CLASS A DISTRIBUTION PLAN
SECURITY EQUITY FUND
MAY 1, 2002
This Distribution Plan (the "Plan") constitutes the plan adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), to the extent applicable, on behalf of the Class A shares of each series
of the Security Equity Fund (the "Fund") set forth on Schedule A, attached
hereto, as such schedule may be amended from time to time (the "Series").
1. THE PLAN. This Plan provides for the financing by the Fund of the
services and activities described in Section 2 (hereinafter called
"distribution services") on behalf of the Class A shares of each Series.
The principal purpose of this Plan is to enable the Fund to supplement
expenditures by Security Distributors, Inc., the Distributor of its
shares (the "Distributor"), for distribution services with respect to the
Class A shares of the Series.
The Board of Directors, in considering whether the Fund should implement
the Plan, has requested and evaluated such information as it deemed
necessary to make an informed determination as to whether the Plan should
be implemented and has considered such pertinent factors as it deemed
necessary to form the basis for a decision to use assets of the Series
for such purposes.
In voting to approve the implementation of the Plan, the Directors have
concluded, in the exercise of their reasonable business judgment and in
light of their respective fiduciary duties, that there is a reasonable
likelihood that the Plan will benefit each of the Series and their
respective shareholders.
2. DISTRIBUTION SERVICES.
(a) The Fund may make payments under this Plan, or any agreement
relating to this Plan ("Agreement"), in connection with any
distribution services, including, but not limited to, the
following distribution services:
(i) Preparation, printing and distribution of the Prospectus
and Statement of Additional Information and any supplement
thereto used in connection with the offering of the Series'
shares to the public;
(ii) Printing of additional copies of reports and other
communications which were prepared by the Fund for
distribution to existing shareholders for use by the
Distributor as sales literature;
(iii) Preparation, printing and distribution of any other sales
literature used in connection with the offering of the
Series' shares to the public;
(iv) Expenses incurred in advertising, promoting and selling
shares of the Series to the public;
(v) Payment or reimbursement of legal and administrative costs
associated with implementing the Plan;
(vi) Any Shareholder Service Fees paid by the Distributor to
securities dealers or other entities that have executed an
Agreement with the Distributor. Shareholder Service Fees
shall include fees for account maintenance and personal
service to shareholders, including, but not limited to,
answering routine customer inquiries regarding the Fund,
assisting customers in changing dividend options, account
designations and addresses, and in enrolling into any of
several special investment plans offered in connection with
the purchase of the Series' Class A shares, assisting in
the establishment and maintenance of customer accounts and
records and in the processing of purchase and redemption
transactions, investing dividends and capital gains
distributions automatically in shares, providing
sub-administration and/or sub-transfer agency services for
the benefit of the Fund and providing such other services
as the Fund or the customer may reasonably request;
(vii) Commissions to sales personnel for selling shares of the
Series and interest expenses related thereto; and
(viii) Expenses incurred in promoting sales of shares of the
Series by securities dealers, including the costs of
preparation of materials for presentations, travel
expenses, costs of entertainment, and other expenses
incurred in connection with promoting sales of Series
shares by dealers.
(b) Any payments for distribution services shall be made pursuant to
an Agreement. As required by the Rule, each Agreement relating to
the implementation of this Plan shall be in writing and subject to
approval and termination pursuant to the provisions of Section 6
of this Plan. However, this Plan shall not obligate the Fund or
any other party to enter into such Agreement.
3. AGREEMENT WITH DISTRIBUTOR. All payments to the Distributor pursuant to
this Plan shall be subject to and be made in compliance with a written
agreement between the Fund and the Distributor containing a provision
that the Distributor shall furnish the Fund with quarterly written
reports of the amounts expended and the purposes for which such
expenditures were made, and such other information relating to such
expenditures or to the other distribution services undertaken or proposed
to be undertaken by the Distributor during such fiscal year under its
Distribution Agreement with the Fund as the Fund may reasonably request.
4. LIMITATIONS ON COVERED EXPENSES. Each Series may pay as compensation for
distribution services provided under Section 2 of this Plan (including
Shareholder Service Fees), or as reimbursement for distribution services
rendered and/or expenses borne, in any fiscal year of the Series a fee
equal to one-quarter of one percent (0.25%) of the Series' average daily
net assets for such fiscal year. Except as provided in the next sentence,
the payments to be paid pursuant to this Plan shall be calculated and
accrued daily and paid monthly or at such other intervals as the
Directors shall determine, subject to any applicable restriction imposed
by rules of the National Association of Securities Dealers, Inc. The
Distributor may pay to the other party to any Agreement a Shareholder
Service Fee payable (a) for the first year, initially, in any amount
equal to 0.25 percent annually of the aggregate net asset value of the
shares purchased by such other party's customers or clients, and (b) for
each year thereafter, quarterly, in arrears in an amount equal to such
percentage (not in excess of .000685 percent per day or 0.25 percent
annually) of the aggregate net asset value of the shares held by such
other party's customers or clients at the close of business each day as
determined from time to time by the Distributor.
Payment of fees as compensation or reimbursement for any distribution
service shall not: (1) duplicate payments for the same service under any
other agreement or plan applicable to a Series; or (2) constitute an
admission that such distribution service is a Rule 12b-1
distribution-related service. In accordance with Conduct Rule 2830 of the
National Association of Securities Dealers, Inc., as amended from time to
time, the entire fee payable under the Plan may constitute a "service
fee" as that term is defined in Conduct Rule 2830.
5. INDEPENDENT DIRECTORS. While this Plan is in effect, the selection and
nomination of Independent Directors of the Fund shall be committed to the
discretion of the Independent Directors. Nothing herein shall prevent the
involvement of others in such selection and nomination if the final
decision on any such selection and nomination is approved by a majority
of the Independent Directors.
6. EFFECTIVENESS, CONTINUATION, TERMINATION AND AMENDMENT. This Plan and
each Agreement shall go into effect when approved.
(a) By vote of the Fund's Directors, including the affirmative vote of
a majority of the Independent Directors, cast in person at a
meeting called for the purpose of voting on the Plan or the
Agreement; and
(b) If adopted with respect to a Series after any public offering of
the Series' Class A shares or the sale of the Series' Class A
shares to persons who are not affiliated persons of the Fund,
affiliated persons of such persons, promoters of the Fund, or
affiliated persons of such persons, the Plan (solely with respect
to Rule 12b-1 distribution-related activities and/or services)
must be approved by a vote of a majority of the outstanding voting
securities of the Class A shares of the Series.
This Plan and any Agreements relating to the implementation of this Plan
shall, unless terminated as hereinafter provided, continue in effect from
year to year only so long as such continuance is specifically approved at
least annually by vote of the Fund's Directors, including the affirmative
vote of a majority of its Independent Directors, cast in person at a
meeting called for the purpose of voting on such continuance. This Plan
and any Agreements relating to the implementation of this Plan may be
terminated with respect to a Series, in the case of the Plan, at any time
or, in the case of any Agreements, upon not more than sixty (60) days'
written notice to any other party to the Agreement by vote of a majority
of the Independent Directors or by the vote of the holders of a majority
of the outstanding voting securities of the Class A shares of such
Series. Any Agreement shall terminate automatically in the event it is
assigned. Any material amendment to this Plan shall require approval by
vote of the Fund's Directors, including the affirmative vote of a
majority of the Independent Directors, cast in person at a meeting called
for the purpose of voting on such amendment. The Plan shall not be
amended to materially increase the amount spent for Rule 12b-1
distribution-related activities or services with respect to a Series
without approval by a vote of a majority of the outstanding voting
securities of the Class A shares of the Series.
In the event this Plan should be terminated by the shareholders or
Directors of the Fund, the payments paid to the Distributor pursuant to
the Plan up to the date of termination shall be retained by the
Distributor. Any expenses incurred by the Distributor in excess of those
payments will be the sole responsibility of the Distributor.
7. RECORDS. The Fund shall preserve copies of this Plan and any Agreements
and all reports made pursuant to Section 3 hereof, for a period of not
less than six (6) years from the date of this Plan, any such Agreement or
any such report, as the case may be, the first two years in an easily
accessible place.
8. DEFINITIONS. As used in the Plan, (a) the term "Independent Directors"
shall mean those Directors of the Fund who are not interested persons of
the Fund and have no direct or indirect financial interest in the
operation of the Plan or any Agreement, (b) the term "Rule 12b-1
distribution-related" shall mean primarily intended to result in the sale
of Class A shares of a Series for purposes of Rule 12b-1, (c) the terms
"affiliated person", "assignment", "interested person", "promoter" and
"majority of the outstanding voting securities" shall have the respective
meanings specified in the 1940 Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the
Securities and Exchange Commission.
February 3, 2002
SCHEDULE A
1. Equity Series
2. Global Series
3. Mid Cap Value Series
4. Social Awareness Series
