment or mistake of law or for any
loss  sustained  by reason of the adoption of any  investment  policy so long as
such  recommendation  shall  have  been  made  with due care and in good  faith.
Nothing in the  Existing  Contract,  however,  shall  protect  SMC  against  any
liability to the Fund or its shareholders by reason of willful misfeasance,  bad
faith, or gross  negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under the agreement.

   Under the Existing Contract SMC has agreed that, if the total annual expenses
of any Series of the Fund, exclusive of interest,  taxes, distribution fees paid
under the  Fund's  Class B or Class C  distribution  plans,  brokerage  fees and
extraordinary  expenses,  but  inclusive  of its own  investment  advisory  fee,
exceeds any expense  limitation imposed by state securities law or regulation in
any state in which shares are offered,  SMC will  contribute to such Series such
funds or waive such  portion of its fee as may be  necessary  to insure that the
annual expenses of such Series will not exceed any such limitation. SMC has also
agreed  that if the total  annual  expenses of the  Enhanced  Index or Select 25
Series  exceeds  1.75%,  or if the total  annual  expenses of the  International
Series exceeds 2.25%,  in each case exclusive of interest,  taxes,  distribution
fees paid under those Series' Class A, B or C distribution plans,  extraordinary
expenses and brokerage fees and commissions, but inclusive of SMC's own advisory
fee,  then SMC will waive or reimburse  expenses in order to keep those  Series'
expenses at the specified level.

   In exchange for  providing  the Bundled  Services to the Equity Series of the
Fund,  SMC  receives  a fee,  equal on an  annual  basis to 2% of the  first $10
million of the Series' average net assets,  1.5 % of the next $20 million of the
average net assets and 1% of the remaining average net assets,  determined daily
and payable  monthly.  In exchange  for  providing  the Bundled  Services to the
Global Series of the Fund, SMC receives a fee, equal on an annual basis to 2% of
the first  $70  million  of the  Series'  average  net  assets  and 1.5 % of the
remaining average net assets,  determined daily and payable monthly. In exchange
for providing Investment Advice under the Existing Contract,  SMC receives from:
(i) the  Social  Awareness,  Value and Small  Company  Series of the Fund a fee,
equal on an annual basis to 1% of those Series  average  daily net assets;  (ii)
the Total Return,  Enhanced  Index and Select 25 Series of the Fund a fee, equal
on an annual basis to .75% of those Series  average daily net assets;  and (iii)
the International Series of the Fund a fee, equal on an annual basis to 1.10% of
the Series  average daily net assets.  These fees are computed daily and payable
monthly.  For these  services,  in the fiscal year ended September 30, 1999, SMC
received from the Fund fees of  $11,048,439  with respect to the Equity  Series,
$835,806  with respect to the Global  Series,  $67,956 with respect to the Total
Return Series,  $189,229 with respect to the Social Awareness  Series,  $258,906
with respect to the Value Series,  $0 with respect to the Small Company  Series,
$82,418 with respect to the Enhanced  Index Series,  $95,115 with respect to the
Select 25 Series and  $44,906  with  respect  to the  International  Series.  No
brokerage  commissions  were paid by the Fund to an  affiliated  broker  for the
fiscal year ended September 30, 1999.

   The Existing  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 SMC. The
Existing Contract is terminated automatically in the event of its assignment (as
such term is defined in the Investment Company Act of 1940).

   For the  administrative  and transfer agency  services  provided to the Total
Return, Social Awareness, Value, Small Company, Enhanced Index and International
Series of the Fund, SMC received, in the aggregate,  $141,804 for administrative
services and $103,641 for transfer  agency services during the fiscal year ended
September 30, 1999.

                      PROPOSED INVESTMENT ADVISORY CONTRACT

   SMC  proposes  to enter into a new  Investment  Advisory  Contract  (the "New
Contract")  with the Fund.  The form of the New  Contract is attached  hereto as
Exhibit C. The form of the New  Contract was proposed by SMC and was approved on
November 30, 1999,  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).   Other  than  the   provisions   relating  to   sub-advisory
arrangements,  and the  provision  relating  to the  ability of SMC to place the
Fund's  purchase  and sale of  portfolio  securities  with  SMC's  broker-dealer
affiliate as discussed in connection  with Proposal No. 5, there are no material
differences  between the Existing Contract and the New Contract.  In particular,
the New Contract  does NOT provide for any increase in the  investment  advisory
fee paid to SMC. It is expected that the New Contract  will become  effective on
January 27, 2000, provided that on the Meeting date it is approved by a majority
vote of the  holders  of the  outstanding  voting  securities  of the  Fund.  If
Proposal No. 4 is approved by stockholders,  but Proposal No. 5 is not approved,
the New Contract will be implemented without the provision allowing SMC to place
purchase and sale  transactions  of  portfolio  securities  with its  affiliated
broker-dealer.  If  Proposal  No.  4 is not  approved,  but  Proposal  No.  5 is
approved,  the New Contract without the provision relating to sub-advisers,  but
with the  provision  allowing  SMC to  place  securities  transactions  with its
affiliated  broker-dealer  will be implemented.  If neither Proposal is adopted,
the Existing Contract will continue in effect in accordance with its terms.

   In approving the New Contract,  and in recommending that stockholders approve
the New  Contract,  the Board  considered  such factors as it deemed  reasonably
necessary and appropriate,  including (1) the nature,  extent and quality of the
services  expected to be provided to the Fund by SMC; (2) SMC's past  investment
performance  with respect to the Fund;  (3) the costs of services to be provided
by SMC;  (4) the fact that the  compensation  payable  to SMC by the Fund is the
same under the New  Contract  as it is under the  Existing  Contract;  (5) other
sources  of  revenue  accruing  to SMC and its  affiliates  as a  result  of its
relationship with the Fund, including any intangible benefits that accrue to SMC
and its  affiliates;  (6) the Fund's expenses  compared to other funds;  and (7)
such other factors as the Board deemed relevant.  The Board gave equal weight to
each of the above factors when considering  approval of the New Contract.  Based
on the  considerations  above,  the Board determined that the New Contract is in
the best interests of the Fund and its stockholders.

          MORE INFORMATION ABOUT THE INVESTMENT MANAGER AND DISTRIBUTOR

   Security Distributors, Inc. ("SDI") is principal underwriter of the Fund. SDI
is a wholly-owned  subsidiary of Security Benefit Group, Inc. ("SBG"), a holding
company wholly owned by Security Benefit Life Insurance Company ("SBL").  SMC is
a limited  liability  company  owned by its members,  SBL and SBG. SBL is wholly
owned by Security Benefit Corp.  (except for shares held by the Directors of SBL
as  required  by Kansas  law) and  Security  Benefit  Corp.  is wholly  owned by
Security  Benefit Mutual Holding  Company.  The address of each of the foregoing
companies is 700 SW Harrison Street,  Topeka, Kansas 66636-0001.  For the fiscal
year  ended  September  30,  1999,  the  Fund  paid  $______  in  Class  A 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:

                         EXECUTIVE OFFICERS OF THE FUND

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME, AGE AND ADDRESS*          PRINCIPAL OCCUPATION                                  POSITION WITH SMC          POSITION WITH FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                                                   <C>                        <C>
James R. Schmank, 46**          President and Managing Member Representative, SMC;    President and Managing     Vice President
                                Senior Vice President, Security Benefit Group,        Member Representative      and Director
                                Inc. and Security Benefit Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
John D. Cleland, 63             Senior Vice President and Managing Member             Senior Vice President      President and
                                Representative, SMC; Senior Vice President,           and Managing Member        Director
                                Security Benefit Group, Inc. and Security Benefit     Representative
                                Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas A. Swank, 39             Senior Vice President and Portfolio Manager, SMC;     Senior Vice President      Vice President
                                Senior Vice President, Security Benefit Group,        and Portfolio Manager
                                Inc. and Security Benefit Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
Amy J. Lee, 38                  Secretary, SMC; Vice President, Associate General     Secretary                  Secretary
                                Counsel and Assistant Secretary, Security Benefit
                                Group, Inc. and Security Benefit Life Insurance
                                Company
- ------------------------------------------------------------------------------------------------------------------------------------
Steven M. Bowser, 39            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, 38               Assistant Vice President and Portfolio Manager,       Assistant Vice             Vice President
                                SMC; Assistant Vice President, Security Benefit       President and
                                Group, Inc. and Security Benefit Life Insurance       Portfolio Manager
                                Company
- ------------------------------------------------------------------------------------------------------------------------------------
Brenda M. Harwood, 35           Assistant Vice President and Treasurer, SMC;          Assistant Vice             Treasurer
                                Assistant Vice President, Security Benefit Group,     President and Treasurer
                                Inc. and Security Benefit Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
Christopher D. Swickard, 34     Assistant Secretary, SMC; Assistant Vice President    Assistant Secretary        Assistant Secretary
                                and Assistant Counsel, Security Benefit Group,
                                Inc. and Security Benefit Life Insurance Company
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
 *All located at 700 SW Harrison Street, Topeka, KS 66636-0001 unless otherwise noted.
**Principal executive officer
</FN>
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

   SMC acts as investment adviser for certain other mutual funds with investment
objectives  similar to the investment  objectives of certain Series of the Fund.
Set forth below are the names of the applicable  Series of the Fund, the name of
the other similar  mutual fund,  information  concerning  the similar funds' net
assets as of November  30, 1999 and the fees paid to SMC for its services to the
other mutual fund.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
                                                                                              ANNUAL RATE OF
                                                                           NET ASSETS OF     COMPENSATION FOR
             SERIES OF FUND NAME                  NAME OF SIMILAR FUND      SIMILAR FUND       SIMILAR FUND
- -------------------------------------------------------------------------------------------------------------
<S>                                                <C>                      <C>              <C>
Security Equity Fund, Equity Series                SBL Fund, Series A       $                               %
Security Equity Fund, Global Series                SBL Fund, Series D
Security Equity Fund, Value Series                 SBL Fund, Series V
Security Equity Fund, Social Awareness Series      SBL Fund, Series S
Security Equity Fund, Small Company Series         SBL Fund, Series X
Security Equity Fund, Enhanced Index Series        SBL Fund, Series H
Security Equity Fund, Select 25 Series             SBL Fund, Series Y
Security Equity Fund, International Series         SBL Fund, Series I
- -------------------------------------------------------------------------------------------------------------
</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.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
                            NUMBER OF SHARES BENEFICIALLY OWNED AS
                            OF NOVEMBER 30, 1999 BY ALL DIRECTORS
          SERIES              AND EXECUTIVE OFFICERS AS A GROUP        PERCENTAGE OF CLASS
- ------------------------------------------------------------------------------------------
                                  CLASS A            CLASS B           CLASS A     CLASS B
<S>                               <C>                <C>               <C>         <C>
Equity Series                                                                %           %
Global Series                                                                %           %
Value Series                                                                 %           %
Social Awareness Series                                                      %           %
Small Company Series                                                         %           %
Enhanced Index Series                                                        %           %
Select 25 Series                                                             %           %
International Series                                                         %           %
- ------------------------------------------------------------------------------------------
*No director or "named  executive  officer" of the Fund  beneficially  owned any shares of
 common stock of the Fund as of November 30, 1999, except as shown in the above chart.
- ------------------------------------------------------------------------------------------
</TABLE>

                                 PROPOSAL NO. 5
              TO APPROVE OR DISAPPROVE A BROKERAGE ENHANCEMENT PLAN
             PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT
              OF 1940, AND A NEW INVESTMENT ADVISORY CONTRACT THAT
                  WOULD PERMIT THE IMPLEMENTATION OF THE PLAN.

            INTRODUCTION AND RECOMMENDATION OF THE BOARD OF DIRECTORS

   At a meeting  of the Board of  Directors  of the Fund (the  "Board")  held on
November 30, 1999,  the Board,  including the Directors who are not  "interested
persons"  of the Fund (as  defined in the  Investment  Company Act of 1940) (the
"Independent  Directors") and who have no direct or indirect  financial interest
in the  operation  of  the  Plan,  unanimously  voted  to  approve  a  Brokerage
Enhancement Plan (the "Plan") and a new investment  advisory contract that would
permit  the  implementation  of the  Plan.  The Plan is  intended  to  assist in
promoting  the sale of the Fund's  shares by providing  the Fund's  distributor,
Security  Distributors,  Inc. (the  "Distributor")  with further resources.  The
Board  recommends that the  stockholders of the Fund approve the Plan. A copy of
the Plan may be found in Exhibit D.

                             DESCRIPTION OF THE PLAN

   Under the Plan,  neither the Fund nor any Series  would incur any new fees or
charges.  In summary,  the Plan would authorize the Fund to place orders for the
purchase  or  sale  of  portfolio   securities   or  other   assets  with:   (i)
broker-dealers  that  have  agreed  to  direct  a  portion  of  their  brokerage
commissions  to  the  Distributor,  or  other  introducing  brokers  ("Brokerage
Payments")  to be used to finance  activities  that are  primarily  intended  to
result in the sale of Fund shares; and (ii) broker-dealers  that, in addition to
executing the trade, will provide brokerage credits,  benefits or other services
("Brokerage  Credits")  to be used to promote the  distribution  of Fund shares.
Under the Plan,  neither  the Fund nor any  Series  would  incur any new fees or
charges. The Distributor,  an affiliate of SMC, is the principal  underwriter of
the Fund.

   Under  the Plan,  the  Distributor  would be  authorized  to direct  that the
Investment Manager or a Sub-Advisor,  if any, subject to the requirement to seek
best price and execution,  effect brokerage transactions in portfolio securities
through broker-dealers in a manner that will help promote the sale of the Fund's
shares.  It is  anticipated  that  activities or services which will be procured
through the  expenditure  of  Brokerage  Payments  and  Brokerage  Credits  will
include:

*  Developing,  preparing,  printing,  and  mailing  of  advertisements,   sales
   literature and other promotional  material  describing and/or relating to the
   Fund or its Series.

*  Printing  and  mailing  of  Fund   prospectuses,   statements  of  additional
   information, any supplements thereto and shareholder reports for existing and
   prospective stockholders.

*  Holding or participating  in seminars and sales meetings  designed to promote
   the  distribution  of shares of the Fund or the Series,  including  materials
   intended either for broker-dealer only use or for retail use.

*  Providing  information about the Fund, its Series or mutual funds in general,
   to registered representatives of broker-dealers.

*  Providing  assistance to broker-dealers  that are conducting due diligence on
   the Fund or any of its Series.

*  Payment of Marketing Fees requested by broker-dealers  who sell shares of the
   Fund.

*  Obtaining  information and providing  explanations to stockholders  regarding
   the Series' investments and policies and other information about the Fund and
   its Series, including the performance of the Series.

*  Training sales personnel regarding sales of the Fund and its Series.

*  Personal service and/or maintenance of stockholder accounts.

*  Payment of commissions to broker-dealers who sell shares of the Fund.

*  Financing  any other  activity that is intended to result in the sale of Fund
   shares.

   The Distributor may also use amounts generated under the Plan to defray legal
and administrative costs associated with implementation of the Plan.

   The Plan  permits  Brokerage  Payments  and  Brokerage  Credits  generated by
securities  transactions from one Series to inure to the benefit of that Series,
any other Series, or to the Fund as a whole.

   The  Distributor  will be obligated to use all of the Brokerage  Payments and
Brokerage Credits generated under the Plan for distribution expenses, except for
a  small  amount  which  may  be  used  to  defray  the  costs  associated  with
implementing  the  Plan,  including  the  Distributor's  costs  associated  with
becoming and acting as an introducing broker-dealer under the Plan. Accordingly,
the  Distributor  will not make any  profit  from  the  operation  of the  Plan.
However,  the  Distributor  could  indirectly  benefit  from  the  Plan  in that
Brokerage  Payments  and  Brokerage  Credits  generated  under the Plan may help
defray, in whole or in part,  distribution  expenses that may otherwise be borne
by the Distributor in distributing the Fund.

   The  Distributor,  on behalf of the Fund,  may take  appropriate  actions  to
effect the purposes of the Plan,  including,  but not limited to,  directing the
Investment  Manager or a Sub-Advisor,  if any, to allocate  transactions for the
purchase or sale of portfolio securities to particular broker-dealers, including
the Distributor or other affiliated  broker-dealers,  in the manner described in
the Plan. The Distributor does not currently provide brokerage services,  but in
connection  with the  implementation  of the Plan is  taking  steps to become an
introducing  broker.  When directing the Investment Manager to allocate purchase
or sale transactions to broker-dealers under the Plan, the Fund will continue to
be subject to those  standards of best price and best execution set forth in the
Fund's registration statement.

   The Plan requires that it be approved, with respect to each Series, by a vote
of at least a majority of the outstanding  voting securities of that Series. The
Plan also  provides  that it is  subject  to an  annual  renewal  by the  Board,
including  the  Independent  Directors  who do not have any  direct or  indirect
financial interest in the operation of the Plan (the "Plan Directors"). The Plan
also provides that the  Distributor  provide the Board with a written  report of
securities transactions directed under the Plan, currently on a quarterly basis.
The Plan may be terminated at any time by a vote of the Board,  by the vote of a
majority  of the Plan  Directors  or, with  respect to a Series,  by a vote of a
majority of the outstanding  voting securities of such Series. All material Plan
amendments  must be  approved  by a  majority  vote of the  Board,  including  a
majority of the Plan Directors.

                         BOARD CONSIDERATION OF THE PLAN

   The Board, including all of the Plan Directors, has voted to approve the Plan
and to recommend to stockholders that they vote to approve the Plan.

   The Board has  determined  that adoption of the Plan is in the best interests
of the Fund and its stockholders and that there is a reasonable  likelihood that
the  Plan  will  benefit  the  Fund  and  its  stockholders.   In  making  these
determinations,  the Board considered a number of factors.  The Board noted that
the Plan would help  promote the sale of the Fund's  shares  without the Fund or
its  Series  bearing  any  direct  additional  expenses  of  the  type  normally
associated  with  distribution  plans  for  mutual  funds.  Moreover,  the Board
considered  that the  Series of the Fund will  continue  to incur  expenses  for
securities transactions,  including commissions,  regardless of whether the Plan
is  adopted.  In  general,  apart from the  execution  provided,  the  brokerage
expenses  incurred by the Series  currently do not directly  benefit the Series,
except to the extent that executing  brokers  provide  research  services to the
Investment Manager.  Under the Plan, the Series could benefit from its brokerage
if it helps generate increased assets.

   The  Board  also  considered  that the Plan  could  help the  Distributor  to
maintain or enhance  the  distribution  system in place for the Fund.  The Board
considered a report from the Investment Manager that  implementation of the Plan
is not likely to increase the brokerage  expenses of the Series. The Board noted
that  further  promotion  of the Fund could  result in an increase in the Fund's
assets,  thereby promoting greater economies of scale and decreasing the Series'
per-share operating expenses.

   The Board also considered the benefits of the Plan to the Investment  Manager
and the Distributor. In particular, the Board considered that an increase in the
Series' assets would increase the advisory fees paid to the Investment  Manager,
and that payment of distribution  expenses with Brokerage Payments and Brokerage
Credits  could reduce the need for the  Distributor  to pay such expenses out of
its own resources.

                        THE INVESTMENT ADVISORY CONTRACT

   The  successful  implementation  of the Plan as recommended by the Board also
necessitates certain changes to the Fund's Investment Advisory Contract with the
Investment  Manager.  Moreover,  as noted in connection  with the  discussion of
Proposal No. 4, that Proposal also requires that certain  changes be made to the
Investment Advisory Contract. For a discussion of the Existing Contract, the New
Contract,  the Investment  Manager and  Distributor,  refer to Proposal No. 4. A
form of the New Contract is attached hereto as Exhibit C.

   The  Existing  Contract  contains a provision  which  provides  that,  if the
Investment  Manager or any  affiliate  (which  would  include  the  Distributor)
receives  any cash  credits,  commissions  or  tender  fees in  connection  with
transactions  in portfolio  securities of the Fund, the Investment  Manager must
immediately  pay such  amounts  to the Fund in cash or as a credit  against  the
Investment  Manager's  fee.  As noted  above,  under the terms of the Plan,  the
Distributor  may  receive  brokerage  commissions  as an  introducing  broker in
connection  with the Fund's  portfolio  transactions.  Accordingly,  in order to
permit  the Plan to operate in the manner  contemplated,  the  provision  of the
Existing  Contract  stating that commissions must be paid to the Fund or used to
reduce the  advisory  fee,  must be removed.  If  Proposal  No. 5 is approved by
stockholders,  the New Contract with this provision omitted will be adopted.  If
Proposal No. 5 is not approved by stockholders,  but Proposal No. 4 is approved,
the New Contract will be adopted, but the above-referenced provision will remain
a part of the New Contract. If neither Proposal is approved by stockholders, the
Existing  Contract will continue in effect  according to its terms. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR PROPOSAL NO. 5.

                                  REQUIRED VOTE

   Approval of the Plan with respect to a Series requires the vote of a majority
of the  outstanding  shares  of that  Series  that are  eligible  to vote at the
meeting.  For purposes of this proposal,  with respect to each Series,  majority
means the lesser of (a) 67% or more of the shares of that Series  present at the
meeting,  if 50% or more of the shares of the Fund are  represented in person or
by proxy; or (b) 50% or more of the shares of such Series.

                              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, 1999.

   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

      PROPOSED FUNDAMENTAL INVESTMENT LIMITATIONS FOR SECURITY EQUITY FUND


1.  Not to invest more than 5% of its total assets in the  securities of any 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 a Series' total assets.

2.  Not to purchase a security if, as a result, with respect to 75% of the value
    of a  Series'  total  assets,  more  than  10%  of  the  outstanding  voting
    securities of any issuer would be held by the Series (other than obligations
    issued   or   guaranteed   by  the  U.S.   Government,   its   agencies   or
    instrumentalities).

3.  Not to act as  underwriter  of  securities  issued by others,  except to the
    extent that a Series may be considered an underwriter  within the meaning of
    the Securities Act of 1933 in the disposition of restricted securities.

4.  Not to borrow in excess of 33 1/3% of a Series' total assets.

5.  Not to lend any  security or make any other loan if, as a result,  more than
    33 1/3% of a Series' total assets would be lent to other parties, 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.

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

7.  Not to purchase or sell real estate unless acquired as a result of ownership
    of securities or other instruments (but this shall not prevent a Series from
    investment  in  securities  or other  instruments  backed by real  estate or
    securities of companies engaged in the real estate business).

8.  Not to purchase or sell physical commodities, except that a Series may enter
    into futures contracts and options thereon.

9.  Not to  invest  25% or  more  of a  Series'  total  assets  in a  particular
    industry.
<PAGE>
                                    EXHIBIT B

               CONDITIONS PROPOSED BY THE FUND AND SMC TO THE SEC
                AS PART OF THEIR APPLICATION FOR EXEMPTIVE RELIEF

1.  No  Fund  will  enter  into  a  subadvisory  agreement  with  an  Affiliated
    Subadviser  without such  agreement,  including the  compensation to be paid
    thereunder,  being approved by the shareholders of the Fund (or, if the Fund
    serves as a funding  medium for any  sub-account  of a  registered  separate
    account,  then pursuant to voting  instructions  by the  unitholders  of the
    sub-account).

2.  At all  times,  a majority  of each  Funds'  Board  will be persons  who are
    Independent  Directors,  and the nomination of new or additional Independent
    Directors  will  be at  the  discretion  of  the  then-existing  Independent
    Directors.

3.  When a change  of  Subadviser  is  proposed  for a Fund  with an  Affiliated
    Subadviser,  the  Fund's  Board,  including  a majority  of the  Independent
    Directors,  will make a separate  finding,  reflected  in the  Fund's  Board
    minutes, that such change of Subadviser is in the best interests of the Fund
    and its  shareholders  (or, if the Fund  serves as a funding  medium for any
    sub-account of a registered  separate account,  in the best interests of the
    Fund and the  unitholders of any  sub-account)  and that the change does not
    involve a conflict of interest from which SMC or the  Affiliated  Subadviser
    derives an inappropriate advantage.

4.  SMC  will  provide  management  services  to the  Funds,  including  overall
    supervisory responsibility for the general management and investment of each
    Fund,  and,  subject to review and approval by the  applicable  Fund's Board
    will (a) set each Fund's overall investment strategies; (b) evaluate, select
    and recommend  Subadvisers to manage all or a part of a Fund's  assets;  (c)
    when  appropriate,  allocate and  reallocate a Fund's assets among  multiple
    Subadvisers;   (d)  monitor  and  evaluate  the  investment  performance  of
    Subadvisers; and (e) implement procedures reasonably designed to ensure that
    the  Subadvisers  comply with the  relevant  Fund's  investment  objectives,
    policies, and restrictions.

5.  Within  90 days  of the  hiring  of any new  Subadviser,  SMC  will  furnish
    shareholders (or, if the Fund serves as a funding medium for any sub-account
    of a registered  separate account,  SMC will furnish the unit holders of the
    sub-account) with respect to the appropriate Fund with all information about
    the new  Subadviser  that  would  be  included  in a proxy  statement.  Such
    information  will  include  any  changes  caused  by the  addition  of a new
    Subadviser.  To meet this condition,  SMC will provide  shareholders (or, if
    the Fund  serves as a funding  medium for any  sub-account  of a  registered
    separate account,  then by providing unitholders of the sub-account) with an
    information  statement  meeting the requirements of Regulation 14C, Schedule
    14C, and Item 22 of Schedule 14A under the Securities Exchange Act of 1934.

6.  Any Fund relying on the requested relief will disclose in its prospectus the
    existence,  substance  and  effect of any  order  granted  pursuant  to this
    application.  In  addition,  any such Fund will hold itself out as employing
    the management  structure described in the application.  The prospectus will
    prominently  disclose  that SMC has ultimate  responsibility  to oversee the
    Subadvisers and recommend their hiring, termination, and replacement.

7.  Before a Fund may rely on the order, the operation of the Fund in the manner
    described  in the  application  will be approved by a majority of the Fund's
    outstanding  voting  securities  (or, if the Fund serves as a funding medium
    for any  sub-account of a registered  separate  account,  pursuant to voting
    instructions provided by the unitholders of the sub-account),  as defined in
    the 1940 Act,  or in the case of a new Fund whose  public  shareholders  (or
    variable  contract owners through a separate account) purchase shares on the
    basis  of  a  prospectus(es)   containing  the  disclosure  contemplated  by
    Condition 6 above, by the sole initial  shareholder(s)  before the shares of
    such Fund are offered to the public (or the variable contract owners through
    a separate account).
<PAGE>
                                    EXHIBIT C

                  INVESTMENT MANAGEMENT AND SERVICES AGREEMENT

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

   WITNESSETH:

   WHEREAS,  the  Fund  is  engaged  in  business  as  an  open-end,  management
investment  company  registered under the Investment  Company Act of 1940 ("1940
Act"); and

   WHEREAS,  SMC is willing to provide investment  research and advice,  general
administrative,  fund  accounting,  transfer  agency,  and  dividend  disbursing
services to the Fund on the terms and  conditions  hereinafter  set forth and to
arrange for the  provision  of all other  services  (except  for those  services
specifically  excluded  in  this  Agreement)  required  by the  Fund,  including
custodial, legal, auditing and printing;

   NOW,  THEREFORE,  in consideration of the premises and mutual agreements made
herein, the parties agree as follows:

   1.  EMPLOYMENT  OF SMC. The Fund hereby  employs SMC to (a) act as investment
adviser  to the  Fund  with  respect  to the  investment  of its  assets  and to
supervise  and arrange for the purchase of  securities of the Fund and the sales
of  securities  held  in  the  portfolio  of the  Fund,  subject  always  to the
supervision of the Board of Directors of the Fund (or a duly appointed committee
thereof),  during the period  and upon and  subject to the terms and  conditions
described  herein;  (b)  provide  the Fund  with  general  administrative,  fund
accounting,  transfer agency, and dividend disbursing services described and set
forth  in  Schedule  A  attached  hereto  and made a part of this  Agreement  by
reference;  and (c) arrange for, and monitor,  the  provision to the Fund of all
other  services  required by the Fund,  including but not limited to services of
independent  accountants,  legal counsel,  custodial services and printing.  SMC
may, in accordance with all applicable legal  requirements,  engage the services
of other persons or entities, regardless of any affiliation with SMC, to provide
services  to the Fund  under  this  Agreement.  SMC shall  bear the  expense  of
providing  such other  services to the Equity and Global  Series.  Total  Return
Series,   Social  Awareness   Series,   Value  Series,   Small  Company  Series,
International Series,  Enhanced Index Series and Select 25 Series shall bear the
expense of such other services and all other expenses of the Series.  SMC agrees
to maintain  sufficient  trained personnel and equipment and supplies to perform
its  responsibilities  under this  Agreement and in conformity  with the current
Prospectus of the Fund and such other reasonable standards of performance as the
Fund may from time to time  specify and shall use  reasonable  care in selecting
and monitoring the  performance of third parties,  who perform  services for the
Fund. SMC shall not guarantee the performance of such persons.

   SMC  hereby  accepts  such  employment  and agrees to  perform  the  services
required by this Agreement for the compensation herein provided.

   2.  ALLOCATION OF EXPENSES AND CHARGES.

       (a) EXPENSES OF SMC. SMC shall pay all  expenses in  connection  with the
   performance of its services under this  Agreement,  including with respect to
   the Equity and Global Series, all fees and charges of third parties providing
   services to the Fund,  whether or not such  expenses are billed to SMC or the
   Fund, except as provided otherwise herein.

       (b)  EXPENSES OF THE FUND.  Anything in this  Agreement  to the  contrary
   notwithstanding,  the Fund shall pay or reimburse  SMC for the payment of the
   following  described  expenses of the Fund whether or not billed to the Fund,
   SMC or any related entity:

              (i)  brokerage fees and commissions;

             (ii)  taxes;

            (iii)  interest expenses;

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

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

   and, in addition to those  expenses  set forth above,  Total  Return  Series,
   Social Awareness Series,  Value Series,  Small Company Series,  International
   Series,  Enhanced Index Series and Select 25 Series shall pay all expenses of
   the  Series  whether or not billed to the Fund,  SMC or any  related  entity,
   including, but not limited to the following: Board of Directors' fees; legal,
   auditing and accounting expenses;  insurance premiums;  broker's commissions;
   taxes and  governmental  fees and any  membership  dues;  fees of  custodian;
   expenses of  obtaining  quotations  on the Fund's  portfolio  securities  and
   pricing of the Fund's  shares;  costs and  expenses  in  connection  with the
   registration of the Fund's capital stock under the Securities Act of 1933 and
   qualification  of the  Fund's  capital  stock  under the Blue Sky laws of the
   states where such stock is offered; costs and expenses in connection with the
   registration  of the Fund under the  Investment  Company  Act of 1940 and all
   periodic  and other  reports  required  thereunder;  expenses  of  preparing,
   printing and distributing reports, proxy statements, prospectuses, statements
   of additional information,  notices and distributions to stockholders;  costs
   of stockholder  and other  meetings;  and expenses of maintaining  the Fund's
   corporate  existence.  Notwithstanding  the  foregoing,  SMC  shall  pay  all
   expenses related to the initial registration and qualification of the Class C
   shares of Total Return Series,  Social Awareness Series,  Value Series, Small
   Company  Series,  International  Series,  Enhanced Index Series and Select 25
   Series,  under the Blue Sky laws of the  states  where such class of stock is
   offered.

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

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

   3.  COMPENSATION OF SMC.

       (a)  As compensation  for the  services  to be  rendered by SMC to Equity
   Series and Global  Series as provided for herein,  for each of the years this
   Agreement  is in effect,  the Fund shall pay SMC an annual fee equal to (1) 2
   percent  of the first $10  million of the  average  daily net  assets,  1 1/2
   percent  of the next $20  million  of the  average  daily net  assets,  and 1
   percent of the remaining average daily net assets of the Equity Series of the
   Fund for any fiscal  year,  and (2) 2 percent of the first $70 million of the
   average daily net assets and 1 1/2 percent of the remaining average daily net
   assets of the Global Series of the Fund for any fiscal year.  Such fees shall
   be determined daily and payable  monthly.  As compensation for the investment
   advisory  services to be rendered by SMC to Social  Awareness  Series,  Value
   Series and Small Company  Series,  for each of the years this Agreement is in
   effect,  the Social Awareness  Series,  Value Series and Small Company Series
   shall  each pay SMC an  annual  fee equal to 1% of their  respective  average
   daily net assets.  Such fee shall be calculated daily and payable monthly. As
   compensation  for the investment  advisory  services to be rendered by SMC to
   International  Series for each of the years this Agreement is in effect,  the
   International  Series  shall  pay SMC an  annual  fee  equal  to 1.10% of its
   average  daily net  assets.  Such fee shall be  calculated  daily and payable
   monthly.  As compensation for the investment advisory services to be rendered
   by SMC to Total Return Series, Enhanced Index Series and Select 25 Series for
   each of the years this  Agreement  is in  effect,  the Total  Return  Series,
   Enhanced  Index  Series and Select 25 Series shall each pay SMC an annual fee
   equal to .75% of their respective average daily net assets. Such fee shall be
   calculated daily and payable monthly.  As compensation for the administrative
   services to be rendered by SMC to  International  Series,  the  International
   Series  shall pay SMC an annual  fee equal to .05% of the  average  daily net
   assets of International Series, plus the greater of .10% of its average daily
   net assets or (i) $30,000 in the year ended January 31, 2000; (ii) $45,000 in
   the year  ending  January 31, 2001 and (iii)  $60,000  thereafter.  Such fees
   shall be  calculated  daily and  payable  monthly.  As  compensation  for the
   administrative  services to be rendered by SMC to Total Return Series, Social
   Awareness Series, Value Series,  Small Company Series,  Enhanced Index Series
   and Select 25 Series,  each such Series  shall pay SMC an annual fee equal to
   .09% of their  respective  average  daily  net  assets.  Such  fees  shall be
   calculated  daily and payable  monthly.  If this Agreement shall be effective
   for only a portion of a year, then SMC's  compensation for said year shall be
   prorated for such  portion.  For purposes of this Section 3, the value of the
   net assets of each Series  shall be computed in the same manner at the end of
   the  business  day as the value of such net assets is computed in  connection
   with the  determination  of the net  asset  value  of the  Fund's  shares  as
   described in the Fund's prospectus.

       For transfer  agency  services  provided by SMC to Total  Return  Series,
   Social Awareness Series,  Value Series,  Small Company Series,  International
   Series,  Enhanced Index Series, and Select 25 Series,  each such Series shall
   pay a Maintenance  Fee of $8.00 per account,  a Transaction  Fee of $1.00 per
   account and a Dividend Fee of $1.00 per account.

       (b) For each of the Fund's fiscal years this Agreement  remains in force,
   SMC agrees that if total annual expenses of any Series of the Fund, exclusive
   of  interest  and taxes,  extraordinary  expenses  (such as  litigation)  and
   distribution  fees  paid  under  the  Fund's  Class  A,  Class B and  Class C
   Distribution Plans, but inclusive of SMC's  compensation,  exceed any expense
   limitation  imposed by state  securities  law or  regulation  in any state in
   which shares of such Series of the Fund are then  qualified for sale, as such
   regulations  may be amended from time to time,  SMC will  contribute  to such
   Series such funds or waive such portion of its fee, adjusted monthly,  as may
   be  requisite  to insure that such annual  expenses  will not exceed any such
   limitation.  If this  Agreement  shall be effective for only a portion of any
   Series' fiscal year,  then the maximum annual  expenses shall be prorated for
   such portion.  Brokerage fees and commissions incurred in connection with the
   purchase  or sale of any  securities  by a Series  shall  not be deemed to be
   expenses within the meaning of this paragraph (b).

   4.  INVESTMENT ADVISORY DUTIES.

       (a)  INVESTMENT  ADVICE.  SMC  shall  regularly  provide  the  Fund  with
   investment  research,   advice  and  supervision,   continuously  furnish  an
   investment  program,  recommend which  securities shall be purchased and sold
   and what  portion  of the  assets of the Fund  shall be held  uninvested  and
   arrange for the purchase of securities and other investments for the Fund and
   the sale of  securities  and other  investments  held in the portfolio of the
   Fund. All investment advice furnished by SMC to the Fund under this paragraph
   4 shall at all times conform to any requirements imposed by the provisions of
   the Fund's Articles of Incorporation and Bylaws, the 1940 Act, the Investment
   Advisors Act of 1940 and the rules and  regulations  promulgated  thereunder,
   and other  applicable  provisions  of law, and the terms of the  registration
   statements of the Fund under the  Securities  Act of 1933 ("1933 Act") and/or
   the 1940 Act,  as may be  applicable  at the  time,  all as from time to time
   amended. SMC shall advise and assist the officers or other agents of the Fund
   in  taking  such  steps as are  necessary  or  appropriate  to carry  out the
   decisions  of the  Board of  Directors  of the Fund  (and any duly  appointed
   committee  thereof)  with  regard to the  foregoing  matters  and the general
   account of the Fund's business.

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

       (c)  PORTFOLIO TRANSACTIONS AND BROKERAGE.

            (i)  Transactions in portfolio  securities shall be effected by SMC,
       through  brokers or  otherwise  (including  affiliated  brokers),  in the
       manner permitted in this paragraph 4 and in such manner as SMC shall deem
       to be in the best interests of the Fund after  consideration  is given to
       all relevant factors.

            (ii)  In reaching  a judgment  relative  to the  qualification  of a
       broker to obtain the best execution of a particular transaction,  SMC may
       take into account all relevant factors and  circumstances,  including the
       size of any contemporaneous market in such securities;  the importance to
       the Fund of speed and  efficiency  of execution;  whether the  particular
       transaction is part of a larger intended change of portfolio  position in
       the  same  securities;   the  execution   capabilities  required  by  the
       circumstances of the particular transaction;  the capital required by the
       transaction;  the overall  capital  strength of the broker;  the broker's
       apparent  knowledge of or  familiarity  with sources from or to whom such
       securities  may  be  purchased  or  sold;  as  well  as  the  efficiency,
       reliability  and  confidentiality  with which the broker has  handled the
       execution of prior similar transactions.

            (iii)  Subject  to  any  statements  concerning  the  allocation  of
       brokerage  contained in the Fund's  Prospectus or Statement of Additional
       Information,  SMC is  authorized  to direct the  execution  of  portfolio
       transactions for the Fund to brokers who furnish  investment  information
       or research service to the SMC. Such allocations shall be in such amounts
       and proportions as SMC may determine. If the transaction is directed to a
       broker providing  brokerage and research  services to SMC, the commission
       paid for such  transaction  may be in  excess of the  commission  another
       broker would have charged for effecting  that  transaction,  if SMC shall
       have  determined  in good  faith that the  commission  is  reasonable  in
       relation to the value of the  brokerage and research  services  provided,
       viewed in terms of either  that  particular  transaction  or the  overall
       responsibilities  of SMC with  respect to all accounts as to which it now
       or  hereafter  exercises  investment  discretion.  For  purposes  of  the
       immediately   preceding  sentence,   "providing  brokerage  and  research
       services"  shall have the meaning  generally  given such terms or similar
       terms under Section  28(e)(3) of the Securities  Exchange Act of 1934, as
       amended.

            (iv)  In  the  selection  of a  broker  for  the  execution  of  any
       transaction not subject to fixed commission rates, SMC shall have no duty
       or obligation to seek advance  competitive bidding for the most favorable
       negotiated  commission rate to be applicable to such  transaction,  or to
       select  any  broker  solely on the  basis of its  purported  or  "posted"
       commission rates.

            (v)  In connection with  transactions on markets other than national
       or regional  securities  exchanges,  the Fund will deal directly with the
       selling  principal  or market  maker  without  incurring  charges for the
       services of a broker on its behalf  unless,  in the best judgment of SMC,
       better price or execution  can be obtained by utilizing the services of a
       broker.

       (d)  LIMITATION OF LIABILITY OF SMC WITH RESPECT TO RENDERING  INVESTMENT
   ADVISORY SERVICES. So long as SMC shall give the Fund the benefit of its best
   judgment and effort in rendering investment advisory services hereunder,  SMC
   shall not be liable for any errors of  judgment or mistake of law, or for any
   loss  sustained  by reason of the  adoption of any  investment  policy or the
   purchase,  sale or retention of any security on its recommendation shall have
   been based upon its own investigation and research or upon  investigation and
   research  made  by  any  other  individual,  firm  or  corporation,  if  such
   recommendation  shall  have  been  made and such  other  individual,  firm or
   corporation shall have been selected with due care and in good faith. Nothing
   herein  contained  shall,  however,  be  construed to protect SMC against any
   liability to the Fund or its  shareholders by reason of willful  misfeasance,
   bad faith or gross  negligence in the  performance of its duties or by reason
   of its reckless  disregard of its obligations and duties under this paragraph
   4. As used in this paragraph 4, "SMC" shall include  directors,  officers and
   employees of SMC, as well as SMC itself.

   5.  ADMINISTRATIVE AND TRANSFER AGENCY SERVICES.

       (a)  RESPONSIBILITIES  OF SMC.  SMC will  provide  the Fund with  general
   administrative,  fund accounting,  transfer agency,  and dividend  disbursing
   services  described  and set forth in  Schedule A attached  hereto and made a
   part of this  Agreement  by  reference.  SMC  agrees to  maintain  sufficient
   trained  personnel  and  equipment  and supplies to perform such  services in
   conformity with the current  Prospectus of the Fund and such other reasonable
   standards  of  performance  as the Fund may from  time to time  specify,  and
   otherwise perform such services in an accurate, timely, and efficient manner.

       (b) INSURANCE. The Fund and SMC agree to procure and maintain, separately
   or as joint insureds with themselves, their directors,  employees, agents and
   others,  and other  investment  companies  for  which SMC acts as  investment
   adviser and transfer  agent,  a policy or policies of insurance  against loss
   arising from  breaches of trust,  errors and  omissions,  and a fidelity bond
   meeting  the  requirements  of the 1940  Act,  in the  amounts  and with such
   deductibles  as may be agreed  upon  from  time to time.  SMC shall be solely
   responsible for the payment of premiums due for such policies.

       (c)  REGISTRATION AND COMPLIANCE.

            (i)  SMC represents  that as of the  date  of this  Agreement  it is
       registered  as  a  transfer   agent  with  the  Securities  and  Exchange
       Commission  ("SEC")  pursuant to  Subsection  17A of the  Securities  and
       Exchange Act of 1934 and the rules and regulations thereunder, and agrees
       to maintain said  registration and comply with all of the requirements of
       said Act,  rules and  regulations  so long as this  Agreement  remains in
       force.

            (ii)  The  Fund  represents  that  it  is a  diversified  management
       investment  company  registered  with the SEC in accordance with the 1940
       Act and the rules and regulations thereunder,  and authorized to sell its
       shares  pursuant to said Act, the 1933 Act and the rules and  regulations
       thereunder.

       (d)   LIABILITY   AND   INDEMNIFICATION   WITH   RESPECT   TO   RENDERING
   ADMINISTRATIVE  AND  TRANSFER  AGENCY  SERVICES.  SMC shall be liable for any
   actual losses,  claims, damages or expenses (including any reasonable counsel
   fees and  expenses)  resulting  from  SMC's bad faith,  willful  misfeasance,
   reckless  disregard of its obligations  and duties,  negligence or failure to
   properly perform any of its  responsibilities or duties under this Section 5.
   SMC shall not be liable and shall be  indemnified  and held  harmless  by the
   Fund, for any claim, demand or action brought against it arising out of or in
   connection with:

            (i)  The bad faith, willful  misfeasance,  reckless disregard of its
       duties or  negligence  by the Board of  Directors  of the Fund,  or SMC's
       acting upon any instructions  properly  executed or and authorized by the
       Board of Directors of the Fund;

            (ii) SMC acting in reliance upon advice given by independent counsel
       retained by the Board of Directors of the Fund.

       In the event that SMC  requests the Fund to indemnify or hold it harmless
   hereunder,  SMC shall use its best efforts to inform the Fund of the relevant
   facts  concerning the matter in question.  SMC shall use  reasonable  care to
   identify and promptly  notify the Fund  concerning any matter which presents,
   or appears likely to present, a claim for indemnification against the Fund.

       The Fund shall have the election of defending SMC against any claim which
   may be the  subject of  indemnification  hereunder.  In the event the Fund so
   elects, it will so notify SMC and thereupon the Fund shall take over defenses
   of the claim,  and if so  requested  by the Fund,  SMC shall incur no further
   legal or other  claims  related  thereto  for which it would be  entitled  to
   indemnity  hereunder provided,  however,  that nothing herein contained shall
   prevent SMC from retaining, at its own expense,  counsel to defend any claim.
   Except with the Fund's prior consent, SMC shall in no event confess any claim
   or make any  compromise  in any  matter  in which  the Fund  will be asked to
   indemnify or hold SMC harmless hereunder.

       PUNITIVE  DAMAGES.  SMC shall  not be  liable  to the Fund,  or any third
   party, for punitive,  exemplary,  indirect,  special or consequential damages
   (even if SMC has been advised of the possibility of such damage) arising from
   its obligations  and the services  provided under this paragraph 5, including
   but not limited to loss of profits, loss of use of the shareholder accounting
   system,  cost of capital and expenses of substitute  facilities,  programs or
   services.

       FORCE   MAJEURE.   Anything  in  this   paragraph   5  to  the   contrary
   notwithstanding,  SMC shall not be liable for delays or errors  occurring  by
   reason of circumstances beyond its control, including but not limited to acts
   of civil or military authority,  national emergencies,  work stoppages, fire,
   flood, catastrophe, earthquake, acts of God, insurrection, war, riot, failure
   of communication or interruption.

       (e) DELEGATION OF DUTIES. SMC may, at its discretion, delegate, assign or
   subcontract any of the duties, responsibilities and services governed by this
   agreement,  to an  affiliated  company,  whether  or  not by  formal  written
   agreement, or to any third party, provided that such arrangement with a third
   party has been  approved by the Board of  Directors  of the Fund.  SMC shall,
   however,  retain ultimate responsibility to the Fund and shall implement such
   reasonable  procedures  as may be  necessary  for  assuring  that any duties,
   responsibilities  or services so assigned,  subcontracted  or  delegated  are
   performed in conformity with the terms and conditions of this Agreement.

   6.  OTHER ACTIVITIES NOT RESTRICTED.  Nothing in this Agreement shall prevent
SMC or any officer thereof from acting as investment  adviser,  administrator or
transfer agent for any other person,  firm or  corporation,  nor shall it in any
way limit or restrict SMC or any of its  directors,  officers,  stockholders  or
employees from buying,  selling,  or trading any securities for its own accounts
or for the accounts of others for whom it may be acting; provided, however, that
SMC expressly  represents  that it will  undertake no activities  which,  in its
judgment,  will conflict with the  performance  of its  obligations  to the Fund
under this Agreement. The Fund acknowledges that SMC acts as investment adviser,
administrator and transfer agent to other investment companies, and it expressly
consents  to SMC acting as such;  provided,  however,  that if in the opinion of
SMC, particular securities are consistent with the investment objectives of, and
desirable  purchases  or sales for the  portfolios  of one or more of such other
investment companies or series of such companies at approximately the same time,
such purchases or sales will be made on a proportionate  basis if feasible,  and
if not feasible, then on a rotating or other equitable basis.

   7.  AMENDMENT. This Agreement and the schedules  forming a part hereof may be
amended at any time,  without  shareholder  approval to the extent  permitted by
applicable law, by a writing signed by each of the parties hereto. Any change in
the Fund's  registration  statements or other  documents of compliance or in the
forms relating to any plan, program or service offered by its current Prospectus
which would require a change in SMC's obligations  hereunder shall be subject to
SMC's approval, which shall not be unreasonably withheld.

   8.  DURATION  AND  TERMINATION  OF  AGREEMENT.  This  Agreement  shall become
effective on January 27, 2000,  provided that on or before that date it has been
approved by the holders of a majority of the  outstanding  voting  securities of
each series of the Fund.  This  Agreement  shall continue in force until January
27, 2002, and for successive  12-month periods  thereafter,  unless  terminated,
provided each such continuance is specifically approved at least annually by (a)
the vote of a majority of the entire  Board of  Directors  of the Fund,  and the
vote of a  majority  of the  directors  of the Fund who are not  parties to this
Agreement  or  interested  persons (as such terms are defined in the  Investment
Company  Act of 1940) of any such  party  cast in person  at a  meeting  of such
directors  called for the  purpose of voting upon such  approval,  or (b) by the
vote of the holders of a majority of the outstanding  voting  securities of each
series of the Fund (as defined in the 1940 Act).  In the event a majority of the
outstanding shares of one series vote for continuance of the Agreement,  it will
be continued for that series even though the Agreement is not approved by either
a majority  of the  outstanding  shares of any other  series or by a majority of
outstanding shares of the Fund.

   Upon this Agreement  becoming  effective,  any previous Agreement between the
Fund and SMC  providing  for  investment  advisory,  administrative  or transfer
agency services shall concurrently terminate, except that such termination shall
not affect any fees  accrued  and  guarantees  of expenses  with  respect to any
period prior to termination.

   This  Agreement  may be  terminated  at any time as to any series of the Fund
without  payment of any penalty,  by the Fund upon the vote of a majority of the
Fund's Board of Directors or, by a majority of the outstanding voting securities
of the  applicable  series of the Fund,  or by SMC,  in each case on sixty  (60)
days' written  notice to the other party.  This  Agreement  shall  automatically
terminate  in the event of its  assignment  (as such term is defined in the 1940
Act).

   9.  SEVERABILITY.  If any clause or provision of this Agreement is determined
to be illegal,  invalid or unenforceable  under present or future laws effective
during  the term  hereof,  then such  clause or  provision  shall be  considered
severed  herefrom and the  remainder of this  Agreement  shall  continue in full
force and effect.

   10.  APPLICABLE  LAW.  This  Agreement  shall be subject to and  construed in
accordance with the laws of the State of Kansas.

   IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be duly
executed by their respective  officers thereto duly authorized on the day, month
and year first above written.

                                              SECURITY EQUITY FUND

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

ATTEST:

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

                                              SECURITY MANAGEMENT COMPANY, LLC

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

ATTEST:

- ----------------------------------
Secretary
<PAGE>
                                   SCHEDULE A
                  INVESTMENT ADVISORY, ADMINISTRATIVE SERVICES
                          AND TRANSFER AGENCY AGREEMENT

     SCHEDULE OF ADMINISTRATIVE AND FUND ACCOUNTING FACILITIES AND SERVICES

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

 1.  FUND AND PORTFOLIO ACCOUNTING

     a.  Maintenance of Fund, General Ledger and Journal.

     b.  Preparing and recording disbursements for direct Fund expenses.

     c.  Preparing daily money transfers.

     d.  Reconciliation of all Fund bank and custodian accounts.

     e.  Assisting Fund independent auditors as appropriate.

     f.  Prepare daily projection of available cash balances.

     g.  Record trading  activity for purposes of  determining  net asset values
         and daily dividend.

     h.  Prepare daily portfolio evaluation report to value portfolio securities
         and determine daily accrued income.

     i.  Determine the daily net asset value per share.

     j.  Determine the daily, monthly, quarterly,  semiannual or annual dividend
         per share.

     k.  Prepare monthly, quarterly, semiannual and annual financial statements.

     l.  Provide  financial  information  for  reports  to  the  Securities  and
         Exchange Commission in compliance with the provisions of the Investment
         Company  Act of 1940  and the  Securities  Act of  1933,  the  Internal
         Revenue Service and any other regulatory agencies as required.

     m.  Provide financial, yield, net asset value, etc. information to NASD and
         other survey and statistical agencies as instructed by the Fund.

     n.  Reports  to  the  Audit  Committee  of  the  Board  of  Directors,   if
         applicable.

 2.  LEGAL

     a.  Provide  registration and other  administrative  services  necessary to
         qualify  the  shares  of the  Fund  for  sale  in  those  jurisdictions
         determined from time to time by the Fund's Board of Directors (commonly
         known as "Blue Sky Registration").

     b.  Provide  registration  with and reports to the  Securities and Exchange
         Commission in compliance with the provisions of the Investment  Company
         Act of 1940 and the Securities Act of 1933.

     c.  Prepare  and  review  Fund   Prospectus  and  Statement  of  Additional
         Information.

     d.  Prepare  proxy  statements  and  oversee  proxy  tabulation  for annual
         meetings.

     e.  Prepare Board materials and maintain minutes of the Board meetings.

     f.  Draft,  review and  maintain  contractual  agreements  between Fund and
         Investment Adviser, Custodian, Distributor and Transfer Agent.

     g.  Oversee   printing   of  proxy   statements,   financial   reports   to
         shareholders, prospectus and Statements of Additional Information.

     h.  Provide legal advice and oversight regarding shareholder  transactions,
         administrative services, compliance with contractual agreements and the
         provisions of the 1940 and 1933 Acts.

           SCHEDULE OF SHARE TRANSFER AND DIVIDEND DISBURSING SERVICES

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

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

 2.  Posting  address  changes  and  other  file   maintenance  for  shareholder
     accounts.

 3.  Posting all transactions to the shareholder file, including:

     a.  Direct purchases;

     b.  Wire order purchases;

     c.  Direct redemptions;

     d.  Wire order redemptions;

     e.  Draft redemptions;

     f.  Direct exchanges;

     g.  Transfers;

     h.  Certificate issuances; and

     i.  Certificate deposits.

 4.  Monitor fiduciary processing, insuring accuracy and deduction of fees.

 5.  Prepare daily  reconciliation's of shareholder processing to money movement
     instructions.

 6.  Handle bounced check  collections.  Immediately  liquidate shares purchased
     and  return  to  the  shareholder   the  check  and   confirmation  of  the
     transaction.

 7.  Issuing all checks and stopping and replacing lost checks.

 8.  Draft clearing services.

     a.  Maintenance of signature cards and appropriate corporate resolutions.

     b.  Comparison  of the  signature  on the  check to the  signatures  on the
         signature  card for the  purpose of paying the face amount of the check
         only.

     c.  Receiving  checks  presented for payment and  liquidating  shares after
         verifying account balance.

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

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

10.  Performing all of the Fund's other mailings, including:

     a.  Dividend and capital gain distributions;

     b.  Semiannual and annual reports;

     c.  1099/year-end shareholder reporting;

     d.  Systematic withdrawal plan payments; and

     e.  Daily confirmations.

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

     a.  General and policy inquiries (research and resolve problems);

     b.  Fund yield inquiries;

     c.  Taking shareholder  processing requests and account maintenance changes
         by telephone as described above;

     d.  Submit pending requests to correspondence;

     e.  Monitor on-line statistical performance of unit; and

     f.  Develop reports on telephone activity.

12.  Respond to written inquiries (research and resolve problems), including:

     a.  Initiate   shareholder   account    reconciliation    proceeding   when
         appropriate;

     b.  Notify shareholder of bounced investment checks;

     c.  Respond to financial institutions regarding verification of deposit;

     d.  Initiate proceedings regarding lost certificates;

     e.  Respond to complaints and log activities; and

     f.  Correspondence control.

13.  Maintaining and retrieving all required past history for  shareholders  and
     provide research capabilities as follows:

     a.  Daily   monitoring  of  all  processing   activity  to  verify  back-up
         documentation;

     b.  Provide exception reports;

     c.  Microfilming; and

     d.  Storage, retrieval and archive.

14.  Prepare materials for annual meetings.

     a.  Address and mail annual proxy and related material.

     b.  Prepare and submit to Fund an affidavit of mailing.

     c.  Furnish  certified  list of  shareholders  (hard copy or microfilm) and
         inspectors of elections.

15.  Report and remit as necessary for state escheat requirements.

Approved:  Fund                                SMC
               ----------------------------         ----------------------------
<PAGE>
                                    EXHIBIT D

                              SECURITY EQUITY FUND
                           BROKERAGE ENHANCEMENT PLAN

WHEREAS,  Security  Equity Fund (the "Fund")  engages in business as an open-end
management  investment  company and is registered  as such under the  Investment
Company Act of 1940, as amended (the "Act");

WHEREAS,  shares of common stock of the Fund are currently  divided into series,
listed on Schedule A hereto (the "Series"), which Schedule can be amended to add
or remove a series by an amended schedule;

WHEREAS,  shares of common stock of the Series are divided into multiple classes
of  shares,  and this Plan  applies to the Fund and the Series and the effect of
the Plan does not vary based upon a class of a Series;

WHEREAS,  the Fund employs Security  Distributors,  Inc. (the  "Distributor") as
distributor of the securities of which the Fund is the issuer;

WHEREAS,  the Board of Directors of the Fund (the "Board") has determined  that,
subject to the  requirement to seek best price and execution,  it is appropriate
and desirable for the Fund to use certain brokerage commissions generated on the
purchase  and  sale of  portfolio  securities  to  finance  activities  that are
primarily  intended  to  result  in the  sale  of  its  shares  (the  "Brokerage
Enhancement Plan" or the "Plan");

WHEREAS, any benefits that may be obtained from brokerage commissions are assets
of the Fund,  and the Fund  wishes,  pursuant  to Rule 12b-1  under the Act,  to
utilize such assets in furtherance of the distribution of the Fund's shares; and

WHEREAS,  the Board has  determined  that,  to the extent  that the use of these
benefits   earned  by  a  Series  under  this  Plan  results  in  the  increased
distribution of the Fund's shares, a benefit in the form of potential  economies
of scale  should  inure to that  Series and to the other  Series  offered by the
Fund;

NOW, THEREFORE, this Brokerage Enhancement Plan is adopted by the Fund on behalf
of the Series,  in  accordance  with Rule 12b-l under the Act, on the  following
terms and conditions:

 1.  The Fund is authorized to enter into agreements or arrangements pursuant to
     which the Fund may direct Security Management Company,  LLC ("SMC"), in its
     capacity as the Fund's  investment  adviser,  and each of the  sub-advisors
     retained by SMC (and approved by the Fund) to manage  certain of the Series
     (each a "Sub-Advisor"), acting as agents for the Fund or its Series:

     a.  To place orders for the purchase or sale of portfolio  securities  with
         the Distributor or other introducing  broker-dealers who will receive a
         portion  of  the   brokerage   commission   paid  by  the  Series  from
         broker-dealers executing such portfolio transactions for the benefit of
         the  Series  ("Brokerage  Payments")  that  can  be  used  directly  or
         indirectly to finance the distribution of the Fund's shares; or

     b.  To  allocate  transactions  for  the  purchase  or  sale  of  portfolio
         securities or other assets to broker-dealers,  and receive, in addition
         to execution of the brokerage transaction,  credits,  benefits or other
         services from the broker-dealer  ("Brokerage Credits") that can be used
         directly  or  indirectly  to  promote  the  distribution  of the Fund's
         shares;

     in each case,  provided that SMC or the Sub-Advisor must reasonably believe
     that the  Distributor or  broker-dealer  (or the clearing broker of either)
     will execute the transaction in a manner  consistent with standards of best
     execution,  as described in the  Registration  Statement  for the Fund,  as
     amended from time to time.

 2.  The Fund is authorized to expend Brokerage  Credits and Brokerage  Payments
     to compensate the  Distributor  and other  broker-dealers  for the cost and
     expense of certain  distribution-related  activities or to procure from, or
     otherwise  induce,  the  Distributor  and other  broker-dealers  to provide
     services,  where such  activities  or services  are intended to promote the
     sale of the Fund's shares.  Such  activities or services may be provided by
     the Distributor or  broker-dealer  to which a purchase or sale  transaction
     has been allocated (the directed broker-dealer) or by another broker-dealer
     or  other  party  at  the   direction  of  the   Distributor   or  directed
     broker-dealer.  The  activities  or  services  which may be  procured  with
     Brokerage Credits and Brokerage  Payments  include,  but are not limited to
     (i) developing,  preparing, printing, and mailing of advertisements,  sales
     literature and other promotional material describing and/or relating to the
     Fund or the  Series;  (ii)  printing  and  mailing  of  Fund  prospectuses,
     statements  of  additional   information,   any  supplements   thereto  and
     shareholder  reports  for  existing  and  prospective  shareholders;  (iii)
     holding or participating in seminars and sales meetings designed to promote
     the distribution of shares of the Fund or the Series,  including  materials
     intended  either  for  broker-dealer  only  use or  for  retail  use;  (iv)
     providing  information  about  the Fund,  its  Series,  or mutual  funds in
     general,  to registered  representatives of  broker-dealers;  (v) providing
     assistance to broker-dealers  that are conducting due diligence on the Fund
     or its Series;  (vi) payment or reimbursement  of legal and  administrative
     costs associated with implementing the Plan; (vii) marketing fees requested
     by broker-dealers who sell shares of the Fund; (viii) obtaining information
     and  providing   explanations   to   shareholders   regarding  the  Series'
     investments  and  policies  and  other  information  about the Fund and its
     Series,  including  the  performance  of the Series;  (ix)  training  sales
     personnel;  (x) personal  service  and/or  maintenance  of the  shareholder
     accounts;  (xi) payment of commissions to broker-dealers who sell shares of
     the Fund; and (xii) financing any other activity that is intended to result
     in the sale of Fund shares.

 3.  The Fund may direct the Distributor to take  appropriate  actions to effect
     the purposes of this Plan, including,  but not limited to, (a) directing on
     behalf  of the Fund or a Series  and  subject  to the  standards  described
     above,  SMC or a Sub-Advisor to allocate  transactions  for the purchase or
     sale of  portfolio  securities  in the manner  described  in the Plan;  (b)
     compensating  a   broker-dealer   for  the  cost  and  expense  of  certain
     distribution-related  activities  or  procuring  from  a  broker-dealer  or
     otherwise  inducing  a  broker-dealer  to  provide  services,   where  such
     activities  or services  are  intended to promote the sale of shares of the
     Fund or a Series,  all on behalf  of the Fund or a Series.  Subject  to the
     standards set forth in Section 1, and subject to applicable  law, SMC and a
     Sub-Advisor may also direct brokerage  transactions to a broker-dealer that
     is an affiliated person of the Distributor, SMC or a Sub-Advisor.  Provided
     that any  Brokerage  Credits or Brokerage  Payments  directly or indirectly
     inure to the  benefit  of  those  Series  which  generated  the  particular
     Brokerage  Credit or  Brokerage  Payment,  any such credits or payments may
     also inure to the benefit of other Series of the Fund.

 4.  This Plan shall not take effect with  respect to a Series until it has been
     approved by (a) a vote of a majority of the outstanding  voting  securities
     of that  Series;  and,  together  with  any  related  agreements,  has been
     approved by (a) the Fund's Board of Directors,  and (b) those  Directors of
     the Fund who are not  "interested  persons"  of the Fund (as defined in the
     Act) and who have no direct or indirect financial interest in the operation
     of this Plan or any agreements  related to it (the "Rule 12b-l Directors"),
     cast in person at a meeting (or meetings) called, at least in part, for the
     purpose of voting on this Plan and such related  agreements.  As additional
     Series of the Fund are  established,  this Plan shall not take  effect with
     respect  to  such  Series  until  the  Plan,   together  with  any  related
     agreements, has been approved by votes of a majority of both (a) the Fund's
     Board of  Directors  and (b) the Rule 12b-1  Directors  cast in person at a
     meeting  called,  at least in  part,  for the  purpose  of  voting  on such
     approval.

 5.  After  approval  as set  forth  in  paragraph  4, and any  other  approvals
     required  pursuant  to the Act and Rule 12b-1  thereunder,  this Plan shall
     take effect at the time specified by the Fund's Board of Directors,  or, if
     no such time is specified by the Directors,  at the time that all approvals
     necessary  have been  obtained.  The Plan shall  continue in full force and
     effect  as to a  Series  for so long as such  continuance  is  specifically
     approved at least  annually by votes of a majority of both (a) the Board of
     Directors and (b) the Rule 12b-1 Directors of the Fund, cast in person at a
     meeting called, at least in part, for the purpose of voting on this Plan.

 6.  The Distributor shall provide to the Directors of the Fund a written report
     of the amounts  expended or benefits  received  and the  purposes for which
     such expenditures were made at such frequency as may be required under Rule
     12b-1 of the Act.

 7.  This  Plan may be  terminated  as to the Fund or each  Series  at any time,
     without  payment of any penalty,  by vote of the  Directors of the Fund, by
     vote of a majority of the Rule 12b-l Directors,  or by a vote of a majority
     of the  outstanding  voting  securities  of the  Series on not more than 30
     days'  written  notice to any other  party to the Plan.  In  addition,  all
     Agreements shall provide that such Agreement shall terminate  automatically
     in the event of its assignment.

 8.  This Plan may not be amended in any material  respect unless such amendment
     is  approved  by a vote of a  majority  of both  (a) the  Fund's  Board  of
     Directors  and (b) the Rule  12b-1  Directors  cast in  person at a meeting
     called,  at least in part, for the purpose of voting on such approval.  The
     Plan may not be amended to increase  materially  the amount to be spent for
     distribution  unless  such  amendment  is  approved  by a  majority  of the
     outstanding  voting securities of the pertinent Series and by a majority of
     both (a) the Fund's  Board of  Directors  and (b) the Rule 12b-1  Directors
     cast in person at a meeting  called,  at least in part,  for the purpose of
     voting on such approval;  PROVIDED HOWEVER, that increases in amounts spent
     for  distribution  by virtue of a greater  amount of  Brokerage  Credits or
     Brokerage  Payments generated by the Fund shall not be deemed to constitute
     a material increase in the amount to be spent for distribution.

 9.  While this Plan is in effect, the selection and nomination of Directors who
     are not  "interested  persons" (as defined in the Act) of the Fund shall be
     committed  to the  discretion  of the  Directors  who  are  not  interested
     persons.

10.  The Fund shall  preserve  copies of this Plan and related  agreements for a
     period of not less than six years from the date of  termination of the Plan
     or related  agreements,  the first two years in an easily accessible place;
     and shall  preserve all reports  made  pursuant to paragraph 6 hereof for a
     period of not less than  six,  the first two years in an easily  accessible
     place.

11.  The provisions of this Plan are severable as to each Series, and any action
     to be taken with  respect to this Plan shall be taken  separately  for each
     Series affected by the matter.

Date:  January __, 2000
<PAGE>
                                   SCHEDULE A

                            Equity Series
                            Global Series
                            Total Return Series
                            Value Series
                            Social Awareness Series
                            Small Company Series
                            Enhanced Index Series
                            International Series
                            Select 25 Series
<PAGE>
[SBG LOGO]
The Security Benefit
Group of Companies
700 SW Harrison St.
Topeka, Kansas 66636-0001

                      EQUITY SERIES OF SECURITY EQUITY FUND
                         Annual Meeting of Stockholders
                                January 26, 2000

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

                      EQUITY SERIES OF SECURITY EQUITY FUND

     held by the  undersigned at the Annual Meeting of  Stockholders of the
     Fund to be held at 9:30 AM,  local  time,  on  January  26,  2000,  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.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
- --------------------------------------------------------------------------------

EQUITY SERIES OF SECURITY EQUITY FUND

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.

              THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

VOTE ON DIRECTORS

1.   To elect six directors to    FOR  AGAINST  FOR ALL   To withhold  authority
     serve on the Board of        ALL    ALL    EXCEPT    to vote, mark "For All
     Directors of the Fund                                Except"  and write the
     until the next annual                                nominee's   number  on
     meeting, if any, or until                            the line below.
     their successors shall
     have been duly elected and
     qualified.

     01) Donald A. Chubb, Jr.,
     02) John D. Cleland,
     03) Penny A. Lumpkin,
     04) Mark L. Morris, Jr.,
     05) Maynard F. Oliverius
     and 06) James R. Schmank     |_|    |_|      |_|     ______________________

VOTE ON PROPOSALS                                        FOR   AGAINST   ABSTAIN

2.   To ratify or reject the selection of the firm of    |_|     |_|       |_|
     Ernst & Young LLP as independent accountants for
     the Fund's fiscal year 2000.

3a.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning diversification.

3b.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning share ownership of any one
     issuer.

3c.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investing for control of
     portfolio companies.

3d.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning underwriting.

3e.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning borrowing.

3f.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning lending.

3g.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning short sales and margin
     purchases of securities.

3h.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning senior securities.

3i.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investment in other
     investment companies.

3j.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investment in companies with
     less than three years' operating history.

3k.  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.

3l.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning the officers or directors of
     the Fund, the Underwriter or Manager purchasing
     shares of the Fund, except at current net asset
     value.

3m.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning buying or selling real
     estate.

3n.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning commodities or commodity
     contracts.

3o.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investment in warrants.

3p.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning restricted securities.

3q.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investment in puts, calls,
     straddles or spreads.

3r.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investment in oil, gas,
     mineral leases or other mineral exploration or
     development programs.

4.   To approve or disapprove an arrangement and new     |_|     |_|       |_|
     investment advisory contract that would permit
     Security Management Company, LLC, the Fund's
     investment adviser, with Board approval, to enter
     into or amend sub-advisory agreements without
     stockholder approval.

5.   To approve or disapprove a Brokerage Enhancement    |_|     |_|       |_|
     Plan pursuant to Rule 12b-1 under the Investment
     Company Act of 1940, and a new investment advisory
     contract that would permit the implementation of
     the Plan.

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.

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

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

                      GLOBAL SERIES OF SECURITY EQUITY FUND
                         Annual Meeting of Stockholders
                                January 26, 2000

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

                      GLOBAL SERIES OF SECURITY EQUITY FUND

     held by the  undersigned at the Annual Meeting of  Stockholders of the
     Fund to be held at 9:30 AM,  local  time,  on  January  26,  2000,  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.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
- --------------------------------------------------------------------------------
GLOBAL SERIES OF SECURITY EQUITY FUND

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.

              THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

VOTE ON DIRECTORS

1.   To elect six directors to    FOR  AGAINST  FOR ALL   To withhold  authority
     serve on the Board of        ALL    ALL    EXCEPT    to vote, mark "For All
     Directors of the Fund                                Except"  and write the
     until the next annual                                nominee's   number  on
     meeting, if any, or until                            the line below.
     their successors shall
     have been duly elected and
     qualified.

     01) Donald A. Chubb, Jr.,
     02) John D. Cleland,
     03) Penny A. Lumpkin,
     04) Mark L. Morris, Jr.,
     05) Maynard F. Oliverius
     and 06) James R. Schmank     |_|    |_|      |_|     ______________________

VOTE ON PROPOSALS                                        FOR   AGAINST   ABSTAIN

2.   To ratify or reject the selection of the firm of    |_|     |_|       |_|
     Ernst & Young LLP as independent accountants for
     the Fund's fiscal year 2000.

3a.  Not applicable.

3b.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning share ownership of any one
     issuer.

3c.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investing for control of
     portfolio companies.

3d.  Not applicable.

3e.  Not applicable.

3f.  Not applicable.

3g.  Not applicable.

3h.  Not applicable.

3i.  Not applicable.

3j.  Not applicable.

3k.  Not applicable.

3l.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning the officers or directors of
     the Fund, the Underwriter or Manager purchasing
     shares of the Fund, except at current net asset
     value.

3m.  Not applicable.

3n.  Not applicable.

3o.  Not applicable.

3p.  Not applicable.

3q.  Not applicable.

3r.  Not applicable.

4.   To approve or disapprove an arrangement and new     |_|     |_|       |_|
     investment advisory contract that would permit
     Security Management Company, LLC, the Fund's
     investment adviser, with Board approval, to enter
     into or amend sub-advisory agreements without
     stockholder approval.

5.   To approve or disapprove a Brokerage Enhancement    |_|     |_|       |_|
     Plan pursuant to Rule 12b-1 under the Investment
     Company Act of 1940, and a new investment advisory
     contract that would permit the implementation of
     the Plan.

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.

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

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

                   TOTAL RETURN SERIES OF SECURITY EQUITY FUND
                         Annual Meeting of Stockholders
                                January 26, 2000

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

                   TOTAL RETURN SERIES OF SECURITY EQUITY FUND

     held by the  undersigned at the Annual Meeting of  Stockholders of the
     Fund to be held at 9:30 AM,  local  time,  on  January  26,  2000,  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.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
- --------------------------------------------------------------------------------
TOTAL RETURN SERIES OF SECURITY EQUITY FUND

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.

              THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

VOTE ON DIRECTORS

1.   To elect six directors to    FOR  AGAINST  FOR ALL   To withhold  authority
     serve on the Board of        ALL    ALL    EXCEPT    to vote, mark "For All
     Directors of the Fund                                Except"  and write the
     until the next annual                                nominee's   number  on
     meeting, if any, or until                            the line below.
     their successors shall
     have been duly elected and
     qualified.

     01) Donald A. Chubb, Jr.,
     02) John D. Cleland,
     03) Penny A. Lumpkin,
     04) Mark L. Morris, Jr.,
     05) Maynard F. Oliverius
     and 06) James R. Schmank     |_|    |_|      |_|     ______________________

VOTE ON PROPOSALS                                        FOR   AGAINST   ABSTAIN

2.   To ratify or reject the selection of the firm of    |_|     |_|       |_|
     Ernst & Young LLP as independent accountants for
     the Fund's fiscal year 2000.

3a.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning diversification.

3b.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning share ownership of any one
     issuer.

3c.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investing for control of
     portfolio companies.

3d.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning underwriting.

3e.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning borrowing.

3f.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning lending.

3g.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning short sales and margin
     purchases of securities.

3h.  Not applicable.

3i.  Not applicable.

3j.  Not applicable.

3k.  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.

3l.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning the officers or directors of
     the Fund, the Underwriter or Manager purchasing
     shares of the Fund, except at current net asset
     value.

3m.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning buying or selling real
     estate.

3n.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning commodities or commodity
     contracts.

3o.  Not applicable.

3p.  Not applicable.

3q.  Not applicable.

3r.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investment in oil, gas,
     mineral leases or othe mineral exploration or
     development programs.

4.   To approve or disapprove an arrangement and new     |_|     |_|       |_|
     investment advisory contract that would permit
     Security Management Company, LLC, the Fund's
     investment adviser, with Board approval, to enter
     into or amend sub-advisory agreements without
     stockholder approval.

5.   To approve or disapprove a Brokerage Enhancement    |_|     |_|       |_|
     Plan pursuant to Rule 12b-1 under the Investment
     Company Act of 1940, and a new investment advisory
     contract that would permit the implementation of
     the Plan.

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.

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

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

                 SOCIAL AWARENESS SERIES OF SECURITY EQUITY FUND
                         Annual Meeting of Stockholders
                                January 26, 2000

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

                 SOCIAL AWARENESS SERIES OF SECURITY EQUITY FUND

     held by the  undersigned at the Annual Meeting of  Stockholders of the
     Fund to be held at 9:30 AM,  local  time,  on  January  26,  2000,  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.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
- --------------------------------------------------------------------------------
SOCIAL AWARENESS SERIES OF SECURITY EQUITY FUND

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.

              THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

VOTE ON DIRECTORS

1.   To elect six directors to    FOR  AGAINST  FOR ALL   To withhold  authority
     serve on the Board of        ALL    ALL    EXCEPT    to vote, mark "For All
     Directors of the Fund                                Except"  and write the
     until the next annual                                nominee's   number  on
     meeting, if any, or until                            the line below.
     their successors shall
     have been duly elected and
     qualified.

     01) Donald A. Chubb, Jr.,
     02) John D. Cleland,
     03) Penny A. Lumpkin,
     04) Mark L. Morris, Jr.,
     05) Maynard F. Oliverius
     and 06) James R. Schmank     |_|    |_|      |_|     ______________________

VOTE ON PROPOSALS                                        FOR   AGAINST   ABSTAIN

2.   To ratify or reject the selection of the firm of    |_|     |_|       |_|
     Ernst & Young LLP as independent accountants for
     the Fund's fiscal year 2000.

3a.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning diversification.

3b.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning share ownership of any one
     issuer.

3c.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investing for control of
     portfolio companies.

3d.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning underwriting.

3e.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning borrowing.

3f.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning lending.

3g.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning short sales and margin
     purchases of securities.

3h.  Not applicable.

3i.  Not applicable.

3j.  Not applicable.

3k.  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.

3l.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning the officers or directors of
     the Fund, the Underwriter or Manager purchasing
     shares of the Fund, except at current net asset
     value.

3m.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning buying or selling real
     estate.

3n.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning commodities or commodity
     contracts.

3o.  Not applicable.

3p.  Not applicable.

3q.  Not applicable.

3r.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investment in oil, gas,
     mineral leases or other mineral exploration or
     development programs.

4.   To approve or disapprove an arrangement and new     |_|     |_|       |_|
     investment advisory contract that would permit
     Security Management Company, LLC, the Fund's
     investment adviser, with Board approval, to enter
     into or amend sub-advisory agreements without
     stockholder approval.

5.   To approve or disapprove a Brokerage Enhancement    |_|     |_|       |_|
     Plan pursuant to Rule 12b-1 under the Investment
     Company Act of 1940, and a new investment advisory
     contract that would permit the implementation of
     the Plan.

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.

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

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

                      VALUE SERIES OF SECURITY EQUITY FUND
                         Annual Meeting of Stockholders
                                January 26, 2000

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

                      VALUE SERIES OF SECURITY EQUITY FUND

     held by the  undersigned at the Annual Meeting of  Stockholders of the
     Fund to be held at 9:30 AM,  local  time,  on  January  26,  2000,  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.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
- --------------------------------------------------------------------------------
VALUE SERIES OF SECURITY EQUITY FUND

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.

              THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

VOTE ON DIRECTORS

1.   To elect six directors to    FOR  AGAINST  FOR ALL   To withhold  authority
     serve on the Board of        ALL    ALL    EXCEPT    to vote, mark "For All
     Directors of the Fund                                Except"  and write the
     until the next annual                                nominee's   number  on
     meeting, if any, or until                            the line below.
     their successors shall
     have been duly elected and
     qualified.

     01) Donald A. Chubb, Jr.,
     02) John D. Cleland, 03)
     Penny A. Lumpkin, 04) Mark
     L. Morris, Jr., 05)
     Maynard F. Oliverius and
     06) James R. Schmank         |_|    |_|      |_|     ______________________

VOTE ON PROPOSALS                                        FOR   AGAINST   ABSTAIN

2.   To ratify or reject the selection of the firm of    |_|     |_|       |_|
     Ernst & Young LLP as independent accountants for
     the Fund's fiscal year 2000.

3a.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning diversification.

3b.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning share ownership of any one
     issuer.

3c.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investing for control of
     portfolio companies.

3d.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning underwriting.

3e.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning borrowing.

3f.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning lending.

3g.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning short sales and margin
     purchases of securities.

3h.  Not applicable.

3i.  Not applicable.

3j.  Not applicable.

3k.  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.

3l.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning the officers or directors of
     the Fund, the Underwriter or Manager purchasing
     shares of the Fund, except at current net asset
     value.

3m.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning buying or selling real
     estate.

3n.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning commodities or commodity
     contracts.

3o.  Not applicable.

3p.  Not applicable.

3q.  Not applicable.

3r.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investment in oil, gas,
     mineral leases or other mineral exploration or
     development programs.

4.   To approve or disapprove an arrangement and new     |_|     |_|       |_|
     investment advisory contract that would permit
     Security Management Company, LLC, the Fund's
     investment adviser, with Board approval, to enter
     into or amend sub-advisory agreements without
     stockholder approval.

5.   To approve or disapprove a Brokerage Enhancement    |_|     |_|       |_|
     Plan pursuant to Rule 12b-1 under the Investment
     Company Act of 1940, and a new investment advisory
     contract that would permit the implementation of
     the Plan.

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.

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

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

                  SMALL COMPANY SERIES OF SECURITY EQUITY FUND
                         Annual Meeting of Stockholders
                                January 26, 2000

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

                  SMALL COMPANY SERIES OF SECURITY EQUITY FUND

     held by the  undersigned at the Annual Meeting of  Stockholders of the
     Fund to be held at 9:30 AM,  local  time,  on  January  26,  2000,  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.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
- --------------------------------------------------------------------------------
SMALL COMPANY SERIES OF SECURITY EQUITY FUND

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.

              THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

VOTE ON DIRECTORS

1.   To elect six directors to    FOR  AGAINST  FOR ALL   To withhold  authority
     serve on the Board of        ALL    ALL    EXCEPT    to vote, mark "For All
     Directors of the Fund                                Except"  and write the
     until the next annual                                nominee's   number  on
     meeting, if any, or until                            the line below.
     their successors shall
     have been duly elected and
     qualified.

     01) Donald A. Chubb, Jr.,
     02) John D. Cleland,
     03) Penny A. Lumpkin,
     04) Mark L. Morris, Jr.,
     05) Maynard F. Oliverius
     and 06) James R. Schmank     |_|    |_|      |_|     ______________________

VOTE ON PROPOSALS                                        FOR   AGAINST   ABSTAIN

2.   To ratify or reject the selection of the firm of    |_|     |_|       |_|
     Ernst & Young LLP as independent accountants for
     the Fund's fiscal year 2000.

3a.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning diversification.

3b.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning share ownership of any one
     issuer.

3c.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investing for control of
     portfolio companies.

3d.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning underwriting.

3e.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning borrowing.

3f.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning lending.

3g.  Not applicable.

3h.  Not applicable.

3i.  Not applicable.

3j.  Not applicable.

3k.  Not applicable.

3l.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning the officers or directors of
     the Fund, the Underwriter or Manager purchasing
     shares of the Fund, except at current net asset
     value.

3m.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning buying or selling real
     estate.

3n.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning commodities or commodity
     contracts.

3o.  Not applicable.

3p.  Not applicable.

3q.  Not applicable.

3r.  Not applicable.

4.   To approve or disapprove an arrangement and new     |_|     |_|       |_|
     investment advisory contract that would permit
     Security Management Company, LLC, the Fund's
     investment adviser, with Board approval, to enter
     into or amend sub-advisory agreements without
     stockholder approval.

5.   To approve or disapprove a Brokerage Enhancement    |_|     |_|       |_|
     Plan pursuant to Rule 12b-1 under the Investment
     Company Act of 1940, and a new investment advisory
     contract that would permit the implementation of
     the Plan.

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.

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

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

                  ENHANCED INDEX SERIES OF SECURITY EQUITY FUND
                         Annual Meeting of Stockholders
                                January 26, 2000

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

                  ENHANCED INDEX SERIES OF SECURITY EQUITY FUND

     held by the  undersigned at the Annual Meeting of  Stockholders of the
     Fund to be held at 9:30 AM,  local  time,  on  January  26,  2000,  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.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
- --------------------------------------------------------------------------------
ENHANCED INDEX SERIES OF SECURITY EQUITY FUND

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.

              THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

VOTE ON DIRECTORS

1.   To elect six directors to    FOR  AGAINST  FOR ALL   To withhold  authority
     serve on the Board of        ALL    ALL    EXCEPT    to vote, mark "For All
     Directors of the Fund                                Except"  and write the
     until the next annual                                nominee's   number  on
     meeting, if any, or until                            the line below.
     their successors shall
     have been duly elected and
     qualified.

     01) Donald A. Chubb, Jr.,
     02) John D. Cleland,
     03) Penny A. Lumpkin,
     04) Mark L. Morris, Jr.,
     05) Maynard F. Oliverius
     and 06) James R. Schmank     |_|    |_|      |_|     ______________________

VOTE ON PROPOSALS                                        FOR   AGAINST   ABSTAIN

2.   To ratify or reject the selection of the firm of    |_|     |_|       |_|
     Ernst & Young LLP as independent accountants for
     the Fund's fiscal year 2000.

3a.  Not applicable.

3b.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning share ownership of any one
     issuer.

3c.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investing for control of
     portfolio companies.

3d.  Not applicable.

3e.  Not applicable.

3f.  Not applicable.

3g.  Not applicable.

3h.  Not applicable.

3i.  Not applicable.

3j.  Not applicable.

3k.  Not applicable.

3l.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning the officers or directors of
     the Fund, the Underwriter or Manager purchasing
     shares of the Fund, except at current net asset
     value.

3m.  Not applicable.

3n.  Not applicable.

3o.  Not applicable.

3p.  Not applicable.

3q.  Not applicable.

3r.  Not applicable.

4.   To approve or disapprove an arrangement and new     |_|     |_|       |_|
     investment advisory contract that would permit
     Security Management Company, LLC, the Fund's
     investment adviser, with Board approval, to enter
     into or amend sub-advisory agreements without
     stockholder approval.

5.   To approve or disapprove a Brokerage Enhancement    |_|     |_|       |_|
     Plan pursuant to Rule 12b-1 under the Investment
     Company Act of 1940, and a new investment advisory
     contract that would permit the implementation of
     the Plan.

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.

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

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

                  INTERNATIONAL SERIES OF SECURITY EQUITY FUND
                         Annual Meeting of Stockholders
                                January 26, 2000

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

                  INTERNATIONAL SERIES OF SECURITY EQUITY FUND

     held by the  undersigned at the Annual Meeting of  Stockholders of the
     Fund to be held at 9:30 AM,  local  time,  on  January  26,  2000,  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.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
- --------------------------------------------------------------------------------
INTERNATIONAL SERIES OF SECURITY EQUITY FUND

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.

              THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

VOTE ON DIRECTORS

1.   To elect six directors to    FOR  AGAINST  FOR ALL   To withhold  authority
     serve on the Board of        ALL    ALL    EXCEPT    to vote, mark "For All
     Directors of the Fund                                Except"  and write the
     until the next annual                                nominee's   number  on
     meeting, if any, or until                            the line below.
     their successors shall
     have been duly elected and
     qualified.

     01) Donald A. Chubb, Jr.,
     02) John D. Cleland,
     03) Penny A. Lumpkin,
     04) Mark L. Morris, Jr.,
     05) Maynard F. Oliverius
     and 06) James R. Schmank     |_|    |_|      |_|     ______________________

VOTE ON PROPOSALS                                        FOR   AGAINST   ABSTAIN

2.   To ratify or reject the selection of the firm of    |_|     |_|       |_|
     Ernst & Young LLP as independent accountants for
     the Fund's fiscal year 2000.

3a.  Not applicable.

3b.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning share ownership of any one
     issuer.

3c.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investing for control of
     portfolio companies.

3d.  Not applicable.

3e.  Not applicable.

3f.  Not applicable.

3g.  Not applicable.

3h.  Not applicable.

3i.  Not applicable.

3j.  Not applicable.

3k.  Not applicable.

3l.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning the officers or directors of
     the Fund, the Underwriter or Manager purchasing
     shares of the Fund, except at current net asset
     value.

3m.  Not applicable.

3n.  Not applicable.

3o.  Not applicable.

3p.  Not applicable.

3q.  Not applicable.

3r.  Not applicable.

4.   To approve or disapprove an arrangement and new     |_|     |_|       |_|
     investment advisory contract that would permit
     Security Management Company, LLC, the Fund's
     investment adviser, with Board approval, to enter
     into or amend sub-advisory agreements without
     stockholder approval.

5.   To approve or disapprove a Brokerage Enhancement    |_|     |_|       |_|
     Plan pursuant to Rule 12b-1 under the Investment
     Company Act of 1940, and a new investment advisory
     contract that would permit the implementation of
     the Plan.

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.

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

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

                    SELECT 25 SERIES OF SECURITY EQUITY FUND
                         Annual Meeting of Stockholders
                                January 26, 2000

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

                    SELECT 25 SERIES OF SECURITY EQUITY FUND

     held by the  undersigned at the Annual Meeting of  Stockholders of the
     Fund to be held at 9:30 AM,  local  time,  on  January  26,  2000,  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.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
- --------------------------------------------------------------------------------
SELECT 25 SERIES OF SECURITY EQUITY FUND

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.

              THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

VOTE ON DIRECTORS

1.   To elect six directors to    FOR  AGAINST  FOR ALL   To withhold  authority
     serve on the Board of        ALL    ALL    EXCEPT    to vote, mark "For All
     Directors of the Fund                                Except"  and write the
     until the next annual                                nominee's   number  on
     meeting, if any, or until                            the line below.
     their successors shall
     have been duly elected and
     qualified.

     01) Donald A. Chubb, Jr.,
     02) John D. Cleland,
     03) Penny A. Lumpkin,
     04) Mark L. Morris, Jr.,
     05) Maynard F. Oliverius
     and 06) James R. Schmank     |_|    |_|      |_|     ______________________

VOTE ON PROPOSALS                                        FOR   AGAINST   ABSTAIN

2.   To ratify or reject the selection of the firm of    |_|     |_|       |_|
     Ernst & Young LLP as independent accountants for
     the Fund's fiscal year 2000.

3a.  Not applicable.

3b.  To amend the Fund's fundamental investment          |_|     |_|       |_|
     limitation concerning share ownership of any one
     issuer.

3c.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning investing for control of
     portfolio companies.

3d.  Not applicable.

3e.  Not applicable.

3f.  Not applicable.

3g.  Not applicable.

3h.  Not applicable.

3i.  Not applicable.

3j.  Not applicable.

3k.  Not applicable.

3l.  To eliminate the Fund's fundamental investment      |_|     |_|       |_|
     limitation concerning the officers or directors of
     the Fund, the Underwriter or Manager purchasing
     shares of the Fund, except at current net asset
     value.

3m.  Not applicable.

3n.  Not applicable.

3o.  Not applicable.

3p.  Not applicable.

3q.  Not applicable.

3r.  Not applicable.

4.   To approve or disapprove an arrangement and new     |_|     |_|       |_|
     investment advisory contract that would permit
     Security Management Company, LLC, the Fund's
     investment adviser, with Board approval, to enter
     into or amend sub-advisory agreements without
     stockholder approval.

5.   To approve or disapprove a Brokerage Enhancement    |_|     |_|       |_|
     Plan pursuant to Rule 12b-1 under the Investment
     Company Act of 1940, and a new investment advisory
     contract that would permit the implementation of
     the Plan.

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.

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

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


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