<PAGE>
As filed with the Securities and Exchange Commission on November 30, 2000
Registration Nos. 2-80751
811-3618
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [_]
[X]
Post-Effective Amendment No. 28
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[_]
[X]
Amendment No. 30
(Check appropriate box or boxes)
----------------
Metropolitan Series Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
One Madison Avenue 10010
New York, New York (Zip Code)
(Address of Principal Executive
Office)
Registrant's Telephone Number, Including Area Code: 212-578-2674
----------------
GARY A. BELLER, ESQ.
One Madison Avenue
New York, New York 10010
(Name and Address of Agent for Service)
Copy to:
GARY O. COHEN, ESQ.
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
It is proposed that the filing will become effective (check appropriate box)
[_]immediately upon filing pursuant to paragraph (b) of Rule 485.
[X] on December 29, 2000 pursuant to paragraph (b) of Rule 485.*
[_]80 days after filing pursuant to paragraph (a)(1) of Rule 485.
[_]on (date) pursuant to paragraph (a)(1) of Rule 485.
[_]75 days after filing pursuant to paragraph (a)(2) of Rule 485.
--------
* Pursuant to Rule 485(b)(1)(iii), this amendment hereby revises effective
date of Post-Effective Amendment No. 27 to this registration statement to be
the same date as is specified in this line.
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<PAGE>
This post-effective amendment is being filed to include a prospectus that will
be used to offer classes of securities that are subject to a newly adopted
Class B Distribution Plan (the "Plan") for the Metropolitan Series Fund, Inc.
(the "Fund"). The Plan will currently apply only to certain classes of shares
of the Fund as set forth in the amendment. Thus, except as otherwise
specifically indicated, the amendment does not delete or supersede any
prospectus, exhibit or other material in post-effective amendment number 26 of
the Fund filed on April 6, 2000.
<PAGE>
[METLIFE LOGO]
[STATE STREET RESEARCH LOGO]
[JANUS LOGO]
[FPO PUTNAM INVESTMENTS]
PROSPECTUS
FOR
METROPOLITAN SERIES FUND, INC.
January 1, 2001
The investment options currently offered by the Fund are:
<TABLE>
<S> <C>
State Street Research Lehman Brothers(R)
Aurora Small Cap Aggregate Bond Index
Value Portfolio
Portfolio
MetLife Stock Index
Putnam International Portfolio
Stock Portfolio
(formerly MetLife Mid Cap Stock
Santander Index Portfolio
International
Stock Portfolio) Morgan Stanley EAFE(R)
Index Portfolio
Putnam Large Cap
Growth Portfolio Russell 2000(R) Index
Portfolio
</TABLE>
Janus Mid Cap
Portfolio
As with all mutual fund shares, neither the Securities and Exchange Commission
nor any state securities authority have approved or disapproved these
securities, nor have they determined if this Prospectus is accurate or
complete. Any representation otherwise is a criminal offense.
<PAGE>
TABLE OF CONTENTS FOR THIS PROSPECTUS
<TABLE>
<CAPTION>
Page
in this
Subject Prospectus
------- ----------
<S> <C>
Risk/Return Summary............................................... 2
Performance and Volatility........................................ 8
About the Investment Managers..................................... 13
Portfolio Turnover Rates.......................................... 16
Dividends, Distributions and Taxes................................ 16
General Information About the Fund and its Purpose................ 17
Sale and Redemption of Shares..................................... 18
Financial Highlights.............................................. 19
Appendix A--Portfolio Manager Prior Performance................... 23
Appendix B--Certain Investment Practices.......................... 25
Appendix C--Description of Some Investments,
Techniques, and Risks............................................ 28
</TABLE>
Risk/Return Summary
[SIDEBAR: Carefully review the objectives and investment practices of the
Portfolios and consider your ability to assume the risks involved before
allocating payments to particular Portfolios.]
About all the Portfolios
Each Portfolio of the Fund has its own investment objective. Since investment
in any Portfolio involves both opportunities for gain and risks of loss, we
cannot give you assurance that the Portfolios will achieve their objectives.
You should carefully review the objectives and investment practices of the
Portfolios and consider your ability to assume the risks involved before
allocating payments to particular Portfolios. The loss of money is a risk of
investing in the Fund.
While certain of the investment techniques, instruments and risks associated
with each Portfolio are referred to in the discussion that follows, additional
information on these subjects appears in Appendix B and C to this Prospectus.
However, those discussions do not list every type of investment, technique, or
risk to which a Portfolio may be exposed. Further, the Portfolios may change
their investment practices at any time without notice, except for those
policies that this Prospectus or the Statement of Additional Information
("SAI") specifically identify as requiring a shareholder vote to change. Unless
otherwise indicated, all percentage limitations, as well as characterization of
a company's capitalization, are evaluated as of the date of purchase of the
security.
[SIDEBAR: State Street Research Aurora Small Cap Value Portfolio]
About the State Street Research Aurora Small Cap Value Portfolio:
Investment objective: high total return, consisting principally of capital
appreciation.
Principal investment strategies: Under normal market conditions, the portfolio
invests at least 65% of its total assets in small company value stocks. The
Portfolio generally expects that most of these stocks, when it first buys them,
will not be larger than the stocks of the largest companies in the Russell 2000
Value Index. As of December 31, 1999, this included companies with
capitalizations of approximately $660 million. The Portfolio
2
<PAGE>
may continue to hold or buy stock in a company that has outgrown this range if
the company appears to remain an attractive investment. In choosing among small
company stocks, the Portfolio takes a value approach, searching for those
companies that appear to be trading below their true worth. The Portfolio uses
research to identify potential investments, examining such features as a firm's
financial condition, business prospects, competitive position and business
strategy. The Portfolio looks for companies that appear likely to come back
into favor with investors, for reasons that may range from good prospective
earnings or strong management teams to new products or services.
The Portfolio may adjust the composition of its holdings as market conditions
and economic outlooks change and reserves the right to invest up to 35% of
total assets in other securities. They would generally consist of other types
of equity securities, such as larger company stocks or growth stocks.
Principal risks: The risks described after the following captions under
"Principal Risks of Investing in the Fund:" "Equity investing;" "Investing in
less mature companies, smaller companies and companies with "special
situations';" and "Value investing." Volatility may be indicative of risk.
[SIDEBAR: Putnam International Stock Portfolio]
About the Putnam International Stock Portfolio:
(formerly, the Santander International Stock Portfolio).
Investment objective: long-term growth of capital.
Principal investment strategies: The Portfolio normally invests mostly in the
common stocks of companies outside the United States. The portfolio manager
selects countries and industries it believes are attractive. The portfolio
manager then seeks stocks offering opportunity for gain. These may include both
growth and value stocks. The Portfolio invests mainly in mid-sized and large
companies, although the Portfolio can invest in companies of any size. The
Portfolio will usually be invested in issuers located in at least three
countries, not including the U.S. Under normal conditions, the Portfolio will
not invest more than 15% of its net assets in the equity securities of
companies domiciled in "emerging countries," as defined by Morgan Stanley
Capital International.
Principal risks: The risks described after the following captions under
"Principal Risks of Investing in the Fund:" Equity investing;" "Investing in
larger companies;" "Investing in securities of foreign issuers;" "Value
investing;" and "Growth investing." Volatility may be indicative of risk.
Please refer to the discussion under "Performance and Volatility."
[SIDEBAR: Putnam Large Cap Growth Portfolio]
About the Putnam Large Cap Growth Portfolio:
Investment objective: capital appreciation.
Principal investment strategies: The Portfolio normally invests in the common
stocks of U.S. companies, with a focus on growth stocks. The portfolio managers
look for stocks issued by companies that are likely to grow faster than the
economy as a whole. The Portfolio invests in a relatively small number of
companies that the managers believe will benefit from long-term trends in the
economy, business conditions, consumer behavior or public perceptions of the
economic environment. The Portfolio invests mainly in large companies.
3
<PAGE>
Principal risks: Since the Portfolio invests in fewer issuers than a fund that
invests more broadly, there is vulnerability to factors affecting a single
investment that can result in greater Portfolio losses and volatility. The
Portfolio's other principal risks are described after the following captions
under "Principal Risks of Investing in the Fund:" "Equity investing;"
"Investing in larger companies;" "Investing in securities of foreign issuers;"
and "Growth investing." Volatility may be indicative of risk.
[SIDEBAR: Janus Mid Cap Portfolio]
About the Janus Mid Cap Portfolio:
Investment objective: long-term growth of capital.
Principal investment strategies: The Portfolio normally invests at least 65% of
its total assets in common stocks of medium capitalization companies selected
for their growth potential. The portfolio manager defines medium capitalization
("mid-cap") companies as those whose market capitalization falls within the
range of companies included in the S&P MidCap 400 Index at the time of the
purchase. As of December 31, 1999, this included companies with capitalizations
between approximately $170 million and $37 billion. The Portfolio is non-
diversified, so that it can own larger positions in a smaller number of
issuers. This means the appreciation or depreciation of a single investment can
have a greater impact on the Portfolio's share price. The portfolio manager
generally takes a "bottom up" approach to building the Portfolio by identifying
companies with earnings growth potential that may not be recognized by the
market at large, without regard to any industry sector or other similar
selection procedure.
Principal risks: The Portfolio is nondiversified which means it may hold larger
positions in a smaller number of securities than would a diversified portfolio.
Thus, a single security's increase or decrease in value may have a greater
impact on the value of the Portfolio and its total return. The Portfolio's
other principal risks are described after the following captions, under
"Principal Risks of Investing in the Fund:" "Equity investing;" "Investing in
less mature companies, smaller companies and companies with "special
situations';" "Investing in larger companies;" "Investing in securities of
foreign issuers;" "Investing in medium sized companies;" and "Growth
investing." Volatility may be indicative of risk. Please refer to the
discussion under "Performance and Volatility."
About all the Index Portfolios
[SIDEBAR: The Index Portfolios]
Principal investment strategies applicable to all the Index Portfolios: Each
Index Portfolio has as an investment objective to equal the performance of a
particular index. Certain strategies common to all of the Index Portfolios are
discussed in the next paragraph below. Thereafter, the unique aspects of the
objective and principal strategies of each Index Portfolio are discussed.
In addition to securities of the type contained in its index, each Portfolio
also expects to invest, as a principal investment strategy, in securities index
futures contracts and/or related options to simulate full investment in the
index while retaining liquidity, to facilitate trading, to reduce transaction
costs or to seek higher return when these derivatives are priced more
attractively than the underlying security. Also, since the Portfolios attempt
to keep transaction costs low, the portfolio manager generally will rebalance a
Portfolio only if it deviates from the applicable index by a certain percent,
depending on the company, industry, and country, as applicable. MetLife
monitors the tracking performance of the Portfolio through examination of
4
<PAGE>
the "correlation coefficient." A perfect correlation would produce a
coefficient of 1.00. The Portfolio will attempt to maintain a target
correlation coefficient of at least .95.
[SIDEBAR: Lehman Brothers Aggregate Bond Index Portfolio]
Lehman Brothers Aggregate Bond Index Portfolio:
Investment objective: to equal the performance of the Lehman Brothers Aggregate
Bond Index.
Principal investment strategies: In addition to the strategies outlined above
under "Principal investment strategies applicable to all the Index Portfolios,"
the Portfolio will normally invest most of its assets in fixed income
securities included in the Lehman Brothers Aggregate Bond Index. This index is
comprised of the Lehman Brothers Government/Corporate Index, the Lehman
Brothers Mortgage-Backed Securities Index, the Lehman Brothers Asset-Backed
Securities Index and, effective July 1, 1999, the Lehman Brothers Commercial
Mortgage-Backed Securities Index. The Portfolio may continue to hold debt
securities that no longer are included in the Index, if, together with any
money market instruments or cash, such holdings are no more than 20% of the
Portfolio's net assets. The types of fixed income securities included in the
Index are debt obligations issued or guaranteed by the United States Government
or its agencies or instrumentalities, debt obligations issued or guaranteed by
U.S. corporations, debt obligations issued or guaranteed by foreign companies,
sovereign governments, municipalities, governmental agencies or international
agencies, and mortgage-backed securities. The Portfolio will invest in a
sampling of the bonds included in the Lehman Brothers Aggregate Bond Index. The
bonds purchased for the Portfolio are chosen to, as a group, reflect the
composite performance of the Index. As the Portfolio's total assets grow, a
larger percentage of bonds included in the Index will be included in the
Portfolio.
Principal risks: The risks described after the following captions under
"Principal Risks of Investing in the Fund:" "Investing in fixed income
securities;" "Prepayment risk;" "Zero coupon risks;" and "Index investing."
Volatility may be indicative of risk. Please refer to the discussion under
"Performance and Volatility."
[SIDEBAR: MetLife Stock Index Portfolio]
MetLife Stock Index Portfolio:
Investment objective: to equal the performance of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index").
Principal investment strategies: In addition to the strategies outlined above
under "Principal investment strategies applicable to all the Index Portfolios,"
the Portfolio will normally invest most of its assets in common stocks included
in the S&P 500 Index. The S&P 500 Index consists of 500 common stocks, most of
which are listed on the New York Stock Exchange. The Portfolio will be managed
by purchasing the common stock of all the companies in the S&P 500 Index. The
stocks included in the S&P 500 Index are issued by companies among those whose
outstanding stock have the largest aggregate market value, although stocks that
are not among the 500 largest are included in the S&P 500 Index for
diversification purposes.
Principal risks: The risks described after the following captions under
"Principal Risks of Investing in the Fund:" "Equity investing;" "Investing in
larger companies;" and "Index investing." Volatility may be indicative of risk.
Please refer to the discussion under "Performance and Volatility."
5
<PAGE>
[SIDEBAR: Morgan Stanley EAGE Index Portfolio]
Morgan Stanley EAFE Index Portfolio:
Investment objective: to equal the performance of the MSCI EAFE Index.
Principal investment strategies: In addition to the strategies outlined above
under "Principal investment strategies applicable to all the Index Portfolios,"
the Portfolio will normally invest most of its assets in equity securities
included in the MSCI EAFE Index. The MSCI EAFE Index (also known as the Morgan
Stanley Capital International Europe Australasia Far East Index) is an index
containing approximately 1,100 equity securities of companies of varying
capitalizations in countries outside the United States. As of December 31, 1999
countries included in the MSCI EAFE Index were Australia, Austria, Belgium,
Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, The
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden,
Switzerland and the United Kingdom. The Portfolio will invest in a
statistically selected sample of the 1,100 stocks included in the MSCI EAFE
Index. The stocks purchased for the Portfolio are chosen to, as a group,
reflect the composite performance of the MSCI EAFE Index. As the Portfolio's
total assets grow, a larger percentage of stocks included in the MSCI EAFE
Index will be included in the Portfolio.
Principal risks: The risks described after the following captions under
"Principal Risks of Investing in the Fund:" "Equity investing;" "Investing in
securities of foreign issuers;" and "Index investing." Volatility may be
indicative of risk. Please refer to the discussion under "Performance and
Volatility."
[SIDEBAR: Russell 2000 Index Portfolio]
Russell 2000 Index Portfolio:
Investment objective: to equal the return of the Russell 2000 Index.
Principal investment strategies: In addition to the strategies outlined above
under "Principal Investment Strategies for the Index Portfolios," the Portfolio
will normally invest most of its assets in common stocks included in the
Russell 2000 Index. The Russell 2000 Index is composed of approximately 2,000
small capitalization companies. As of December 31, 1999, the average stock
market capitalization of companies in the Russell 2000 Index was $460 million,
and the weighted average stock market capitalization was $1,360 million. The
Portfolio will invest in a statistically selected sample of the 2000 stocks
included in the Russell 2000 Index. The stocks purchased for the Portfolio are
chosen to, as a group, reflect the composite performance of the Russell 2000
Index. As the Portfolio's total assets grow, a larger percentage of stocks
included in the Russell 2000 Index will be included in the Portfolio.
Principal risks: The risks described after the following the captions under
"Principal Risks of Investing in the Fund:" "Equity investing;" "Investing in
less mature companies, smaller companies and companies with "special
situations';" and "Index investing." Volatility may be indicative of risk.
Please refer to the discussion under "Performance and Volatility."
[SIDEBAR: MetLife Mid Cap Stock Index Portfolio]
About the MetLife Mid Cap Stock Index Portfolio:
Investment objective: to equal the performance of the Standard & Poor's MidCap
400 Composite Stock Index ("S&P MidCap 400 Index").
Principal investment strategies: In addition to the strategies outlined above
under "Principal investment strategies applicable to all the Index Portfolios,"
the Portfolio will normally invest most of its assets in common
6
<PAGE>
stocks included in the S&P 400 MidCap Index. The S&P MidCap 400 Index consists
of the common stock of approximately 400 mid capitalization companies. As of
December 31, 1999, the average stock market capitalization of companies in the
S&P MidCap 400 Index was $2.304 billion, and the weighted average stock market
capitalization was $5.531 billion. The Portfolio will be managed by purchasing
the common stock of all the companies in the S&P MidCap 400 Index.
Principal risks: The risks described after the following captions under
"Principal Risks of Investing in the Fund;" "Equity Investing;" "Index
Investing;" "Investing in less mature companies, smaller companies, and
companies with "special situations';" "Investing in larger companies;" and
"Investing in medium sized companies." Volatility may be indicative of risk.
7
<PAGE>
Performance and Volatility
The following tables and charts are provided to illustrate the variability of
the investment returns that each Portfolio shown below has earned in the past.
. Average annual total return measures a Portfolio's performance over time, and
compares those returns to a representative index. Periods of 1, 5, and 10
years (or since inception as applicable) are presented.
. The graphs of year-by-year returns examine volatility by illustrating a
Portfolio's historic highs and lows, as well as the consistency of returns.
. In general, as reflected in this section, Portfolios with higher average
annual total returns tend to be more volatile.
. Return calculations do not reflect insurance product fees or other charges,
and if included these charges would reduce each Portfolio's past performance.
Also, past performance does not necessarily indicate how a particular
Portfolio will perform in the future.
State Street Research Aurora Small Cap Value
Since the Portfolio commenced operations effective July 5, 2000,
no volatility or performance information is available.
[GRAPH]
Putnam International Stock/1/
Investment Results
Average Annual Total Returns
As of December 31, 1999
-------------------------------
1 Year 5 Years Inception
------ ------- ---------
Santander
International Stock 16.44% 6.66% 7.80%
-------------------------------------------------------------------------------
MSCI EAFE 26.96% 12.83% 10.07%
92 -10.21%
93 47.76%
94 5.08%
95 0.84%
96 -1.77%
97 -2.34%
98 22.56%
99 16.44%
During the period shown in the bar chart, the highest return for a quarter was
19.4% (quarter ended March 31, 1993) and the lowest return for a quarter was
-12.8% (quarter ended September 30, 1998).
--------
1. Putnam became the sub-investment manager of the Putnam International Stock
Portfolio on January 24, 2000. Performance for all prior periods reflects
results under other sub-investment managers.
Putnam Large Cap Growth
Since the Portfolio commenced operations effective May 1, 2000,
no volatility or performance information is available.
[GRAPH]
Janus Mid Cap
Investment Results
Average Annual Total Returns
As of December 31, 1999
-----------------------
1 Year Inception
------ ---------
Janus Mid Cap 122.67% 61.72%
-------------------------------------------------------------------------------
S&P 400 MicCap 14.72% 21.99%
97 28.03%
98 36.94%
99 122.67%
For periods prior to the inception of Class B Shares (January 1, 2001),
performance information shown is the performance of Class A shares adjusted to
reflect the 12b-1 fees paid by Class B shares.
8
<PAGE>
Lehman Brothers(R) Aggregate Bond Index
Investment Results
Average Annual Total Returns
As of December 31, 1999
-----------------------
1 Year Inception
------ ---------
Lehman Brothers(R)
Aggregate Bond Index -1.62% -0.29%
------------------------------------------------------------------------------
Lehman Brothers(R) Aggregate -0.82% -2.23%
[BAR CHART]
98* 1.34
99 -1.62
*For the period November 9, 1998 to December 31,1998.
For periods prior to the inception of Class B Shares (January 1, 2001),
performance information shown is the performance of Class A shares adjusted to
reflect the 12b-1 fees paid by Class B shares.
MetLife Stock Index
Investment Results
Average Annual Total Returns
As of December 31, 1999
---------------------------
1 Year 5 Years Inception
------ ------- ---------
MetLife
Stock Index 20.54% 27.76% 18.83%
-------------------------------------------------------------------------------
S&P 500 21.04% 28.54% 19.57%
[BAR CHART]
91 29.51
92 7.19
93 9.29
94 0.93
95 36.62
96 22.41
97 31.94
98 27.98
99 20.54
For periods prior to the inception of Class B Shares (January 1, 2001),
performance information shown is the performance of Class A shares adjusted to
reflect the 12b-1 fees paid by Class B shares.
MetLife Mid Cap Stock Index
Since the Portfolio commenced operations effective July 5, 2000,
no volatility or performance information is available.
Morgan Stanley EAFE(R) Index
Investment Results
Average Annual Total Returns
As of December 31, 1999
-----------------------
1 Year Inception
------ ---------
Morgan Stanley EAFE(R)
Index 24.66% 29.73%
-------------------------------------------------------------------------------
MSCI EAFE 26.96% 32.74%
[BAR CHART]
98* 8.08
99 24.66
*For the period November 9, 1998 to December 31, 1998.
For periods prior to the inception of Class B Shares (December 1, 2001),
performance information shown is the performance of Class A shares adjusted to
reflect the 12b-1 fees paid by Class B shares.
9
<PAGE>
[GRAPH]
Russell 2000(R) Index
Investment Results
Average Annual Total Returns
As of December 31, 1999
-----------------------
1 Year Inception
------ ---------
Russell 2000(R) 22.49% 25.03%
-------------------------------------------------------------------------------
Russell 21.26% 24.72%
98* 99
5.44 22.49
*For the period November 9, 1998 to December 31, 1998.
For periods prior to the inception of Class B Shares (January 1, 2001),
performance information shown is the performance of Class A shares adjusted to
reflect the 12b-1 fees paid by Class B shares.
10
<PAGE>
Principal Risks of Investing in the Fund
[SIDEBAR: Carefully review the principal risks associated with investing in the
Portfolios.]
The following briefly describes the principal risks that are associated with
one or more of the Fund's Portfolios.
Equity investing: Portfolios that invest in equities could lose money due to
sudden unpredictable drops in value and the potential for periods of lackluster
performance. Such adverse developments could result from general market or
economic conditions and/or developments at a particular company that the
portfolio managers do not foresee or circumstances that they do not evaluate
correctly. Historically, investments in equities have been more volatile than
many other investments.
This is a principal risk for the following Portfolios:
State Street Research Aurora Small Cap Value, Putnam International Stock,
Putnam Large Cap Growth, Janus Mid Cap, MetLife Stock Index, Morgan Stanley
EAFE Index, MetLife Mid Cap Stock Index and Russell 2000 Index.
Investing in less mature companies, smaller companies and companies with
"special situations": These investments can be particularly sensitive to market
movements, because they may be thinly traded and their market prices tend to
reflect future expectations. Also, these companies often have limited product
lines, markets or financial resources and their management personnel may lack
depth and experience. (For an explanation of "special situations" see
"investment styles" in Appendix C.)
This is a principal risk for the following Portfolios:
State Street Research Aurora Small Cap Value, Janus Mid Cap, MetLife Mid Cap
Stock Index and Russell 2000 Index.
Investing in larger companies: Larger more established companies may be unable
to respond quickly to new competitive challenges such as changes in technology
and consumer tastes. Many larger companies also may not be able to attain the
high growth rates of successful smaller companies, especially during extended
periods of economic expansion.
This is a principal risk for the following Portfolios:
Putnam International Stock, Putnam Large Cap Growth, Janus Mid Cap, MetLife Mid
Cap Stock Index and MetLife Stock Index.
Investing in fixed income securities: These types of investments are subject to
loss in value if the market interest rates subsequently rise after purchase of
the obligation. This risk is greater for investments with longer remaining
durations. Another risk is that the issuer's perceived creditworthiness can
drop and cause the fixed income investment to lose value or the issuer could
default on interest or principal payments causing a loss in value. Lower rated
instruments, especially so called "junk bonds," involve greater risks due to
the financial health of the issuer and the economy generally and their market
prices can be more volatile.
This is a principal risk for the Lehman Brothers Aggregate Bond Index
Portfolio.
Prepayment risk: Prepayment risk is the risk that an issuer of a debt security
owned by a Portfolio repays the debt before it is due. This is most likely to
occur when interest rates have declined and the issuer can therefore refinance
the debt at a lower interest rate. A Portfolio that owns debt obligations that
are prepaid would generally have to reinvest the amount
11
<PAGE>
prepaid in lower yielding instruments. Also, debt obligations that can be
prepaid tend to increase less in value when interest rates decline, and
decrease more when interest rates rise, than otherwise similar obligations that
are not prepayable.
This is a principal risk for the Lehman Brothers Aggregate Bond Index
Portfolio.
Zero coupon risks: "Zero coupon" securities are debt obligations that provide
for payment of interest at the maturity date, rather than over the life of the
instrument. The values of zero coupon securities tend to respond more to
changes in interest rates than do otherwise comparable debt obligations that
provide for periodic payment of interest.
This is a principal risk for the Lehman Brothers Aggregate Bond Index
Portfolio.
Investing in securities of foreign issuers: Investments in securities that are
traded outside the U.S. have additional risks beyond those of investing in U.S.
securities. Foreign securities are frequently more volatile and less liquid
than their U.S. counterparts for reasons that may include unstable political
and economic climates, lack of standardized accounting practices, limited
information available to investors and smaller markets that are more sensitive
to trading activity. Also, changes in currency exchange rates have the
potential of reducing gains or creating losses. There also can be risks of
expropriation, currency controls, foreign taxation or withholding, and less
secure procedures for transacting business in securities. The risks of
investing in foreign securities are usually higher in emerging markets such as
most countries in Southeast Asia, Eastern Europe, Latin America and Africa.
This is a principal risk for the following Portfolios:
Putnam International Stock, Morgan Stanley EAFE Index, and Janus Mid Cap.
Value investing: This investment approach has additional risk associated with
it because the portfolio manager's judgement that a particular security is
undervalued in relation to the company's fundamental economic values may prove
incorrect.
This is a principal risk for the following Portfolios:
State Street Research Aurora Small Cap Value and Putnam International Stock.
Growth investing: This investment approach has additional risk associated with
it due to the volatility of growth stocks. Growth companies usually invest a
high portion of earnings in their businesses, and may lack the dividends of
value stocks that can cushion prices in a falling market. Also, earnings
disappointments often lead to sharply falling prices because investors buy
growth stocks in anticipation of superior earnings growth.
This is a principal risk for the following Portfolios:
Putnam International Stock, Putnam Large Cap Growth and Janus Mid Cap.
Index investing: Unlike actively managed portfolios, portfolios that attempt to
match the return of an index generally will not use any defensive strategies.
You, therefore, will bear the risk of adverse market conditions with respect to
the market segment that the index seeks to match. In
12
<PAGE>
addition, transaction costs, other Portfolio or Fund expenses, brief delays
that occur until a Portfolio can invest cash it receives and other tracking
errors may result in a Portfolio's return being lower than the return of the
applicable index.
This is a principal risk for the following Portfolios:
MetLife Stock Index, Morgan Stanley EAFE Index, Russell 2000 Index, MetLife Mid
Cap Stock Index and Lehman Brothers Aggregate Bond Index.
Investing in medium sized companies: These companies present additional risks
because their earnings are less predictable, their share prices more volatile,
and their securities less liquid than larger, more established companies.
This is a principal risk for the following Portfolios:
Janus Mid Cap and MetLife Mid Cap Stock Index.
Defensive Strategies
Except with respect to the index Portfolios, portfolio managers generally may
use defensive strategies. These include holding greater cash positions, short-
term money market instruments or similar investments that are not within the
Portfolio's usual investment strategy, but do not violate any prohibition to
which the Portfolio is subject. Portfolio managers may use defensive strategies
when they believe that market conditions are not favorable for profitable
investing or when the portfolio manager is otherwise unable to locate favorable
investment opportunities. Adopting a defensive position, however, can mean that
a Portfolio would be unable to meet its investment objective.
About The Investment Managers
[SIDEBAR: About MetLife]
Metropolitan Life Insurance Company ("MetLife") has overall responsibility for
investment management for each Portfolio and day-to-day investment management
responsibility for the index Portfolios. (MetLife also performs general
administrative and management services for the Fund.) In addition, MetLife is
the Fund's principal underwriter and distributor. MetLife also manages its own
investment assets and those of certain affiliated companies and other entities.
MetLife is a life insurance company which sells insurance policies and annuity
contracts. As of September 30, 2000 MetLife had $423.2 billion in assets under
management. Of this approximately $121.6 billion was attributable to the Nvest
Companies, L.P. ("Nvest"). In October, MetLife sold its interests in Nvest and
has approximately $301.6 billion in assets under management. MetLife is the
parent of Metropolitan Tower Life Insurance Company ("Metropolitan Tower").
[SIDEBAR: Portfolio management of the State Street Research Portfolios]
State Street Research & Management Company ("State Street Research") is the
sub-investment manager for the State Street Research Aurora Small Cap Value
Portfolio. It is a Delaware corporation and traces its history back to 1924. It
is a wholly-owned indirect subsidiary of MetLife. In addition to the Fund, it
provides investment management services to several mutual funds and
institutional clients. As of December 31, 1999, State Street Research had
investment arrangements in effect for about $54 billion in assets.
13
<PAGE>
Rudolph K. Kluiber has been responsible for the Portfolio's day-to-day
management since its inception. A senior vice president, he joined State Street
Research in 1989 and has worked as an investment professional since 1988.
[SIDEBAR: Portfolio management of the Putnam Portfolios]
Putnam Investment Management, Inc. ("Putnam") is the sub-investment manager of
the Putnam Portfolios. Putnam, a Massachusetts corporation, has managed mutual
funds since 1937. As of December 31, 1999, Putnam and its affiliates managed in
excess of $391 billion of retail and institutional investors worldwide. All of
the outstanding voting and nonvoting securities of Putnam
are held of record by Putnam Investments, Inc., which is, in turn, except for a
minority interest owned by employees, owned by Marsh & McLennan Companies,
Inc., an NYSE listed public company whose business is insurance brokerage,
investment management and consulting.
The following gives you information on the portfolio managers for the Putnam
Portfolios:.
Putnam International Stock Portfolio:
The Portfolio is managed by Putnam's Core International team, with Omid
Kamshad, Managing Director, as the lead manager. Mr. Kamshad has been employed
by Putnam since 1996. Prior to 1996, Mr. Kamshad was employed at Lombard Odier
International Portfolio Management Limited. Prior to April, 1995 he was
employed at Baring Asset Management Company. He also has portfolio management
responsibilities on the Putnam teams that manage European Core, Global Core,
and Core International Small Cap institutional portfolios.
Until January 24, 2000, Santander Global Advisors, Inc. ("Santander") was the
sub-investment manager for the Portfolio (then known as the Santander
International Stock Portfolio). On January 11, 2000, the Board of Directors of
the Fund voted to terminate the sub-investment management agreement with
Santander relating to the Portfolio effective January 24, 2000. The Board also
voted to retain Putnam as the new sub-investment manager effective the same
date. The shareholders of the Portfolio approved Putnam as the new sub-
investment manager at a special meeting of shareholders on March 31, 2000.
Putnam Large Cap Growth Portfolio:
The Portfolio is managed by Putnam's Large Cap Growth team, with Jeffrey R.
Lindsey, Senior Vice President, as the lead manager. Mr. Lindsey has been
employed by Putnam since 1994. He is responsible for Core Growth Equity and
Concentrated Growth Equity institutional portfolios, is lead manager of Putnam
Growth Opportunities Fund and co-manager of Voyager II and New Opportunities
Fund.
[SIDEBAR: Portfolio management of the Janus Mid Cap Portfolio]
Janus Capital Corporation ("Janus") is the sub-investment manager for the Janus
Mid Cap Portfolio. It is a Colorado corporation that began providing investment
management services at its inception in 1970. In addition to the Fund, it
provides investment management services to several mutual funds and several
individual and institutional clients. As of December 31, 1999, Janus managed
approximately $248 billion in assets.
James P. Goff, Vice President since December 1993 and Portfolio Manager, joined
Janus in 1988. He is the portfolio manager for the Portfolio and has been
primarily responsible for its day-to-day management since its inception in
14
<PAGE>
March, 1997. He is also a portfolio manager for other investment portfolios.
Over the past five years, he has also been Portfolio Manager at Janus.
[SIDEBAR: Investment Management Fees]
The Fund pays MetLife monthly for its investment management services. MetLife
pays each sub-investment manager for their investment management services.
There is no separate charge to the Fund for the sub-investment management
services.
For the Portfolios indicated below, the following table shows the investment
management and sub-investment management fees for the year ending December 31,
1999 as an annual percentage of the average daily net assets of each Portfolio.
<TABLE>
<CAPTION>
% of Average
Daily Net Assets
% of Average Paid by
Daily Net Assets Investment
Paid to Manager to
Investment Sub-Investment
Portfolio Manager Manager
-----------------------------------------------------------------------------------
<S> <C> <C>
MetLife Stock Index .25% N/A
-----------------------------------------------------------------------------------
Putnam International Stock/1/ .75% .55%
-----------------------------------------------------------------------------------
Janus Mid Cap .67% .49%
-----------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond
Index .25% N/A
-----------------------------------------------------------------------------------
Russell 2000 Index .25% N/A
-----------------------------------------------------------------------------------
Morgan Stanley EAFE Index .30% N/A
</TABLE>
The Portfolios indicated in the following table commenced operations on or
after May 1, 2000. The following shows the investment management and sub-
investment management fee schedules as an annual percentage of the average
daily net assets of each Portfolio.
<TABLE>
<CAPTION>
% per
% per annum
annum Paid to
Average paid to Average Sub-
Daily Net Investment Daily Net Investment
Portfolio Assets Manager Assets Manager
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Metlife Mid Cap Stock
Index All assets .25% N/A N/A
---------------------------------------------------------------------------------
Putnam Large Cap 1st $500 million .80% first $150 million .50%
Growth next $500 million .75% next $150 million .45%
over $1 billion .70% over $300 million .35%
---------------------------------------------------------------------------------
State Street Research 1st $500 million .85% first $50 million .55%
Aurora next $500 million .80% next $75 million .50%
Small Cap Value over $1 billion .75% next $100 million .45%
over $225 million .40%
</TABLE>
/1/For the year ending December 31, 1999, Santander Global Advisors, Inc.
("Santander") was sub-investment manager. Beginning January 24, 2000, Putnam
replaced Santander as sub-investment manager. MetLife paid all sub-investment
management fees to Santander.
15
<PAGE>
[SIDEBAR: Fund Expenses]
The Fund is responsible for paying its own expenses. However, MetLife
voluntarily pays expenses of certain Portfolios in excess of a certain
percentage of net assets until the earlier of either total net assets of the
Portfolio reach a certain limit or a certain date as follows:
<TABLE>
<CAPTION>
SUBSIDIZED
EXPENSES* IN TOTAL NET
PORTFOLIO EXCESS OF ASSETS DATE
<S> <C> <C> <C>
Morgan Stanley EAFE Index 0.40% $200 million 4/30/01
Putnam Large Cap Growth 0.20% $100 million 7/4/02
State Street Research Aurora Small Cap Value 0.20% $100 million 7/4/02
Metlife Mid Cap Stock Index 0.20% $100 million 7/4/02
Russell 2000 Index 0.30% $200 million 4/30/01
</TABLE>
--------
*Expenses for this purpose exclude the investment management fees payable to
MetLife, brokerage commissions on portfolio transactions (including any other
direct costs related to portfolio investment transactions), amounts payable
pursuant to a plan adopted in accordance with Rule 12b-1 under the Investment
Company Act of 1940, taxes, interest and other loan costs owed by the Fund and
any unusual one-time expenses (such as legal related expenses).
MetLife also paid such excess expenses for the Janus Mid Cap Portfolio until
December 31, 1997, for the Russell 2000 Index Portfolio until December 3, 1999
and for the Lehman Brothers Aggregate Bond Index Portfolio until July 13, 1999.
These subsidies and other prior expense reimbursement arrangements can increase
the performance of the Portfolios. MetLife also has the right to stop these
payments at any time upon notice to the Board of Directors and to Fund
shareholders.
Portfolio Turnover Rates
The rate of portfolio turnover is the annual amount, expressed as a percentage,
of a Portfolio's securities that it replaces in one year. The portfolio
turnover rate will not be a limiting factor when it is deemed appropriate to
purchase or sell securities for a Portfolio. Portfolio turnover may vary from
year to year or within a year, depending upon economic, market or business
conditions and client contributions and withdrawals. To the extent that
brokerage commissions and transaction costs are incurred in buying and selling
portfolio securities, the rate of portfolio turnover could affect each
Portfolio's net asset value. The historical rates of portfolio turnover for all
of the Portfolios are set forth in the Prospectus under the Financial
Highlights.
Dividends, Distributions and Taxes
[SIDEBAR: Dividends are reinvested]
The Fund intends to qualify as a regulated investment company under the tax law
and, as such distributes substantially all of each Portfolio's ordinary net
income and capital gains each calendar year as a dividend to the separate
accounts funding the Contracts to avoid an excise tax on certain undistributed
amounts. The Fund expects to pay no income tax. Dividends are reinvested in
additional full and partial shares of the Portfolio as of the dividend payment
date.
16
<PAGE>
The Fund and its Portfolios intend to comply with special diversification and
other tax law requirements that apply to investments under variable life
insurance and annuity contracts. Under these rules, shares of the Fund will
generally only be available through the purchase of a variable life insurance
or annuity contract. Income tax consequences to Contract owners who allocate
premiums to Fund shares are discussed in the prospectus for the Contracts that
is attached at the front of this Prospectus.
General Information about the Fund and its Purpose
The Fund is an open-end management investment company (or "mutual fund"). The
Fund is a "series" type of mutual fund, which issues separate classes (or
series) of stock. Each class or series represents an interest in a separate
portfolio of Fund investments ("Portfolio").
The Fund offers its shares to MetLife and its affiliated insurance companies
("Insurance Companies"), including New England Life Insurance Company. The
Insurance Companies hold the Fund's shares in separate accounts that they use
to support variable life insurance policies and variable annuity contracts
(together, the "Contracts"). Not all of the Portfolios of the Fund are
available to each of these separate accounts. An Insurance Company holding Fund
shares for a separate account has different rights from those of the owner of a
Contract. The terms "shareholder" or "shareholders" in this Prospectus refer to
the Insurance Companies, and not to any Contract owner.
[SIDEBAR: Contract owners may allocate the amounts under the Contracts for
ultimate investment in the Portfolios.]
Within limitations described in the appropriate Contract, owners may allocate
the amounts under the Contracts for ultimate investment in the various
Portfolios of the Fund. See the prospectus which is attached at the front of
this Prospectus for a description of (a) the Contract, (b) the Portfolios of
the Fund that are available under that Contract and (c) the relationship
between increases or decreases in the net asset value of Fund shares (and any
dividends and distributions on such shares) and the benefits provided under
that Contract.
Some of the Portfolios have names and investment objectives that are very
similar to certain publicly available mutual funds that are managed by the same
money managers. These Portfolios are not those publicly available mutual funds
and will not have the same performance. Different performance will result from
such factors as different implementation of investment policies, different cash
flows into and out of the Portfolios, different fees, and different sizes.
It is conceivable that in the future it may be disadvantageous for different
types of variable life insurance and variable annuity separate accounts to
invest simultaneously in the Fund. However, the Fund, New England Life
Insurance Company and MetLife do not currently foresee any such disadvantages.
The Fund's Board of Directors intends to monitor for the existence of any
material irreconcilable conflict between or among such owners, and the
Insurance Companies will take whatever remedial action may be necessary.
17
<PAGE>
Sale and Redemption of Shares
[SIDEBAR: Fund shares are available only through variable life and variable
annuity contracts.]
Except for the State Street Research Aurora Small Cap Value, Putnam
International Stock and Putnam Large Cap Growth Portfolios, the Fund offers
two classes of shares on behalf of each of the Portfolios offered by this
Prospectus, Class A and Class B shares. There are no Class B shares for the
State Street Research Aurora Small Cap Value, Putnam International Stock and
the Putnam Large Cap Growth Portfolios. Both classes of shares are sold and
redeemed at a price equal to the net asset value without any sales charge. The
Fund has adopted a Distribution Plan under Rule 12b-1 of the Investment
Company Act of 1940 for the Fund's Class B shares. Under the Class B
Distribution Plan, the Class B shares of the Fund pay an annual fee to
compensate certain other parties for promoting, selling, and servicing the
Class B shares of a Portfolio. These other parties may include the Insurance
Companies (or their affiliates) and other broker-dealers and financial
intermediaries involved in the offer and sale of the Contracts. The annual fee
equals 0.25% of each Portfolio's average daily net assets. These fees will
increase your cost of investing over time and may cost more than other types
of sales charges.
The Insurance Companies purchase or redeem shares of each Portfolio, based on,
among other things: (a) the amount of net Contract premiums or purchase
payments transferred to the separate accounts; (b) transfers to or from
separate account investment divisions; (c) policy loans; (d) loan repayments;
and (e) benefit payments to be effected on a given date under the Contracts.
Generally, these purchases and redemptions are priced using the Portfolio net
asset value computed for the same date and time as are used to price the
corresponding Contract transaction.
The Portfolios are not designed for market timers, or large or frequent
transfers. The Fund may restrict or refuse purchases or exchanges by market
timers. You will be considered a market timer if you have (a) requested an
exchange out of the Portfolios within two weeks of an earlier exchange
request, or (b) exchanged shares out of the Portfolios more than twice in a
calendar quarter, or (c) exchanged shares equal to at least $5 million, or
more than 1% of the Portfolios net assets, or (d) otherwise seem to follow a
timing pattern. Accounts under common ownership or control are combined for
these limits.
Each Portfolio's net asset value per share is calculated by taking its assets
(including dividends and interest received or accrued), deducting its
liabilities (including accrued expenses and dividends payable) and dividing
the result by the total number of the Portfolio's outstanding shares. To
determine the value of a Portfolio's assets, cash and receivables are valued
at their face amounts. Interest is recorded as accrued and dividends are
recorded on the ex-dividend date.
Securities, options and futures contracts held by the Portfolios are valued at
market value. Short-term debt instruments with a maturity of 60 days or less
held by all Portfolios are valued on an amortized cost basis. When market
quotations are not readily available for securities and assets, or when the
Board of Directors determines that customary pricing procedures would result
in an unreliable valuation, they are valued at fair value as determined by the
Board of Directors. Such a fair value procedure could be followed, for
example, if (a) an event occurs after the time of the most recent available
market quotations that is likely to have affected the value of those
securities
18
<PAGE>
[SIDEBAR: A Portfolio's net asset value per share is determined once daily.]
or (b) such market quotations for other reasons do not reflect information
material to the value of those securities. The possibility of fair value
pricing means that changes in a Portfolio's net asset value may not always
correspond to changes in quoted prices of a Portfolio's investments.
A Portfolio's net asset value per share is determined once daily immediately
after any dividends are declared and is currently determined at the close of
regular trading on the New York Stock Exchange. When it is open, regular
trading on the New York Stock Exchange usually ends at 4:00 p.m., Eastern time.
The net asset value may also be determined on days when the New York Stock
Exchange is closed when there has been trading in a Portfolio's securities
which would result in a material change in the net asset value.
Financial Highlights
The financial highlights table is intended to help you understand each
Portfolio's financial performance for the past 5 years, or since inception of
the Portfolio if shorter. Certain information reflects financial results for a
single share of the Portfolio. The total returns in the table represent the
rate that a shareholder would have earned or lost on an investment in a
Portfolio (assuming reinvestment of all dividends and distributions). The total
return information does not reflect expenses that apply at the separate account
level or to related Contracts. Inclusion of these charges would reduce the
total return figures for all periods shown. All of the information in the table
is for the Class A shares of each Portfolio, because no Class B shares were
outstanding during any of the periods covered by the table. However, all of the
Portfolios other than the State Street Research Aurora Small Cap Value, Putnam
International Stock, and Putnam Large Cap Growth Portfolios will also be
issuing Class B shares in the future. The results for the Class B shares would
be the same as that for the Class A shares, reduced by the Rule 12b-1 fee to
which the Class B shares are subject. The Rule 12b-1 fee applicable to the
Class B shares is at an annual rate of .25% of the average daily net assets of
the applicable Portfolio. These financial highlights (with the exception of the
period ended June 30, 2000) have been audited by Deloitte & Touche LLP, whose
report, along with the Fund's financial statements, are included in the annual
report, which is available upon request.
19
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MetLife Stock Index Portfolio
--------------------------------------------------------------------------------
Selected Data For a Share of Capital For Six Months
Stock Outstanding Throughout Period: Ended Year Ended December 31,
June 30, 2000 ----------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- --------
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period............. $40.59 $35.38 $28.78 $22.23 $18.56 $13.87
-----------------------------------------------------------------------------------------------------------------------------------
Investment Operations:
Net investment income.......................... 0.17 0.37 0.37 0.34 0.33 0.32
Net realized and unrealized gain/(loss)........ (0.39) 6.89 7.75 6.79 3.88 4.79
---------- ---------- ---------- ---------- ---------- --------
Total From Investment Operations............. (0.22) 7.26 8.12 7.13 4.21 5.11
---------- ---------- ---------- ---------- ---------- --------
Less Distributions:
Dividends from net investment income........... -- (0.36) (0.36) (0.34) (0.33) (0.32)
Distributions from net realized capital gains.. -- (1.69) (1.16) (0.24) (0.21) (0.10)
---------- ---------- ---------- ---------- ---------- --------
Total Distributions.......................... -- (2.05) (1.52) (0.58) (0.54) (0.42)
---------- ---------- ---------- ---------- ---------- --------
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period................... $40.37 $40.59 $35.38 $28.78 $22.23 $18.56
-----------------------------------------------------------------------------------------------------------------------------------
Total return................................... (0.54)% 20.79% 28.23% 32.19% 22.66% 36.87%
Supplemental Data/Significant Ratios:
Net assets at end of period (000's)............ $4,348,518 $4,205,202 $3,111,919 $2,020,480 $1,122,297 $635,823
Operating expenses to average net assets....... 0.28%* 0.29% 0.30% 0.33% 0.30% 0.32%
Net investment income to average net assets.... 0.88%* 1.01% 1.21% 1.47% 1.91% 2.22%
Portfolio turnover............................. 6.13% 8.77% 15.07% 10.69% 11.48% 6.35%
<CAPTION>
Putnam International Stock Portfolio +
---------------------------------------------------------------------------------
Selected Data For a Share of Capital For Six Months
Stock Outstanding Throughout Period: Ended Year Ended December 31,
June 30, 2000 ----------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- --------
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period............. $13.87 $14.14 $11.67 $11.95 $12.29 $12.30
-----------------------------------------------------------------------------------------------------------------------------------
Investment Operations:
Net investment income.......................... 0.03 0.13 0.13 0.10 0.07 0.03
Net realized and unrealized gain/(loss)........ (0.09) 2.05 2.50 (0.38) (0.28) 0.07
---------- ---------- ---------- ---------- ---------- --------
Total From Investment Operations............. (0.06) 2.18 2.63 (0.28) (0.21) 0.10.
---------- ---------- ---------- ---------- ---------- --------
Less Distributions:
Dividends from net investment income........... -- (0.13) (0.16) -- -- (0.04)
Distributions from net realized capital gains.. -- (2.32) -- -- (0.13) (0.07)
---------- ---------- ---------- ---------- ---------- --------
Total Distributions.......................... -- (2.45) (0.16) -- (0.13) (0.11)
---------- ---------- ---------- ---------- ---------- --------
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period................... $13.81 $13.87 $14.14 $11.67 $11.95 $12.29
------------------------------------------------------------------------------------------------------------------------------------
Total return................................... (0.43)% 16.44% 22.56% (2.34)% (1.77)% 0.84%
Supplemental Data/Significant Ratios:
Net assets at end of period (000's)............ $342,980 $317,831 $297,381 $267,089 $303,826 $297,461
Operating expenses to average net assets....... 1.03%* 0.97% 1.02% 1.03% 0.97% 1.01%
Net investment income to average net assets.... 0.55%* 0.95% 0.87% 0.77% 0.56% 0.21%
Portfolio turnover............................. 273.96% 86.77% 156.32% 182.11% 116.67% 86.24%
</TABLE>
--------------------
+ Formerly Santander International Stock Portfolio.
* Ratios have been determined based on annualized operating results for the
period. Twelve month results may be different.
20
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Janus Mid Cap Portfolio
-------------------------------------------------
Selected Data For a Share of Capital For Six Months Year Ended December 31,
Stock Outstanding Throughout Period: Ended -------------------------------
June 30, 2000 1999 1998 1997A
(unaudited) ------ ------ ------
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period................................. $36.54 $17.44 $12.77 $10.00
----------------------------------------------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss)....................................... (0.05) (0.05) (0.02) 0.01
Net realized and unrealized gain/(loss)............................ (0.80) 21.14 4.77 2.81
------- ------ ------ ------
Total From Investment Operations................................. (0.85) 21.09 4.75 2.82
------- ------ ------ ------
Less Distributions:
Dividends from net investment income............................... -- -- -- (0.01)
Distributions from net realized capital gains...................... -- (1.99) (0.08) (0.04)
------- ------ ------ ------
Total Distributions.............................................. -- (1.99) (0.08) (0.05)
------- ------ ------ ------
----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period....................................... $35.69 $36.54 $17.44 $12.77
----------------------------------------------------------------------------------------------------------------------
Total return......................................................... (2.33)% 122.92% 37.19% 28.22%
Supplemental Data/Significant Ratios:
------------------------------------
Net assets at end of period (000's)................................ $2,479,410 $1,931,797 $371,504 $103,852
Net expenses to average net assets................................. 0.69%* 0.71% 0.81% 0.85%*
Operating expenses to average net assets before
voluntary expense reimbursements................................... N/A N/A N/A 0.99%*
Net investment income to average net assets........................ (0.32)%* (0.41)% (0.22)% 0.10%*
Net investment income to average net assets before
voluntary expense reimbursements................................... N/A N/A N/A (0.40)%*
Portfolio turnover................................................. 153.78% 103.28% 106.66% 74.70%
</TABLE>
<TABLE>
<CAPTION>
Lehman Brothers Aggregate Bond
Index Portfolio Morgan Stanley EAFE Index
-------------------------------------- ---------------------------------------
Selected Data For a Share of Capital For Six Months For Six Months
Stock Outstanding Throughout Period: Ended Year Ended December 31, Ended Year Ended December 31,
June 30, 2000 ----------------------- June 30, 2000 -----------------------
(unaudited) 1999 1998C (unaudited) 1999 1998C
-------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period............... $9.45 $10.06 $10.00 $13.34 $10.80 $10.00
------------------------------------------------------------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss)..................... 0.32 0.48 0.07 0.08 0.10 0.01
Net realized and unrealized gain/(loss).......... 0.05 (0.62) 0.07 (0.66) 2.58 0.80
-------- -------- ------- ------- ------- -------
Total From Investment Operations............... 0.37 (0.14) 0.14 (0.58) 2.68 0.81
-------- -------- ------- ------- ------- -------
Less Distributions:
Dividends from net investment income............. -- (0.47) (0.08) -- (0.06) (0.01)
Distributions from net realized capital gains.... -- --B -- -- (0.08) --
-------- -------- ------- ------- ------- -------
Total Distributions............................ -- (0.47) (0.08) -- (0.14) (0.01)
-------- -------- ------- ------- ------- -------
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period..................... $9.82 $9.45 $10.06 $12.76 $13.34 $10.80
------------------------------------------------------------------------------------------------------------------------------------
Total return..................................... 3.92% (1.37)% 1.38% (4.35)% 24.90% 8.11%
Supplemental Data/Significant Ratios:
------------------------------------
Net assets at end of period (000's).............. $135,423 $129,339 $58,810 $90,971 $82,355 $25,453
Net expenses to average net assets............... 0.36%* 0.40% 0.42%* 0.55%* 0.50% 0.49%*
Operating expenses to average net assets before
voluntary expense reimbursements................. N/A N/A 0.59%* 0.97%* 1.77% 1.41%*
Net investment income to average net assets...... 6.59%* 6.06% 5.28%* 1.39%* 1.25% 0.71%*
Net investment income to average net assets
before voluntary expense reimbursements.......... N/A N/A 5.11%* 0.97%* (0.02)% (0.21)%*
Portfolio turnover............................... 18.21% 96.19% 11.08% 14.23% 43.67% 12.68%
</TABLE>
A For the period March 3, 1997 (commencement of operations) to December 31,
1997.
B Less than $.005 per share.
C For the period November 9, 1998 (commencement of operations) to December 31,
1998.
* Ratios have been determined based on annualized operating results for the
period. Twelve month results may be different.
21
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Putnam Large
Cap Growth
Russell 2000 Index Portfolio Portfolio
--------------------------------------- ----------------
Selected Data For a Share of Capital For Six Months For the Period
Stock Outstanding Throughout Period: Ended Year Ended December 31, May 1, 2000B
June 30, 2000 ----------------------- to June 30, 2000
(unaudited) 1999 1998A (unaudited)
--------- ---------
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period............................ $12.52 $10.53 $10.00 $10.00
-------------------------------------------------------------------------------------------------------------------------------
Investment Operations:
Net investment income/(loss).................................. 0.04 0.08 0.02 --
Net realized and unrealized gain/(loss)....................... 0.26 2.29 0.53 (0.01)
--------- --------- --------- ---------
Total From Investment Operations............................ 0.30 2.37 0.55 (0.01)
--------- --------- --------- ---------
Less Distributions:
Dividends from net investment income.......................... -- (0.08) (0.02) --
Distributions from net realized capital gains................. -- (0.30) -- --
--------- --------- --------- ---------
Total Distributions......................................... -- (0.38) (0.02) --
--------- --------- --------- ---------
-------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period.................................. $12.82 $12.52 $10.53 $9.99
-------------------------------------------------------------------------------------------------------------------------------
Total return.................................................. 2.40% 22.73% 5.48% (0.10)%
Supplemental Data/Significant Ratios:
Net assets at end of period (000's)........................... $128,924 $111,729 $38,147 $8,504
Net expenses to average net assets............................ 0.57%* 0.45% 0.40%* 0.90%*
Operating expenses to average net assets before voluntary
expense reimbursements........................................ 0.59%* 0.89% 1.04%* 2.77%*
Net investment income to average net assets................... 0.66%* 1.04% 1.46%* (0.19)%*
Net investment income to average net assets before voluntary
expense reimbursements........................................ 0.64%* 0.59% 0.82%* (2.06)%*
Portfolio turnover............................................ 110.65% 67.01% 2.80% 28.49%
</TABLE>
A For the period November 9, 1998 (commencement of operations) to December 31,
1998.
B Commencement of operations.
* Ratios have been determined based on annualized operating results for the
period. Twelve month results may be different.
See Notes to Financial Statements.
22
<PAGE>
Appendix A To Prospectus
Portfolio Manager Prior Performance
Because it commenced operations only on November 9, 1998, limited performance
history is available for the Lehman Brothers Aggregate Bond Index Portfolio.
The following, however, sets forth total return information for the one-year,
three-year, five-year and ten-year periods ended December 31, 1999 (or since
inception if more recent) for certain similar accounts that are managed by
MetLife, the investment manager of this Portfolio. Year-to-date information is
also given for the nine months ended September 30, 2000. Results are shown on a
"total return" basis and include reinvestment of all dividends and capital gain
distributions.
Because Putnam Large Cap Growth did not commence operations until May 1, 2000,
and State Street Research Aurora Small Cap Value did not commence operations
until July 5, 2000, limited performance history is available for these
Portfolios. The following, however, sets forth total return information for the
one-year, three-year, five-year and ten-year periods ended December 31, 1999
(or since inception if more recent) for certain similar accounts that are
managed by the same sub-investment managers as are these two Portfolios. Year-
to-date information is also given for the nine months ended September 30, 2000.
Results are shown on a "total return" basis and include reinvestment of all
dividends and capital gain distributions.
The tables also show the total return information for appropriate indices for
the same periods. The index performance information set forth below does not
reflect any fees and expenses that the applicable Fund Portfolio will bear.
Finally each table also shows the related Fund Portfolio over the period of its
existence.
Each sub-investment manager has represented to the Fund that, except as
otherwise noted, the similar accounts for which performance figures are shown
include all of the sub-investment manager's investment company and other
accounts that (a) have been managed with investment objectives, policies, and
strategies substantially similar to those used in managing the corresponding
Portfolio, (b) are of sufficient size that their performance would be
considered relevant to the owner of a policy or contract investing in that
Portfolio and (c) are otherwise deemed sufficiently comparable to warrant
including their performance. No such similar account performance information is
available with respect to the MetLife Mid Cap Stock Index Portfolio, which
commenced operations on July 5, 2000.
The similar accounts are shown for illustrative purposes only and do not
necessarily predict future performance of the Portfolios. You should be aware
that the Portfolios are likely to differ from other accounts managed by the
same sub-investment manager in such matters as size, cash flow pattern, expense
levels and certain tax matters. Accordingly, the portfolio holdings and
performance of the Portfolio will vary from those of such other accounts.
The performance figures set forth below do not reflect any of the charges and
deductions under the terms of the variable annuity contracts and variable life
insurance policies that may invest in the Portfolios. These charges may be
substantial and will cause the investment return under such a contract or
policy to be less than that of the Portfolio. Such charges are discussed in
detail in the appropriate Contract prospectus.
23
<PAGE>
MetLife
<TABLE>
<CAPTION>
Lehman Brothers Lehman Brothers
Total Return for MetLife Fixed Aggregate Aggregate Bond
Period (unaudited) Income Account/1/ Bond Index/2/ Index Portfolio/4/
------------------ ----------------- --------------- ------------------
<S> <C> <C> <C>
Year to Date (ended
9/30/2000) 6.87% 7.12% 6.73%
One Year (12/31/98 to
12/31/99) -0.67% -0.82% -1.62%
Three Year (12/31/96 to
12/31/99), annualized 5.88% 5.74% --
8/1/96 to 12/31/99,
annualized/3/ 6.62% 6.19% --
</TABLE>
--------
/1/ As of December 31, 1999 the MetLife Fixed Income Account, a non-mutual fund
separate account, had assets of $400 million. The MetLife Fixed Income Account
is not an SEC registered investment company and does not comply with
requirements of Subchapter M of the Internal Revenue Code. The management of
the Account would not have been affected had the Account been a registered
investment company that complied with all legal requirements applicable to such
companies and Subchapter M of the Code. The total returns were calculated using
the estimated fees and expenses (including the 12b-1 fees paid by Class B
shares of the Lehman Brothers Aggregate Bond Index Portfolio) of the Lehman
Brothers Aggregate Bond Index Portfolio. Performance figures are based on
historical performance and do not guarantee future results.
/2/ Lehman Brothers Aggregate Bond Index is an unmanaged index comprised of the
Lehman Brothers Government/Corporate Index, the Lehman Brothers Mortgaged-
Backed Securities Index, and the Lehman Brothers Asset-Backed Securities Index
and effective July 1, 1999, the Lehman Brothers Commercial Mortgage-Backed
Securities Index. Performance for the index has been obtained from public
sources and has not been audited.
/3/ MetLife was not the investment manager of the separate account until August
1, 1996. Prior thereto an affiliate of MetLife was the investment manager for
the separate account.
/4/ Performance adjusted to reflect the 12b-1 fees paid by Class B shares.
Putnam
<TABLE>
<CAPTION>
Putnam Lipper
Growth Variable Funds
Total Return for Opportunities Underlying Growth Putnam Large Cap
Period (unaudited) Fund/1/ Funds Average/2/ S&P 500/2/ Growth Portfolio
------------------ ------------- ----------------- ---------- ----------------
<S> <C> <C> <C> <C>
Year to Date (ended
9/30/2000) 2.37% 3.75% 1.39% -3.60%
One Year (12/31/98 to
12/31/99) 51.37% 29.97% 21.04% --
Three Year (12/31/96 to
12/31/99, annualized) 46.62% 26.79% 27.56% --
10/2/95 to 12/99,
annualized (since
inception of the
Putnam Growth
Opportunities Fund) 38.20% 23.13% 26.55% --
</TABLE>
--------
/1/ As of December 31, 1999 the Putnam Growth Opportunities Fund, a mutual
fund, had assets of $5.3 billion. The total returns were calculated using the
actual fees and expenses of the fund whose performance is shown. Had the
Portfolio's estimated fees and expenses been used (whether before or after
estimated expense reimbursement), the performance figures would have been
lower. Performance figures are based on historical performance and do not
guarantee future results.
/2/ The Lipper Variable Funds Underlying Growth Funds Average represents the
average total return based on net asset values of all underlying growth funds.
The S&P 500 Index is an unmanaged index of common stocks that are primarily
issued by companies with large aggregate market values. Performance for the
indices has been obtained from public sources and has not been audited.
State Street Research
<TABLE>
<CAPTION>
State Street
State Street Russell 2000 Research Aurora
Total Return for Research Value Small Cap Value
Period (unaudited) Aurora Fund/1/ Index/2/ S&P 500/2/ Portfolio
------------------ -------------- ------------ ---------- ---------------
<S> <C> <C> <C> <C>
Year to Date (ended
9/30/2000) 32.00% 13.62% 1.39% 9.40%
One Year (12/31/98 to
12/31/99) 33.91% -1.49% 21.04% --
Three Year (12/31/96 to
12/31/99), annualized 18.74% 6.69% 27.56% --
2/13/95 to 12/99,
annualized (since in-
ception of the State
Street Research Aurora
Fund) 26.68% 13.23% 28.22% --
</TABLE>
--------
/1/ As of December 31, 1999, the State Street Research Aurora Fund, a mutual
fund, had assets of $525.9 million. The total returns were calculated using the
actual fees and expenses of the fund for class S shares whose performance is
shown. Had the Portfolio's estimated fees and expenses been used (whether
before or after estimated expense reimbursement) the performance figures would
have been lower. Performance figures are based on historical performance and do
not guarantee future results.
/2/ The Russell 2000 Value Index is an unmanaged index of common stocks that
are primarily issued by the 2000 smallest companies with the Russell 3000
Index. The S&P 500 Index is an unmanaged index of common stocks that are
primarily issued by companies with large aggregate market values. Performance
for the indices has been obtained from public sources and has not been audited.
24
<PAGE>
Appendix B To Prospectus
Certain Investment Practices
The Table that follows sets forth certain investment practices in which some or
all of the Portfolios may engage. These practices will not be the primary
activity of any Portfolio, however, except if noted under "Risk/Return Summary"
in the Prospectus. The following Portfolio numbers are used in the table:
<TABLE>
<CAPTION>
Portfolio
Number Portfolio Name
--------- --------------
<C> <S>
1. Putnam International Stock
2. Janus Mid Cap
Lehman Brothers Aggregate Bond
3. Index
4. MetLife Stock Index
5. Morgan Stanley EAFE Index
</TABLE>
<TABLE>
<CAPTION>
Portfolio
Number Portfolio Name
--------- --------------
<C> <S>
6. Russell 2000 Index
7. MetLife Mid Cap Stock Index
8. Putnam Large Cap Growth
9. State Street Research Aurora Small
Cap Value
</TABLE>
<TABLE>
<CAPTION>
Percentage limit per Portfolio
Item Investment practice Portfolios on assets/1/
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Sell covered call options on securities and All None
stock indices as a hedge against or to
minimize anticipated loss in value.
----------------------------------------------------------------------------------------------------
2 Sell covered put options on securities and 1,2,8,9 None
stock indices to earn additional income, as a
hedge against or to minimize anticipated loss
in value.
----------------------------------------------------------------------------------------------------
3 Sell covered put and covered call options on 1,2,9 None
currencies as a hedge against anticipated
declines in currency exchange rates in which
securities are held or to be purchased or to
earn additional income.
----------------------------------------------------------------------------------------------------
4 Purchase put options on securities and All None
indices that correlate with a Portfolio's
securities for defensive purposes in order to
protect against anticipated declines in
values.
----------------------------------------------------------------------------------------------------
5 Purchase call options on securities and All None
indices that correlate with that Portfolio's
securities.
----------------------------------------------------------------------------------------------------
6 Purchase put options on currencies for 1,2,9 None
defensive purposes in order to protect
against anticipated declines in values on
currencies in which a Portfolio's securities
are or may be denominated.
----------------------------------------------------------------------------------------------------
7 Purchase call options on currencies that 1,2,9 None
correlate with the currencies in which the
Portfolio's securities may be denominated.
----------------------------------------------------------------------------------------------------
8 Purchase and sell otherwise permitted stock, 1,2,9 None
currency, and index put and call options
"over-the-counter" (rather than only on
established exchanges).
----------------------------------------------------------------------------------------------------
9 Purchase and sell futures contracts (on All, except Combined limit on the sum of
recognized futures exchanges) on debt 4,5,6,7 the initial margin for
securities and indices of debt securities as futures and options sold on
a hedge against or to minimize adverse futures, plus premiums paid
principal fluctuations resulting from for unexpired options on
anticipated interest rate changes or to futures, is 5% of total
adjust exposure to the bond market. assets (excluding "in the
money" and, for Portfolio 2,
"bona fide hedging" as
defined by the Commodity
Futures Trading Commission)
----------------------------------------------------------------------------------------------------
10 Purchase and sell future contracts (on All, except Same as Item 9
recognized futures exchanges) on equity 3
securities or stock indices as a hedge or to
enhance return.
----------------------------------------------------------------------------------------------------
11 Purchase and sell currency futures contracts 1,2,9 Same as Item 9
(on recognized futures exchanges) as a hedge
or to adjust exposure to the currency market.
----------------------------------------------------------------------------------------------------
12 Sell covered call options on and purchase put All Same as Item 9
and call options contracts on futures
contracts (on recognized futures exchanges)
of the type and for the same reasons the
Portfolio is permitted to enter futures
contracts.
----------------------------------------------------------------------------------------------------
13 Sell covered put options on futures contracts 1,2,8,9 Same as Item 9
(on recognized futures exchanges) of the type
and for the same reasons the Portfolio is
permitted to enter into futures contracts.
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Percentage limit per Portfolio
Item Investment practice Portfolios on assets/1/
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
14 Enter into forward foreign currency exchange All, except None
contracts to hedge currency risk relating to 4,6,7
securities denominated, exposed to, or traded
in a foreign currency in which the Portfolio
may invest.
-----------------------------------------------------------------------------------------------------
15 Enter into forward foreign currency exchange 1,2,9 5% of total assets
contracts for non hedging purposes.
-----------------------------------------------------------------------------------------------------
16 Enter into transactions to offset or close All None
out any of the above.
-----------------------------------------------------------------------------------------------------
17 Mortgage-related securities (except for IOs All None
and POs).
-----------------------------------------------------------------------------------------------------
18 Mortgage related interest only (IOs) and All, except None
principal only (POs) securities. 4,5,6,7
-----------------------------------------------------------------------------------------------------
19 Use swaps, caps, floors and collars on 1,2,3,8,9 None
interest rates, currencies and indices as a
risk management tool or to enhance return.
-----------------------------------------------------------------------------------------------------
20 Invest in foreign securities (including A. 4,6,7,8 A. 10% of total assets in
investments through European Depository securities of foreign
Receipts ("EDRs") and International issuers except 25% of
Depository Receipts ("IDRs")). total assets may be
invested in securities
issued, assumed, or
guaranteed by foreign
governments or their
political subdivisions or
instrumentalities; assumed
or guaranteed by domestic
issuers; or issued,
assumed, or guaranteed by
foreign issuers with a
class of securities listed
on the New York Stock
Exchange.*
B. 1,3,5,9 B. None
C. 2 C. 30% of total assets in
foreign securities
denominated in a foreign
currency and not publicly
traded in the U.S.*
-----------------------------------------------------------------------------------------------------
21 Lend Portfolio securities. A. 1,4 A. 20% of total assets*
B. 3,5,6,7,8,9 B. 33 1/3% of total assets*
C. 2 C. 25% of total assets*
-----------------------------------------------------------------------------------------------------
22 Invest in securities that are illiquid. All 15% of total assets
-----------------------------------------------------------------------------------------------------
23 Invest in other investment companies, which A. All A. 10% of total assets
may involve payment of duplicate fees. except as in B below
(except that only 5% of
total assets may be
invested in a single
investment company and no
portfolio can purchase
more than 3% of the total
outstanding voting
securities of any one
investment company or,
together with other
investment companies
having the same investment
adviser, purchase more
than 10% of the voting
stock of any "closed-end"
investment company).
B. 2 B. Up to 25% of total assets
may be invested in
affiliated money market
funds for defensive
purposes or as a means of
receiving a return on idle
cash.
-----------------------------------------------------------------------------------------------------
24 Invest in money market instruments issued by 1,2,8,9 None
a commercial bank or savings and loan
associations (or its foreign branch or
agency) notwithstanding that the bank or
association has less than $1 billion in total
assets, is not a member of the Federal
Deposit Insurance Corporation, is not
organized in the U.S., and/or is not
operating in the U.S.
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Percentage limit per Portfolio
Item Investment practice Portfolios on assets/1/
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
25 Invest assets in securities issued by All 25% of total assets.
companies primarily engaged in any one Excluded from the 25%
industry. Provided that: (a) utilities will limitation are portfolios 2
be considered separate industries according and 5's: (a) money market,
to type of service; (b) oil and oil related securities, securities
companies will be considered separate issued or guaranteed by the
industries according to type; and (c) U.S. government, its
savings, loan associations, and finance agencies or
companies will be considered separate instrumentalities; and (b)
industries. bank issued debt
securities.* (The Fund will
disclose when more than 25%
of a Portfolio's total
assets are invested in four
oil related industries. For
Portfolios 3 and 9,
companies engaged in the
business of financing may be
classified according to the
industries of their parent
or sponsor companies, or
industries that otherwise
most affect the financing
companies).
----------------------------------------------------------------------------------------------------
26 Borrow in the form of short-term credits All Together with item 27, up to
necessary to clear Portfolio transactions; 1/3 of the amount by which
enter into reverse repurchase arrangements total assets exceed total
with banks. liabilities (excluding the
liabilities represented by
such obligations).*
----------------------------------------------------------------------------------------------------
27 Borrow money for extraordinary or emergency A. All A. 5% of total assets*
purposes (e.g.
to honor redemption requests which might B. All B. Together with item 26, up
otherwise require the sale of securities at to 1/3 of the amount by
an inopportune time). which total assets exceed
total liabilities
(excluding the liabilities
represented by such
obligations).*
----------------------------------------------------------------------------------------------------
28 Purchase securities on a "when-issued" basis. All None
----------------------------------------------------------------------------------------------------
29 Invest in real estate interests, including All 10% of total assets.* This
real estate mortgage loans. limit shall not restrict
investments in exchange-
traded real estate
investment trusts and shares
of other real estate
companies.
----------------------------------------------------------------------------------------------------
30 Purchase American Depository Receipts A. 8 A. Together with the assets
("ADRs"). referred to in Item 20 A
above, 35% of total assets
B. 1,2,5,9 B. None
C. 4,6,7 C. Together with assets
referred to in Item 20 D
above, 30% of total assets
----------------------------------------------------------------------------------------------------
31 Invest in debt securities. A. All, A. None
except
1,3,8,9
B. 1,3,8,9 B. None on investment grade
securities but 5% in below
investment grade
securities.
----------------------------------------------------------------------------------------------------
32 Invest in preferred stocks. All None
----------------------------------------------------------------------------------------------------
33 Invest in common stocks. All None
----------------------------------------------------------------------------------------------------
34 Invest in hybrid instruments. All None
----------------------------------------------------------------------------------------------------
35 Enter into forward contracts on debt All None
securities.
</TABLE>
-------
/1/ At time of investment, unless otherwise noted.
* Policy may be changed only by shareholder vote.
27
<PAGE>
Appendix C To Prospectus
Description Of Some Investments, Techniques, And Risks
Investment Styles
[SIDEBAR: To varying extents, the portfolio managers may use the following
techniques and investments in managing the Portfolios.]
A value investing approach concentrates on securities that are undervalued in
relation to a company's fundamental economic values. Securities may be
undervalued for various reasons including special situations (i.e., where the
portfolio manager believes that a company's securities will appreciate when the
market recognizes a specific development at the company, such as a new product
or process, a management change or a technological breakthrough). A growth
investing approach emphasizes stocks of companies that are projected to grow at
above-average rates based on the company's earnings growth potential.
Index Portfolios attempt to equal the return of a particular index, which can
provide broad exposure to various market segments. Unlike actively managed
portfolios, they do not expect to use any defensive strategies and investors
bear the risk of adverse market conditions.
Morgan Stanley sponsors the MSCI EAFE Index, Lehman Brothers sponsors the
Lehman Brothers Aggregate Bond Index, Standard & Poor's sponsors the Standard &
Poor's 500 Composite Stock Price Index and the Standard & Poor's MidCap 400
Composite Stock Index, and Frank Russell Company sponsors the Russell 2000
Index (together referred to as "index sponsors"). The index sponsors have no
responsibility for and do not participate in the management of the Portfolio
assets or sale of the Portfolio shares. Each index and its associated
trademarks and service marks are the exclusive property of the respective index
sponsors. The Metropolitan Series Fund, Inc. Statement of Additional
Information contains a more detailed description of the limited relationship
the index sponsors have with MetLife and the Fund.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's 500", "S&P
MidCap 400", "Standard & Poor's MidCap 400", and "500" are trademarks of
Standard & Poor's and references thereto have been made with permission. The
Portfolio is not sponsored, endorsed, sold or promoted by Standard & Poor's and
Standard & Poor's makes no representation regarding the advisability of
investing in the Portfolio. For more detailed information, see the discussion
under "GENERAL INFORMATION--Index Sponsors" in the Statement of Additional
Information.
[SIDEBAR: Capitalization]
Capitalization measures the size of a company, based on the aggregate market
value of the company's outstanding stock. Different Portfolios may use
different definitions with respect to whether a company is classified as a
small-cap, mid-cap or large-cap company. Investments in companies that are less
mature or are small or mid-cap may present greater opportunities for capital
appreciation than investments in larger, more mature companies, but also
present greater risks including:
. greater price volatility because they are less broadly traded
. less available public information
. greater price volatility due to limited product lines, markets, financial
resources, and management experience.
28
<PAGE>
[SIDEBAR: Equity Securities]
Equity securities include common stocks, preferred stocks, convertible
securities and warrants. Equity securities may offer a higher rate of return
than debt securities. However, the risks associated with investments in equity
securities may also be higher, because the investment performance of equity
securities depends upon factors which are difficult to predict. Equity security
values may fluctuate in response to the activities of an individual company or
in response to general market, interest rate, and/or economic conditions.
Historically, equity securities have provided greater long-term returns and
have entailed greater short-term risk than other securities choices. Depending
on their terms, however, preferred stock and convertible securities may have
investment and risk characteristics more closely resembling those of debt
securities than those of other equity securities.
Common stocks represent ownership in a company and participate in company
profits through dividend payments or capital
appreciation after other claims are satisfied. Common stock generally has the
greatest potential for appreciation and depreciation of all corporate
securities (other than warrants) since the share price reflects the company's
earnings.
Preferred stocks represent an ownership interest in a company of a specified
rank (after bonds and before common stocks) with respect to dividend payments
and company assets. Preferred stock generally receives a dividend, but may also
omit or be in danger of omitting a dividend payment, in which case it would be
purchased for its capital appreciation potential.
Convertible securities generally are bonds or preferred stocks which can be
exchanged, through warrants or otherwise, into a specified number of shares of
the issuer's common stock. Convertible securities generally pay higher interest
or dividends than common stock but lower interest or dividends than non-
convertible securities.
Warrants are rights issued by the issuer of a security (usually common stock)
to purchase that security at a specified price for a specified period of time.
They do not represent an ownership interest in the issuing company, and their
prices do not necessarily parallel the prices of the underlying security.
[SIDEBAR: Debt ("Fixed Income") Securities]
Some of the many varieties of debt securities that the Portfolios may purchase
are described below. Most debt securities (other than those that have
"floating" interest rates) will increase in value if market interest rates
subsequently decrease and decrease in value if market interest rates
subsequently increase. In most market environments these variations tend to be
more pronounced the longer the security's remaining duration. Changes in the
issuer's perceived creditworthiness can also significantly affect the value of
any debt securities that a Portfolio holds.
Investment grade securities are rated by at least one nationally recognized
statistical rating organization in one of its top four rating categories, or if
unrated, the portfolio manager must determine that the securities are of
comparable quality. All other securities are considered below investment grade.
Below investment grade securities are also known as "junk bonds." Although they
generally provide higher yields, below investment grade fixed income
securities, and to a lesser extent, lower rated investment grade fixed income
securities, expose a Portfolio to greater risks than higher rated investment
grade securities including:
. the inability of the issuer to meet principal and interest payments
. loss in value due to economic recession or substantial interest rate
increases
29
<PAGE>
. adverse changes in the public's perception of these securities
. legislation limiting the ability of financial institutions to invest in these
securities
. lack of liquidity in secondary markets
. market price volatility
Mortgage-related securities represent a direct or indirect interest in a pool
of mortgages such as FNMAs, FHLMCs, Collateralized Mortgage Obligations
("CMOs"), and related securities including GNMAs and mortgage-backed
securities. They may be issued or guaranteed by U.S. government
instrumentalities or other entities whose obligation is securitized by the
underlying portfolio of mortgages or mortgage-backed securities. These
securities are valued based on expected prepayment rates. The risks associated
with prepayment of the obligations makes these securities more volatile in
response to changing interest rates than other fixed-income securities.
Interest only securities ("IOs") are entitled to interest payments from a class
of these securities and principal only securities ("POs") are entitled to
principal payments from a class of these securities. POs are more volatile in
response to changing interest rates than mortgage-related securities that
provide for interest payments. IOs also are extremely volatile and generally
experience a loss in value in the event prepayment rates are greater than
anticipated, which occurs generally when interest rates fall, and an increase
in value when interest rates rise.
Asset-backed securities represent a direct or indirect interest in a pool of
receivables such as automobile, credit cards, equipment leases, or student
loans. The issuers of the asset-backed securities are special purpose entities
that do not have significant assets other than the receivables securitizing the
securities. The collateral supporting these securities generally is of shorter
maturity than mortgage-related securities, but exposes a Portfolio to similar
risks associated with prepayment of the receivables prior to maturity.
Zero coupon securities credit interest at a specified rate but do not
distribute cash payments for interest as it falls due. These securities
fluctuate in value due to changes in interest rates more than comparable debt
obligations that pay periodic interest.
[SIDEBAR: Foreign Investments]
Foreign securities include equity securities and debt securities of non-U.S.
domiciled issuers. A few of the many varieties of foreign investments are
described below.
EDRs and IDRs are receipts issued in Europe, generally by a non-U.S. bank or
trust company, that evidence ownership of non-U.S. securities.
GDRs are securities convertible into equity securities of foreign issuers.
Forward Foreign Currency Exchange Contracts obligate a Portfolio to purchase or
sell a specific currency on a specified date for a specified amount. They can
be used to hedge the currency risk relating to securities traded in or exposed
to a foreign currency. When used as a hedge, substitute or proxy currency can
also be used instead of the currency in which the investment is actually
denominated. This is known as proxy hedging. These contracts can also be used
to generate income or adjust a Portfolio's exposure to various currencies.
Synthetic Non-U.S. Money Market positions are created through the simultaneous
purchase of a U.S. dollar-denominated money market
30
<PAGE>
instrument and a forward foreign currency exchange contract to deliver U.S.
dollars for a foreign currency. These are purchased instead of foreign currency
denominated money market securities because they can provide greater liquidity.
Foreign Securities Risk Considerations.
Although Portfolios that invest in foreign securities may reduce their overall
risk by providing further diversification, the Portfolios will be exposed to
the risks listed below. In addition, these risks may be heightened for
investments in developing countries:
. adverse effects from changing political, social or economic conditions,
diplomatic relations, taxation or investment regulations
. limitations on repatriation of assets
. expropriation
. costs associated with currency conversions
. less publicly available information because foreign securities and issuers
are generally not subject to the reporting requirements of the SEC
. differences in financial evaluation because foreign issuers are not subject
to the domestic accounting, auditing and financial reporting standards and
practices
. lack of development or efficiency with respect to non-domestic securities
markets and brokerage practices (including higher, non-negotiable brokerage
costs)
. less liquidity (including due to delays in transaction settlement)
. more price volatility
. smaller options and futures markets, causing lack of liquidity for these
securities
. higher custodial and settlement costs
. change in net asset value of the Portfolio's shares on days when shareholders
will not be able to purchase or redeem Fund shares.
[SIDEBAR: American Depository Receipts ("ADRs")]
ADRs are U.S. dollar-denominated certificates issued by a U.S. bank or trust
company which represent the right to receive securities of a foreign issuer
deposited in a domestic bank or foreign branch of a U.S. bank. ADRs are traded
on domestic exchanges or in the U.S. over-the-counter market and are registered
domestically. These factors eliminate certain risks associated with investing
in foreign securities.
[SIDEBAR: U.S. Dollar-Denominated Money Market Securities of Foreign Issuers]
These securities may be registered domestically and traded on domestic
exchanges or in the U.S. over-the-counter market (e.g., Yankee securities). If
the securities are registered domestically, certain risk factors of investing
in foreign securities are eliminated. These securities may also be registered
abroad and traded exclusively in foreign markets (e.g., Eurodollar securities).
[SIDEBAR: Derivative Instruments]
Futures contracts are agreements to buy or sell a security, or deliver a final
cash settlement price in connection with an index, interest rate, currency, or
other contracts not calling for physical delivery, for a set price in the
future. A Portfolio must post an amount equal to a portion of the total market
value of the futures contract as initial margin, which is returned when a
Portfolio's obligations under the contract have been satisfied. From time to
time thereafter, the Portfolio may have to post variation margin to maintain
this amount as the market value of the contract fluctuates.
Special skill is required in order to effectively use futures contracts. No
Portfolio will use futures contracts or options thereon for leveraging
31
<PAGE>
purposes. Certain risks exist when a Portfolio uses futures contracts including
the:
. inability to close out or offset futures contract transactions at favorable
prices
. reduction of the Portfolio's income
. reduction in the value of the subject of the futures contract or of the
contract itself
. imperfect correlation between the value of the futures contract and the value
of the subject of the contract
. prices moving contrary to the portfolio manager's expectation
Call options give the purchaser the right to buy and obligate the seller to
sell an underlying security, currency, stock index (which is based on the
weighted average of the securities in the index), or futures contract at a
specified "exercise" price during the option period. There are certain risks to
a Portfolio that sells call options, including the inability to effect closing
transactions at favorable prices or to participate in the appreciation of the
subject of the call option above the exercise price. Purchasing call options
exposes a Portfolio to the risk of losing the entire premium it has paid for
the option.
Put options give the purchaser the right to sell and obligate the seller to
purchase an underlying security, currency, stock index (which is based on the
weighted average of the securities in the index) or futures contract at a
specified "exercise" price during the option period. There are certain risks to
a Portfolio that sells put options, including the inability to effect closing
transactions at favorable prices and the obligation to purchase the subject of
the put option at prices which may be greater than current market values or
exchange rates. Purchasing put options exposes a Portfolio to the risk of
losing the entire premium it has paid for the option if the option cannot be
exercised profitably.
Covered options involve a Portfolio's (a) segregating liquid assets with its
custodian that at all times at least equal the Portfolio's obligations under
such options, (b) holding an appropriate offsetting option or other derivative
instrument, or, (c) in the case of a call option sold by the Fund, owning the
securities or other investments subject to the option.
Hybrid instruments combine elements of futures contracts or options with
elements of debt, preferred equity, depository instruments, or other evidence
of indebtedness. A portion of or all interest payments to the Portfolio and/or
the principal or stated amount payable to the Portfolio at maturity,
redemption, or retirement of the hybrid instrument are determined by reference
to prices, changes in prices, or differences between prices of securities,
currencies, intangibles, goods, articles, or commodities or by another
benchmark such as an index or interest rate.
Hybrid instruments can be an efficient means of exposing a Portfolio to a
particular market in order to enhance total return. Hybrid instruments are
potentially more volatile and carry greater market risks than traditional debt
instruments. The risks of investing in these instruments reflect a combination
of the risks of investing in securities, options, futures and currencies.
Hybrid securities typically do not trade on exchanges. Hybrid instruments are
frequently (or may become) less liquid than other types of investments. They
also expose the Portfolio to losses if the other party to the transaction fails
to meet its obligations.
32
<PAGE>
Portfolios use swaps, caps, floors and collars as risk management tools to
protect against changes in interest rates or in security or currency values, or
to gain exposure to certain markets in an economical way. Swap transactions
involve an agreement where one party exchanges payments equal to a floating
interest rate, currency exchange rate or variation in interest rates or
currency indexes on a specified amount (the "notional amount"), and the other
party agrees to make payments equal to a fixed rate on the same amount for a
specified period. Caps give the purchaser the right to receive payments from
the seller to the extent a specified interest rate, currency exchange rate or
index exceeds a specified level during a specified period of time. Floors give
the purchaser the right to receive payments from the seller to the extent a
specified interest rate, currency exchange rate or index is less than a
specified level during a specified period of time. Collars give the purchaser
the right to receive payments from the seller to the extent a specified
interest rate, currency exchange rate or index is outside an agreed upon range
during a specified period of time.
A Portfolio will not use swaps, caps, floors or collars to leverage its
exposure to changing interest rates, currency rates, or security values. Nor
will a Portfolio sell interest rate caps, floors or collars unless it owns
securities that will provide the interest that the Portfolio may be required to
pay.
The use of swaps, caps and floors exposes the Portfolio to investment risks
different than those associated with other security transactions including:
. total loss of the Portfolio's investment in swaps and the sale of caps,
floors and collars (a Portfolio's purchase of caps, floors and collars can
result only in the loss of the purchase price)
. investment performance of the Portfolio can be worse than if these techniques
were not used if the assumptions used in entering into the transactions were
incorrect
. since these instruments generally do not trade on exchanges, a Portfolio may
not be able to enter into offsetting positions, or may suffer other losses,
if the other party to the transaction fails to meet its obligations
. more market volatility than other types of investments
[SIDEBAR: When-Issued Securities]
Purchasing securities "when-issued" is a commitment by a Portfolio to buy a
security before the security is actually issued. The amount of the Portfolio's
payment obligation and the security's interest rate are determined when the
commitment is made, even though no interest accrues until the security is
issued, which is generally 15 to 120 days later. The Portfolio will segregate
liquid assets with its custodian sufficient at all times to satisfy these
commitments. If the value of the security is less when delivered than when the
commitment was made, the Portfolio will suffer a loss.
[SIDEBAR: Securities Lending]
Securities lending involves lending some of a Portfolio's securities to
brokers, dealers and financial institutions. As collateral for the loan, the
Portfolio receives an amount that is at all times equal to at least 100% of the
current market value of the loaned securities. The Portfolio invests the
collateral in short-term high investment grade securities, or in a mutual fund
that invests in such securities. Securities lending can increase current income
for a Portfolio because the Portfolio continues to receive payments equal to
the interest and dividends on loaned securities. Also, the investment
experience of the cash collateral will inure to the Portfolio. Loans will not
have a term longer than 30 days and will be terminable at any time. As with any
extension of credit, securities lending exposes a Portfolio to some risks
including delay in recovery and loss of rights in the collateral if the
borrower fails financially.
33
<PAGE>
Metropolitan Series Fund, Inc.
---------------------
Principal Office of the Fund
1 Madison Avenue
New York, New York 10010
---------------------
Investment Manager and Principal Underwriter
Metropolitan Life Insurance Company
1 Madison Avenue
New York, New York 10010
(Principal Business Address)
Sub-Investment Managers
State Street Research &
Management Company
One Financial Center
Boston, Massachusetts 02111
(Principal Business Address)
Janus Capital Corporation
100 Fillmore Street
Denver, Colorado 80206-4923
(Principal Executive Offices)
Putnam Investment Management, Inc.
One Post Office Square
Boston, Massachusetts 02109
(Principal Executive Office)
Custodian, Transfer Agent and
Dividend Paying Agent
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
(Principal Business Address)
No dealer, salesman, or other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus, in connection with the offer made by this Prospectus, and, if given
or made, such other information or representations must not be relied upon as
having been authorized by the Fund, Metropolitan Life, New England Life
Insurance Company, State Street Research, Janus, or Putnam. This Prospectus
does not constitute an offering in any state in which such offering may not
lawfully be made.
<PAGE>
How to learn more:
We have incorporated the Statement of Additional Information ("SAI") into this
Prospectus. That means the SAI is considered part of this Prospectus as though
it were included in it. The SAI contains more information about the Fund. Also,
the Fund's annual and semi-annual reports to shareholders (the "reports")
contain more information including information on each Portfolio's investments
and a discussion of the market conditions and investment strategies that
affected each Portfolio's performance for the period covered by the report.
How to get copies:
To request a free copy of the SAI or the reports or to make any other
inquiries, write or call:
Metropolitan Life Insurance Company
One Madison Avenue
New York, NY 10010
Phone: (800) 553-4459
You can also get information about the Fund (including the SAI) from the
Securities and Exchange Commission (a copying fee may apply) by visiting or
writing to its Public Reference Room or using its Internet site at:
Securities and Exchange Commission
Public Reference Room
Washington, D.C. 20549
Call 1-800-SEC-0330 (for information about
using the Public Reference Room)
Internet site: http://www.sec.gov
IC# 811-3618
<PAGE>
Supplement to the Statement of Additional Information of Metropolitan Series
Fund dated May 1, 2000
The following language is added to the first paragraph under "Sale and
Redemption of Shares" on page B-17 of the Statement of Additional Information:
The Fund has a distribution agreement with MetLife. MetLife serves as
distributor (the "Distributor") of the Fund's Class A and Class B shares.
Pursuant to the Class B Distribution Plan (the "Plan"), the Fund compensates
the Distributor from assets attributable to the Class B shares for services
rendered and expenses borne in connection with activities primarily intended
to result in the sales of Class B shares. The Fund anticipates that the
amounts it pays to the Distributor will be used to compensate the Distributor,
the Insurance Companies and their other affiliates, other financial
intermediaries and third-party broker-dealers for services such as those
listed in (a) to (g) below.
The Plan provides that the Fund, on behalf of each Portfolio which issues
Class B shares, may pay up to 0.50% of the average daily net assets of a
Portfolio attributable to its Class B shares for activities in connection with
the distribution of the Class B shares. Under the distribution agreement,
however, such payments are currently limited to 0.25% of the average daily net
assets of the Portfolio.
The Plan is what is known as a "compensation plan" because the Fund makes
payments to the Distributor for services rendered regardless of the actual
level of expenditures by the Distributor. The Board of Directors of the Fund
will take into account the level of expenditures in connection with their
annual consideration of whether to renew the Plan. The Distributor has
indicated that it expects to use the Plan primarily to pay for the following
types of distribution services:
(a) the printing and mailing of Fund prospectuses, statements of
additional information and reports for prospective purchasers of Contracts
investing directly in Class B shares;
(b) the development, preparation, printing and mailing of Fund
advertisements, sales literature and other promotional materials describing
and/or relating to the Fund;
(c) holding seminars and sales meetings designed to promote the
distribution of the Class B shares;
(d) obtaining information and providing explanations to Contract owners
regarding Fund investment objectives and policies and other information
about the Fund and its Portfolios, including the performance of the
Portfolios;
(e) training sales personnel regarding the Fund;
(f) compensating sales personnel in connection with the allocation of
cash values and premiums of the Contracts to the Fund; and
(g) personal services and/or maintenance of Contract owner accounts with
respect to Class B shares attributable to such accounts.
The Board of Directors, including the independent directors, has determined,
in the exercise of its business judgment, that the Plan is reasonably likely
to benefit the Fund and Contract owners and has approved the Plan's adoption.
Certain of the Insurance Companies have products that are priced on the
assumption that the Insurance Company will receive Rule 12b-1 payments.
Without these payments the Insurance Company may not find it economically
worthwhile to offer the Fund's Portfolios as an option under those products.
Therefore, the Fund is now offering Class B shares for several of its
Portfolios. This should enable those Portfolios to enhance the distribution of
their shares through such products. Over time, Contract owners should benefit
from efficiencies and economies of scale that any such enhanced distribution
may promote. Also, a larger portfolio is able to invest in a broader array of
investments, and invest more efficiently.
The Plan and any Rule 12b-1 related agreement that is entered into by the
Fund or Distributor in connection with the Class B shares will continue in
effect for a period of more than one year only so long as the continuance is
specifically approved at least annually by a vote of the majority of the
Fund's Board of Directors, including a majority of the independent directors,
cast in person at a meeting called for the purpose of voting on the Plan or
any Rule 12b-1 related agreement. Also, the Plan and any such agreement may be
terminated as to the Class B shares of a Portfolio at any time, without
S-1
<PAGE>
penalty, by vote of a majority of the outstanding Class B shares of the
Portfolio invested in by Contract owners or by vote a majority of the
independent directors. The Plan also provides that it may not be amended
to increase materially the amount (up to .50% of average daily net assets
annually) that may be spent for distribution of Class B shares of any
Portfolio without the approval of Contract owners investing in the Class B
shares of that Portfolio.
FINANCIAL STATEMENTS
The Fund's financial statements for the periods ending June 30, 2000, and
the related schedules of investments for each Portfolio, are included in the
Fund's semi-annual report to shareholders for June 30, 2000 that accompanies
this Supplement to the Statement of Additional Information and are
incorporated by reference into this Supplement.
DIRECTORS AND OFFICERS OF THE FUND
Mr. David A. Levene resigned, in connection with the Nvest transaction, from
the Board of Directors effective October 30, 2000.
Ms. Dianne Johnson resigned as Controller of the Fund and was replaced by
Mr. Peter H. Duffy* (44). Mr. Duffy has been Senior Vice President of New
England Investment Management and Treasurer of the New England Zenith Fund
since 1998; prior thereto, he was Senior Vice President and head of the Fund
Administration Department.
--------
* Interested person as defined in the Investment Company Act of 1940, of the
Fund.
S-2
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
FOR
METROPOLITAN SERIES FUND, INC.
May 1, 2000
The investment options ("Portfolios") currently offered by the Metropolitan
Series Fund, Inc. (the "Fund") are:
State Street Research Aggressive
Growth Portfolio Neuberger Berman Partners Mid Cap
Value Portfolio
State Street Research Diversified
Portfolio Scudder Global Equity Portfolio
State Street Research Growth T. Rowe Price Large Cap Growth
Portfolio Portfolio
State Street Research Income T. Rowe Price Small Cap Growth
Portfolio Portfolio
State Street Research Money Market Lehman Brothers(R) Aggregate Bond
Portfolio Index Portfolio
MetLife Stock Index Portfolio
State Street Research Aurora Small
Cap Value Portfolio
MetLife MidCap Stock Index Portfolio
Putnam International Stock Portfolio
(formerly Santander International
Stock Portfolio) Morgan Stanley(R) EAFE Index Portfolio
Russell 2000(R) Index Portfolio
Putnam Large Cap Growth Portfolio
Harris Oakmark Large Cap Value
Portfolio
Janus Mid Cap Portfolio
Loomis Sayles High Yield Bond
Portfolio
This Statement of Additional Information ("SAI") is not a prospectus. It should
be read in conjunction with the Prospectus dated May 1, 2000. The annual report
for the Fund for the year ending December 31, 1999 accompanies this SAI and is
incorporated by reference. A copy of the May 1, 2000 Prospectus and the annual
report may be obtained, without charge, from Metropolitan Life Insurance
Company, One Madison Avenue, New York, New York 10010, Area 2H or by calling
(800) 553-4459.
E00048LJI (exp0501)MLIC-LD
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Headings Page
-------- ----
<S> <C>
The Fund's Organization.................................................... B-2
Description of Some Investment Practices, Policies and Risk................ B-3
Certain Investment Limitations............................................. B-7
Investment Management Arrangements......................................... B-8
Directors and Officers of the Fund......................................... B-11
Placing Portfolio Transactions............................................. B-13
Shareholder Meetings....................................................... B-17
Voting..................................................................... B-17
Sale and Redemption of Shares.............................................. B-17
Pricing of Portfolio Securities............................................ B-17
Taxes...................................................................... B-19
General Information........................................................ B-20
Financial Statements....................................................... B-22
Appendix................................................................... B-23
</TABLE>
THE FUND'S ORGANIZATION
The Fund, an open-end management investment company, is a corporation that was
formed in Maryland on November 23, 1982. The Fund has 3 billion shares of
authorized common stock at $0.01 par value per share. The Board of Directors
may classify and reclassify any authorized and unissued shares. The Fund can
issue additional classes of shares without shareholder consent. The shares are
presently divided into classes (or series), including one for each Portfolio
consisting of 100 million shares (200 million shares for the State Street
Research Diversified, State Street Research Growth, and MetLife Stock Index
Portfolios). Each Portfolio, other than the Janus Mid Cap Portfolio, is
"diversified" for purposes of the Investment Company Act of 1940.
Each Portfolio's issued and outstanding shares participate equally in dividends
and distributions declared by such Portfolio and receive a portion (divided
equally among all of the Portfolio's outstanding shares) of the Portfolio's
assets (less liabilities) if the Portfolio is liquidated or dissolved.
Liabilities which are not clearly assignable to a Portfolio are generally
allocated among the Portfolios in proportion to their relative net assets. In
the unlikely event that any Portfolio has liabilities in excess of its assets,
the other Portfolios may be held responsible for the excess liabilities.
MetLife purchased shares of each of the Portfolios at their inception for its
general account. MetLife has sold some of those shares, but will not sell
shares if the sale would reduce the Fund's net worth below $100,000. MetLife
paid all of the organizational expenses of the Fund and will not be reimbursed.
B-2
<PAGE>
DESCRIPTION OF SOME INVESTMENT PRACTICES, POLICIES, AND RISKS
The information that follows expands on the similar discussion in the Fund's
Prospectus and does not describe every type of investment, technique, or risk
to which a Portfolio maybe exposed. Each Portfolio reserves the right, without
notice, to make any investment, or use any investment technique, except to the
extent that such activity would require a shareholder vote, as discussed below
under "Fundamental Policies."
Money market instruments generally have a remaining maturity of no more than 13
months when acquired by the Fund. They include the following:
. United States Government securities -- direct obligations (in the form of
Treasury bills, notes and bonds) of the United States Government, differing
mainly by maturity lengths.
. Government Agency Securities -- debt securities issued by agencies or
instrumentalities of the United States Government. They are backed by the
full faith and credit of the United States, guaranteed by the United States
Treasury, supported by the issuing agency's or instrumentality's right to
borrow from the United States Treasury, or supported by the issuing agency's
or instrumentality's credit. Agency securities include several of the types
of instruments discussed below under "Mortgage-Backed Securities."
. Certificates of Deposit -- generally short-term, interest-bearing negotiable
certificates issued by commercial banks or savings and loan associations
against funds deposited in the issuing institution. Any non-negotiable time-
deposits must mature in seven days or less.
. Bankers' Acceptances -- time drafts drawn by borrowers on commercial banks,
usually in connection with an international commercial transaction where both
the borrower and the bank guarantee the payment of the draft in its face
amount on the maturity date (which is usually within six months). These
securities are traded in secondary markets prior to maturity. The Portfolios
will not invest in non-negotiable bankers' acceptance maturing in more than 7
days.
. Commercial Paper -- short-term unsecured promissory notes issued by
corporations, usually to finance short-term credit needs. Commercial paper is
generally sold on a discount basis, with maturity from issue not exceeding
nine months. The Portfolios may purchase commercial paper with the highest
(two highest for the T. Rowe Price Large Cap Growth and T. Rowe Price Small
Cap Growth Portfolios) rating (and, for the State Street Research Money
Market Portfolio, it must also be rated in one of the top two "modifiers"
that indicate the best investment attributes of such rating) given by a
nationally recognized statistical rating organization ("NRSRO") or, if
unrated (a) of comparable quality or (b) issued by companies having
outstanding debt issues in with ratings with one of the top three ratings
given by an NRSRO (and for State Street Research Money Market Portfolio the
debt issues must be in the top two rating categories).
. Variable Amount Master Demand Notes -- commercial paper of companies that
permit the purchaser to lend varying investment amounts (up to the maximum
indicated in the note) at varying rates to the borrower. The borrower can
prepay the amount borrowed at any time with no penalty and the lender can
redeem the note at any time and receive the face value plus accrued interest.
No secondary market exists for these notes. The same rating/credit quality
requirements apply as described above for other forms of commercial paper.
. Non-convertible Corporate Debt Securities -- such as bonds and debentures
that will mature within a short time and that have credit characteristics
comparable to those required above for commercial paper.
. Repurchase Agreements -- the purchaser acquires ownership of another money
market instrument, and the seller agrees at the time of sale to repurchase
such other instrument at a specified time and price which determine the
purchaser's yield during the holding period. This insulates the purchaser
from market fluctuations unless the seller defaults. Repurchase agreements
are collateralized by cash or the purchased (or equivalent) underlying
instrument at all times at least equal in value to the price the Fund paid
for the underlying instrument plus interest accrued to date. The Fund can
B-3
<PAGE>
enter into repurchase agreements with primary dealers for periods not to
exceed 30 days. Repurchase agreements with a duration of more than 7 days are
considered illiquid. If the seller defaults on its repurchase obligation, the
Fund could experience a delay in recovery or inadequacy of the collateral and
a cost associated with the disposition of the collateral.
. Reverse Repurchase Agreements -- the sale of money market instrument by the
Fund with an agreement by the Fund to repurchase the instrument at a
specified time, price and interest payment. These agreements can be used when
interest income earned from the reinvestment of the proceeds (in money market
instruments with the same or shorter duration to maturity or resale) is
greater than the interest expense of the reverse repurchase transaction.
These agreements can also be used by the Fund as a form of borrowing and they
therefore are subject to the limitations regarding borrowing by the Fund. In
order to minimize the risk that it will have insufficient assets to
repurchase the instrument subject to the agreement, the Fund will keep in a
segregated account with its custodian liquid assets at least equal to the
value of the specified repurchase price or the proceeds received on the sale
subject to repurchase, plus accrued interest.
Mortgage-Related Securities
GNMA -- partial ownership interests in a pool of mortgage loans which are
individually guaranteed or insured by the Federal Housing Administration, the
Farmers Home Administration or the Veterans Administration. The GNMA
certificates are issued and guaranteed by the Government National Mortgage
Association, a U.S. Government corporation, and backed by the full faith and
credit of the United States.
FNMA and FHLMC -- partial ownership interests in pools of mortgage loans. FNMA
certificates are issued and guaranteed by the Federal National Mortgage
Association, a federally chartered, privately owned corporation and are not
backed by the U.S. Government (although the U.S. Secretary of the Treasury has
discretionary authority to lend it up to $2.25 billion). FHLMC certificates are
issued and guaranteed by the Federal Home Loan Corporation, a federally
chartered corporation owned by the Federal Home Loan Bank and are not backed by
the U.S. government (although the U.S. Secretary of the Treasury has
discretionary authority to lend it up to $2.25 billion).
Mortgage-backed securities -- may be issued by governmental or non-governmental
entities such as banks and other mortgage lenders. Non-governmental securities
may offer higher yield to the Fund but may also expose the Fund to greater
price fluctuation and risk than governmental securities. Many issuers guarantee
payment of interest and principal on the securities regardless of whether
payments are made on the underlying securities, which generally increases the
quality and security. Risks which affect mortgage-backed securities' market
values or yields, include actual or perceived interest rate changes,
creditworthiness of the issuer or guarantor, prepayment rates value of the
underlying mortgages and changes in governmental regulation or tax policies. In
addition, certain mortgage-related securities may be settled only through
privately owned clearing corporations whose solvency and creditworthiness are
not backed by the U.S. Government and whose operational problems may result in
delays in settlement or losses to a Portfolio. Mortgage-related securities
include:
. Mortgage-backed bonds, which are secured by a first lien on a pool of single-
family detached properties and are also general obligations of their issuers.
. Mortgage pass-through bonds, which are secured by a pool of mortgages where
the cash flow generated from the mortgage collateral pool is dedicated to
bond repayment.
. Stripped agency mortgage-backed securities, which are interests in a pool of
mortgages, where the cash flow has been separated into its interest only
("interest only" or "IOs") and principal only ("principal only" or "POs")
components. IOs or POs, other than government-issued IOs or POs backed by
fixed rate mortgages, are considered illiquid securities.
. Other mortgage-related securities, which are other debt obligations secured
by mortgages on commercial real estate or residential properties.
Below investment grade securities (or junk bonds) -- debt securities that are
not rated in
B-4
<PAGE>
(or judged to be of comparable quality to) one of the top four categories by an
NRSRO. These securities expose the Fund to more risks than higher rated
securities, including:
. greater doubt as to the issuer's capacity to pay interest and principal
. greater fluctuations in market values due to individual corporate
developments
. greater risk of default for various reasons including that (a) the issuers of
these securities tend to be more highly leveraged and may not have available
to them more traditional methods of financing and (b) the securities are
unsecured and are generally subordinated to debts of other creditors
. greater difficulty in obtaining accurate market quotations for valuation
purposes
. increased expenses to the extent the Fund must seek recovery due to a default
in payment
. less liquid trading markets
Restricted or illiquid securities -- securities for which there is no readily
available market. These securities are priced at fair value under procedures
approved by the Fund's Board of Directors. A Portfolio can sell restricted
securities only in privately negotiated transactions or in a public offering
registered with the Securities and Exchange Commission ("SEC"). Subsequent to
the purchase of a restricted security, SEC registration of such security may
become necessary and a Portfolio that owns the security may need to pay all or
part of the registration expenses and may need to wait until such registration
becomes effective before it can sell the security. In addition, the absence of
ready markets may delay a Portfolio's sale of an illiquid investment. Delays in
disposing of an investment expose a Portfolio to fluctuations in value for
longer periods than it desired.
Rule 144A securities -- securities that are not registered with the SEC but
under certain circumstances may be considered as liquid. Pursuant to procedures
approved by the Board of Directors, these securities are subject to ongoing
evaluation to monitor their liquidity, and the purchase of these securities
could have the effect of increasing the percent of a Portfolio's securities
invested in illiquid securities. Liquidity is evaluated based on various
factors including:
. the availability of trading markets for the security
. the frequency of trades and quotes
. the number of dealers and potential purchasers
. dealer undertakings to make a market
. the nature of the security and of the marketplace trades (including disposal
time, solicitation methods and mechanics of transfer)
Lending portfolio securities. The Fund may pay reasonable finders,
administrative and custodial fees to persons that are unaffiliated with the
Fund for services in connection with loans of its portfolio securities.
Payments received by a Portfolio equal to dividends, interest and other
distributions on loaned securities may be treated as income other than
qualified income for the 90% test discussed under "Taxes" below. The Fund
intends to engage in securities lending only to the extent that it does not
jeopardize its qualification as a regulated investment company under the
Internal Revenue Code (the "Code").
Options on securities, currencies and indices. Options that are traded on
recognized securities exchanges often have less of a risk of loss than those
sold "over-the-counter." A Portfolio will not sell the security or currencies
against which options have been written until after the option period has
expired, a closing purchase transaction is executed, a corresponding put or
call option has been purchased, or the sold option is otherwise covered. The
sale and purchase of options involves paying brokerage commissions and other
transaction costs. In addition, selling covered call options can increase the
portfolio turnover rate.
The purchase and sale of index options have additional risks. For example if
trading of certain securities in the index is interrupted, a Portfolio would
not be able to close out options which it had purchased or sold if restrictions
on exercise were also imposed. To address such liquidity concerns the Fund
limits use of index options to options on indices (a) with a sufficient number
of securities to minimize the likelihood of a trading halt and (b) for which
there is a developed secondary market.
A Portfolio will cover any option it has sold on a stock index by (a) if the
option is a call option, segregating with the Fund's custodian bank either (i)
cash or other liquid assets having a
B-5
<PAGE>
value that, when added to any related margin deposits, at all times at least
equals the value of the securities comprising the index, or (ii) securities
that substantially replicate changes in value of the securities in the index;
(b) if the option is a put option, segregating with the Fund's custodian bank
cash or other liquid assets having a value that, when added to any related
margin deposits, at all times at least equals the exercise price; or (c)
regardless of whether the option is a call or a put option, holding an
offsetting position in the same option at an exercise price that is at least as
favorable to the Fund.
Forward foreign currency exchange contracts. These contracts are traded in the
interbank market through currency traders. The traders do not charge a fee, but
they do realize a profit based on the difference between the prices at which
they are buying and selling various currencies. The use of these contracts
involves various risks including:
. inability to enter into a contract at advantageous times or with respect to
the desired foreign currencies
. poor correlation between a currency's value and any proxy currency that a
Portfolio is using
. the creditworthiness of the counterparty to the transaction
. losses (or lost profits) due to unanticipated or otherwise adverse changes in
the relative value of currencies
. additional expense due to transaction costs or the need to purchase or sell
foreign currency on the spot market to correlate with the currency delivery
requirements of the contract
The Portfolios will cover outstanding forward currency contracts by maintaining
liquid portfolio securities denominated in or exposed to the currency
underlying the forward contract or the currency being hedged. To the extent
that a Portfolio is not able to cover its forward currency positions with
underlying portfolio securities, the Portfolio will have its bank custodian
segregate cash or liquid assets having a value equal to the aggregate amount of
such Portfolio's commitments under forward contracts. As an alternative to
segregating assets, a Portfolio may buy call options permitting such Portfolio
to buy the amount of foreign currency being hedged by a forward sale contract
or a Portfolio may buy put options permitting it to sell the amount of foreign
currency subject to a forward buy contract.
Swaps, caps, floors and collars. A Portfolio will not enter into any swap, cap,
floor or collar unless the portfolio manager thinks that the other party to the
transaction is creditworthy. If the other party defaults, the Portfolio may
have contractual remedies pursuant to agreements related to the transaction.
Portfolios for which swaps are a permissible investment can enter credit
protection swap arrangements which involve the sale by the Portfolio of a put
option on a debt security which is exercisable by the buyer upon certain
events, such as default by the referenced creditor on the underlying debt or a
bankruptcy event of the creditor.
The swap market has grown substantially in recent years and the swap market has
become relatively liquid due to a large number of banks and investment banks
acting as principals and agents and using standardized documentation. Caps,
floors and collars are more recent innovations and standardized documentation
has not yet been fully developed. For that reason they are less liquid than
swaps. Liquidity of swaps, caps, floors and collars will be evaluated based on
various factors including:
. the frequency of trades and quotations
. the number of dealers and prospective purchasers in the marketplace
. dealer undertakings to make a market
. the nature of the instrument (including demand or tender features)
. the nature of the marketplace (including the ability to assign or offset a
Portfolio's rights and obligations)
Futures contracts and options on futures contracts. A Portfolio will cover any
futures contract it has sold, or any call option it has sold on a futures
contract, by (a) segregating with the Fund's custodian bank (i) cash or other
liquid assets having a value that, when added to any related margin deposits,
at all times at least equals the value of the securities or currency on which
the futures contract (or related index) is based or (ii) securities or
currencies that substantially replicate changes in value of the securities or
currencies on which the futures contract (or related index) is based or (b)
holding an offsetting call option on that futures contract at the same or
better
B-6
<PAGE>
settlement price. A Portfolio will cover any futures contract it has
purchased, or any put option it has sold on a futures contract, by (a)
segregating with the Fund's custodian bank cash or other liquid assets having
a value that, when added to any related margin deposits, at all times at least
equals the amount payable upon settlement of such futures contract or (b)
holding an offsetting call option on that futures contract at the same or
better settlement price.
CERTAIN INVESTMENT LIMITATIONS
Fundamental policies are those that may not be changed without approval of the
outstanding voting shares of each affected Portfolio. If such a vote is
required, approval requires a favorable vote of at least the lesser of: (a)
67% of the shares represented (in person or by proxy) at a meeting and
entitled to vote thereon; or (b) if at least 50% of such shares are
represented at the meeting, a majority of those represented.
A policy is fundamental only if the Prospectus or this SAI states that it is
fundamental or that it may be changed only by shareholder vote. If the
Prospectus or SAI specifically states that one or more Portfolios may engage
in practices that would otherwise violate a fundamental policy, such exception
is also part of the Fund's fundamental policies. (On the other hand, any
policy set forth in the Prospectus that is more restrictive than any
fundamental policy on the same subject may be changed without any shareholder
vote.) Unless otherwise indicated, all restrictions apply only at the time of
purchase.
No Portfolio may:
. borrow money to purchase securities or purchase securities on margin
. engage in the underwriting of securities of other issuers except to the
extent that in selling portfolio securities it may be deemed to be a
"statutory" underwriter for purposes of the Securities Act of 1933
. issue senior securities
. sell call options which are not covered options
. sell put options other than to close out option positions previously entered
into
. invest in commodities or commodity contracts. In this regard, the following
aspects of the Prospectus's table of "Certain Investment Practices" are non-
fundamental: all of the prohibitions and limitations in item 9; the
recognized exchange requirement in, and the omission of any Portfolio that
invests in equity securities from, item 10; the recognized exchange
requirement and the limitations on purpose in item 11; and all of item 12,
except the requirement that the Portfolio must be authorized to use the
underlying futures contract.
. make loans but this shall not prohibit a Portfolio from entering into
repurchase agreements or purchasing bonds, notes, debentures or other
obligations of a character customarily purchased by institutional or
individual investors
. For purposes of the industry concentration limit in item 25 of the
Prospectus table, the following additional fundamental policies will apply:
domestic crude oil and gas producers, domestic integrated oil companies,
international oil companies, and oil service companies each will be deemed a
separate industry; money market instruments issued by a foreign branch of a
domestic bank will not be deemed to be an investment in a domestic bank.
No more than 5% of the Scudder Global Equity Portfolio's assets will be
committed to transactions in options, futures or other "derivative"
instruments that are intended for any purpose other than to protect against
changes in market values of investments the Portfolio owns or intends to
acquire, to facilitate the sale or disposition of investments for the
Portfolio, or to adjust the effective duration or maturity of fixed income
instruments owned by the Portfolio.
Non-Fundamental Policies are those that may be changed without approval of
shareholders. Unless otherwise indicated, all restrictions apply at the time
of purchase. The following non-fundamental policies are in addition to those
described elsewhere in the Prospectus or SAI.
. No Portfolio will acquire securities for the purpose of exercising control
over the management of any company
. At least 75% of a Portfolio's total assets must be: (a) securities of
issuers in which the Portfolio has not invested more than 5% of its total
assets, (b) voting securities of issuers as to which the Fund owns no more
than 10% of such securities, and (c) securities issued or guaranteed by the
U.S.
B-7
<PAGE>
government, its agencies or instrumentalities. These restrictions do not
apply to the Janus Mid Cap Portfolio.
. No Portfolio may make any short sale
. No Portfolio (except for the Janus Mid Cap Portfolio) may participate on a
joint or joint and several basis in any trading account in securities
Insurance Law Restrictions
The ability to sell contracts in New York requires that each portfolio manager
use his or her best efforts to assure that each Portfolio of the Fund complies
with the investment restrictions and limitations prescribed by Sections 1405
and 4240 of the New York State Insurance Law and regulations thereunder in so
far as such restrictions and limitations are applicable to investment of
separate account assets in mutual funds. Failure to comply with these
restrictions or limitations will result in the Insurance Companies ceasing to
make investments in that Portfolio for the separate accounts. The current law
and regulations permit the Fund to make any purchase if made on the basis of
good faith and with that degree of care that an ordinarily prudent person in a
like position would use under similar circumstances.
INVESTMENT MANAGEMENT ARRANGEMENTS
Investment Management Agreements and Sub-investment Management Agreements
MetLife and the Fund have entered into investment management agreements under
which MetLife has the primary management responsibility for the Fund's five
index Portfolios and overall responsibility for all Portfolios. In addition,
MetLife has entered into sub-investment management agreements for all other
Portfolios. For simplicity, each of MetLife and the sub-investment managers are
referred to as "managers" when discussing issues affecting all of them.
Each agreement continues from year to year with annual approval by (a) the
Board of Directors or a majority of that Portfolio's outstanding shares, and
(b) a majority of the Board of Directors who are not "interested persons" of
any party of the agreement. Each agreement may be terminated by any party to
the agreement, without penalty, with 60 days' written notice. Shareholders of a
Portfolio may vote to terminate an agreement as to services provided for that
Portfolio.
Managers make investment decisions and effect transactions based on information
from a variety of sources including their own securities and economic research
facilities. Managers are also obligated to provide office space, facilities,
equipment and personnel necessary to perform duties associated with their
designated Portfolio(s).
Payment of Fund Expenses
As detailed in the Prospectus, MetLife currently pays certain expenses for the
Harris Oakmark Large Cap Value, T. Rowe Price Large Cap Growth, Neuberger
Berman Partners Mid Cap Value, Putnam Large Cap Growth, State Street Research
Aurora Small Cap Value, Lehman Brothers Aggregate Bond Index, Russell 2000
Index, MetLife Mid Cap Stock Index and Morgan Stanley EAFE Index Portfolios to
the extent they exceed certain amounts.
Apart from any such payment by MetLife, each Portfolio bears its share of all
Fund expenses, including those for: (a) fees of the Fund's directors; (b)
custodian and transfer agent fees; (c) audit and legal fees; (d) printing and
mailing costs for the Fund's prospectuses, proxy material and periodic reports
to shareholders; (e) MetLife's investment management fee; (f) brokerage
commissions on portfolio transactions (including costs for acquisition,
disposition, lending or borrowing of investments); (g) Fund taxes; (h) interest
and other costs related to any Fund borrowing; and (i) extraordinary or one-
time expenses (such as litigation related costs).
All of the Fund's expenses, except extraordinary or one-time expenses, are
accrued daily.
B-8
<PAGE>
Management Fees
The Fund pays MetLife for its investment management services.
MetLife pays the sub-investment managers for their investment management
services.
The following table shows the fee schedules for the investment management fees
and sub-investment management fees as a percentage per annum of the average net
assets and the investment management fees paid to MetLife for each Portfolio:
<TABLE>
<CAPTION>
Sub-
Investment Investment
Management Management
Fee Fee Investment Management Fees
Average Schedule-- Average Schedule-- For the Year Ended December 31,
Daily Net % Per Daily Net % Per ----------------------------------
Portfolio Assets Annum Assets Annum 1997 1998 1999
--------- ----------------- ---------- ----------------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
State Street Research .25% .25%
Money Market All assets $ 105,515 $ 105,727 $ 127,180
State Street Research
Growth 1st $500 million .55% .40% $7,305,001 $13,095,405 $15,804,021
next $500 million .50% .35%
over $1 billion .45% .30%
State Street Research
Income 1st $250 million .35% .27%
next $250 million .30% .22% $1,102,819 $ 1,514,111 $ 1,635,946
over $500 million .25% .17%
State Street Research
Diversified 1st $500 million .50% .35%
next $500 million .45% .30% $5,811,475 $10,067,374 $11,893,804
over $1 billion .40% .25%
State Street Research 1st $500 million .75% .55%
Aggressive Growth next $500 million .70% .50% $9,931,653 $ 9,539,534 $ 9,495,639
over $1 billion .65% .45%
Putnam Large Cap Growth 1st $500 million .80% 1st $150 million .50%
next $500 million .75% next $150 million .45% -- -- --
over $1 billion .70% over $300 million .35%
State Street Research .85% 1st $50 million .55%
Aurora 1st $500 million
Small Cap Value next $500 million .80% next $75 million .50%
over $1 billion .75% next $100 million .45% -- -- --
over $225 million .40%
Putnam International .90% 1st $150 million .65%
Stock /1/ 1st $500 million
next $500 million .85% next $150 million .55% $2,258,438 $ 2,161,315 $ 2,250,241
over $1 billion .80% over $300 million .45%
Loomis Sayles High Yield .70% .50%
Bond All assets $ 84,589 $ 266,117 $ 359,652
T. Rowe Price Small Cap .35%
Growth 1st $100 million .55%
next $300 million .50% .30% $ 187,380 $764,242 $ 1,040,413
over $400 million .45% .25%
T. Rowe Price Large Cap .50%
Growth 1st $50 million .70%
over $50 million .60% .40% -- $ 3,585 $ 181,312
Janus Mid Cap 1st $100 million .75% .55%
next $400 million .70% .50% $ 263,954 $ 1,584,660 $ 5,844,052
over $500 million .65% .45%
Scudder Global Equity 1st $50 million .90% .70%
next $50 million .55% .35% $ 201,758 $ 674,520 $ 884,558
next $400 million .50% .30%
over $500 million .475% .275%
Harris Oakmark Large Cap
Value 1st $250 million .75% 1st $100 million .45%
over $250 million .70% next $400 million .40% -- $ 6,470 $ 192,890
over $500 million .35%
Neuberger Berman .70% .50%
Partners 1st $100 million
Mid Cap Value next $250 million .675% .475% -- $ 6,314 $ 169,231
next $500 million .65% .45%
next $750 million .625% .425%
over $1.6 billion .60% .40%
</TABLE>
B-9
<PAGE>
<TABLE>
<CAPTION>
Sub-
Investment Investment
Management Management
Fee Fee Investment Management Fees
Average Schedule-- Average Schedule-- For the Year Ended December 31,
Daily Net % Per Daily Net % Per --------------------------------
Portfolio Assets Annum Assets Annum 1997 1998 1999
--------- ---------- ---------- --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
MetLife Stock Index All Assets .25% N/A $3,961,131 $6,387,967 $9,091,545
Lehman Brothers All Assets .25% N/A -- $ 18,962 $ 239,612
Aggregate Bond Index
Russell 2000 Index All Assets .25% N/A -- $ 11.355 $ 172,630
Morgan Stanley EAFE(R) All Assets .30% N/A -- $ 9,366 $ 148,862
Index
MetLife Mid Cap Stock All Assets .25% N/A -- -- --
Index
</TABLE>
--------
/1/For the years ended December 31, 1997, 1998 and 1999, a lower investment
management fee schedule was in effect for the Putnam International Stock
Portfolio. Thus, the investment management fees set forth herein were based
on the lower schedule. Such fees would have been higher if the revised fee
schedule had been in effect.
B-10
<PAGE>
DIRECTORS AND OFFICERS OF THE FUND
The Fund's Directors review actions of the Fund's investment manager and sub-
investment managers, and decide upon matters of general policy. The Fund's
officers supervise the daily business operations of the Fund. The Board of
Directors and the Fund's officers are listed below. Unless otherwise noted, the
address of each executive officer and director listed below is One Madison
Avenue, New York, New York 10010.
<TABLE>
<CAPTION>
Principal Occupation(s)
Name, (Age) and Address Position(s) with Fund During Past 5 Years
------------------------------------------------------------------------------------------------
<S> <C> <C>
Steve A. Garban (62)+ Director Retired, formerly Senior Vice-President
The Pennsylvania State Finance and Operations and Treasurer, The
University Pennsylvania State University
208 Old Main
University Park, PA
16802
------------------------------------------------------------------------------------------------
David A. Levene (60)* Chairman of the Board, Executive Vice-President, MetLife since
Chief Executive Officer 1996; prior thereto, Senior Vice-President
and Director and Chief Actuary
------------------------------------------------------------------------------------------------
Linda B. Strumpf (52) Director Vice-President and Chief Investment Officer,
Ford Foundation Ford Foundation
320 E. 43rd St.
New York, NY 10017
------------------------------------------------------------------------------------------------
Dean O. Morton (68)+ Director Retired, formerly Executive Vice-President,
3200 Hillview Avenue Chief Operating Officer and Director,
Palo Alto, CA 94304 Hewlett-Packard Company
------------------------------------------------------------------------------------------------
Michael S. Scott Morton Director Jay W. Forrester Professor of Management at
(61)+ Sloan School of Management, MIT
Massachusetts Institute
of
Technology ("MIT")
50 Memorial Drive
Cambridge, MA 02139-4307
------------------------------------------------------------------------------------------------
Arthur G. Typermass Director Retired, formerly Senior Vice-President and
(62)* Treasurer, MetLife
43 Chestnut Street
Garden City, NY 11530
------------------------------------------------------------------------------------------------
Dianne Johnson (48)* Controller Director -- Financial Management, MetLife
since 1999; Senior Technical Consultant --
Financial Management, MetLife 1997-1999;
prior thereto Technical Consultant --
Retirement and Savings Center
------------------------------------------------------------------------------------------------
Christopher P. Nicholas President and Chief Associate General Counsel, MetLife
(51)+* Operating Officer
------------------------------------------------------------------------------------------------
Janet Morgan (37)* Treasurer Assistant Vice-President, MetLife since
1997; prior thereto, Director
------------------------------------------------------------------------------------------------
Barbara Hume (46)* Vice-President Vice-President, MetLife since 1997; prior
thereto, Vice-President, Prudential
Investments
------------------------------------------------------------------------------------------------
Lawrence A. Vranka (60)* Vice-President Vice-President, MetLife
------------------------------------------------------------------------------------------------
Danne L. Bullock (31)* Secretary Associate Counsel, MetLife since February
2000; prior thereto, Branch Chief, U.S.
Securities & Exchange Commission
------------------------------------------------------------------------------------------------
Patricia S. Worthington Assistant Secretary Assistant Vice-President and Associate
(43)* Compliance Director of MetLife since 1997;
prior thereto Associate Counsel
------------------------------------------------------------------------------------------------
Nancy A. Turchio (31)* Assistant Secretary Legal Assistant, MetLife
------------------------------------------------------------------------------------------------
John Malatchi (30)* Assistant Controller Senior Technical Consultant -- Financial
Management, MetLife since 1996; prior
thereto, Technical Analyst -- Retirement and
Savings Center
------------------------------------------------------------------------------------------------
Jeanne Manning (49)* Assistant Controller Technical Consultant -- Financial
Management, MetLife since 1997; Accounting
Supervisor -- Retirement and Savings Center,
1995-1997; prior thereto, Associate
Accounting Analyst -- Retirement and Savings
Center
</TABLE>
-----------
(*) Interested Person, as defined in the Investment Company Act of 1940 ("1940
Act"), of the Fund.
(+) Serves as a trustee, director and/or officer of one or more of the
following investment companies, each of which has a direct or indirect
advisory relationship with the Investment Manager or its affiliates: State
Street Research Financial Trust, State Street Research Income Trust, State
Street Research Money Market Trust, State Street Research Tax-Exempt Trust,
State Street Research Capital Trust, State Street Research Master
Investment Trust, State Street Research Equity Trust, State Street Research
Securities Trust, State Street Research Growth Trust, State Street Research
Exchange Trust and State Street Research Portfolios, Inc.
B-11
<PAGE>
The Directors have been compensated as follows:
<TABLE>
<CAPTION>
(3)
Pension or (5)
Retirement (4) Total
(2) Benefits Estimated Compensation
Aggregate Accrued Annual from the Fund
(1) Compensation as part of Benefits and Fund
Name of from Fund Upon Complex Paid
Director(b) Fund(a)(c) Expenses Retirement to Directors(b)
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Linda B. Strumpf(d) 0 0 0 0
-----------------------------------------------------------------------------
Steve A. Garban $30,750 0 0 $110,900
-----------------------------------------------------------------------------
Malcolm T. Hopkins(f) $30,750 0 0 $103,450
-----------------------------------------------------------------------------
Robert A. Lawrence(e) $ 8,000 0 0 $ 25,600
-----------------------------------------------------------------------------
Dean O. Morton $27,750 0 0 $108,900
-----------------------------------------------------------------------------
Michael S. Scott Morton $27,750 0 0 $113,000
-----------------------------------------------------------------------------
David A. Levene 0 0 0 0
-----------------------------------------------------------------------------
Arthur G. Typermass $26,750 0 0 $ 26,750
</TABLE>
------------
(a) For the fiscal year ended December 31, 1999.
(b) Complex is comprised of 10 trusts and two corporations with a total of 31
funds and/or series. "Total Compensation from the Fund and Fund Complex
Paid to Directors" is for the 12 months ended December 31, 1999.
(c) Directors and officers who are currently active employees of MetLife
receive no compensation for services rendered to the Fund other than their
regular compensation from MetLife or its affiliate of which they are
employees. Other directors who are not currently active employees of
MetLife receive a fee of $15,000 per year, plus $3,500 for each directors'
meeting they attend, $500 for each audit committee meeting they attend, and
reimbursement for out-of-pocket expenses related to such attendance.
Messrs. Garban and Hopkins also each receive $1,500 for attending any
contract committee meeting. The chairmen of the audit and contracts
committees each receive a fee of $1,500 for each full calendar year during
which he/she serves as chairman.
(d) Linda B. Strumpf was appointed to the Board effective May 1, 2000.
(e) Robert A. Lawrence resigned as a director effective April 1, 1999.
(f) Malcolm Hopkins, resigned as a director effective May 1, 2000.
------------
None of the above officers and directors of the Fund owns any stock of the
Fund.
B-12
<PAGE>
PLACING PORTFOLIO TRANSACTIONS
Each Portfolio's manager has day-to-day responsibility for selecting broker-
dealers who will process investment transactions for the Portfolio. The
managers follow similar policies and procedures for each Portfolio. When a
manager's policy or practice is significantly different, it is specifically
identified below. In the discussion that follows, the term broker-dealer
includes both brokers (brokerage firms who act as agents in purchases or sales
of portfolio investments by the Fund) and dealers (investment firms who act for
their own account in selling or purchasing securities to or from the Fund).
Codes of Personal Conduct
The Fund has adopted a code of conduct for its officers, directors and other
personnel. Among other things this code regulates (although it does not
absolutely prohibit) transactions by such persons in securities of a type in
which the Portfolios of the Fund may and do invest. The investment managers and
the sub-investment managers have adopted codes of conduct that are similar to
the Fund's.
Primary Policy
Each manager's primary policy is to get prompt and reliable execution of orders
with the most favorable overall net prices to the Fund. To this end, when
selecting the best broker-dealer for a given transaction, each manager will
consider one or more of the following:
. the price of the security or instrument
. the nature of the market for the security or instrument
. the size and difficulty of the order
. the execution experience of the broker-dealer with respect to specific
markets or securities (see, for example, "Fixed Income Securities" and "Over-
the-Counter Securities Market" below)
. confidentiality
. the broker-dealer's financial responsibility
. the competitiveness of the commission or spread (see "Competitiveness of
Commission Rates and Net Prices" below)
. proven integrity and reliability
. the quality of execution
. the broker-dealer's research and statistical services and capabilities (see
"Research and Statistical Services" below)
. the broker-dealer's capital clearance and settlement capabilities
. desired timing of the trade
. any broker rebate of commissions to pay Portfolio expenses under any
"directed brokerage" arrangements (see "Directed Brokerage" below)
Research and Statistical Services
When more than one firm satisfies the Portfolio's other standards, managers may
consider the range of services and capabilities that those broker-dealers
provide, including:
. recommendations and advice about market projections and data, security
values, asset allocation and portfolio evaluation, purchasing or selling
specific securities, and portfolio strategy
. seminars, information, analyses, and reports concerning companies,
industries, securities, trading markets and methods, legislative and
political developments, changes in accounting practices and tax law, economic
and business trends, proxy voting, issuer credit-worthiness, technical charts
and portfolio strategy
. access to research analysts, corporate management personnel, industry
experts, economists, government representatives, technical market measurement
services and quotation services, and comparative performance evaluation
. products and other services including financial publications, reports and
analysis, electronic access to data bases and trading systems, computer
equipment, software, information and accessories
. statistical and analytical data relating to various investment companies,
including historical performance, expenses and fees, and risk measurements
In most cases, these services supplement a manager's own research and
statistical efforts. Research and statistical information and materials are
generally subject to internal analysis before being incorporated into a
manager's investment process.
Generally, services are received primarily in the form of written reports,
computer generated services, telephone contacts and personal meetings. Often
managers use internal surveys and other methods to evaluate the quality of
research and other services provided by various broker-dealer firms. Results of
these studies are available to the managers' trading departments for use when
selecting broker-dealers to execute portfolio transactions.
B-13
<PAGE>
Multiple Uses for Services The same research and statistical products and
services may be useful for multiple accounts. Managers may use such products
and services when managing any of their investment accounts. Therefore,
managers may use research and statistical information received from broker-
dealers who have handled transactions for any such account (which may or may
not include any Portfolio) in the management of the same or any such other
account (which, again, may or may not include that Portfolio). If any research
or statistical product or service has a mixed use, so that it also serves
functions other than assisting in a manager's investment decision process, then
the manager may allocate the costs and value accordingly. Only the portion of
the cost or value attributable to a product or service that assists the manager
with the investment decision process may be considered by the manager in
allocating transactions to broker-dealers.
Competitiveness of Commission Rates and Net Prices
Brokerage and other services furnished by broker-dealers are routinely reviewed
and evaluated. Managers try to keep abreast of commission structures and the
prevalent bid/ask spread of the market and/or security in which transactions
for the Portfolios occur. Commissions on foreign transactions are often higher
and fixed, unlike in the United States where commission rates are negotiable.
Against this backdrop, managers evaluate the reasonableness of a commission or
net price for each transaction.
Other considerations which determine reasonableness of a broker-dealer's
commission rates or net prices include:
.the difficulty of execution and settlement
. the size of the transaction (number of shares, dollar amount, and number of
clients involved)
. historical commission rates or spreads
. rates and prices quoted by other brokers and dealers
. familiarity with commissions or net prices paid by other institutional
investors
. the level and type of business done with the broker-dealer over time
. the extent to which broker or dealer has capital at risk in the transaction
After considering a combination of all the factors, managers may not
necessarily select the broker with the lowest commission rate or the dealer
with the lowest net price. Managers may or may not ask for competitive bids
based on their judgment as to whether such bids would have a negative effect on
the execution process.
Compensating Broker-Dealers for Non-Execution Services
Managers do not intentionally pay a broker-dealer brokerage commission or net
price that is higher than another firm would charge for handling the same
transaction in a recognition of services (other than execution services)
provided.
This is an area where differences of opinion as to fact and circumstances may
exist, however. Therefore, to the extent necessary, managers rely on Section
28(e) of the Securities Exchange Act of 1934, which permits managers to pay
higher commission rates if the manager determines in good faith that the rate
is reasonable in relation to the value of the brokerage, research and
statistical services provided.
Accordingly, while it is difficult to determine any extent to which commission
rates or net prices charged by broker-dealers reflect the value of their
services, managers expect commissions to be reasonable in light of total
brokerage and research services provided by each particular broker. Although it
is also difficult to place an exact dollar value on research and statistical
services received from broker-dealers, the managers believe that these services
tend to reduce the Portfolio's expenses in the long-run.
When purchasing securities for a Portfolio in fixed price underwriting
transactions, managers follow instructions received from the Fund as to the
allocation of new issue discounts, selling concessions and designations to any
brokers or dealers which provide the Fund with research, performance
evaluation, master trustee and other services. Absent instructions from the
Fund, the manager may make such allocations to broker-dealers which provide it
with research, statistical, and brokerage services.
Brokerage Allocation Agreements and Understandings Managers may pay cash for
certain services provided by external sources or
B-14
<PAGE>
choose to allocate brokerage business as compensation for the services.
Managers do not have fixed agreements with any broker-dealer as to the amount
of brokerage business which that firm may expect to receive because of the
services they supply. However, managers may have understandings with certain
firms which acknowledge that in order for such firms to be able to continuously
supply certain services, they need to receive allocation of a specified amount
of brokerage business. These understandings are honored to the extent possible
in accordance with the policies set forth above.
Managers have internal brokerage allocation procedures for that portion of
their discretionary client brokerage business where more than one broker-dealer
can provide best price and execution. In such cases, managers make judgments as
to the level of business which would recognize any research and statistical
services provided. In addition, broker-dealers sometimes suggest a level of
business they would like to receive in return for the various brokerage,
research and statistical services they provide. The actual brokerage received
by any firm may be less than the suggested allocations but can, and often do,
exceed the suggestions, because the total business is allocated on the basis of
all the considerations described above. Broker-dealers are never excluded from
receiving business because they do not provide research or statistical
services.
Directed Brokerage
On behalf of the Portfolios, the Fund may request that managers also consider
directed brokerage arrangements, which involve rebates of commissions by a
broker-dealer to pay Portfolio expenses. The Fund may condition its requests by
requiring that managers effect transactions with specified broker-dealers only
if the broker-dealers are competitive as to price and execution. While the Fund
believes that overall this practice can benefit the Fund, in some cases
managers may be unable to negotiate commissions or obtain volume discounts or
best execution and commissions charged under directed brokerage arrangements
may be higher than those not using such arrangements. Directed brokerage
arrangements may also result in a loss of the possible advantage from
aggregation of orders for several clients as a single transaction for the
purchase or sale of a particular security. Among other reasons why best
execution may not be achieved using directed brokerage arrangements is that in,
an effort to achieve orderly execution of transactions, execution of orders
using directed brokerage arrangements may, at the discretion of the trading
desk, be delayed until execution of other orders have been completed. The Board
of Directors will monitor directed brokerage transactions to help ensure that
they are in the best interest of the Fund and its shareholders.
Fixed Income Securities
Fixed income securities are generally purchased from the issuer or a primary
market-maker acting as principal for the securities on a net basis, with no
brokerage commission paid, although the price usually includes undisclosed
compensation. Transactions placed through dealers serving as primary market-
makers reflect the spread between the bid and asked prices known as a dealer's
mark-up. Securities may also be purchased from underwriters at prices which
include underwriting fees paid by the issuer.
Over-the-Counter Securities Market
Orders through the over-the-counter securities market are placed with the
principal market-makers for the security, unless a more favorable result is
available elsewhere. A principal market-maker is one who actively and
effectively trades in the relevant security.
Bunching of Orders
When securities are purchased or sold for a Portfolio, managers may also be
purchasing or selling the same securities for other accounts. Managers may
group orders of various accounts for execution to get lower prices and
commission rates. To be fair to all accounts over time, managers allocate
aggregate orders executed in a series of transactions or orders in which the
amount of securities available does not fill the order or price requirements at
the average price and, as nearly as practicable, on a pro-rata basis in
proportion to the amounts intended to be purchased or sold by each account.
Managers also consider the investment objectives, amount of money available to
invest, order size, amount an account already has committed to the investment,
and relative investment risks. While the Fund believes this practice
contributes to better overall execution of portfolio transactions, occasionally
this policy may adversely affect the price or number of
B-15
<PAGE>
shares in a particular Portfolio's transaction caused by either increased
demand or supply of the security involved in the transaction.
The Board of Directors has adopted procedures governing bunching to ensure that
bunching remains in the best interest of the Fund and its shareholders. Because
the procedures do not always adequately accommodate all facts and
circumstances, exceptions are made to the policy of allocating trades on an
adjusted, pro-rata basis. Exceptions to the policy may include not aggregating
orders and/or reallocating to:
. recognize a manager's negotiation efforts
. eliminate de minimus positions
. give priority to accounts with specialized investment policies and objectives
. give special consideration of an account's characteristics (such as
concentrations, duration, or credit risk)
. avoid a large number of small transactions which may increase custodial and
other transaction costs (which effect smaller accounts disproportionately)
Depending on the circumstances, such exceptions may or may not cause an account
to receive a more or less favorable execution relative to other accounts.
Harris Associates L.P. may use its affiliate, Harris Associates Securities
L.P., and Neuberger Berman Management Inc. may use its affiliate, Neuberger
Berman, LLC (the "affiliated brokers") as brokers for effecting securities
transactions for the respective portfolios for which they are the managers. The
Board of Directors, including a majority of the directors who are not
"interested" directors, has determined that securities transactions for a
Portfolio may be executed through these affiliated brokers, if, in the judgment
of the manager, the use of the affiliated broker is likely to result in prices
and execution at least as favorable to the Portfolio as those available from
other qualified brokers and, if, in such transactions, the affiliated broker
charges the Portfolio commission rates at least as favorable as those charged
by the affiliated broker to comparable unaffiliated customers in similar
transactions. The Board of Directors has adopted procedures designed to provide
that commissions, fees or other remuneration paid to affiliated brokers are
consistent with this standard. The Portfolios will not effect principal
transactions with affiliated brokers.
Brokerage commissions paid to Harris Associates Securities, L.P. during 1999
totaled $50,582. This represented 70.37% of the total commissions paid by the
Harris Oakmark Large Cap Value Portfolio during 1999 and 72% of the aggregate
dollar amount of transactions involving payment of commissions for that
Portfolio during 1999.
Brokerage commission paid to Neuberger Berman, LLC during 1999 totaled $16,175.
This represented 11% of the total commissions paid by the Neuberger Berman
Partners Mid Cap Value Portfolio during 1999 and 12% of the aggregate dollar
amount of transactions involving payment of commissions for that Portfolio
during 1999.
The following table shows the brokerage commissions paid by the Fund for each
of the Portfolios for the years ended December 31, 1997, 1998 and 1999:
<TABLE>
<CAPTION>
Portfolio 1997 1998 1999
<S> <C> <C> <C>
State Street Research
Money Market N/A N/A N/A
State Street Research N/A N/A N/A
Income
State Street Research $1,771,904 $2,204,538 $2,669,281
Diversified
State Street Research $3,228,651 $4,486,471 $5,614,065
Growth
State Street Research $5,031,886 $3,260,411 $2,687,582
Aggressive Growth
Putnam $3,009,725 $2,313,364 $1,584,912
International Stock
Loomis Sayles High $ 4,236 $ 6,463 $ 1,966
Yield Bond
T. Rowe Price Small $ 84,657 $ 174,688 $ 180,042
Cap Growth
T. Rowe Price Large N/A $ 5,222 $ 55,158
Cap Growth
Janus Mid Cap $ 139,969 $ 482,758 $1,007,044
Scudder Global Equity $ 143,783 $ 165,847 $ 183,800
Harris Oakmark Large N/A $ 12,228 $ 71,883
Cap Value
Neuberger Berman N/A $ 11,875 $ 126,856
Partners Mid Cap Value
MetLife Stock Index $ 341,117 $ 469,162 $ 369,088
Lehman Brothers N/A N/A N/A
Aggregate Bond Index
Russell 2000 Index N/A $ 41,989 $ 150,280
</TABLE>
B-16
<PAGE>
<TABLE>
<S> <C> <C> <C>
Morgan Stanley EAFE N/A $79,325 $198,582
Putnam Large Cap Growth N/A N/A N/A
State Street Research Aurora N/A N/A N/A
Small Cap Value
MetLife MidCap Stock Index N/A N/A N/A
</TABLE>
SHAREHOLDER MEETINGS
Regular annual shareholder meetings are not required and the Fund does not
expect to have regular meetings. For certain purposes, the Fund is required to
have a shareholder meeting. Examples of the reasons a meeting might be held are
to: (a) approve certain agreements required by securities laws; (b) change
fundamental investment objectives and restrictions of the Portfolios; and (c)
fill vacancies on the Board of Directors when less than a majority have been
elected by shareholders. Also, if 10% or more of the outstanding shares request
a shareholders' meeting, then by a vote of two-thirds of the Fund's outstanding
shares (as of a designated record date) a director may be removed from office.
The Fund assists with all shareholder communications. Except as mentioned
above, directors will continue in office and may appoint directors for
vacancies.
VOTING
Each share has one vote and fractional shares have fractional votes. Votes for
all Portfolios are generally aggregated. When there is a difference of
interests between the Portfolios, votes are counted on a per Portfolio basis
and not totaled. Shares in a Portfolio not affected by a matter are not
entitled to vote on that matter. A Portfolio-by-Portfolio vote may occur, for
example, when there are proposed changes to a particular Portfolio's
fundamental investment policies or investment management agreement.
Owners of Contracts supported by separate accounts registered as unit
investment trusts under the Investment Company Act of 1940 have certain voting
interests in Fund shares. The Contract prospectus attached to the Fund
Prospectus describes how Contract owners can give voting instructions for Fund
shares. Shares held by MetLife's general account or in a separate account not
registered as a unit investment trust vote in the same proportion as shares
held by the Insurance Companies in their separate accounts registered as unit
investment trusts.
SALE AND REDEMPTION OF SHARES
Portfolio shares, when issued, are fully paid and non-assessable. In addition,
there are no preference, preemptive, conversion, exchange
or similar rights, and shares are freely transferable. Shares do not have
cumulative voting rights.
MetLife need not sell any specific number of Fund shares. MetLife will pay the
Fund's distribution expenses and costs (which are those arising from activities
primarily intended to sell Fund shares).
The Fund may suspend sales and redemptions of a Portfolio's shares during any
period when (a) trading on the New York Stock Exchange is restricted or the
Exchange is closed (other than customary weekend and holiday closings); (b) an
emergency exists which makes disposing of portfolio securities or establishing
a Portfolio's net asset value impractical; or (c) the Securities and Exchange
Commission orders suspension to protect Portfolio shareholders.
If the Board of Directors decides that continuing to offer shares of one or
more Portfolios will not serve the Fund's best interest (e.g. changing market
conditions, regulatory problems or low Portfolio participation), the Fund may
stop offering such shares and, by a vote of the Board of Directors, may require
redemption (at net asset value) of outstanding shares in such Portfolio(s) upon
30 day's prior written notice to affected shareholders.
In the future, the Fund may offer shares to be purchased by separate accounts
of life insurance companies not affiliated with MetLife to support insurance
contracts they issue.
PRICING OF PORTFOLIO SECURITIES
Portfolio securities are priced as described in the table that follows. If the
data necessary to employ the indicated pricing methods are not available, the
investment will be assigned a fair value in good faith pursuant to procedures
approved by the Board of Directors. Such "fair value" pricing may also be used
if the customary pricing procedures are judged for any reason to result in an
unreliable valuation.
B-17
<PAGE>
PRICING OF SECURITIES CHART
<TABLE>
<CAPTION>
Value
Average Established by
Last Between Recognized
Last Spot Last Bid Exchange or
Sale Last Bid Price and Asked Other
(primary (primary (primary (primary Amortized Recognized
market) market) market) market) Cost* Sources
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Portfolio Securities All
Traded on Domestic Stock All Portfolios/2
Exchanges Portfolios/1/ L/2/ / except L
----------------------------------------------------------------------------------------------------------------
Portfolio Securities
Traded Primarily on
Non-Domestic All
Securities Exchanges Portfolios/1/
----------------------------------------------------------------------------------------------------------------
Securities Listed or All All
Traded on More than All Portfolios/3 Portfolios/2
One Exchange Portfolios/1/ / S/2/ / except S
----------------------------------------------------------------------------------------------------------------
Domestic Securities All
Traded in the Over Portfolios/1
the Counter Market / except S, L,
S/1/, NB/1/ L/1/ S/2/ NB and MM MM
----------------------------------------------------------------------------------------------------------------
Non-U.S. Securities All
Traded in the Over All Portfolios/2
the Counter Market Portfolios/1/ / except NB NB/2/
----------------------------------------------------------------------------------------------------------------
Short-term
Instruments with
Remaining Maturity
of Sixty Days or All
Less Portfolios/1/
----------------------------------------------------------------------------------------------------------------
Options on Securities,
Indices, or Futures All All
Contracts Portfolios/1/ Portfolios/2/
----------------------------------------------------------------------------------------------------------------
All
Currencies Portfolios/1/
----------------------------------------------------------------------------------------------------------------
All
Futures Contracts Portfolios/1/
----------------------------------------------------------------------------------------------------------------
</TABLE>
------------
1. primary method used
2. if primary method is unavailable
3. if both primary and secondary methods are unavailable
L. Loomis Sayles High Yield Bond Portfolio Only
NB.Neuberger Berman Partners Mid Cap Value Portfolio Only
S. Scudder Global Equity Portfolio Only
MM.State Street Research Money Market Portfolio Only
* Amortized Cost Method: Securities are valued at the cost on the date of
purchase and thereafter, a constant proportionate amortization value is
assumed until maturity of any discount or premium (regardless of
fluctuating interest rates on the market value of the security).
Maturity is deemed to be the next date on which the interest rate is to
be adjusted. Note, using this method may result in different yield and
net asset values than market valuation methods.
B-18
<PAGE>
TAXES
The following summarizes some of the relevant tax considerations associated
with the Fund. It is not a complete explanation and should not substitute for
careful tax planning and consulting with individual tax advisers.
The Fund's tax attributes are allocated among the Portfolios as if they were
separate corporations. For example, if a Portfolio has a net capital loss for a
taxable year, including any allocated net capital loss carryforwards, such
loss(es) will only offset net capital gains of that Portfolio. Also, each
Portfolio stands alone to determine that Portfolio's net ordinary income or
loss.
The Fund currently qualifies (and intends to continue to qualify) as a
"regulated investment company" under the Code. To qualify, among other things,
each Portfolio must derive at least 90% of its gross income from dividends,
interest, payments for security loans, and gains or other income derived from
each Portfolio's business of investing in stocks, securities or foreign
currencies. As a regulated investment company, the Fund does not pay federal
income tax on net ordinary income and net realized capital gains distributed to
shareholders. A nondeductible 4% excise tax applies to any regulated investment
company on any excess of required distributions for the calendar year over the
amount actually distributed. The Fund must distribute 98% of its ordinary
income and capital gain net income. The Fund does not expect to incur excise
taxes.
Dividends paid by a Portfolio from its ordinary income, and distributions of
its net realized short-term capital gains, are taxable to the shareholder as
ordinary income. Generally, any of a Portfolio's income which represents
dividends on common or preferred stock of a domestic corporation (rather than
interest income), distributed to the Insurance Companies may be deducted as
dividends received, to the extent the deduction is available to a life
insurance company.
Distributions from the Fund's net realized long-term gains are taxable to the
Insurance Companies as long-term capital gains regardless of the holding period
of the Portfolio shares. Long-term capital gain distributions are not eligible
for the dividends received deduction.
Dividends and capital gains distributions may also be subject to state and
local taxes.
The Fund complies with section 817(h) of the Code and its related regulations.
This means that the Fund generally may issue shares only to life insurance
company segregated asset accounts (also referred to as separate accounts) that
fund variable life insurance or annuity contracts ("variable insurance
contracts") and the general account of MetLife which provided the initial
capital for the Portfolios. The prospectus for the Contracts discusses in more
depth the taxation of segregated asset accounts and of the Contract owner.
Section 817(h) of the Code and related regulations require segregated asset
accounts investing in the Portfolios to diversify. These diversification
requirements, which are in addition to those imposed on the Fund under the 1940
Act and under Subchapter M of the Code, may affect selection of securities for
the Portfolios. Failing to meet Section 817(h) requirements may have adverse
tax consequences for the insurance company offering the variable insurance
contract and result in immediate taxation of the contract owner if the
investment in the contract has appreciated in value.
The Treasury Department may possibly adopt regulations or the IRS may issue a
revenue ruling which may deem a Contract owner, rather than the insurance
company, to be treated as owner of the assets of a segregated asset account
based on the extent of investment control by the contract owner. As a result,
the Fund may take action to assure that a Contract continues to qualify as a
variable insurance contract under federal tax laws. For example, the Fund may
alter the investment objectives of a Portfolio or substitute shares of one
Portfolio for those of another. To the extent legally necessary, a change of
investment objectives or share substitution will only occur with prior notice
to affected shareholders, approval by a majority of shareholders and approval
by the Securities and Exchange Commission.
Several unique tax considerations arise in connection with a Portfolio which
may invest in foreign securities. The Portfolio may have to pay foreign taxes,
which could reduce its investment performance. Dividends paid by a Portfolio
corresponding to dividends paid by
B-19
<PAGE>
non-United States companies do not qualify for the dividends received
deduction.
Those Portfolios that invest substantial amounts of their assets in foreign
securities may make an election to pass through to the Insurance Companies any
taxes withheld by foreign taxing jurisdictions on foreign source income. Such
an election will result in additional taxable income and income tax to the
Insurance Companies. The amount of additional income tax, however, may be more
than offset by credits for the foreign taxes withheld, which are also passed
through. These credits may provide a benefit to the Insurance Companies.
GENERAL INFORMATION
Experts
The Board of Directors annually approves an independent auditor which is expert
in accounting and auditing. Deloitte & Touche LLP, 555 17th Street, Suite 3600,
Denver, CO, 80202, is the Fund's independent auditor. The Fund's financial
statements for the 12 months ended December 31, 1999 incorporated by reference
into this SAI have been audited by Deloitte & Touche LLP. The Fund relies on
this firm's report which appears with the financial statements.
Custodian Arrangement
State Street Bank and Trust Company of Boston, Massachusetts, is the custodian
of the assets of all Portfolios. The custodian's duties include safeguarding
and controlling the Fund's cash and investments, handling the receipt and
delivery of securities, and collecting interest and dividends on the Fund's
investments. Portfolio securities purchased in the United States are maintained
in the custody of State Street Bank, although such securities may be deposited
in the Book-entry system of the Federal Reserve System or with Depository Trust
Company. Except as otherwise permitted under applicable Securities and Exchange
Commission "no-action" letters or exemptive orders, the Fund holds foreign
assets in qualified foreign banks and depositories meeting the requirements of
Rule 17f-5 under the Investment Company Act of 1940.
Index Sponsors
The Prospectus describes certain aspects of the limited relationship the index
sponsors have with the Fund.
With respect to Standard & Poor's, neither the MetLife Stock Index Portfolio or
the MetLife Mid Cap Stock Index Portfolio is sponsored, endorsed, sold or
promoted by Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
("S&P"). S&P makes no representation or warranty, express or implied, to the
owners of either Portfolio or any member of the public regarding the
advisability of investing in securities generally or in either Portfolio
particularly or the ability of the S&P 500 Index or the S&P 400 MidCap Index to
track general stock market performance. S&P's only relationship to the Licensee
is S&P's grant of permission to the Licensee to use the S&P 500 Index or the
S&P 400 MidCap Index which are determined, composed and calculated by S&P
without regard to the Licensee or either Portfolio. S&P has no obligation to
take the needs of the Licensee or the owners of this Portfolio into
consideration in determining, composing or calculating the S&P 500 Index or the
S&P 400 MidCap Index.
S&P is not responsible for and has not participated in the determination of the
prices and amount of this Portfolio or the timing of the issuance or sale of
this Portfolio or in the determination or calculation of the equation by which
this Portfolio is to be converted into cash. S&P has no obligation or liability
in connection with the administration, marketing or trading of this Portfolio.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500
INDEX OR THE S&P 400 MIDCAP INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL
HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P
MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE
LICENSEE, OWNERS OF THIS PORTFOLIO, OR ANY OTHER PERSON OR ENTITY FROM THE USE
OF THE S&P 500 INDEX OR THE S&P 400 MIDCAP INDEX OR ANY DATA INCLUDED THERE.
S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P 500 INDEX OR THE S&P 400 MIDCAP INDEX OR ANY DATA INCLUDED
THEREIN. WITHOUT
B-20
<PAGE>
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
In addition, with respect to Morgan Stanley, the Morgan Stanley EAFE (R) Index
Portfolio is not sponsored, endorsed, sold or promoted by Morgan Stanley.
Morgan Stanley makes no representation or warranty, express or implied, to the
owners of this Portfolio or any member of the public regarding the advisability
of investing in funds generally or in this Portfolio particularly or the
ability of the MSCI EAFE (R) index to track general stock market performance.
Morgan Stanley is the licensor of certain trademarks, service marks and trade
names of Morgan Stanley and of the MSCI EAFE (R) index which is determined,
composed and calculated by Morgan Stanley without regard to the issuer of this
Portfolio or this Portfolio. Morgan Stanley has no obligation to take the needs
of the issuer of this Portfolio or the owners of this Portfolio into
consideration in determining, composing or calculating the MSCI EAFE (R) index.
Morgan Stanley is not responsible for and has not participated in the
determination of the timing of, prices at, or quantities of this Portfolio to
be issued or in the determination or calculation of the equation by which this
Portfolio is redeemable for cash. Morgan Stanley has no obligation or liability
to owners of this Portfolio in connection with the administration, marketing or
trading of this Portfolio.
ALTHOUGH MORGAN STANLEY SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN
THE CALCULATION OF THE INDEXES FROM SOURCES WHICH MORGAN STANLEY CONSIDERS
RELIABLE, NEITHER MORGAN STANLEY NOR ANY OTHER PARTY GUARANTEES THE ACCURACY
AND/OR THE COMPLETENESS OF THE INDEXES OR ANY DATA INCLUDED THEREIN. NEITHER
MORGAN STANLEY NOR ANY OTHER PARTY MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS
TO RESULTS TO BE OBTAINED BY LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES,
OWNERS OF THE PORTFOLIO, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
INDEXES OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED
HEREUNDER OR FOR ANY OTHER USE. NEITHER MORGAN STANLEY NOR ANY OTHER PARTY
MAKES ANY EXPRESS OR IMPLIED WARRANTIES, AND MORGAN STANLEY HEREBY EXPRESSLY
DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
WITH RESPECT TO THE INDEXES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY
OF THE FOREGOING, IN NO EVENT SHALL MORGAN STANLEY OR ANY OTHER PARTY HAVE ANY
LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY
OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF THE POSSIBILITY OF
SUCH DAMAGES. The MSCI EAFE (R) Index is the exclusive property of Morgan
Stanley. Morgan Stanley Capital International is a service mark of Morgan
Stanley and has been licensed for use by MetLife.
With respect to Frank Russell Company, the Russell 2000 Index Portfolio is not
promoted, sponsored or endorsed by, nor in any way affiliated with Frank
Russell Company. Frank Russell Company is not responsible for and has not
reviewed the Portfolio nor any associated literature or publications and Frank
Russell Company makes no representation or warranty, express or implied, as to
their accuracy, or completeness, or otherwise. Frank Russell Company reserves
the right at any time and without notice, to alter, amend, terminate or in any
way change its index. The Russell 2000(R) Index is a service mark of the Frank
Russell Company. Russell(TM) is a trademark of the Frank Russell Company. Frank
Russell Company has no obligation to take the needs of any particular fund or
its participants or any other product or person into consideration in
determining, composing or calculating the index. Frank Russell Company's
publication of the index in no way suggests or implies an opinion by Frank
Russell Company as to the attractiveness or appropriateness of investment in
any or all securities upon which the index is based. FRANK RUSSELL COMPANY
B-21
<PAGE>
MAKES NO REPRESENTATION, WARRANTY, OR GUARANTEE AS TO THE ACCURACY,
COMPLETENESS, RELIABILITY, OR OTHERWISE OF THE INDEX OR ANY DATA INCLUDED IN
THE INDEX. FRANK RUSSELL COMPANY MAKES NO REPRESENTATION OR WARRANTY REGARDING
THE USE, OR THE RESULTS OF USE, OF THE INDEX OR ANY DATA INCLUDED THEREIN, OR
ANY SECURITY (OR COMBINATION THEREOF) COMPRISING THE INDEX. FRANK RUSSELL
COMPANY MAKES NO OTHER EXPRESS OR IMPLIED WARRANTY, AND EXPRESSLY DISCLAIMS ANY
WARRANTY, OF ANY KIND, INCLUDING, WITHOUT MEANS OF LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEX
OR ANY DATA OR ANY SECURITY (OR COMBINATION THEREOF) INCLUDED THEREIN.
FINANCIAL STATEMENTS
The Fund's financial statements for periods ending December 31, 1999, and the
related schedules of investments for each Portfolio and report of independent
auditors thereon, are included in the Fund's annual report to shareholders for
1999 that accompanies this Statement of Additional Information and are
incorporated by reference into this SAI.
B-22
<PAGE>
APPENDIX
DESCRIPTION OF CERTAIN CORPORATE BOND AND DEBENTURE RATINGS
<TABLE>
<CAPTION>
Standard & Poor's Rating Group (S&P)
Rating Moody's Investor Service, Inc. (Moody's) Description Rating Description
-----------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Aaa Bonds with this rating are judged AAA An obligation with this rating
to be of the best quality, has the highest rating assigned
carrying the smallest degree or by S&P. The obligor's capacity to
investment risk. They are meet its financial commitment on
generally referred to as "gilt the obligation is extremely
edged." Interest payments are strong.
protected by a large or by an
exceptionally stable margin and
principal is secure. While the
various protective elements are
likely to change, such changes as
can be visualized are most
unlikely to impair the
fundamentally strong position of
such issues.
-----------------------------------------------------------------------------------------------------------
Aa Bonds with this rating are judged AA An obligation with this rating
to be of high quality by all differs from the highest
standards. Together with the Aaa obligations only in small degree.
group, they comprise what are The obligor's capacity to meet
generally known as high-grade its financial commitment on the
bonds. They are rated lower than obligation is very strong.
the best bonds because margins of
protection may not be as large as
in Aaa securities or fluctuation
of protective elements may be of
greater amplitude or there may be
other elements present which make
the long-term risks appear
somewhat greater than in Aaa
securities.
-----------------------------------------------------------------------------------------------------------
A Bonds with this rating possess A An obligation with this rating is
many favorable investment somewhat more susceptible to the
attributes and are to be adverse effects of changes in
considered as upper-medium-grade circumstances and economic
obligations. Factors giving conditions than obligations in
security to principal and higher-rated categories. However,
interest are considered adequate, the obligor's capacity to meet
but elements may be present which its financial commitment on the
suggest a susceptibility to obligation is still strong.
impairment sometime in the
future.
-----------------------------------------------------------------------------------------------------------
Baa Bonds with this rating are BBB An obligation with this rating
considered as medium grade exhibits adequate protection
obligations, i.e., they are parameters. However, adverse
neither highly protected nor economic conditions or change
poorly secured. Interest payments circumstances are more likely to
and principal security appear lead to weakened capacity of the
adequate for the present but obligor to meet its financial
certain protective elements may commitment on the obligation.
be lacking or may be
characteristically unreliable
over any great length of time.
Such bonds lack outstanding
investment characteristics and in
fact have speculative
characteristics as well.
-----------------------------------------------------------------------------------------------------------
Ba Bonds with this rating are judged BB An obligation with this rating
to have speculative elements; has significant speculative
their future cannot be considered characteristics, but is less
as well-assured. Often, the vulnerable to nonpayment than
protection of interest and bonds in the lower ratings.
principal payments may be very However, it faces major ongoing
moderate, and thereby not well uncertainties or exposure to
safeguarded during both good and adverse business, financial or
bad times over the future. economic conditions which could
Uncertainty of position lead to the obligor's inadequate
characterizes bonds in this capacity to meet its financial
class. commitment on the obligation.
-----------------------------------------------------------------------------------------------------------
B Bonds with this rating generally B An obligation with this rating is
lack characteristics of the more vulnerable to nonpayment
desirable investment. Assurance than obligations rated BB, but
of interest and principal the obligor currently has the
payments of maintenance of other capacity to meet its financial
terms of the contract of any long commitment on the obligation.
period of time may be small. Adverse business, financial or
economic conditions will likely
impair the obligator's capacity
or willingness to meet its
financial commitment on the
obligation.
</TABLE>
B-23
<PAGE>
<TABLE>
<CAPTION>
Rating Moody's Investor Service, Inc. (Moody's) Description Rating Standard & Poor's Rating Group (S&P)Description
--------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Caa Bonds with this rating are of CCC An obligation with this rating is
poor standing. Such issues may be currently vulnerable to
in default or there may be nonpayment, and is dependent upon
present elements of danger with favorable business, financial,
respect to principal or interest. and economic conditions for the
obligor to meet its financial,
and economic commitment on the
obligation. In the event of
adverse business, financial or
economic conditions, the obligor
is not likely to have the
capacity to meet its financial
commitment on the obligation.
--------------------------------------------------------------------------------------------------------------------------
Ca Bonds with this rating represent C An obligation with this rating
obligations which are speculative may be used to cover a situation
in a high degree. Such issues are where a bankruptcy petition has
often in default or have other been filed or similar action has
marked shortcomings. been taken, but payments on this
obligation are being continued.
--------------------------------------------------------------------------------------------------------------------------
C Bonds with this rating are the D An obligation rated D is in
lowest rated class of bonds, and payment default. This rating
issues so rated can be regarded category is used when payments on
as having extremely poor an obligation are not made on the
prospects of ever attaining any date due even if the applicable
real investment standing. grace period has not expired,
unless S&P believes that such
payments will be made during such
grace period. This rating also
will be used upon the filing of a
bankruptcy petition on an
obligation are jeopardized.
--------------------------------------------------------------------------------------------------------------------------
1 This modifier is used with Aa, A, (+)/(-) These modifiers are used with
Baa, Ba and B ratings and ratings from AA to CCC to show
indicates the bond possesses relative standing within the
strongest investment attributes rating category.
within the rating class.
--------------------------------------------------------------------------------------------------------------------------
No Rating This might arise if: (1) an r This symbol attached to the
application for rating was not ratings of instruments with
received or accepted; (2) the significant non credit risks. It
issue or issuer belongs to a highlights risks to principal or
group of securities that are not volatility of expected returns
rated as a matter of policy; which are not addressed in the
(3) there is a lack of essential credit rating. Examples include:
data pertaining to the issue or obligations linked or indexed to
issuer; (4) the issue was equities, currencies or
privately placed in which case commodities; obligations exposed
the rating is not published in to severe prepayment risk such as
the Moody's publication; or interest only principal only
(5) the rating was suspended or mortgage securities; and
withdrawn because new and obligations with unusually risky
material circumstances arose, the interest terms, such as inverse
effects of which preclude floaters.
satisfactory analysis; there is
no longer available reasonable
up-to-date data to permit a
judgment to be formed; a bond is
called for redemption or for
other reasons.
</TABLE>
B-24
<PAGE>
DESCRIPTION OF COMMERCIAL PAPER RATINGS
<TABLE>
<CAPTION>
Rating Moody's Investor Service, Inc. (Moody's) Description Rating Standard & Poor's Rating Group (S&P)Description
----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Prime Commercial paper with this rating A Commercial paper with this rating
is the highest rated based on the is the highest based on: (1)
following factors: (1) management liquidity ratios are adequate to
of the issuer; (2) economics of meet cash requirements; (2) the
the issuer's industry or issuer's long-term senior debt is
industries and the speculative- rated "A" or better, although in
type risks which may be inherent some cases "BBB" or better may be
in certain areas; (3) the allowed; (3) the issuer has
issuer's products in relation to access to at least two additional
competition and customer channels of borrowing; (4) the
acceptance; (4) liquidity; (5) issuer's basic earnings and cash
amount and quality of long-term flow have an upward trend with
debt; (6) trend of earnings over allowance made for unusual
a period of 10 years; (7) circumstances; (5) Typically, the
financial strength of any parent issuer's industry is well
and the relationships which exist established and the issuer has a
with the issuer; and (8) strong position within the
recognition by the management of industry; and (6) the reliability
obligations which may be present and quality of management are
or may arise as a result of unquestioned.
public interest questions and
preparations to meet such
obligations.
----------------------------------------------------------------------------------------------------------------------------
1, 2 or 3 These modifiers indicates the 1, 2 or 3 These modifiers indicate the
relative degree to which the relative degree to which the
commercial paper possesses the commercial paper possesses the
qualities that are required to qualities that are required to
receive a Prime rating. receive an A rating.
----------------------------------------------------------------------------------------------------------------------------
(+) Commercial paper with an A-1
rating can be further modified
with this modifier to show that
they possess overwhelming safety
characteristics.
</TABLE>
B-25
<PAGE>
PART C. OTHER INFORMATION
Item 23. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
(a)(a). --Articles of Incorporation of Registrant, as amended May 23, 1983*
(a)(b). --Articles Supplementary of Registrant*
(a)(c). --Articles Supplementary of Registrant*
(a)(d). --Articles Supplementary of Registrant*
(a)(e). --Articles Supplementary of Registrant*
(a)(f). --Articles Supplementary of Registrant*
(a)(g). --Articles Supplementary of Registrant*
(a)(h). --Articles Supplementary of Registrant+++
(a)(i). --Articles Supplementary of Registrant*****
(a)(j). --Articles Supplementary of Registrant+
(a)(k). --Articles Supplementary of Registrant+
(a)(l). --Articles of Amendment****
(a)(m). --Articles of Amendment+++++
(b)(a). --By-Laws of Registrant, as amended January 27, 1988*
(b)(b). --Amendment to By-Laws Dated April 24, 1997***
(c). --None, other than Exhibits (a) and (b) above
(d)(a). --Investment Management Agreement(s), as amended, relating to the
MetLife Stock Index and State Street Research Money Market
Portfolios*
(d)(b). --Investment Management Agreements, as amended, relating to State
Street Research Growth, State Street Research Income, State Street
Research Diversified, State Street Research Aggressive Growth and
Putnam International Stock Portfolios***
(d)(c). --Investment Management Agreements relating to Loomis Sayles High
Yield Bond, Janus Mid Cap, Scudder Global Equity and T. Rowe Price
Small Cap Growth Portfolios**
(d)(d). --Investment Management Agreements relating to Neuberger Berman
Partners Mid Cap Value, T. Rowe Price Large Cap Growth, Harris
Oakmark Large Cap Value, Lehman Brothers Aggregate Bond Index,
Russell 2000 Index and Morgan Stanley EAFE Index Portfolios*****
(d)(e). --Investment Management Agreements relating to the Putnam Large Cap
Growth, the State Street Research Aurora Small Cap Value, and the
Met Life Mid Cap Stock Index Portfolios.++
(d)(f). --Sub-Investment Management Agreements relating to State Street
Research Growth, State Street Research Income, State Street Research
Diversified, State Street Research Aggressive Growth and State
Street Research Money Market Portfolios***
(d)(g). --Sub-Investment Management Agreements relating to Scudder Global
Equity Portfolio, Neuberger Berman Partners Mid Cap Value and T.
Rowe Price Large Cap Growth Portfolios*****
(d)(h). --Sub-Investment Management Agreements relating to Janus Mid Cap and
T. Rowe Price Small Cap Growth Portfolios**
(d)(i). --Sub-Investment Management Agreement relating to the Putnam
International Stock Portfolio+++++
(d)(j). --Sub-Investment Management Agreements relating to the Putnam Large
Cap Growth and State Street Research Aurora Small Cap Value
Portfolios++
(d)(k). --Amended Investment and Sub-Investment Management Agreements relating
to Putnam International Stock Portfolio++
</TABLE>
C-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
(d)(l). --Sub-Investment Management Agreements relating to the Harris Oakmark
Large Cap Value and the Loomis Sayles High Yield Bond Portfolios+
(d)(m). --Interim Sub-Investment Management Agreements relating to the Harris
Oakmark Large Cap Value and the Loomis Sayles High Yield Bond
Portfolios+
(e)(a). --Distribution Agreement*
(e)(b). --Addendum to Distribution Agreement*
(e)(c). --Second Addendum to Distribution Agreement*
(e)(d). --Third Addendum to Distribution Agreement+
(f). --None
(g)(a). --Custodian Agreement with State Street Bank & Trust Company*
(g)(b). --Revised schedule of remuneration*
(g)(c). --Amendment to Custodian Agreement*
(g)(d). --Amendments to Custodian Agreement*
(h)(a). --Transfer Agency Agreement*
(h)(b). --Agreement relating to the use of the "Metropolitan" name and service
marks*
(h)(c). --Licensing Agreements relating to Morgan Stanley EAFE Index, Russell
2000 Index and Lehman Brothers Aggregate Bond Index Portfolio++++
(h)(d). --Licensing Agreement relating to MetLife Stock Index and MetLife Mid
Cap Stock Index Portfolios (fee schedule omitted)+
(h)(e). --Form of Participation Agreement+
(i)(a). --Opinion and Consent of Counsel with respect to the shares of the
State Street Research Growth, State Street Research Income and State
Street Research Money Market Portfolios*
(i)(b). --Opinion and Consent of Counsel with respect to the shares of the
State Street Research Diversified and GNMA Portfolios*
(i)(c). --Opinion and Consent of Counsel with respect to the shares of the
State Street Research Aggressive Growth and Equity Income
Portfolios*
(i)(d). --Opinion and Consent of Counsel with respect to the shares of the
MetLife Stock Index Portfolio*
(i)(e). --Opinion and Consent of Counsel with respect to the shares of the
Putnam International Stock Portfolio (formerly the Santander
International Stock Portfolio)*
(i)(f). --Opinion and Consent of Counsel with respect to the shares of the
Loomis Sayles High Yield Bond, Janus Mid Cap, T. Rowe Price Small
Cap Growth and Scudder Global Equity Portfolios**
(i)(g). --Opinion and Consent of Counsel with respect to the shares of the
Neuberger Berman Partners Mid Cap Value, T. Rowe Price Large Cap
Growth, Harris Oakmark Large Cap Value, Lehman Brothers Aggregate
Bond Index, Russell 2000 Index and Morgan Stanley EAFE Index
Portfolios****
(i)(h). --Opinion and Consent of Counsel with respect to the shares of the
Putnam Large Cap Growth, State Street Research Aurora Small Cap
Value and MetLife Mid Cap Index Portfolios.+
(i)(i). --Opinion and Consent of Counsel with respect to the A Class and B
Class shares of the Janus Mid Cap, MetLife Stock Index, MetLife Mid
Cap Stock Index, Lehman Brothers Aggregate Bond Index, Russell 2000
Index, and Morgan Stanley EAFE Index Portfolios+
(j)(a). --Consent of Independent Public Accountants+
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
(j)(b). --Consent of Freedman, Levy, Kroll & Simonds*
(k). --None
(l)(a). --Stock Purchase Agreement*
(l)(b). --Supplementary Stock Purchase Agreement*
(l)(c). --Second Supplementary Stock Purchase Agreement*
(l)(d). --Third Supplementary Stock Purchase Agreement*
(l)(e). --Fourth Supplementary Stock Purchase Agreement*
(l)(f). --Fifth Supplementary Stock Purchase Agreement*
(l)(g). --Sixth Supplementary Stock Purchase Agreement**
(l)(h). --Seventh Supplementary Stock Purchase Agreement*****
(l)(i). --Eighth Supplementary Stock Purchase Agreement++
(m). --Class B Distribution Plan+
(n). --Rule 18b-3 Plan+
(o). --None
(p)(a). --Metropolitan Series Fund, Inc. Code of Ethics+
(p)(b). --Metropolitan Life Insurance Company Statement of Policy with Respect
to Material Nonpublic Information+
(q). --Specimen Price Make-Up Sheet+
(r). --Powers of Attorney++
</TABLE>
--------
+ Filed herewith.
* Incorporated by reference to the filing of Post-Effective Amendment No.
17 to this Registration Statement on April 30, 1996.
** Incorporated by reference to the filing of Post-Effective Amendment No.
19 to this Registration Statement on February 27, 1997.
*** Incorporated by reference to the filing of Post-Effective Amendment No.
20 to the Registration Statement on April 2, 1998.
**** Incorporated by reference to the filing of Post-Effective Amendment No.
22 to the Registration Statement on October 6, 1998.
***** Incorporated by reference to the filing of Post-Effective Amendment No.
23 to the Registration Statement on January 11, 1999.
++ Powers of Attorney for all signatories except for Messrs. Levene,
Typermass and Duffy and Ms. Strumpf are incorporated by reference to the
filing of Post-Effective Amendment No. 17 to this Registration Statement
on April 30, 1996. The Powers of Attorney for Messrs. Levene and
Typermass are incorporated by reference to the filing of Post-Effective
Amendment No. 21 on July 30, 1998. The Power of Attorney for Ms. Strumpf
is incorporated by reference to the filing of Post-Effective Amendment
No. 27 on September 29, 2000. The Power of Attorney of Mr. Duffy is
filed herewith.
+++ Incorporated by reference to the filing of Post-Effective Amendment No.
18 on December 18, 1996.
++++ Incorporated by reference to the filing of Post-Effective Amendment No.
24 on April 1, 1999.
+++++ Incorporated by reference to the filing of Post-Effective Amendment No.
25 on January 19, 2000.
+ Incorporated by reference to the filing of Post-Effective Amendment No.
26 on April 6, 2000.
++ Incorporated by reference to the filing of Post-Effective Amendment No.
27 on September 29, 2000.
Item 24. Persons Controlled by or Under Common Control with the Fund
C-3
<PAGE>
ORGANIZATIONAL STRUCTURE OF METROPOLITAN AND SUBSIDIARIES
AS OF APRIL 3, 2000
The following is a list of subsidiaries of Metropolitan Life Insurance Company
("Metropolitan"). It is expected that Metropolitan will become a wholly-owned
subsidiary of MetLife, Inc. on or about April 7, 2000. MetLife, Inc. will become
a publicly-traded company at that time. Those entities which are listed at the
left margin (labelled with capital letters) are direct subsidiaries of
Metropolitan. Unless otherwise indicated, each entity which is indented under
another entity is a subsidiary of such indented entity and, therefore, an
indirect subsidiary of Metropolitan. Certain inactive subsidiaries have been
omitted from the Metropolitan Organizational listing. The voting securities
(excluding directors' qualifying shares, if any) of the subsidiaries listed are
100% owned by their respective parent corporations, unless otherwise indicated.
The jurisdiction of domicile of each subsidiary listed is set forth in the
parenthetical following such subsidiary.
A. Metropolitan Tower Corp. (Delaware)
1. Metropolitan Property and Casualty Insurance Company (Rhode Island)
a. Metropolitan Group Property and Casualty Insurance Company
(Rhode Island)
i. Metropolitan Reinsurance Company (U.K.) Limited (Great
Britain)
b. Metropolitan Casualty Insurance Company (Rhode Island)
c. Metropolitan General Insurance Company (Rhode Island)
d. Metropolitan Direct Property and Casualty Insurance Company
(Georgia)
e. Metropolitan P&C Insurance Services, Inc. (California)
f. Metropolitan Lloyds, Inc. (Texas)
g. Met P&C Managing General Agency, Inc. (Texas)
h. Economy Fire & Casualty Company
i. Economy Preferred Insurance Company
j. Economy Premier Assurance Company
2. Metropolitan Insurance and Annuity Company (Delaware)
a. MetLife Europe I, Inc. (Delaware)
b. MetLife Europe II, Inc. (Delaware)
c. MetLife Europe III, Inc. (Delaware)
d. MetLife Europe IV, Inc. (Delaware)
e. MetLife Europe V, Inc. (Delaware)
3. MetLife General Insurance Agency, Inc. (Delaware)
a. MetLife General Insurance Agency of Alabama, Inc. (Alabama)
b. MetLife General Insurance Agency of Kentucky, Inc. (Kentucky)
c. MetLife General Insurance Agency of Mississippi, Inc.
(Mississippi)
d. MetLife General Insurance Agency of Texas, Inc. (Texas)
e. MetLife General Insurance Agency of North Carolina, Inc. (North
Carolina)
f. MetLife General Insurance Agency of Massachusetts, Inc.
(Massachusetts)
<PAGE>
4. Metropolitan Asset Management Corporation (Delaware)
(a.) MetLife Capital, Limited Partnership (Delaware).
Partnership interests in MetLife Capital, Limited
Partnership are held by Metropolitan (90%) and
Metropolitan Asset Management Corporation (10%).
(i.) MetLife Capital Credit L.P. (Delaware).
Partnership interests in MetLife Capital Credit
L.P. are held by Metropolitan (90%) and
Metropolitan Asset Management Corporation (10%).
(1) MetLife Capital CFLI Holdings, LLC (DE)
(a.) MetLife Capital CFLI Leasing, LLC
(DE)
b. MetLife Financial Acceptance Corporation (Delaware).
MetLife Capital Holdings, Inc. holds 100% of the voting
preferred stock of MetLife Financial Acceptance Corporation.
Metropolitan Property and Casualty Insurance Company holds
100% of the common stock of MetLife Financial Acceptance
Corporation.
c. MetLife Investments Limited (United Kingdom). 23rd Street
Investments, Inc. holds one share of MetLife Investments
Limited.
d. MetLife Investments Asia Limited (Hong Kong). One share of
MetLife Investments Asia Limited is held by W&C Services, Inc.,
a nominee of Metropolitan Asset Management Corporation.
e. MetLife Investment, S.A. 23rd Street Investment, Inc. holds one
share of MetLife Investments Limited and MetLife Investments,
S.A.
5. SSRM Holdings, Inc. (Delaware)
a. State Street Research & Management Company (Delaware). Is a
sub-investment manager for the Growth, Income, Diversified
and Aggressive Growth Portfolios of Metropolitan Series
Fund, Inc.
i. State Street Research Investment Services, Inc.
(Massachusetts)
<PAGE>
b. SSR Realty Advisors, Inc. (Delaware)
i. Metric Management Inc. (Delaware)
ii. Metric Property Management, Inc. (Delaware)
(1) Metric Realty (Delaware). SSR Realty Advisors, Inc.
and Metric Property Management, Inc. each hold 50% of
the common stock of Metric Realty.
(2) Metric Colorado, Inc. (Colorado). Metric Property
Management, Inc. holds 80% of the common stock of
Metric Colorado, Inc.
iii. Metric Capital Corporation (California)
iv. Metric Assignor, Inc. (California)
v. SSR AV, Inc. (Delaware)
6. MetLife Holdings, Inc. (Delaware)
a. MetLife Funding, Inc. (Delaware)
b. MetLife Credit Corp. (Delaware)
7. Metropolitan Tower Realty Company, Inc. (Delaware)
8. Security First Group, Inc. (DE)
a. Security First Life Insurance Company (DE)
b. Security First Insurance Agency, Inc. (MA)
c. Security First Insurance Agency, Inc. (NV)
d. Security First Group of Ohio, Inc. (OH)
e. Security First Financial, Inc. (DE)
f. Security First Investment Management Corporation (DE)
g. Security First Financial Agency, Inc. (TX)
9. Natiloportem Holdings, Inc. (Delaware)
a. Services Administrativos Gen, S.A. de CV One Share of Servicos
Administrativos Gen. S.A. de C.V. is held by a nominee of
Natiloportem Holdings, Inc.
B. Metropolitan Tower Life Insurance Company (Delaware)
C. MetLife Security Insurance Company of Louisiana (Louisiana)
<PAGE>
D. MetLife Texas Holdings, Inc. (Delaware)
1. Texas Life Insurance Company (Texas)
a. Texas Life Agency Services, Inc. (Texas)
b. Texas Life Agency Services of Kansas, Inc. (Kansas)
E. MetLife Securities, Inc. (Delaware)
F. 23rd Street Investments, Inc. (Delaware)
G. Santander Met, S.A. (Spain). Shares of Santander Met, S.A. are held by
Metropolitan (50%) and by an entity (50%) unaffiliated with Metropolitan.
1. Seguros Genesis, S.A. (Spain)
2. Genesis Seguros Generales, Sociedad Anomina de Seguros y Reaseguros
(Spain)
I. MetLife Saengmyoung Insurance Company Ltd. (Korea).
J. Metropolitan Life Seguros de Vida S.A. (Argentina)
K. Metropolitan Life Seguros de Retiro S.A. (Argentina).
L. Met Life Holdings Luxembourg (Luxembourg)
M. Metropolitan Life Holdings, Netherlands BV (Netherlands)
N. MetLife International Holdings, Inc. (Delaware)
O. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)
P. Metropolitan Marine Way Investments Limited (Canada)
Q. P.T. MetLife Sejahtera (Indonesia) Shares of P.T. MetLife Sejahtera are
held by Metropolitan (80%) and by an entity (20%) unaffiliated with
Metropolitan.
R. Seguros Genesis S.A. (Mexico) Metropolitan holds 85.49%, Metropolitan Tower
Corp. holds 7.31% and Metropolitan Asset Management Corporation holds 7.20%
of the common stock of Seguros Genesis S.A.
S. Metropolitan Life Seguros de Vida S.A. (Uruguay). One share of Metropolitan
Life Seguros de Vida S.A. is held by Alejandro Miller Artola, a nominee of
Metropolitan Life Insurance Company.
T. Metropolitan Life Seguros E Previdencia Privada S.A. (Brazil)
<PAGE>
U. MetLife (India) Ltd.
V. Hyatt Legal Plans, Inc. (Delaware)
1. Hyatt Legal Plans of Florida, Inc. (Fl)
W. One Madison Merchandising L.L.C. (Connecticut) Ownership of membership
interests in One Madison Merchandising L.L.C. is as follows: Metropolitan
owns 99% and Metropolitan Tower Corp. owns 1%.
X. Metropolitan Realty Management, Inc. (Delaware)
1. Edison Supply and Distribution, Inc. (Delaware)
2. Cross & Brown Company (New York)
a. CBNJ, Inc. (New Jersey)
Y. MetPark Funding, Inc. (Delaware)
Z. Transmountain Land & Livestock Company (Montana)
AA. Farmers National Company (Nebraska)
1. Farmers National Commodities, Inc. (Nebraska)
A.B. MetLife Trust Company, National Association. (United States)
A.C. Benefit Services Corporation (Georgia)
A.D. G.A. Holding Corporation (MA)
A.E. MetLife, Inc.
A.F. CRH., Co, Inc. (MA)
A.G. 334 Madison Euro Investments, Inc.
A.H. Park Twenty Three Investments Company 1% Voting Control of Park Twenty
Three Investment Company is held by St. James Fleet Investments Two
Limited
a. Convent Stution Euro Investments Four Company 1% voting control of
Convert Stution Euro Investments Four Company is held by 334 Madison
Euro Investments, Inc. as nominee for Park Twenty Three Investments
Company.
A.I. L/C Development Corporation (CA)
A.J. One Madison Investments (Cayco) Limited 1% Voting Control of One Madison
Investment (Cayco) Limited is held by Convent Station Euro Investments
Four Company.
A.K. New England Portfolio Advisors, Inc. (MA)
A.L. CRB Co., Inc. (MA) AEW Real Estate Advisors, Inc. holds 49,000 preferred
non-voting shares of CRB Co., Inc. AEW Advisors, Inc. holds 1,000
preferred non-voting shares of CRB Co., Inc.
A.M. New England Life Mortgage Funding Corporation (MA)
A.N. Mercadian Capital L.P. (DE). Metropolitan holds a 95% limited partner
interest and an unaffiliated third party holds 5% of Mercadian Capital
L.P.
A.O. Mercadian Funding L.P. (DE). Metropolitan holds a 95% limited partner
interest and an unaffiliated third party holds 5% of Mercadian
Funding L.P.
A.P. St. James Fleet Investments two Limited.
<PAGE>
A.Q. MetLife New England Holdings, Inc. (DE)
1. Fulcrum Financial Advisors, Inc. (MA)
2. New England Life Insurance Company (MA)
a. New England Life Holdings, Inc. (DE)
i. New England Securities Corporation (MA)
(1) Hereford Insurance Agency, Inc. (MA)
(2) Hereford Insurance Agency of Alabama, Inc. (AL)
(3) Hereford Insurance Agency of Minnesota, Inc. (MN)
(4) Hereford Insurance Agency of Ohio, Inc. (OH)
(5) Hereford Insurance Agency of New Mexico, Inc. (NM)
(6) Hereford Insurance Agency of Wyoming, Inc.
(7) Hereford Insurance Agency of Oklahoma, Inc.
ii. TNE Information Services, Inc. (MA)
(1) First Connect Insurance Network, Inc. (DE)
(2) Interative Financial Solutions, Inc. (MA)
iii. N.L. Holding Corp. (Del)(NY)
(1) Nathan & Lewis Securities, Inc. (NY)
(2) Nathan & Lewis Associates, Inc. (NY)
(a) Nathan and Lewis Insurance Agency of Massachusetts,
Inc. (MA)
(b) Nathan and Lewis Associates of Texas, Inc. (TX)
(3) Nathan & Lewis Associates--Arizona, Inc. (AZ)
(4) Nathan & Lewis of Nevada, Inc. (NV)
(5) Nathan and Lewis Associates Ohio, Incorporated (OH)
iv. New England Securities Corporation
v. New England Investment Management Inc.
b. Exeter Reassurance Company, Ltd. (MA)
c. Omega Reinsurance Corporation (AZ)
d. New England Pension and Annuity Company (DE)
e. Newbury Insurance Company, Limited (Bermuda)
A.R. General American Life
1. General American Life Insurance Company
a. GenAm Benefits Life Insurance Company
b. Paragon Life Insurance Company
c. Security Equity Life Insurance Company
d. Cova Corporation
i. Cova Financial Services Life Insurance Company
(1) Cova Financial Life Insurance Company
(2) First Cova Life Insurance Company
ii. Cova Investment Advisory Corporation
(1) Cova Investment Advisory Corporation
(2) Cova Investment Allocution Corporation
(3) Cova Life Sales Company
(4) Cova Life Administration Services Company
e. General Life Insurance Company
i. General Life Insurance Company of America
f. Equity Intermediary Company
i. Reinsurance Group of America, Incorporated
1. Reinsurance Company of Missouri Incorporated
a. RGA Reinsurance Company
b. Fairfield Management Group, Inc.
i. Reinsurance Partners, Inc.
ii. Great Rivers Reinsurance Management, Inc.
iii. RGA (U.K.) Underwriting Agency Limited
2. Triad Re, Ltd
3. RGA Americas Reinsurance Company, Ltd.
4. RGA Reinsurance Company (Barbados) Ltd.
(a) RGA/Swiss Financial Group, L.L.C.
5. RGA International Ltd.
(a) RGA Financial Products Limited
(b) RGA Canada Management Company, Ltd.
(i) RGA Life Reinsurance Company of Canada
6. Benefit Resource Life Insurance Company (Bermuda) Ltd.
7. RGA Holdings Limited
(a) RGA Managing Agency Limited
(b) RGA Capital Limited
8. RGA South African Holdings (Pty) Ltd.
(a) RGA Reinsurance Company of South Africa Limited
9. RGA Australian Holdings Pty Limited
(a) RGA Reinsurance Company of Australia Limited
10. General American Argentina Seguros
11. RGA Argentina, S.A.
12. RGA Sudamerica, S.A.
(a) RGA Reinsurance
(b) BHIF American Seguros de Vida, S.A.
g. GenAm Holding Company
i. NaviSys Incorporated
ii. NaviSys Illustration Solutions, Inc.
iii. NaviSys Asia Pacifica Limited
iv. NaviSys de Mexico S.A. de C.V.
99% of the shares of NaviSys de Mexico S.A. de C.V. are held
by NaviSys Incorporated and 1% is held by General American
Life Insurance Company.
v. NaviSys Enterprise Solutions, Inc.
vi. Red Oak Realty Company
vii. White Oak Royalty Company
viii. GenMark Incorporated
(a) Stan Mintz Associates, Inc.
(b) GenMark Insurance Agency of Alabama, Inc.
(c) GenMark Insurance Agency of Massachusetts, Inc.
(d) GenMark Insurance Agency of Ohio, Inc.
(e) GenMark Insurance Agency of Texas, Inc.
ix. Conning Corporation
(a) Conning, Inc.
(i) Conning & Company
(1) Conning Asset Management Company
2. Collaborative Strategies, Inc.
3. Virtual Finances.Com, Inc.
4. Missouri Reinsurance (Barbados) Inc.
5. GenAmerican Capital I
6. GenAmerican Management
7. Walnut Street Securities, Inc.
a. WSS Insurance Agency of Alabama, Inc.
b. WSS Insurance Agency of Massachusetts, Inc.
c. WSS Insurance Agency of Ohio, Inc.
d. WSS Insurance Agency of Texas, Inc.
e. Walnut Street Advisers, Inc.
3. Nvest Corporation (MA)
a. Nvest, L.P. (DE) Nvest Corporation holds a 1.69% general partnership
interest and MetLife New England Holdings, Inc. 3.19% general
partnership interest in Nvest, L.P.
b. Nvest Companies, L.P. (DE) Nvest Corporation holds a 0.0002% general
partnerhship interest in Nvest Companies, L.P. Nvest, L.P. holds a
14.64% general partnership interest in Nvest Companies, L.P.
Metropolitan holds a 46.23% limited partnership interest in Nvest
Companies, L.P.
i. Nvest Holdings, Inc. (DE)
(1) Back Bay Advisors, Inc. (MA)
(a) Back Bay Advisors, L.P. (DE)
Back Bay Advisors, Inc.
holds a 1% general partner
interest and NEIC
Holdings, Inc. holds a 99%
limited partner interest
in Back Bay Advisors, L.P.
(2) R & T Asset Management, Inc. (MA)
(a) Reich & Tang Distributors, Inc. (DE)
(b) Reich & Tang Asset Management
R & T Asset Management, Inc.
holds a 0.5% general partner interest and
NEIC Holdings, Inc. hold a 99.5% limited
partner interest in &
Asset Management, L.P.
(c) Reich & Tang Services, Inc. (DE)
<PAGE>
(3) Loomis, Sayles & Company, Inc. (MA)
(a) Loomis Sayles & Company, L.P. (DE)
Loomis Sayles & Company, Inc.
holds a 1% general partner interest and
R & T Asset Management, Inc. holds a 99%
limited partner interest in Loomis Sayles &
Company, L.P.
(4) Westpeak Investment Advisors, Inc. (MA)
(a) Westpeak Investment Advisors, L.P. (DE)
Westpeak Investment Advisors, Inc.
holds a 1% general partner interest and
Reich & Tang holds a 99% limited
partner interest in Westpeak Investment
Advisors, L.P.
(i) Westpeak Investment Advisors Australia
Limited Pty.
(5) Vaughan, Nelson Scarborough & McCullough (DE)
(a) Vaughan, Nelson Scarborough & McCullough, L.P. (DE)
VNSM, Inc. holds a 1% general partner interest and
Reich & Tang Asset Management, Inc. holds a 99%
limited partner interest in Vaughan, Nelson
Scarborough & McCullough, L.P.
(i) VNSM Trust Company
(6) MC Management, Inc. (MA)
(a) MC Management, L.P. (DE)
MC Management, Inc. holds a 1% general partner
interest and R & T Asset Management, Inc.
holds a 99% limited partner interest in MC
Management, L.P.
(7) Harris Associates, Inc. (DE)
(a) Harris Associates Securities L.P. (DE)
Harris Associates, Inc. holds a 1% general partner
interest and Harris Associates L.P. holds a
99% limited partner interest in Harris Associates
Securities, L.P.
(b) Harris Associates L.P. (DE)
Harris Associates, Inc. holds a 0.33% general
partner interest and NEIC Operating Partnership,
L.P. holds a 99.67% limited partner interest in
Harris Associates L.P.
(i) Harris Partners, Inc. (DE)
(ii) Harris Partners L.L.C. (DE)
Harris Partners, Inc. holds a 1%
membership interest and
Harris Associates L.P. holds a 99%
membership interest in Harris Partners L.L.C.
(1) Aurora Limited Partnership (DE)
Harris Partners L.L.C. holds a 1% general
partner interest
<PAGE>
(2) Perseus Partners L.P. (DE) Harris Partners
L.L.C. holds a 1% general partner interest
(3) Pleiades Partners L.P. (DE) Harris
Partners L.L.C. holds a 1% general partner
interest
(4) Stellar Partners L.P. (DE)
Harris Partners L.L.C. holds a 1% general
partner interest
(5) SPA Partners L.P. (DE) Harris Partners
L.L.C. holds a 1% general partner interest
(8) Graystone Partners, Inc. (MA)
(a) Graystone Partners, L.P. (DE)
Graystone Partners, Inc. holds a 1%
general partner interest and New England
NEIC Operating Partnership, L.P.
holds a 99% limited partner interest in
Graystone Partners, L.P.
(9) NEF Corporation (MA)
(a) New England Funds, L.P. (DE) NEF Corporation holds a
1% general partner interest and NEIC Operating
Partnership, L.P. holds a 99% limited
partner interest in New England Funds, L.P.
(b) New England Funds Management, L.P. (DE) NEF
Corporation holds a 1% general partner interest and
NEIC Operating Partnership, L.P. holds a 99%
limited partner interest in New England Funds
Management, L.P.
(10) New England Funds Service Corporation
(11) AEW Capital Management, Inc. (DE)
(a) AEW Securities, L.P. (DE) AEW Capital Management, Inc. holds
a 1% general partnership and AEW Capital Management, L.P.
holds a 99% limited partnership interest in AEW Securities,
L.P.
ii. Nvest Associates, Inc.
iii. Snyder Capital Management, Inc.
(1) Snyder Capital Management, L.P. NEIC Operating
Partnership holds a 99.5% limited partnership
interest and Snyder Capital Management Inc. holds a
0.5% general partnership interest.
iv. Jurika & Voyles, Inc.
(1) Jurika & Voyles, L.P NEIC Operating Partnership,
L.P. holds a 99% limited partnership interest and
Jurika & Voyles, Inc. holds a 1% general partnership
interest.
v. Capital Growth Management, L.P. (DE)
NEIC Operating Partnership, L.P. holds a 50% limited partner
interest in Capital Growth Management, L.P.
vi. Nvest Partnerships, LLC ( )
<PAGE>
vii. AEW Capital Management L.P. (DE)
New England Investment Companies, L.P. holds a 99% limited partner
interest and AEW Capital Management, Inc. holds a 1% general
partner interest in AEW Capital Management, L.P.
(1) AEW II Corporation ( )
(2) AEW Partners III, Inc. ( )
(3) AEW TSF, Inc. ( )
(4) AEW Exchange Management, LLC
(5) AEWPN, LLC ( )
(6) AEW Investment Group, Inc. (MA)
(a) Copley Public Partnership Holding, L.P. (MA)
AEW Investment Group, Inc. holds a 25% general partnership
interest and AEW Capital Management, L.P. holds a 75%
limited partnership interest in Copley Public Partnership
Holding, L.P.
(b) AEW Management and Advisors L.P. (MA)
AEW Investment Group, Inc. holds a 25% general partnership
interest and AEW Capital Management, L.P. holds a 75% limited
partnership interest in AEW Management and Advisors L.P.
ii. AEW Real Estate Advisors, Inc. (MA)
1. AEW Advisors, Inc. (MA)
2. Copley Properties Company, Inc. (MA)
3. Copley Properties Company II, Inc. (MA)
4. Copley Properties Company III, Inc. (MA)
5. Fourth Copley Corp. (MA)
6. Fifth Copley Corp. (MA)
7. Sixth Copley Corp. (MA)
8. Seventh Copley Corp. (MA).
9. Eighth Copley Corp. (MA).
10. First Income Corp. (MA).
11. Second Income Corp. (MA).
12. Third Income Corp. (MA).
13. Fourth Income Corp. (MA).
14. Third Singleton Corp. (MA).
15. Fourth Singleton Corp. (MA)
16. Fifth Singleton Corp. (MA)
17. Sixth Singleton Corp. (MA).
18. BCOP Associates L.P. (MA)
AEW Real Estate Advisors, Inc. holds a 1% general
partner interest in BCOP Associates L.P.
ii. CREA Western Investors I, Inc. (MA)
1. CREA Western Investors I, L.P. (DE)
CREA Western Investors I, Inc. holds a 24.28% general
partnership interest and Copley Public Partnership Holding,
L.P. holds a 57.62% limited partnership interest in CREA
Western Investors I, L.P.
iii. CREA Investors Santa Fe Springs, Inc. (MA)
(7) Copley Public Partnership Holding, L.P. (DE)
AEW Capital Management, L.P. holds a 75% limited partner interest and
AEW Investment Group, Inc. holds a 25% general partner interest and
CREA Western Investors I, L.P holds a 57.62% Limited Partnership
interest.
<PAGE>
(8) AEW Real Estate Advisors, Limited Partnership (MA)
AEW Real Estate Advisors, Inc. holds a 25% general partnership interest
and AEW Capital Management, L.P. holds a 75% limited partnership
interest in AEW Real Estate Advisors, Limited Partnership.
(9) AEW Hotel Investment Corporation (MA)
(a.) AEW Hotel Investment, Limited Partnership (MA)
AEW Hotel Investment Corporation holds a 1% general
partnership interest and AEW Capital Management, L.P. holds a
99% limited partnership interest in AEW Hotel Investment,
Limited Partnership.
(10) Aldrich Eastman Global Investment Strategies, LLC (DE)
AEW Capital Management, L.P. holds a 25% membership interest and an
unaffiliated third party holds a 75% membership interest in Aldrich
Eastman Global Investment Strategies, LLC.
A.R. General American Life
1. General American Life Insurance Company
a. GenAm Benefits Life Insurance Company
b. Paragon Life Insurance Company
c. Security Equity Life Insurance Company
d. Cova Corporation
i. Cova Financial Services Life Insurance Company
(1) Cova Financial Life Insurance Company
(2) First Cova Life Insurance Company
ii. Cova Investment Advisory Corporation
(1) Cova Investment Advisory Corporation
(2) Cova Investment Allocution Corporation
(3) Cova Life Sales Company
(4) Cova Life Administration Services Company
e. General Life Insurance Company
i. General Life Insurance Company of America
f. Equity Intermediary Company
i. Reinsurance Group of America, Incorporated
1. Reinsurance Company of Missouri Incorporated
a. RGA Reinsurance Company
b. Fairfield Management Group, Inc.
i. Reinsurance Partners, Inc.
ii. Great Rivers Reinsurance Management, Inc.
iii. RGA (U.K.) Underwriting Agency Limited
2. Triad Re, Ltd
3. RGA Americas Reinsurance Company, Ltd.
4. RGA Reinsurance Company (Barbados) Ltd.
(a) RGA/Swiss Financial Group, L.L.C.
5. RGA International Ltd.
(a) RGA Financial Products Limited
(b) RGA Canada Management Company, Ltd.
(i) RGA Life Reinsurance Company of Canada
6. Benefit Resource Life Insurance Company (Bermuda) Ltd.
7. RGA Holdings Limited
(a) RGA Managing Agency Limited
(b) RGA Capital Limited
8. RGA South African Holdings (Pty) Ltd.
(a) RGA Reinsurance Company of South Africa Limited
9. RGA Australian Holdings Pty Limited
(a) RGA Reinsurance Company of Australia Limited
10. General American Argentina Seguros
11. RGA Argentina, S.A.
12. RGA Sudamerica, S.A.
(a) RGA Reinsurance
(b) BHIF American Seguros de Vida, S.A.
g. GenAm Holding Company
i. NaviSys Incorporated
ii. NaviSys Illustration Solutions, Inc.
iii. NaviSys Asia Pacifica Limited
iv. NaviSys de Mexico S.A. de C.V.
99% of the shares of NaviSys de Mexico S.A. de C.V. are held
by NaviSys Incorporated and 1% is held by General American
Life Insurance Company.
v. NaviSys Enterprise Solutions, Inc.
vi. Red Oak Realty Company
vii. White Oak Royalty Company
viii. GenMark Incorporated
(a) Stan Mintz Associates, Inc.
(b) GenMark Insurance Agency of Alabama, Inc.
(c) GenMark Insurance Agency of Massachusetts, Inc.
(d) GenMark Insurance Agency of Ohio, Inc.
(e) GenMark Insurance Agency of Texas, Inc.
ix. Conning Corporation
(a) Conning, Inc.
(i) Conning & Company
(1) Conning Asset Management Company
2. Collaborative Strategies, Inc.
3. Virtual Finances.Com, Inc.
4. Missouri Reinsurance (Barbados) Inc.
5. GenAmerican Capital I
6. GenAmerican Management
7. Walnut Street Securities, Inc.
a. WSS Insurance Agency of Alabama, Inc.
b. WSS Insurance Agency of Massachusetts, Inc.
c. WSS Insurance Agency of Ohio, Inc.
d. WSS Insurance Agency of Texas, Inc.
e. Walnut Street Advisers, Inc.
In addition to the entities listed above, Metropolitan (or where indicated an
affiliate) also owns an interest in the following entities, among others:
1) CP&S Communications, Inc., a New York corporation, holds federal radio
communications licenses for equipment used in Metropolitan owned facilities and
airplanes. It is not engaged in any business.
2) Quadreal Corp., a New York corporation, is the fee holder of a parcel of
real property subject to a 999 year prepaid lease. It is wholly owned by
Metropolitan, having been acquired by a wholly owned subsidiary of Metropolitan
in 1973 in connection with a real estate investment and transferred to
Metropolitan in 1988.
3) Met Life International Real Estate Equity Shares, Inc., a Delaware
corporation, is a real estate investment trust. Metropolitan owns approximately
18.4% of the outstanding common stock of this company and has the right to
designate 2 of the 5 members of its Board of Directors.
4) Metropolitan Structures is a general partnership in which Metropolitan owns
a 50% interest.
5) Metropolitan owns, via its subsidiary, AFORE Genesis Metropolitan S.A. de
C.V., approximately 61.7% of SIEFORE Genesis S.A. de C.V., a mutual fund.
6) Metropolitan owns varying interests in certain mutual funds distributed by
its affiliates. These ownership interests are generally expected to decrease as
shares of the funds are purchased by unaffiliated investors.
7) Metropolitan Lloyds Insurance Company of Texas, an affiliated association,
provides homeowner and related insurance for the Texas market. It is an
association of individuals designated as underwriters. Metropolitan Lloyds,
Inc., a subsidiary of Metropolitan Property and Casualty Insurance Company ("MET
P&C"), serves as the attorney-in-fact and manages the association.
8) Metropolitan directly owns 100% of the non-voting preferred stock of Nathan
and Lewis Associates Ohio, Incorporated, an insurance agency. 100% of the voting
common stock of this company is held by an individual who has agreed to vote
such shares at the direction of N.L. Holding Corp. (DEL), an indirect wholly
owned subsidiary of Metropolitan.
<PAGE>
9) 100% of the capital stock of Hereford Insurance Agency of Oklahoma, Inc.
(OK) is owned by an officer. New England Life Insurance Company controls the
issuance of additional stock and has certain rights to purchase such officer's
shares.
10) 100% of the capital stock of Fairfield Insurance Agency of Texas, Inc. (TX)
is owned by an officer. New England Life Insurance Company controls the
issuance of additional stock and has certain rights to purchase such officer's
shares.
11) Mezzanine Investment Limited Partnerships ("MILPs"), Delaware limited
partnerships, are investment vehicles through which investments in certain
entities are held. A wholly owned subsidiary of Metropolitan serves as the
general partner of the limited partnerships and Metropolitan directly owns a 99%
limited partnership interest in each MILP. The MILPs have various's ownership
interests in certain companies. The various MILPs own, directly or indirectly,
100% of the voting stock of the following company: Coating Technologies
International, Inc.
NOTE: THE METROPOLITAN LIFE ORGANIZATIONAL CHART DOES NOT INCLUDE REAL ESTATE
JOINT VENTURES AND PARTNERSHIPS OF WHICH METROPOLITAN LIFE AND/OR ITS
SUBSIDIARIES IS AN INVESTMENT PARTNER. IN ADDITION, CERTAIN INACTIVE
SUBSIDIARIES HAVE ALSO BEEN OMITTED.
<PAGE>
Item 25. Indemnification.
(a) Maryland Law and By-Laws.
The Registrant is required by Article V of its By-Laws to indemnify or
advance expenses to directors and officers (or former directors and officers)
to the extent permitted or required by the Maryland General Corporation Law
("MGCL") and, in the case of officers (or former officers), only to the extent
specifically authorized by resolution of the Board of Directors. Section 2-418
of the MGCL permits indemnification of a director against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by the
director in connection with any proceeding to which he has been made a party
by reason of service as a director, unless it is established that (i) the
director's act or omission was material to the matter giving rise to the
proceeding and was committed in bad faith or was the result of active and
deliberate dishonesty; or (ii) the director actually received an improper
personal benefit in money, property or services; or (iii) in the case of a
criminal proceeding, the director had reasonable cause to believe that the act
or omission was unlawful. However, indemnification may not be made in any
proceeding by or in the right of the corporation in which the director has
been adjudged to be liable to the corporation. In addition, a director may not
be indemnified in respect of any proceeding charging improper personal benefit
to the director, whether or not involving action in the director's official
capacity, in which the director was adjudged to be liable on the basis that
personal benefit was improperly received. Section 2-418 of the MGCL also
requires a corporation, unless limited by its charter, to indemnify a director
who has been successful in the defense of a proceeding against reasonable
expenses incurred. Reasonable expenses incurred by a director may be paid or
reimbursed by a corporation in advance the final disposition of a proceeding
upon the receipt of certain written affirmations and undertakings required by
Section 2-418. Unless limited by its directors, a Maryland corporation may
indemnify and advance expenses to an officer to the same extent it may
indemnify a director, and is required to indemnify an officer to the extent
required for a director.
Notwithstanding the foregoing, Article V of the Registrant's By-Laws
provides that nothing contained therein shall be construed to protect any
director or officer against any liability to the Registrant or its security
holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
(b) Distribution Agreement.
Under the distribution agreement between the Registrant and Metropolitan
Life, Metropolitan Life agreed to indemnify and hold harmless any officer or
director (or any former officer or director) or any controlling person of the
Registrant from damages and expenses arising out of actual or alleged
misrepresentations or omissions to state material facts on the part of
Metropolitan Life or persons for whom it is responsible or the negligence of
any such persons in rendering services under the agreement.
(c) Undertaking.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
C-14
<PAGE>
(d) Insurance.
The Registrant's directors are indemnified by Metropolitan Life in the same
manner and to the same extent as Metropolitan Life's directors. In addition
thereto, Metropolitan Life has purchased an Investment Counselors Errors and
Omissions Policy to insure the Registrant's directors and officers.
Item 26. Business and other Connections of Investment Manager.
Metropolitan Life is a life insurance company which sells insurance policies
and annuity contracts. It is authorized to transact business in all states of
the United States, the District of Columbia, Puerto Rico and all Provinces of
Canada. Its Home Office is located at 1 Madison Avenue, New York, New York
10010 (telephone number 212-578-6130). As of December 31, 1999 Metropolitan
Life had $420 billion in total assets under management. Metropolitan Life is
the parent of Metropolitan Tower. Metropolitan Life also serves as the
investment adviser for certain other advisory clients.
Set forth below is a list of each director of Metropolitan Life indicating
each business, profession, vocation or employment of a substantial nature in
which each such person has been, at any time during the past two fiscal years,
engaged for his or her own account or in the capacity of director, officer,
partner or trustee.
<TABLE>
<CAPTION>
Organization and Principal
Name Position Business Address of Organization
---- -------- --------------------------------
<C> <C> <S>
Curtis H. Barnette..... Chairman of the Board Bethlehem Steel Corporation
and Chief Executive Bethlehem, PA
Officer
Director and former International Iron and Steel
Chairman Institute,
Brussels, Belgium
Director and former Pennsylvania Business
Chairman Roundtable,
Harrisburg, PA
Director and former American Iron and Steel
Chairman Institute,
Washington, DC
Director and former West Virginia University
Chairman Foundation,
Morgantown, WV
Trustee Lehigh University
Bethlehem, PA
Director Owens Corning
Board of Advisors West Virginia University
Robert H. Benmosche . . Chairman of the Board, MetLife, Inc. and Metropolitan
President and Chief Life Insurance Company
Executive Officer New York, NY
Director New York Philharmonic
Director New England Financial
Trustee Alfred University
Joan Ganz Cooney....... Chairman, Executive Com- Children's Television Workshop,
mittee New York, NY
Director Johnson & Johnson,
New Brunswick, NJ
Trustee National Child Labor Committee,
New York, NY
Trustee Sesame Workshop,
New York, NY
Trustee Museum of Television and Radio
Trustee The New York and Presbyterian
Hospitals
</TABLE>
C-15
<PAGE>
<TABLE>
<CAPTION>
Organization and Principal
Name Position Business Address of Organization
---- -------- --------------------------------
<C> <C> <S>
Burton A. Dole, Jr. . Retired Chairman, Puritan Bennett, Inc., Overland
President and Chief Park, KS
Executive Officer
Former Chairman of the Nellcor Puritan Bennett, Inc.,
Board Pleasanton, CA
Director Anesthesia Patient Safety
Foundation
Former Chairman of the Health Industries Manufacturer's
Board Association
Former Chairman of the Federal Reserve Bank of Kansas
Board City
Gerald Clark......... 7/1/98 Vice-Chairman of MetLife, Inc. and Metropolitan
the Board and Chief Life Insurance Company,
Investment Officer and New York, NY
Director; Senior
Executive Vice-
President and Chief
Investment Officer and
Director since 1/97;
prior thereto Senior
Executive Vice-
President and Chief
Investment Officer
Director/Trustee Credit Suisse Group
Director/Trustee Villanova University
Director/Officer Certain wholly-owned subsidiaries
of Metropolitan Life Insurance
Company
James R. Houghton.... Chairman of the Board Corning Incorporated, Corning, NY
Emeritus and Director
Director J.P. Morgan & Co., Inc., New York,
NY
Director Exxon Corp., Dallas, TX
Director/Trustee Corning Incorporated Foundation
Director/Trustee Corning Museum of Glass
Director/Trustee Metropolitan Museum of Art
Director/Trustee Pierpont Morgan Library
Chairman National Skill Standards Board
Member Business Council
Member Council on Foreign Relations
Member Harvard Corporation
Harry Paul Kamen..... Chairman and Chief Metropolitan Life Insurance
Executive Officer Company,
(Retired) and Director New York, NY
since 7/1/98, prior
thereto, Chairman,
Chief Executive Officer
and Director
Director Bethlehem Steel Corporation,
Bethlehem, PA
Director Banco Santander, Madrid, Spain
Director and Treasurer New York City Partnership, New
York, NY
Director/Trustee Board of Overseers of the School
of Arts and Sciences at the
University of Pennsylvania
Director/Trustee and Carnegie Hall
Treasurer
Director/Trustee Jewish Museum (Vice-President)
Director/Trustee Smith College
Director NVEST L.P.
Director National Association of Securities
Dealers
Director/Trustee and Conference Board
Vice-Chairman
Director/Trustee American Museum of Natural History
Director Pfizer Inc.
</TABLE>
C-16
<PAGE>
<TABLE>
<CAPTION>
Organization and Principal
Name Position Business Address of Organization
---- -------- --------------------------------
<C> <C> <S>
Helene L. Kaplan..... Of Counsel Skadden, Arps, Slate, Meagher &
Flom,
New York, NY
Director May Department Stores Co., New
York, NY
Chair Emeritus Barnard College, New York, NY
Director Exxon Mobil Corp., New York, NY
Director Bell Atlantic Corporation, New
York, NY
Director The Chase Manhattan Corporation
Trustee and Vice-Chair American Museum of Natural History
Trustee Carnegie Corporation of New York
Trustee Commonwealth Fund
Trustee J. Paul Getty Trust
Chairman Mt. Sinai School of Medicine
Trustee Institute for Advanced Study
Trustee Mt. Sinai-NYU Health System
Charles M. Leighton.. Retired Chairman and CML Group, Inc., Bolton, MA
Chief Executive Officer
Director CML Group, Inc.
Director NVEST Companies, L.P.
Former Chairman Listed Company Advisory Committee,
New York Stock Exchange
Trustee Lahey Clinic
Chairman New York Yacht Club America's Cup
Challenge
Director Fitsense Technology Corp.
Allen E. Murray...... Retired Chairman of the Mobil Corporation, New York, NY
Board and Chief
Executive Officer
Director Morgan Stanley, Dean Witter,
Discovery Co., New York, NY
Director Minnesota Mining and Manufacturing
Co.,
St. Paul, MN
Honorary Director American Petroleum Institute,
Washington, DC
Director St. Francis Hospital Foundation
Trustee New York University
Stewart Nagler....... Vice-Chairman of the MetLife, Inc. and Metropolitan Life
Board and Chief Insurance Company
Financial Officer New York, NY
and Director
Director Life Insurance Council of New York
Director Various Metropolitan Subsidiaries
Trustee Boys and Girls Clubs of America
Trustee Barnard College
Chairman of the Board Polytechnic University of New York
(Chairman, Finance Committee)
</TABLE>
C-17
<PAGE>
<TABLE>
<CAPTION>
Organization and Principal
Name Position Business Address of Organization
---- -------- --------------------------------
<C> <C> <S>
John J. Phelan, Jr...... Retired Chairman and New York Stock Exchange, Inc.,
Chief Executive Officer New York, NY
Director Eastman Kodak Co., Rochester, NY
Director Merrill Lynch & Co., Inc., New
York, NY
Former President International Federation of
Stock Exchanges
Director or Trustee Aspen Institute and Cold Spring
Harbor Laboratories
Director or Trustee Catholic Charities Archdiocese
of NY
Hugh B. Price........... President and Chief National Urban League, Inc., New
Executive Officer York, NY
Director Bell Atlantic Corp., New York,
NY
Director The Urban Institute, New York,
NY
Director Education Testing Service
Director Sears Roebuck and Company
Robert G. Schwartz...... Retired Chairman of the Metropolitan Life Insurance
Board, President and Company,
Chief Executive Officer New York, NY
and Director
Director Lowe's Companies, Inc., North
Wilkesboro, NC
Director Potlatch Corporation, San
Francisco, CA
Director COMSAT Corporation, Washington,
DC
Director/Trustee Committee for Economic
Development, Washington, DC
Director Consolidated Edison Company of
New York, Inc., New York, NY
Director/Trustee The Horatio Alger Association of
Distinguished Americans, Inc.
Ruth J. Simmons, Ph.D. . President Smith College, Northampton, MA
Director Pfizer Inc.
Trustee Carnegie Corporation
Trustee Clarke School for the Deaf
Director Texas Instruments
Director Goldman Sachs
William C. Steere, Jr. . Chairman of the Board Pfizer Inc.
and Chief Executive
Officer
Director Dow Jones & Company, Inc.
Director Minerals Technologies Inc.
Director Texaco Inc.
Director Mt. Sinai-New York University
Health System
Director Business Council
Director Business Roundtable
Director New York Botanical Garden
Board of Memorial Sloan-Kettering Cancer
Overseers/Executive Center
Committee
</TABLE>
C-18
<PAGE>
Set forth below is a list of certain principal officers of Metropolitan Life
and officers of Metropolitan Life who may be considered to be involved in
Metropolitan Life's investment advisory activities. The principal business
address of each officer of Metropolitan Life is One Madison Avenue, New York,
New York 10010.
<TABLE>
<CAPTION>
Name of Officer Position
--------------- --------
<C> <S>
Robert H. Benmosche. Chairman, President, Chief Executive Officer and
Director
Gerald Clark........ Vice-Chairman, Chief Investment Officer and Director
Stewart G. Nagler... Vice-Chairman, Chief Financial Officer and Director
Gary A. Beller...... Senior Executive Vice-President and General Counsel
James H. Benson..... President, Individual Business; Chairman, Chief
Executive
Officer and President, New England Life Insurance
Company
C. Robert Henrikson. President, Institutional Business
Jeffrey J Hodgman... Executive Vice-President
Catherine A. Rein... Senior Executive Vice-President; President and Chief
Executive
Officer of Metropolitan Property and Casualty
Insurance Company
William J. Toppeta.. President, Client Services and Chief Administrative
Officer
John H. Tweedie..... Senior Executive Vice-President
Lisa Weber.......... Executive Vice-President
Stanley J. Talbi.... Senior Vice-President & Chief Actuary
</TABLE>
The business of State Street Research since December 31, 1983 is summarized
under "Management of the Fund", in the prospectus constituting Part A of this
Registration Statement, which summarization is incorporated herein by
reference.
The list of each director and certain officers of State Street Research
indicating any other business, profession, vocation or employment of a
substantial nature in which each such person is or has been, at any time
during the past two fiscal years, engaged for his or her own account or in the
capacity of director, officer, employee, partner or trustee is incorporated
herein by reference to the filing of Post-Effective Amendment No. 34 to the
Registration Statement of State Street Research Financial Trust on February
29, 2000.
The list of each director and certain officers of Scudder Kemper
Investments, Inc. indicating any other business, profession, vocation or
employment of a substantial nature in which each such person is or has been,
at any time during the past two fiscal years, engaged for his or her own
account or in the capacity of director, officer, employee, partner or trustee
is incorporated herein by reference to the filing of Post-Effective Amendment
No. 16 to the Registration Statement of Scudder Mutual Funds, Inc. (File No.
811-5565) on March 1, 2000. Scudder Kemper Investments, Inc. has stockholders
and employees who are denominated officers but do not as such have
corporation-wide responsibilities, and therefore are not considered officers.
The list of each director and certain officers of Janus indicating any other
business, profession, vocation or employment of a substantial nature in which
each such person is or has been, at any time during the past five fiscal
years, engaged for his or her own account or in the capacity of director,
officer, employee, partner or trustee is incorporated herein by reference to
the filing of Post-Effective Amendment No. 20 to the Registration Statement
for Janus Aspen Series (File No. 33-63212) on October 26, 1999.
The list of each director and certain officers of T. Rowe Price indicating
any other business, profession, vocation or employment of a substantial nature
in which each such person is or has been, at any time during the past two
fiscal years, engaged for his or her own account or in the capacity of
C-19
<PAGE>
director, officer, employee, partner or trustee is incorporated herein by
reference to Schedules A and D of Form ADV filed by T. Rowe Price pursuant to
the Investment Advisers Act of 1940 (SEC File No. 801-856).
Loomis Sayles, the sub-adviser of the Loomis Sayles High Yield Bond
Portfolio, provides investment advice to the seventeen series of Loomis Sayles
Funds, seven series of Loomis Sayles Investment Trust, five series of New
England Funds Trust I, one series of New England Funds Trust II, one series of
New England Funds Trust III, two series of New England Zenith Fund, all of
which are registered investment companies, several other registered investment
companies and other organizations and individuals.
The sole general partner of Loomis Sayles is Loomis, Sayles & Company,
Incorporated, One Financial Center, Boston, Massachusetts 02111.
The list of each director and certain officers of Harris Oakmark indicating
any other business, profession, vocation or employment of a substantial nature
in which each such person is or has been, at any time during the past five
fiscal years, engaged for his or her own account or in the capacity of
director, officer, employee, partner or trustee is incorporated herein by
reference to the filing of Post-Effective Amendment No. 23 to Registration
Statement to the Harris Associates Investment Trust (File No. 33-38953) on
November 30, 1999.
The list of each director and certain officers of Neuberger Berman
indicating any other business, profession, vocation or employment of a
substantial nature in which each such person is or has been, at any time
during the past two fiscal years, engaged for his or her own account or in the
capacity of director, officer, employee, partner or trustee is incorporated
herein by reference to Schedules A and D of Form ADV for Neuberger Berman
Management Inc. pursuant to the Investment Advisers Act of 1940 (SEC File No.
801-8259).
The list of each director and certain officers of Putnam indicating any
other business, profession, vocation or employment of a substantial nature in
which each such person is or has been, at any time during the past two fiscal
years, engaged for his or her own account or in the capacity of director,
officer, employee, partner or trustee is incorporated herein by reference to
Schedules A and D of Form ADV for Putnam Investment Management, Inc. pursuant
to the Investment Advisers Act of 1940 (SEC File No. 801-7974).
Item 27. Principal Underwriters.
Not applicable
Item 28. Location of Accounts and Records.
Accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act and the rules thereunder are maintained at the offices
of the Registrant, of State Street Research & Management Company of Boston,
Massachusetts, Putnam Investment Management, Inc. of Boston, Massachusetts,
Loomis, Sayles & Company, L.P. of Boston, Massachusetts, Janus Capital
Corporation of Denver, Colorado, T. Rowe Price Associates, Inc. of Baltimore,
Maryland, Scudder Kemper Investments, Inc. of New York, New York, Neuberger
Berman Management Incorporated, of New York, New York, Harris Associates L.P.
of Boston, Massachusetts and State Street Bank and Trust Company of Boston,
Massachusetts. The address of each is set forth on the back cover of the
prospectus forming Part A of this Registration Statement and is incorporated
herein by reference. Certain records are maintained at the Registrant's office
at 501 Boylston Street, Boston, Massachusetts 02116.
Item 29. Management Services.
None.
Item 30. Undertakings.
Not applicable.
C-20
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this Registration Statement and has caused
this amended Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, and State of
New York, on the 30th day of November, 2000.
METROPOLITAN SERIES FUND, INC.
(Registrant)
/s/ Christopher P. Nicholas
By: ..................................
Christopher P. Nicholas President
and Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this amended
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Date
/s/ Christopher P. Nicholas
....................................
Christopher P. Nicholas
President and Chief Operating
Officer (Principal Executive
Officer)
*
....................................
Steve A. Garban
Director
*
...............................
Linda Strumpf
Director
*
....................................
Dean O. Morton
Director
*
....................................
Michael S. Scott Morton
Director
*
....................................
Arthur G. Typermass
Director
*
....................................
Peter H. Duffy
Controller (Principal Financial and
Accounting Officer)
/s/ Christopher P. Nicholas
*By: ............................... November 30, 2000
Christopher P. Nicholas, Esq.
Attorney-in-Fact
C-21
