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SIGNATURE THOMAS M LENZ
TITLE SECRETARY
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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Exhibit 77B
Deloitte & Touche LLP
200 Berkeley Street
Boston, Massachusetts 02116-5022
To the Board of Managers and Contract Owners of
New England Variable Annuity Fund I:
In planning and performing our audit of the financial statements of New
England Variable Annuity Fund I (the Fund) for the year ended December 31
1999 (on which we have issued our report dated February 7, 2000), we
considered its internal control, including control activities for
safeguarding securities, in order to determine our auditing procedures for
the purpose of expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, and not to provide assurance on
the Fund's internal control.
The management of the Fund is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and
related costs of controls. Generally, controls that are relevant to an
audit pertain to the entity's objective of preparing financial statements
for external purposes that are fairly presented in conformity with generally
accepted accounting principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in any internal control, misstatements due
to error or fraud may occur and not be detected. Also, projections of any
evaluation of internal control to future periods are subject to the risk
that the internal control may become inadequate because of changes in
conditions or that the degree of compliance with policies or procedures may
deteriorate.
Our consideration of the Fund's internal control would not necessarily
disclose all matters in internal control that might be material weaknesses
under standards established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the design or
operation of one or more of the internal control components does not reduce
to a relatively low level the risk that misstatements caused by error or
fraud in amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned
functions. However, we noted no matters involving the Fund's internal
control and its operation, including controls for safeguarding securities,
that we consider to be material weaknesses as defined above as of December
31, 1999.
This report is intended solely for the information and use of management,
the Board of Managers of New England Variable Annuity Fund I, and the
Securities and Exchange Commission and is not intended to be and should not
be used by anyone other than these specified parties.
Deloitte & Touche LLP
February 7, 2000
Deloitte Touche Tohmatsu
Item 77C: Submission of matters to a vote of security holders
Contract Owner Meetings for 1999
At a Special Meeting of Contractholders of New England Variable Annuity Fund I
held on October 15, 1999, sufficient votes were represented to constitute a
quorum, and Contractholders voted to approve the following proposals:
1. To fix the number of members of the Board of Managers at ten members.
Voted For: 1,047,744.62
Voted Against: 20,213.03
Abstained Votes: 20,664.33
Total Votes: 1,088,622.00
2. To elect a Board of Managers:
Voted For: 1,071,070.01
Withheld Votes: 17,551.99
Total Votes: 1,088,622.00
Managers:
John J. Arena
Edward A. Benjamin
Mary Ann Brown
John W. Flynn
Anne M. Goggin
Nancy Hawthorne
Joseph M. Hinchey
Robert B. Kittredge
John T. Ludes
Dale Rogers Marshall
3. To replace the fundamental investment objective of the Fund with an
otherwise identical, non-fundamental investment objective.
Voted For: 975,148.34
Voted Against: 92,333.62
Abstained Votes: 21,140.03
Total Votes: 1,088,622.00
4. To approve or disapprove certain changes to the fundamental investment
restrictions of the Fund in order to adopt a set of standardized investment
restrictions.
Voted For: 1,004,555.02
Voted Against: 49,824.66
Abstained Votes: 34,242.31
Total Votes: 1,088,622.00
4a. Eliminate fundamental investment restriction relating to investments of
a single issuer.
Voted For: 978,940.53
Voted Against: 82,497.90
Abstained Votes: 27,183.55
Total Votes: 1,088,622.00
4b. Revise the fundamental investment restriction relating to concentration
of investment in one industry.
Voted For: 986,679.57
Voted Against: 77,695.39
Abstained Votes: 24,247.03
Total Votes: 1,088,622.00
4c. Revise the fundamental restriction relating to borrowings.
Voted For: 968,259.19
Voted Against: 99,262.75
Abstained Votes: 21,100.05
Total Votes: 1,088,622.00
4d. Revise the fundamental investment restriction relating to underwriting
of securities.
Voted For: 988,333.68
Voted Against: 78,870.80
Abstained Votes: 21,417.51
Total Votes: 1,088,622.00
4e. Eliminate the fundamental investment restriction relating to the
purchase of restricted securities.
Voted For: 988,578.36
Voted Against: 77,762.87
Abstained Votes: 22,280.76
Total Votes: 1,088,622.00
4f. Revise the fundamental investment restriction relating to investments in
real estate.
Voted For: 994,166.63
Voted Against: 71,796.43
Abstained Votes: 22,658.93
Total Votes: 1,088,622.00
4g. Revise the fundamental investment restriction relating to investments in
commodities.
Voted For: 995,724.11
Voted Against: 71,797.82
Abstained Votes: 21,100.05
Total Votes: 1,088,622.00
4h. Revise the fundamental investment restriction relating to making loans.
Voted For: 975,719.49
Voted Against: 83,772.11
Abstained Votes: 29,130.39
Total Votes: 1,088,622.00
Exhibit 77Q1
NEW ENGLAND VARIABLE ANNUITY FUND I
AMENDED AND RESTATED RULES AND REGULATIONS
Effective July 28, 1999
ARTICLE I. GENERAL
Section 1. Name. The name of this separate investment account shall be New
England Variable Annuity Fund I (the Fund). The name of the Fund has been
selected by Metropolitan Life Insurance Company (the Company), whose
subsidiary, New England Life Insurance Company (NELICO), owns such name,
and may be used by the Fund only with the consent of NELICO and the Company,
which reserve the right in their discretion to withdraw such consent at any
time. In the event that such consent is withdrawn, the Fund shall adopt some
other name which shall not include the phrase New England as a part
thereof. The use of said name by the Fund shall in no way prevent the
Company or NELICO, or any other separate investment account thereof, or any
company affiliated with the Company or NELICO, or any investment company for
which NELICO's subsidiary, New England Securities Corporation, or any other
direct or indirect subsidiary of the Company, acts as distributor, from using
as part of or in connection with its name, the phrase New England, with any
other words or symbols, in connection with any other entity or business,
whether or not competitive with the Fund.
Section 2. Office. The office of the Fund shall be at the home office of
NELICO, 501 Boylston Street, Boston, Massachusetts.
Section 3. Purpose. The Fund was initially established in accordance with
Massachusetts law as a separate investment account of New England Mutual Life
Insurance Company, which merged with and into the Company on August 30, 1996;
following such merger the Fund operates under New York law as a separate
investment account of the Company within which assets attributable to certain
variable annuity contracts issued by the Company are set aside, held and
invested for the sole benefit of the Contractholders and other persons
entitled to payments under such contracts. Such assets shall be part of the
assets of the Company but shall not be chargeable with liabilities arising
out of any other business conducted by the Company and the income and
realized and unrealized capital gains or losses of the Fund shall be credited
to or charged against the Fund without regard to other income and capital
gains or losses of the Company.
Assets may also be transferred to the Fund by the Company from its
general assets for any legitimate purpose consistent with applicable law and
such assets (other than those transferred to the Fund in order to support
obligations of the Company under the variable annuity contracts) shall not be
attributable to such variable annuity contracts but shall stand to the credit
of the Company; provided that immediately following any such transfer the
value of such assets (other than those transferred to the Fund in order to
support obligations of the Company under the variable annuity contracts)
shall not exceed the greater of $200,000 or 5% of the total assets of the
Fund. The withdrawal of assets so placed in the Fund by the Company shall be
at its sole discretion, subject to applicable law and to the terms of any
undertaking it may make in connection with the registration of the Fund under
the Investment Company Act of 1940.
Section 4. Alteration of Classification. The Fund is registered and
qualified as an open-end management investment company under the Investment
Company Act of 1940. The Fund reserves the right to terminate such
registration under the Act, to the extent permitted by law, or to reorganize
and qualify as a unit investment trust under such Act upon approval of a
majority of all votes entitled to be cast at any meeting of the owners of
contracts which depend in whole or in part on the investment performance of
the Fund (the Contractholders), provided that: (1) such reorganization
will not result in any expense chargeable to, or the imposition of any tax
upon, the assets of the Fund or the Contractholders or other payees under the
contracts; and (2) the assets of the unit investment trust will be shares of
an open-end management company sponsored by or affiliated with the Company
and having the same investment objectives as the Fund, except to the extent
otherwise approved by a majority of the votes entitled to be cast at any
meeting of the Contractholders.
ARTICLE II. BOARD OF MANAGERS
Section 1. Election. A Board of Managers, composed of not more than fifteen
nor less than three Managers, shall be elected at each meeting of
Contractholders called for the purpose of electing Managers. The number of
Managers shall be fixed by vote of the meeting at which they are elected, but
the Contractholders or the Managers may, at any subsequent meeting held for
the purpose, increase (within the limits above specified) the number of
Managers as so fixed and (a) in the case of the Contractholders, elect new
Managers to complete the number so fixed, and (b) in the case of the
Managers, fill the vacancy so created in accordance with Section 6 of this
Article II. No Manager need be a Contractholder. The Managers shall hold
office until the next meeting of the Contractholders called for the purpose
of electing Managers and until their successors are elected and qualified, or
until a Manager sooner dies, resigns, is removed or becomes disqualified.
Section 2. Meetings. Regular meetings of the Board of Managers may be held
without call or notice at such places and at such times as the Board may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Managers. Special
meetings of the Managers may be held at any time and at any place designated
in the call of the meeting, when called by the Chairman of the Board of
Managers or any two or more members of the Board of Managers, sufficient
notice thereof being given to each member by the Secretary or by the person
or persons calling the meeting. It shall be sufficient notice to a member to
send notice by mail at least forty-eight hours or by telegram at least
twenty-four hours before the meeting addressed to him at his usual or last
known business or residence address or to give notice to him in person or by
telephone at least twenty-four hours before the meeting. Notice of a meeting
need not be given to any member if a written waiver of notice, executed by
him before or after the meeting, is filed with the records of the meeting, or
to any member who attends the meeting without protesting prior thereto or at
its commencement the lack of notice to him. Neither notice of a meeting nor
a waiver of a notice need specify the purposes of the meeting. The Chairman
of the Board of Managers shall preside at all meetings of the Board at which
he is present, and if he is not present, one of the members present shall be
designated to act as presiding officer.
Section 3. Quorum. A majority of the members of the Board of Managers in
office shall constitute a quorum for the transaction of business at any
meeting of the Board. When a quorum is present at any meeting, a majority of
the members present shall decide any question brought before such meeting,
except as otherwise provided by applicable law or these Rules and
Regulations. Except as otherwise required by applicable law, any action
required or permitted to be taken at any meeting of the Managers may be taken
without a meeting if a written consent thereto is signed by all the Managers
and such written consent is filed with the records of the meetings of the
Managers. Such consent shall be treated for all purposes as a vote at a
meeting.
Section 4. Officers. From time to time as the Board of Managers shall
determine, the Board of Managers shall elect one of its members to act as
Chairman of the Board of Managers to hold office until his successor is
elected and qualified.
As such meeting as they elect a Chairman, the Board of Managers shall
also elect a Secretary and one or more Assistant Secretaries to the Board,
who may or may not be members of the Board of Managers. The Secretary shall
have the power to keep and certify the minutes of the meetings of the
Contractholders and the Board of Managers and portions thereof and all other
duties and powers provided for in these Rules and Regulations or designated
by the Board of Managers. In the absence of the Secretary, an Assistant
Secretary shall perform such duties and have such powers and, in the absence
of the Secretary and any Assistant Secretary, a temporary Secretary may be
designated by the Board of Managers to perform such duties and have such
powers. The Board of Managers may appoint such other officers as it may from
time to time deem appropriate. The Chairman of the Board of Managers, the
Secretary and such other officers shall have and perform such duties and have
such other powers as the Board of Managers shall designate from time to time.
Section 5. Resignations and Removal. Any member of the Board of Managers or
the Secretary to the Board or any other officer may resign at any time by
delivering his resignation in writing to the Chairman of or Secretary to the
Board of Managers or to a meeting of the Board of Managers. Such resignation
shall be effective upon receipt unless specified to be effective at some
other time. A Manager (including persons elected by the Managers to fill
vacancies in the Board of Managers) may be removed from office (a) with or
without cause by the vote of a majority of all votes entitled to be cast at a
meeting of Contractholders or (b) for cause by a majority of the Managers
then in office. The Board of Managers may remove any officer elected by them
with or without cause by the vote of a majority of the Managers then in
office. A Manager or officer may be removed for cause only after reasonable
notice and opportunity to be heard before the body proposing to remove him.
No Manager or officer resigning or removed shall have any right to any
compensation for any period following his resignation or removal, or any
right to damages on account of such removal.
Section 6. Vacancies. No person shall serve as a member of the Board of
Managers unless duly elected to that office by the Contractholders, except
that whenever any vacancy shall occur in the Board of Managers by death,
resignation or otherwise (including by an increase in the size of the Board
of Managers), the Board of Managers may appoint a person to fill such vacancy
by a vote of a majority of all the remaining members of the Board, with the
person so appointed to hold office until the next meeting of the
Contractholders called for the purpose of electing Managers and until his
successor is elected and qualified (unless he sooner dies, resigns, is
removed or becomes disqualified) if, immediately after filling such vacancy,
at least two-thirds of the members of the Board of Managers then holding
office shall have been elected by the Contractholders. In the event that at
any time less than a majority of the Board have been so elected, the Board of
Managers shall forthwith cause to be held as promptly as possible, and in any
event within sixty days, a meeting of the Contractholders for the purpose of
electing members to fill the existing vacancies in the Board of Managers.
The Board of Managers may fill any vacancy occurring in the office of
Chairman of the Board or Secretary to the Board. Except as otherwise
provided by law, the Board of Managers shall have and may exercise all its
powers notwithstanding the existence of one or more vacancies in their
number.
Section 7. Powers and Duties of Board of Managers. Subject to applicable
law, the Board of Managers shall have the following powers, responsibilities
and duties:
a. To select an independent accountant at a meeting held within thirty
days before or ninety days after the beginning of the fiscal year, provided
such selection is made by the vote, cast in person, of a majority of those
members of the Board of Managers of the Fund who are not interested persons
of the Fund or affiliated persons of the Company; and to fill any vacancy due
to the death or resignation of such accountant, by the vote of a majority of
those members of the Board of Managers who are not interested persons of the
Fund or affiliated persons of the Company, cast in person at a meeting called
for the purpose of voting on such action.
b. To approve an initial or amended distribution agreement for the
Fund and to approve the continuance of such an agreement, provided that the
terms of any such agreement and any renewal thereof shall also be approved by
the vote of a majority of those members of the Board of Managers who are not
parties to such agreement or interested persons of any party to such
agreement or of the Fund or affiliated persons of the Company, cast in person
at a meeting called for the purpose of voting on such approval.
c. To approve an initial or amended agreement for investment advisory
services to the Fund, subject to approval by Contractholders as provided in
Section 10 of Article V, and to approve the continuance of such an agreement,
provided that the terms of any such agreement and any renewal thereof shall
also be approved by vote of a majority of those members of the Board of
Managers who are not parties to such agreement or interested persons of any
party to such agreement or of the Fund, cast in person at a meeting called
for the purpose of voting on such approval.
d. To recommend from time to time any changes deemed appropriate in
the fundamental investment policies of the Fund for submission to the
Contractholders at their next meeting, and to make such changes in those
investment policies of the Fund not requiring approval by the Contractholders
as the Board deems appropriate.
e. To review periodically the investment portfolio of the Fund to
ascertain that it is being managed in accordance with the investment
objectives and policies of the Fund and the interests of the Contractholders,
and to take such corrective action as may be necessary.
f. To enter into agreements and take any and all actions necessary or
appropriate in the judgment of the Board of Managers in connection with the
operation and management of the Fund and its assets, including such actions
as are necessary or appropriate to comply with any applicable federal or
state statutes or rules.
Section 8. Committees. The Board of Managers may elect by vote of a
majority of the whole Board two or more of its members to constitute an
Executive Committee, which committee shall, except as otherwise required by
applicable law, have and may exercise when the Board is not in session any or
all powers of the Board of Managers in the management of the business and
affairs of the Fund.
The Board of Managers likewise may appoint from its number other
committees from time to time, determine the number (but not less than two)
composing such committees, and specify the functions to be performed by such
committees.
Each committee may make rules for the notice and conduct of its
meetings and the keeping of the records thereof. The term of any member of
any committee shall be fixed by the Board of Managers.
ARTICLE III. FEES OF MEMBERS OF BOARD AND OTHERS
The Board of Managers shall have power to fix and determine the fee or
fees to be paid to members of the Board of Managers or to any officers or
other persons elected by the Board of Managers or by the Contractholders, on
account of services to the Fund, except that members and officers of the
Board of Managers of the Fund who are also officers, directors or employees
of the Company or any company affiliated with the Company shall not be
entitled to any fee. Any fees so fixed and determined by the Board of
Managers shall be subject to revision or amendment by the Contractholders.
ARTICLE IV. INDEMNIFICATION
The Fund shall indemnify each of the members of its Board of Managers
and officers (including persons who serve at its request as directors,
officers or trustees of another organization in which it has any interest, as
a shareholder, creditor or otherwise) against all liabilities and expenses,
including but not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and counsel fees reasonably incurred by
him in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which he may be or may have been
involved as a party or otherwise or with which he may be or may have been
threatened, while in office or thereafter, by reason of any alleged act or
omission as a member or officer or by reason of his being or having been such
a member or officer, except with respect to any matter as to which he shall
have been finally adjudicated in any such action, suit or other proceeding
not to have acted in good faith in the reasonable belief that his action was
in the best interests of the Fund and except that no member or officer shall
be indemnified against any liability to the Fund or its Contractholders 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. Expenses, including counsel fees, so incurred by any
such member or officer may be paid by the Fund in advance of the final
disposition of any such action, suit or proceeding on the condition that the
amounts so paid shall be repaid to the Fund if it is ultimately determined
that indemnification of such expenses is not authorized under this Article.
As to any matter disposed of by a compromise payment by such member or
officer, pursuant to a consent decree or otherwise, no such indemnification
either for said payment or for any other expenses shall be provided unless
such compromise shall be approved as in the best interests of the Fund, after
notice that it involves such indemnification, (a) by a disinterested majority
of the members of the Board of Managers then in office; or (b) by a majority
of the disinterested members of the Board of Managers then in office; or
(c) by any disinterested person or persons to whom the question may be
referred by the Board of Managers, provided that in the case of approval
pursuant to clause (b) or (c) there has been obtained an opinion in writing
of independent legal counsel to the effect that such member or officer
appears to have acted in good faith in the reasonable belief that his action
was in the best interests of the Fund and that such indemnification would not
protect such member or officer against any liability to the Fund or its
Contractholders 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; or (d) by the Contractholders holding
a majority of the votes at the time entitled to vote for members of the Board
of Managers, exclusive of the votes of any interested member or officer.
Approval by the Board of Managers pursuant to clause (a) or (b) or by any
disinterested person or persons pursuant to clause (c) of this paragraph
shall not prevent the recovery from any officer or member of any amount paid
to him in accordance with either of such clauses as indemnification if such
officer or member is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief that
his action was in the best interests of the Fund or to have been liable to
the Fund or its Contractholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct
of his office.
The right of indemnification hereby provided shall not be exclusive of
or affect any other rights to which any member or officer of the Board of
Managers may be entitled. As used in this Article, the terms member and
officer include their respective heirs, executors and administrators, and
an interested member or officer is one against whom the action, suit or
other proceeding in question or another action, suit or other proceeding on
the same or similar grounds is then or had been pending, and a disinterested
person is a person against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or
similar grounds is then or had been pending. Nothing contained in this
Article shall affect any rights to indemnification to which Fund personnel
other than members and officers may be entitled by contract or otherwise
under law.
ARTICLE V. MEETINGS OF CONTRACTHOLDERS
Section 1. Time and Place of Meetings. Meetings of the Contractholders may
be called by the Chairman of the Board of Managers or by a majority of the
Board of Managers to be held at such times and places as he or they may
determine.
Section 2. Notice of Meeting. A written notice stating the place, day and
hour of the meeting, and the purpose or purposes for which the meeting is
called, shall be given to each Contractholder who is such as of the record
date for the meeting and no business shall be transacted at the meeting
except matters coming within such purpose. Such notice shall be mailed to
the Contractholder's address as it appears upon the records of the Company
not less than twenty days nor more than ninety days prior to the day of such
meeting. Only persons owning a contract on the record date will be entitled
to vote at such meeting. Notice of any adjourned meeting shall not be
required. No call or notice of any meeting of Contractholders need be given
to a Contractholder if a written waiver of notice, executed before or after
the meeting by such Contractholder or his attorney thereunto duly authorized,
is filed with the records of the meeting.
Section 3. Record Date. The record date for any meeting of the
Contractholders shall be such date within ninety days of the date of the
meeting as is determined by the Board of Managers.
Section 4. Quorum. Thirty per cent (30%) of all votes which may be cast by
Contractholders represented either in person or by proxy shall constitute a
quorum for the transaction of business at any meeting of the Contractholders.
If a quorum shall not be present, a majority of the votes represented may
adjourn the meeting to some later time. When a quorum is present, the vote
of a majority of the votes represented in person or by proxy shall determine
any question, except as may be otherwise provided by these Rules and
Regulations or by law. A majority of the votes entitled to be cast by the
Contractholders, when required by these Rules and Regulations, means (a) 67%
or more of the votes present (in person or by proxy) and entitled to be cast
at a meeting if Contractholders entitled to more than 50% of the outstanding
votes of the Fund are present (in person or by proxy); or (b) more than 50%
of all votes which are entitled to be cast, whichever is less.
Section 5. Order of Business. The Chairman of the Board of Managers shall
act as Chairman of each meeting of the Contractholders, and in his absence
the Chairman of the meeting shall be such person as may be designated for
such purpose by the Chairman of the Board of Managers. The order of business
at the meeting shall be determined by the Chairman.
Section 6. Proxies. A Contractholder entitled to vote may vote either in
person or by proxy duly executed in writing by the Contractholder. A proxy
for any meeting shall be valid for any adjournment of such meeting.
Section 7. Voting. The number of votes which a Contractholder may cast
shall be determined as of the record date for the meeting. Prior to the
commencement of annuity payments, i.e. during the accumulation period under a
deferred variable annuity contract, the number of votes which a
Contractholder may cast shall be equal to the number of Accumulation Units
standing to the credit of his contract. After annuity payments under a
deferred or immediate variable annuity contract have begun, i.e. during the
annuity period, the number of votes which a Contractholder may cast shall be
equal to (i) the amount of assets established in the Fund to meet the
obligation for future payments under variable options elected under the
contract, divided by (ii) the value of an Accumulation Unit.
Neither the Fund nor the Company shall be under a duty to inquire as to
(1) the receipt by a Contractholder of instructions from persons, if any, who
may have the right to instruct the Contractholder with respect to votes
attributable to the Contractholder's contract, (2) the validity or effect of
any voting instructions received by a Contractholder or (3) the authority of
the Contractholder to cast votes. Except as the Fund or the Company has
actual knowledge to the contrary, the votes cast by the Contractholders shall
be valid and effective as they affect the Fund, the Company and any others
having voting rights with respect to the Fund.
For purposes of these Rules and Regulations, the Company shall be
deemed a Contractholder with respect to and shall be entitled to cast the
votes attributable to assets in the Fund not attributable to variable annuity
contracts, provided that the Company's votes shall be cast only in the same
manner and proportion in which all other votes are cast.
Cumulative voting for members of the Board of Managers is not
authorized.
Section 8. Tellers. The Chairman shall appoint at least two tellers to
receive, count and report all ballots cast at every meeting of
Contractholders and he may also appoint a committee on qualifications and
proxies to inquire and report to the meeting what Contractholders are
present, duly qualified or properly represented. If the right of any person
to vote is questioned, the Chairman of the meeting shall upon receiving the
report of the committee on qualifications and proxies determine his said
right, subject to an appeal from such decision to the meeting.
Section 9. Voting Authority. Subject to applicable law, the Contractholders
shall have authority, at any meeting called for that purpose, to:
a. Determine the number of and elect members of the Board of Managers
of the Fund, and fill vacancies in the Board when such action is required
under applicable law;
b. Remove any member of the Board of Managers of the Fund or any
officer elected or appointed by the Board;
c. Ratify the selection of an independent public accountant for the
Fund, and terminate the employment of such independent public accountant;
d. Approve an initial or amended agreement for investment advisory
services for the Fund, approve the continuance of such an agreement in the
absence of approval of such continuance by the Board of Managers of the Fund
and terminate such agreement;
e. Approve an initial or amended distribution agreement for the Fund
and approve the continuance of such an agreement, in the absence of approval
of such agreement or its continuance by the Board of Managers of the Fund;
and
f. Authorize changes in the fundamental investment policies of the
Fund.
Action with respect to the matters referred to in paragraphs (b), (d),
(e), and the second clause of paragraph (c) shall be by vote of a majority of
the votes entitled to be cast.
ARTICLE VI. VALUATION OF THE ASSETS OF THE FUND
Section 1. Valuation of Assets. In determining the total value of the
assets of the Fund on any valuation date, securities shall be taken at their
market value and all other assets at fair value, determined as follows:
(1) The market value of each security that is traded on a national
securities exchange shall be determined by the price of the last reported
sale of such security on any of said exchanges on the valuation date. In
case there has been no such sale of such security on such day, and for any
security not traded on a national securities exchange, the market value shall
be taken to be the last reported bid price on the valuation date.
(2) The market value of each security for which market quotations are
not readily available shall be determined by any method which may be selected
by the Board of Managers.
(3) Dividends declared but not yet received and rights in respect of
securities quoted ex-dividends or ex-rights shall be included at the fair
value thereof as determined by any method which may be selected by the Board
of Managers, which may, but need not be, the fair value so determined on the
day the particular securities are first quoted ex-dividends or ex-rights.
(4) The fair value of any other assets of the Fund (or the value of
any of the assets mentioned in paragraphs (1), (2) or (3) in situations not
covered thereby or in the event of the closing of the New York Stock Exchange
or any other circumstances determined by the Board of Managers to make other
methods of valuation advisable) shall be determined by any method which may
be selected by the Board of Managers.
(5) Whenever value or market prices or any other matters are to be
determined hereunder by any method which may be selected by the Board of
Managers, the method selected shall be in accordance with generally accepted
accounting principles.
Section 2. Determination Binding. Any determination made in good faith and,
so far as accounting matters are involved, in accordance with generally
accepted accounting principles, by or pursuant to the direction of the Board
of Managers, as to the amount of assets, debts, obligations, or liabilities
of the Fund, as to the amount of any reserves or charges set up and the
propriety thereof, as to the time of or purpose for creating such reserves or
charges, as to the use, alteration or cancellation of any reserves or charges
(whether or not any debt, obligation or liability for which such reserves or
charges shall have been created shall have been paid or discharged or shall
be then or thereafter required to be paid or discharged), as to the price or
bid or asked price of any security owned or held by the Fund, as to the
market value of any security or fair value of any other asset of the Fund, as
to the estimated expense to the Fund in connection with purchases of assets,
as to the ability to liquidate securities in orderly fashion, or as to any
other matters relating to the issue, sale, purchase and/or acquisition or
disposition of securities of the Fund, shall be final, conclusive and
binding. The foregoing sentence shall not be construed to protect any member
of the Board of Managers or officer or agent of the Fund against any
liability to the Fund or Contractholders 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 or
agency; nor shall the foregoing sentence be construed as a waiver of
compliance with any provisions of the Investment Company Act of 1940
(including, without limitation, the provisions of Section 47(a) thereof) or
with any rule, regulation, or order promulgated under said Act. Nothing in
this section is to be construed to give the Board of Managers any control or
authority over the determination of liabilities under the variable annuity
contracts.
ARTICLE VII. FISCAL YEAR
The fiscal year of the Fund shall begin on January 1 and end on
December 31.
ARTICLE VIII. AMENDMENTS
These Rules and Regulations may be altered, amended or repealed at any
meeting of the Contractholders called for the purpose, of which the notice
shall specify the general purport of the proposed alteration, amendment or
repeal and of the articles to be affected thereby, by vote of the
Contractholders. These Rules and Regulations may also be altered, amended or
repealed by vote of a majority of the Board of Managers then in office,
except with respect to any provision which by law or these Rules and
Regulations requires action by the Contractholders. Action by the
Contractholders shall be required to amend, alter or repeal Article IV or to
amend, alter or repeal this Article VIII so as to increase the power of the
Board of Managers or reduce the power of the Contractholders to amend, alter
or repeal these Rules and Regulations. Any provision of these Rules and
Regulations adopted by the Board of Managers may be amended or repealed by
the Contractholders in the above manner.
