METROPOLITAN SERIES FUND INC.
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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METROPOLITAN SERIES FUND
(Name of registrant as specified in its charter)
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MET INVESTORS SERIES TRUST
METROPOLITAN SERIES FUND INC.
501 Boylston StreetOne Financial Center
Boston, Massachusetts 0211602111
December 2016
Dear Contract Holder:
I am writing to ask for your vote on a series of important matters concerning your investment in the series (each a “Portfolio” and collectively, the “Portfolios”) of Met Investors Series Trust (“MIST”) and Metropolitan Series Fund Inc. (the “Fund”(“MSF” and together with MIST, the “Trusts”). The BoardThis proxy statement asks you to consider and vote on two proposals in connection with the separation of DirectorsMetLife Advisers, LLC (the “Manager”), the investment adviser to the Portfolios, from its parent company, MetLife, Inc. (“MetLife”) (the “Separation”) and on a third proposal to elect Trustees of the FundTrusts (the “Board”“Proposals”) has called:
(I) | To approve for each Portfolio a new investment advisory agreement between each Trust, on behalf of its Portfolios, and the Manager (“Proposal I”); |
(II) | To approve for each of MetLife Aggregate Bond Index Portfolio, MetLife Stock Index Portfolio, MetLife Mid Cap Stock Index Portfolio, Russell 2000® Index Portfolio and MSCI EAFE® Index Portfolio, each a series of MSF, and for MetLife Multi-Index Targeted Risk Portfolio, a series of MIST (the “MLIA Subadvised Portfolios”), each of which is subadvised by MetLife Investment Advisors, LLC (“MLIA”), an affiliate of the Manager, a new subadvisory agreement between the Manager and MLIA with respect to such MLIA Subadvised Portfolio (“Proposal II”); and |
(III) | To elect Trustees of the Trusts (“Proposal III”). |
A special meeting of shareholders of the Portfolios has been scheduled for February 24, 20122017 at the offices of MetLife Advisers, LLC, 501 Boylston Street,One Financial Center, Boston, Massachusetts 02116,02111, at 10:00 a.m. Eastern Time (the “Meeting”). The for the purpose of the Meeting is to ask shareholders to consider the following important proposals:
(I) To elect Directors of the Fund (“Proposal I”);
(II) To approve for each Portfolio of the Fund an Amended and Restated Advisory Agreement between the Fund, on behalf of such Portfolio, and MetLife Advisers, LLC, the Fund’s investment adviser (the “Manager”) (“Proposal II”); and
(III) To approve an Agreement and Plan of Reorganization (the “Reorganization Agreement”) providing for (i) the transfer of all of the assets of each Portfolio of the Fund to, and the assumption of all of the liabilities of each Portfolio of the Fund by, a separate, corresponding newly-formed series (a “New Portfolio”) of Metropolitan Series Fund, a newly-formed Delaware statutory trust (the “New Trust”), in exchange for shares of the corresponding New Portfolio; (ii) the distribution of such shares to the shareholders of each Portfolio in complete liquidation of the Portfolio; and (iii) the dissolution of the Fund under Maryland law (collectively, the “Reorganization”) (“Proposal III” and, together with Proposal I and Proposal II, the “Proposals”).
considering these Proposals. In addition, shareholders may be asked to consider and act upon other matters which may properly come before the Meeting or any adjournment or postponement thereof. Shareholders of record of any Portfolio as of the close of business on November 30, 2016 are entitled to vote at the Meeting and any adjournment or postponement thereof.
In Proposal I, shareholders of each Portfolio are asked to approve a new investment advisory agreement (each a “New Advisory Agreement” and collectively, the “New Advisory Agreements”) with the Manager on terms substantially identical to those of the Portfolio’s current advisory agreement (each a “Current Advisory Agreement” and collectively, the “Current Advisory Agreements”). Under applicable law, the Separation will result in a change in control of the Manager, which may be deemed to be an “assignment” of each Portfolio’s Current Advisory Agreement, resulting in its automatic termination. The change in control of the Manager is not expected to have a material effect on the management of either Trust.
In Proposal II, shareholders of each MLIA Subadvised Portfolio are asked to approve a new subadvisory agreement (each a “New Subadvisory Agreement” and collectively, the “New Subadvisory Agreements”) between the Manager and MLIA on terms substantially identical to those of the MLIA Subadvised Portfolios’ current subadvisory agreement (each a “Current Subadvisory Agreement” and collectively, the “Current Subadvisory Agreements”). Because each Current Subadvisory Agreement provides for its automatic termination upon the termination of the applicable Current Advisory Agreement, the Separation is expected to result in the termination of the Current Subadvisory Agreement as well. Under exemptive relief from the U.S. Securities and Exchange Commission applicable to the Trusts, a subadvisory agreement with a subadviser that is not an affiliate of the Manager may be approved by the Board of Trustees of each Trust (the “Board”) without shareholder approval, but this exemptive relief does not apply to subadvisory agreements with an affiliate of the Manager, which must be approved by shareholders. The New Subadvisory Agreement for each MLIA Subadvised Portfolio will be substantially identical to the Portfolio’s Current Subadvisory Agreement.
In Proposal III, shareholders are asked to elect four (4) new directorseight (8) Trustees (each a “Nominee” and re-elect five (5) existing directorscollectively, the “Nominees”) for among other things, the purpose of substantially aligning the membershipeach Trust. All of the Board withNominees currently serve as Trustees of the boardTrusts and have served in that overseescapacity continuously since their original election or appointment to the other investment company portfolios advised by the Manager (the “MIST Portfolios” and, together with the Portfolios, the “MetLife Funds Complex”).Board. The Board has determined that iteach Nominee’s professional experience, skills, and their relative tenures as Trustees of the Trusts would be beneficial to the Fund and that certain efficiencies may inure to the Fund if substantially similar boards were responsible for the oversight of all of the funds in the MetLife Funds Complex given, among other things, the increased similarity between the operations of the Portfolios and the MIST Portfolios and the additional responsibilities imposed on board members generally as a result of recent regulatory developments.Trusts. If elected, each of the board members, except for me,Nominees other than Mr. Rosenthal is expected to qualify as a board member who is not an “interested person” (asperson,” as defined in the Investment Company Act of 1940, as amended)amended (the “1940 Act”), of the Fund.
In Proposal II, shareholders of each Portfolio are asked to approve an Amended and Restated Advisory Agreement with the Manager for the purpose of revising the terms of that Agreement to reflect, among other things, that the Fund may retain a third party to perform administrative services for each Portfolio at the Portfolio’s expense, and to limit generally the Manager’s role in respect of those administrative services to supervising and overseeing them. Under the Amended and Restated Advisory Agreement for each Portfolio, the Manager would no longer be obligated to provide administrative services to the Portfolios.
If shareholders of a Portfolio approve Proposal II, the Fund expects, at a future date, to retain for the Portfolio a third-party service provider that specializes in providing administrative services to mutual funds. The Manager and Board believe the Portfolios may benefit over the long term from the retention of a third-party administrator dedicated to the business of providing administrative services to mutual fund families. If Proposal II were approved by each Portfolio and a third-party administrator were retained on behalf of the Portfolios, the Manager estimates, based on a preliminary review of the market, that each Portfolio’s total annual operating expenses would increase by less than 0.005% of the Portfolio’s average daily net assets, assuming current asset levels for the funds in the MetLife Funds Complex remain the same and that the entire MetLife Funds Complex retains the same third-party administrator. There can be no assurances that a Portfolio’s total annual operating expenses will not increase by more than the amount shown above.
In addition, with respect to the advisory agreements of the Barclays Capital Aggregate Bond Index Portfolio, Loomis Sayles Small Cap Growth Portfolio, MetLife Mid Cap Stock Index Portfolio, MetLife Stock Index Portfolio, MFS Value Portfolio, Morgan Stanley EAFE Index Portfolio, Neuberger Berman Mid Cap Value Portfolio, Oppenheimer Global Equity Portfolio, Russell 2000 Index Portfolio, T. Rowe Price Large Cap Growth Portfolio and T. Rowe Price Small Cap Growth Portfolio only (collectively, the “Group A Portfolios”), additional amendments are proposed to modernize the terms of the Group A Portfolios’ advisory agreements and to align the terms of the Group A Portfolios’ current advisory agreements with those of the advisory agreements of the other Portfolios of the Fund.
In Proposal III, shareholders are asked to approve the reorganization of the Fund, currently a Maryland corporation, as a Delaware statutory trust. The New Trust expects to adopt the registration statement of the Fund, such that each New Portfolio is expected to have, immediately after the Reorganization, the same investment objectives and policies as the corresponding Portfolio to whose business it will succeed. In addition, each New Portfolio is expected to be managed by the same investment adviser, subadviser (if applicable) and portfolio managers as its corresponding Portfolio. No changes to any of the Portfolios’ expense structures would be expected to result if Proposal III is approved by shareholders. The Manager and Board believe the Fund may benefit from certain flexibility provided by the Reorganization (e.g., the ability to authorize the issuance of an unlimited number of shares) and certain efficiencies that may be achieved by having all of the funds in the MetLife Funds Complex organized as Delaware statutory trusts (e.g., the elimination
of certain legal costs that result from operating a family of funds that does not have uniform organizational documents).Trusts.
After careful consideration, the Board unanimously recommends that you vote “FOR” each Proposal.
A Notice of Special Meeting of Shareholders is enclosed, followed by a proxy statement relating to the Proposals (the “Proxy Statement”). Please review the enclosed Proxy Statement for a more detailed description of the Proposals.
As an owner of a variable life insurance policy or variable annuity contract issued by separate accounts of Metropolitan Life Insurance Company and its insurance company affiliates (collectively,(each an “Insurance Company” and collectively, the “Insurance Companies”), you have the right to instruct your Insurance Company how to vote at the Meeting on the Proposals. You may give voting instructions for the number of shares of the relevant Portfolio(s) attributable to your life insurance policy or annuity contract as of the record time at the close of business on November 30, 2011.2016.
Your vote is very important to us regardless of the number of shares attributable to your variable life insurance policy or variable annuity contract. Whether or not you plan to attend the Meeting in person, pleasePlease read the Proxy Statement and cast your vote promptly. It is important that your vote bereceived by no later than the time of the Meeting on February 24, 2012.2017. VOTING IS QUICK
AND EASY. EVERYTHING YOU WILL REQUIRE IS ENCLOSED. To cast your vote simply complete, sign and return the Voting Instruction Card in the enclosed postage-paid envelope. As an alternative to voting by mail you may also vote either via the Internet or by telephone, as explained on the Voting Instruction Card. You may still vote in person if you attend the Meeting.
We encourage you to vote via the Internet or by telephone using the control number that appears on your enclosed Voting Instruction Card. Use of Internet or telephone voting will reduce the time and costs associated with this proxy solicitation.
If you have any questions after considering the enclosed materials, please call your financial representative.
Sincerely, |
Kristi Slavin |
President, Met Investors Series Trust and Metropolitan Series Fund |
MET INVESTORS SERIES TRUST
Elizabeth M. Forget(TO BE RENAMED BRIGHTHOUSE FUNDS TRUST I)
PresidentOne Financial Center
Boston, MA 02111
AB Global Dynamic Allocation Portfolio
Allianz Global Investors Dynamic Multi-Asset Plus Portfolio
American Funds® Balanced Allocation Portfolio
American Funds® Growth Allocation Portfolio
American Funds® Growth Portfolio
American Funds® Moderate Allocation Portfolio
AQR Global Risk Balanced Portfolio
BlackRock Global Tactical Strategies Portfolio
BlackRock High Yield Portfolio
Clarion Global Real Estate Portfolio
ClearBridge Aggressive Growth Portfolio
Goldman Sachs Mid Cap Value Portfolio
Harris Oakmark International Portfolio
Invesco Balanced-Risk Allocation Portfolio
Invesco Comstock Portfolio
Invesco Mid Cap Value Portfolio
Invesco Small Cap Growth Portfolio
JPMorgan Core Bond Portfolio
JPMorgan Global Active Allocation Portfolio
JPMorgan Small Cap Value Portfolio
Loomis Sayles Global Markets Portfolio
Met/Aberdeen Emerging Markets Equity Portfolio
(to be renamed Brighthouse/Aberdeen Emerging Markets Equity Portfolio)
Met/Artisan International Portfolio
(to be renamed Brighthouse/Artisan International Portfolio)
Met/Eaton Vance Floating Rate Portfolio
(to be renamed Brighthouse/Eaton Vance Floating Rate Portfolio)
Met/Franklin Low Duration Total Return Portfolio
(to be renamed Brighthouse/Franklin Low Duration Total Return Portfolio)
Met/Templeton International Bond Portfolio
(to be renamed Brighthouse/Templeton International Bond Portfolio)
Met/Wellington Large Cap Research Portfolio
(to be renamed Brighthouse/Wellington Large Cap Research Portfolio)
MetLife Asset Allocation 100 Portfolio
(to be renamed Brighthouse Asset Allocation 100 Portfolio)
MetLife Balanced Plus Portfolio
(to be renamed Brighthouse Balanced Plus Portfolio)
MetLife Multi-Index Targeted Risk Portfolio
MetLife Small Cap Value Portfolio
(to be renamed Brighthouse Small Cap Value Portfolio)
MFS® Research International Portfolio
Morgan Stanley Mid Cap Growth Portfolio
Oppenheimer Global Equity Portfolio
PanAgora Global Diversified Risk Portfolio
PIMCO Inflation Protected Bond Portfolio
PIMCO Total Return Portfolio
Pyramis® Government Income Portfolio
Pyramis® Managed Risk Portfolio
Schroders Global Multi-Asset Portfolio
SSGA Growth and Income ETF Portfolio
SSGA Growth ETF Portfolio
TCW Core Fixed Income Portfolio
T. Rowe Price Large Cap Value Portfolio
T. Rowe Price Mid Cap Growth Portfolio
METROPOLITAN SERIES FUND INC.
Artio(TO BE RENAMED BRIGHTHOUSE FUNDS TRUST II)
One Financial Center
Boston, MA 02111
Baillie Gifford International Stock Portfolio
Barclays Capital Aggregate Bond Index Portfolio
BlackRock Aggressive Growth Portfolio
BlackRock Bond Income Portfolio
BlackRock DiversifiedCapital Appreciation Portfolio
BlackRock Large Cap Value Portfolio
BlackRock Legacy Large Cap GrowthUltra-Short Term Bond Portfolio
BlackRock Money Market Portfolio
Davis Venture Value Portfolio
FI Value LeadersFrontier Mid Cap Growth Portfolio
Jennison Growth Portfolio
Loomis Sayles Small Cap Core Portfolio
Loomis Sayles Small Cap Growth Portfolio
Met/Artisan Mid Cap Value Portfolio
(to be renamed Brighthouse/Artisan Mid Cap Value Portfolio)
Met/Dimensional International Small Company Portfolio
(to be renamed Brighthouse/Dimensional International Small Company Portfolio)
Met/Wellington Balanced Portfolio
(to be renamed Brighthouse/Wellington Balanced Portfolio)
Met/Wellington Core Equity Opportunities Portfolio
(to be renamed Brighthouse/Wellington Core Equity Opportunities Portfolio)
MetLife Conservative AllocationAggregate Bond Index Portfolio
MetLife Conservative Asset Allocation 20 Portfolio
(to Moderatebe renamed Brighthouse Asset Allocation 20 Portfolio)
MetLife Asset Allocation 40 Portfolio
(to be renamed Brighthouse Asset Allocation 40 Portfolio)
MetLife Asset Allocation 60 Portfolio
(to be renamed Brighthouse Asset Allocation 60 Portfolio)
MetLife Asset Allocation 80 Portfolio
(to be renamed Brighthouse Asset Allocation 80 Portfolio)
MetLife Mid Cap Stock Index Portfolio
MetLife Moderate Allocation Portfolio
MetLife Moderate to Aggressive Allocation Portfolio
MetLife Stock Index Portfolio
MFS® Total Return Portfolio
MFS® Value Portfolio
Morgan StanleyMSCI EAFE® Index Portfolio
(to be renamed MetLife MSCI EAFE® Index Portfolio)
Neuberger Berman Genesis Portfolio
Neuberger Berman Mid Cap ValueRussell 2000® Index Portfolio
Oppenheimer Global Equity Portfolio
(to be renamed MetLife Russell 2000® Index PortfolioPortfolio)
T. Rowe Price Large Cap Growth Portfolio
T. Rowe Price Small Cap Growth Portfolio
Van Eck Global Natural Resources Portfolio
Western Asset Management Strategic Bond Opportunities Portfolio
Western Asset Management U.S. Government Portfolio
Zenith Equity Portfolio
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Notice is hereby given that a Special Meeting (the “Meeting”) of the shareholders of Met Investors Series Trust (“MIST”) and Metropolitan Series Fund Inc. (the “Fund”(“MSF” and together with MIST, the “Trusts”) and each series of the FundTrusts (each a “Portfolio” and collectively, the “Portfolios”) will be held at 10:00 a.m. Eastern Time on February 24, 2012,2017, at the offices of MetLife Advisers, LLC (the “Manager”), 501 Boylston Street,One Financial Center, Boston, Massachusetts 0211602111 for the following purposes:
To |
To approve for each of MetLife Aggregate Bond Index Portfolio, MetLife Stock Index Portfolio, MetLife Mid Cap Stock Index Portfolio, Russell 2000® Index Portfolio and MSCI EAFE® Index Portfolio, each a series of MSF, and for MetLife Multi-Index Targeted Risk Portfolio, a series of MIST (the “MLIA Subadvised Portfolios”), each of which is subadvised by MetLife Investment Advisors, LLC (“MLIA”), an |
To |
In addition, shareholders may be asked to consider and act upon other matters which may properly come before the Meeting or any adjournment or postponement thereof.
Shareholders of record at the close of business on November 30, 2011,2016 are entitled to notice of and to vote at the Meeting and any adjourned or postponed session thereof.
By order of the Board of Directors of the Fund,
By order of the Board of Trustees of the Trusts, | ||
Michael P. Lawlor, | ||
Assistant Secretary |
Boston, Massachusetts
Michael P. Lawlor, Assistant Secretary
[ ], 2011December 27, 2016
NOTICE: YOUR VOTE IS IMPORTANT. PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED VOTING INSTRUCTION CARD PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING.ENVELOPE. YOU CAN ALSO VOTE VIA THE INTERNET OR BY TELEPHONE BY FOLLOWING THE SIMPLE INSTRUCTIONS THAT APPEAR ON THE ENCLOSED VOTING INSTRUCTION CARD. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING.
METROPOLITANMET INVESTORS SERIES FUND, INC.TRUST
501 Boylston Street(TO BE RENAMED BRIGHTHOUSE FUNDS TRUST I)
One Financial Center
Boston, Massachusetts 02116MA 02111
Artio International StockAB Global Dynamic Allocation Portfolio
Barclays Capital Aggregate Bond IndexAllianz Global Investors Dynamic Multi-Asset Plus Portfolio
American Funds® Balanced Allocation Portfolio
American Funds® Growth Allocation Portfolio
American Funds® Growth Portfolio
American Funds® Moderate Allocation Portfolio
AQR Global Risk Balanced Portfolio
BlackRock Global Tactical Strategies Portfolio
BlackRock High Yield Portfolio
Clarion Global Real Estate Portfolio
ClearBridge Aggressive Growth Portfolio
Goldman Sachs Mid Cap Value Portfolio
Harris Oakmark International Portfolio
Invesco Balanced-Risk Allocation Portfolio
Invesco Comstock Portfolio
Invesco Mid Cap Value Portfolio
Invesco Small Cap Growth Portfolio
JPMorgan Core Bond Portfolio
JPMorgan Global Active Allocation Portfolio
JPMorgan Small Cap Value Portfolio
Loomis Sayles Global Markets Portfolio
Met/Aberdeen Emerging Markets Equity Portfolio
(to be renamed Brighthouse/Aberdeen Emerging Markets Equity Portfolio)
Met/Artisan International Portfolio
(to be renamed Brighthouse/Artisan International Portfolio)
Met/Eaton Vance Floating Rate Portfolio
(to be renamed Brighthouse/Eaton Vance Floating Rate Portfolio)
Met/Franklin Low Duration Total Return Portfolio
(to be renamed Brighthouse/Franklin Low Duration Total Return Portfolio)
Met/Templeton International Bond Portfolio
(to be renamed Brighthouse/Templeton International Bond Portfolio)
Met/Wellington Large Cap Research Portfolio
(to be renamed Brighthouse/Wellington Large Cap Research Portfolio)
MetLife Asset Allocation 100 Portfolio
(to be renamed Brighthouse Asset Allocation 100 Portfolio)
MetLife Balanced Plus Portfolio
(to be renamed Brighthouse Balanced Plus Portfolio)
MetLife Multi-Index Targeted Risk Portfolio
MetLife Small Cap Value Portfolio
(to be renamed Brighthouse Small Cap Value Portfolio)
MFS® Research International Portfolio
Morgan Stanley Mid Cap Growth Portfolio
Oppenheimer Global Equity Portfolio
PanAgora Global Diversified Risk Portfolio
PIMCO Inflation Protected Bond Portfolio
PIMCO Total Return Portfolio
Pyramis® Government Income Portfolio
Pyramis® Managed Risk Portfolio
Schroders Global Multi-Asset Portfolio
SSGA Growth and Income ETF Portfolio
SSGA Growth ETF Portfolio
TCW Core Fixed Income Portfolio
T. Rowe Price Large Cap Value Portfolio
T. Rowe Price Mid Cap Growth Portfolio
METROPOLITAN SERIES FUND
(TO BE RENAMED BRIGHTHOUSE FUNDS TRUST II)
One Financial Center
Boston, MA 02111
Baillie Gifford International Stock Portfolio
BlackRock Bond Income Portfolio
BlackRock DiversifiedCapital Appreciation Portfolio
BlackRock Large Cap Value Portfolio
BlackRock Legacy Large Cap GrowthUltra-Short Term Bond Portfolio
BlackRock Money Market Portfolio
Davis Venture Value Portfolio
FI Value LeadersFrontier Mid Cap Growth Portfolio
Jennison Growth Portfolio
Loomis Sayles Small Cap Core Portfolio
Loomis Sayles Small Cap Growth Portfolio
Met/Artisan Mid Cap Value Portfolio
(to be renamed Brighthouse/Artisan Mid Cap Value Portfolio)
Met/Dimensional International Small Company Portfolio
(to be renamed Brighthouse/Dimensional International Small Company Portfolio)
Met/Wellington Balanced Portfolio
(to be renamed Brighthouse/Wellington Balanced Portfolio)
Met/Wellington Core Equity Opportunities Portfolio
(to be renamed Brighthouse/Wellington Core Equity Opportunities Portfolio)
MetLife Conservative AllocationAggregate Bond Index Portfolio
MetLife Conservative Asset Allocation 20 Portfolio
(to Moderatebe renamed Brighthouse Asset Allocation 20 Portfolio)
MetLife Asset Allocation 40 Portfolio
(to be renamed Brighthouse Asset Allocation 40 Portfolio)
MetLife Asset Allocation 60 Portfolio
(to be renamed Brighthouse Asset Allocation 60 Portfolio)
MetLife Asset Allocation 80 Portfolio
(to be renamed Brighthouse Asset Allocation 80 Portfolio)
MetLife Mid Cap Stock Index Portfolio
MetLife Moderate Allocation Portfolio
MetLife Moderate to Aggressive Allocation Portfolio
MetLife Stock Index Portfolio
MFS® Total Return Portfolio
MFS® Value Portfolio
Morgan StanleyMSCI EAFE® Index Portfolio
(to be renamed MetLife MSCI EAFE® Index Portfolio)
Neuberger Berman Genesis Portfolio
Neuberger Berman Mid Cap ValueRussell 2000® Index Portfolio
Oppenheimer Global Equity Portfolio
(to be renamed MetLife Russell 2000® Index PortfolioPortfolio)
T. Rowe Price Large Cap Growth Portfolio
T. Rowe Price Small Cap Growth Portfolio
Van Eck Global Natural Resources Portfolio
Western Asset Management Strategic Bond Opportunities Portfolio
Western Asset Management U.S. Government Portfolio
Zenith Equity Portfolio
1
PROXY STATEMENT
December 19, 2016
This Proxy Statement is being furnished in connection with the solicitation of proxies by the Board of Trustees (the “Trustees” or the “Board”) of Met Investors Series Trust (“MIST”) and Metropolitan Series Fund (“MSF” and together with MIST, the “Trusts”) and the solicitation of voting instructions by the Board of Directors (the “Board of Directors,”Metropolitan Life Insurance Company and its insurance company affiliates (each an “Insurance Company” and collectively, the “Board,” or the “Directors”“Insurance Companies”) of Metropolitan Series Fund, Inc. (the “Fund”), for use at the special meeting (the “Meeting”) of shareholders of the FundTrusts and each series of the Fund’s seriesTrusts (each a “Portfolio” and collectively, the “Portfolios”). The Meeting will be held at 10:00 a.m. Eastern Time on February 24, 2012,2017, at the offices of MetLife Advisers, LLC 501 Boylston Street,(the “Manager”), One Financial Center, Boston, Massachusetts 02116.MA 02111. This Proxy Statement and its enclosures are being mailed to shareholders of the Portfolios beginning on or about January 3, 2012.December 27, 2016. Shareholders of record at the close of business on November 30, 20112016 (the “Record Date”) are entitled to vote on the proposals, as set forth below.
THE PROPOSALS
As described in greater detail below, this Proxy Statement relates to proposals to (i) elect Directors of the Fund for the purpose of, among other things, substantially aligning the membership of the Board with the board that oversees the other portfolios in the MetLife Funds Complex (as defined below) (“Proposal I”); (ii) approve for each Portfolio of the Fund an Amended and Restated Advisory Agreement between the Fund, on behalf of such Portfolio, and MetLife Advisers, LLC, the Fund’s investment adviser (the “Manager”) (“Proposal II”); and (iii) approve an Agreement and Plan of Reorganization (the “Reorganization Agreement”) providing for (a) the transfer of all of the assets of each Portfolio of the Fund to, and the assumption of all of the liabilities of each Portfolio of the Fund by, a separate, corresponding newly-formed series (a “New Portfolio”) of Metropolitan Series Fund, a newly formed Delaware statutory trust (the “New Trust”), in exchange for shares of the corresponding New Portfolio; (b) the distribution of such shares to the shareholders of each Portfolio in complete liquidation of each Portfolio; and (c) the dissolution of the Fund under Maryland law (collectively, the “Reorganization”) (“Proposal III” and, together with Proposal I and Proposal II, the “Proposals”).proposals:
(I) | To approve for each Portfolio a new investment advisory agreement between each Trust, on behalf of its Portfolios, and the Manager (“Proposal I”); |
(II) | To approve for each of MetLife Aggregate Bond Index Portfolio, MetLife Stock Index Portfolio, MetLife Mid Cap Stock Index Portfolio, Russell 2000® Index Portfolio and MSCI EAFE® Index Portfolio, each a series of MSF, and for MetLife Multi-Index Targeted Risk Portfolio, a series of MIST (the “MLIA Subadvised Portfolios”), each of which is subadvised by MetLife Investment Advisors, LLC (“MLIA”), an affiliate of the Manager, a new subadvisory agreement between the Manager and MLIA with respect to such MLIA Subadvised Portfolio (“Proposal II”); and |
(III) | To elect Trustees of the Trusts (“Proposal III”). |
With respect to Proposals I and III, the shareholders of the Portfolios will vote together as a single class. With respect to Proposal II, the shareholders of each Portfolio will vote separately. The approval and implementation of any oneWith respect to Proposal III, the shareholders of the Proposals is not contingent on the approvalPortfolios of any of the other Proposals.each Trust will vote together as a single class.
INTRODUCTION
The Fund,Each Trust is anopen-end management investment company is a Maryland corporation that was formed in 1982. The Fund is a series-type company with 34 separate series (or “Portfolios”). The Manager advises a number of other investment companies (the “MIST Portfolios” and together with the Portfolios, the “MetLife Funds Complex”) that are series of a separate entity, Met Investors Series Trust (“MIST”), formedorganized as a Delaware statutory trust. AtMIST was formed in 2000 as a meetingseries-type company and currently consists of 45 separate Portfolios. MSF was formed in 1982 as a series-type company and currently consists of 30 separate Portfolios. The Portfolios are currently used solely as funding options in variable annuity and life insurance contracts issued by Insurance Companies affiliated with MetLife, Inc. (“MetLife”). Both Trusts are managed by the Fund’s Board onManager.
2-1-
August 18, 2011 (the “August Meeting”),All of the voting interests in the Manager introduced a number of proposals toand MLIA are currently owned by MetLife, the Board that were intended to align more closely the operationsultimate parent company of the PortfoliosManager and the MIST Portfolios. The Manager proposed (i) aligning substantially the membershipMLIA. In January 2016, MetLife announced that it was planning to divest itself, through one or more transactions, of the Board with the membershipa substantial portion of the Board of Trustees of MIST (the “MIST Board” or the “MIST Trustees”) by electing certain of the MIST Trustees to serve on the Fund’s Board; (ii) amending each Portfolio’s existing advisory agreement for the purpose of revising the terms of those agreements to reflect that the Fund may retain a third party to perform administrative services for each Portfolio at such Portfolio’s expense, and to limit the Manager’s role in respect of those administrative services to supervising and overseeing them; and (iii) reorganizing the Fund as a Delaware statutory trust.
The Board formed a Special Ad Hoc Committee (the “Special Committee”), comprised solely of Directors of the Fund who are not “interested persons” (as defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of the Fund (“Independent Directors”) to evaluate the proposals made by the Manager at the August Meeting. The Special Committee held its first meeting on August 18, 2011 during which it considered, among other things, the information it would need to evaluate the Manager’s proposals.
Over the following three months, the Special Committee met in person and by phone several more times to discuss and evaluate information provided by the Manager in respect of the proposals; provide comments on the materials and information provided by the Manager regarding the proposals; review and discuss the experience and qualifications of the MIST Trustees under consideration to be nominated to the Fund’s Board; and request, where necessary, additional information from the Manager. During that period, members of the Special Committee also attended a meeting of the MIST Board and met separately with the Trustees of MIST who are not “interested persons” (as defined in the 1940 Act) of MIST.
On November 10, 2011, the Special Committee met to review and discuss an additional proposal from the Manager to align substantially the advisory agreements of each of the Portfolios and, as part of that proposal, to modernize the terms of certain of the Portfolios’ advisory agreements.
Throughout its review of the proposals, the Special Committee was advised by counsel to the Fund and separate counsel to the Independent Directors.
At a meeting of the Fund’s Board on November 16-17, 2011 (the “November Meeting”), the Manager made a revised presentation regarding each of the Proposals. Based upon the unanimous recommendation of the Special Committee and the Board’s own review of the Proposals, the Board approved a form of Amended and Restated Advisory Agreement between the Fund, on behalf of each Portfolio, andU.S. retail business, including the Manager (the “Amended Advisory Agreement”“Separation”). The new separate retail business will be organized under a holding company to be called Brighthouse Financial, Inc. (“Brighthouse”). In connection with the Separation, the voting interests in the Manager that are currently held by MetLife will be transferred to Brighthouse and Brighthouse will become the Reorganization Agreement. Acting on nominations made byultimate parent company of the Board’s Nominating Committee, the Fund’s Board approved
3
the nominations of Messrs. Stephen M. Alderman, Robert Boulware and Daniel A. Doyle and Ms. Susan C. Gause, each currently a MIST Trustee, to the Fund’s Board.Manager. In addition, in connection with the Board determined to seekSeparation, Brighthouse will become the re-electionultimate parent company of Mses. Nancy Hawthorne, Linda B. Strumpf, Dawn M. Vroegop and Elizabeth M. Forget and Mr. Keith M. Schappert bya registered broker-dealer that will serve as the Portfolios’ distributor, as well as certain insurance companies that are shareholders of the Fund.Portfolios. The Board also called a shareholder meeting forvoting interests in MLIA that are currently held by MetLife will not be transferred to Brighthouse in connection with the purposeSeparation, and MetLife will remain the ultimate parent company of asking shareholdersMLIA following the Separation. The Separation is expected to actoccur in the first half of 2017.
The Separation is not expected to have any material effect on the Proposals.
If elected, any newly elected directors will joinoperations or personnel of the Fund’s Board and, if approved, any Amended Advisory Agreement will become effective asManager or MLIA or the services they provide to the Portfolios approvingTrusts. In connection with the Separation, it is anticipated that the Manager will change its name from MetLife Advisers, LLC to Brighthouse Investment Advisers, LLC, and MIST and MSF will change their names to Brighthouse Funds Trust I and Brighthouse Funds Trust II, respectively, effective on or about April 30, 2012. The reorganization of the Fund, if approved, is expected to close on April 30, 2012, although the date may be adjusted in accordance with the Reorganization Agreement.March 6, 2017.
THE BOARD OF DIRECTORSTRUSTEES UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” PROPOSALS I, II AND III.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on February 24, 2012.2017.
This proxy statement and each Portfolio’s most recent reports to shareholders are available atwww.metlife.com/msf.msf.
4
PROPOSAL I – ELECTIONAPPROVAL OF BOARD MEMBERSNEW ADVISORY AGREEMENTS
Introduction
The Fund’s Board is recommending that shareholders electManager currently serves as the following personsinvestment adviser to the Trusts under the Trusts’ current advisory agreements (each a “Current Advisory Agreement” and collectively, the “Current Advisory Agreements”). The Manager, as Directorspermitted by the Current Advisory Agreements, has engaged one or more investment managers to manage many of the Fund: Stephen M. Alderman, Robert Boulware, DanielTrusts’ Portfolios on a subadvisory basis under each Portfolio’s current subadvisory agreements (each a “Current Subadvisory Agreement” and collectively, the “Current Subadvisory Agreements”). The Manager is responsible for, among other things, monitoring the performance of each Trust’s subadvisers and, subject to the approval of the Board, may terminate subadvisers and identify and select new subadvisers for the
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Portfolios. The Manager operates each Trust under a“manager-of-managers” structure pursuant to an exemptive order (the“Manager-of-Managers Order”) issued by the U.S. Securities and Exchange Commission (the “SEC”).1 The date of each Portfolio’s Current Advisory Agreement and the date on which it was last approved by shareholders and last approved or continued by the Board are provided in Appendix A. Doyle and Susan C. Gause
As required by the Investment Company Act of 1940, as amended (the “New Nominees”“1940 Act”), such electionseach Current Advisory Agreement provides for its automatic termination in the event of its assignment. The Separation is expected, through one or more transactions, to result in a change in control of the Manager, and therefore an “assignment,” as that term is defined in the 1940 Act, of each Current Advisory Agreement. The change in control of the Manager is not expected to have a material effect on the management of any Portfolio.
In anticipation of the Separation, shareholders of each Portfolio are being asked to approve a new advisory agreement (each a “New Advisory Agreement” and collectively, the “New Advisory Agreements”) between the Trust, on behalf of the Portfolio, and the Manager, to be effective upon the termination of the Current Advisory Agreements in connection with the Separation. The form of the New Advisory Agreement for each Portfolio is attached hereto as Appendix B. The New Advisory Agreement for each Portfolio will have an initial term of one year and will be substantially identical to the Portfolio’s Current Advisory Agreement, including with respect to the services the Manager is required to provide to the Portfolio and the fee rates paid to the Manager by the Portfolio. Each New Advisory Agreement will differ from the corresponding Current Advisory Agreement only with respect to dates and the names of the Manager, the Trusts and each Portfolio (which will be changed to reflect their new names following the Separation under the Brighthouse organization). The Manager’s name will be changed from MetLife Advisers, LLC to Brighthouse Investment Advisers, LLC, MIST’s name will be changed to Brighthouse Funds Trust I, and MSF’s name will be changed to Brighthouse Funds Trust II, effective on or about April 30, 2012, and re-elect Nancy Hawthorne, Keith M. Schappert, Linda B. Strumpf, Dawn M. Vroegop and Elizabeth M. Forget (the “Director Nominees,” and together withMarch 6, 2017.
The 1940 Act provides that, in order for an advisory agreement relating to a Portfolio to become effective, it must be approved by the New Nominees, the “Nominees”) as DirectorsBoard, including a majority of the Fund. The Board is recommending the election of the New Nominees, each of whom currently servesTrustees who are not “interested persons,” as a Trustee on the MIST Board (as do Mses. Forget and Vroegop), for the purposes of, among other things, substantially aligning the members of the Board with the membership of the MIST Board, which is the board that oversees the MIST Portfolios. If elected, each of the Nominees, except Ms. Forget, is expected to qualify as an Independent Director of the Fund. Ms. Forget is an “interested person” of the Fund (as defined in the 1940 Act) becauseAct, of her position as Presidentany Portfolio (the “Independent Trustees”), and by the Portfolio’s shareholders. In anticipation of the Separation, the Board met in person on September27-28, and again on November15-16, 2016 (the “November Meeting”), for the purpose of considering
1 As discussed below, theManager-of-Managers Order enables the Manager, subject to the approval of the Board, but without the need for shareholder approval, to retain and terminate subadvisers, engage new subadvisers (including entering into new subadvisory agreements) and to make material revisions to the terms of the subadvisory agreements relating to the Trusts, with respect to any subadviser that is not an affiliate of the Manager. Subadvisory agreements with a subadviser that is an affiliated person of the Manager her positions with certain other affiliates of MetLife, Inc. (“MetLife”), the ultimate parent company of the Manager, and her ownership of securities issuedmust be approved by MetLife.shareholders (see Proposal II).
Over the past several months, representatives of the Fund’s Board participated in informal and formal meetings with the Manager, counsel to the Fund and counsel to the Board’s Independent Directors to review and discuss ways to coordinate and enhance the governance of the MetLife Funds Complex, given, among other things, the increased similarity between the operations of the Portfolios and the MIST Portfolios and the additional responsibilities imposed on board members generally as a result of recent regulatory developments. Among the subjects considered by the Board was the possible substantial alignment of the memberships of the Board and the MIST Board. The Board considered the potential benefits of such an alignment, including, among other things, (i) the potential for enhanced board oversight of portfolio operations throughout the MetLife Funds Complex; (ii) the potential for further uniformity of practices throughout the MetLife Funds Complex; (iii) the potential for key personnel of the Manager to oversee Fund operations more efficiently by enabling them to address matters concerning both Boards simultaneously; and (iv) the potential for operational efficiencies by, for example, decreasing the time dedicated to preparing for and holding multiple regular board meetings each calendar quarter.
After extensive discussions and meetings, the Nominating Committee of the Board, composed exclusively of board members of the Fund who are Independent Directors, determined that-3-
whether it would be beneficialin the best interest of each Portfolio to approve a New Advisory Agreement with respect to such Portfolio and, for those Portfolios that are managed on a subadvisory basis, a new subadvisory agreement (each a “New Subadvisory Agreement” and collectively, the Fund if substantially similar boards were responsible for overseeing the operations of the entire MetLife Funds Complex. Throughout these discussions the Nominating Committee of the Board was advised by counsel to the Independent Directors.
“New Subadvisory Agreements”) with such Portfolio’s current subadviser(s). At the November Meeting, and for the Nominating Committee of the Board determined to recommend to the full Board the New Nominees for election to the Board and the Director Nominees for re-election to the Board. Acting on that recommendation at the
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November Meeting, the Board approved those nominations and called a meeting of shareholders to allow shareholders of the Fund to vote on the election and re-election, respectively, of the New Nominees and the Director Nominees to the Board.
To further align the boards that oversee the operations of the MetLife Funds Complex, the Manager has informed the Fund that the MIST Board expects to ask shareholders of MIST to elect each of the Director Nominees who do not already serve as members of the MIST Board as Trustees of MIST effective on or about April 30, 2012.
Information about each Nominee is set forth below. If elected by the shareholders of the Fund, it is expected that each Nominee would serve on the Board and, subject to MIST shareholder approval, on the MIST Board.
Information Concerning Nominees, Directors and Executive Officers
The following table provides information concerning the Nominees for election or re-election by shareholders, current Directors not proposed for re-election to the Board, and the executive officers of the Fund. Unless otherwise noted, (i) each Nominee, current Director and officer has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity and (ii) the address of the current Directors and officers of the Fund is c/o Metropolitan Series Fund, Inc., 501 Boylston Street, Boston, MA 02116, and the address of the New Nominees is c/o Met Investors Series Trust, 5 Park Plaza, Suite 1900, Irvine, California 92614.
Mr. Ludes, a current Director, is expected to retire at the end of the 2011 calendar year. Messrs. Garban, Scott Morton and Typermass are expected to retire from the Fund’s Board either before or at the time the New Nominees, if elected, join the Board. Following their retirement from the Board, Messrs. Garban and Scott Morton are expected to serve as Directors Emeriti to the Board and will commit to attend meetings of the Board, if requested by the Independent Directors, and will remain available for consultation by the Independent Directors of the Fund until December 31, 2012. As compensation for their service, each Director Emeritus will receive the pro rated portion of the retainer they would have received had they remained on the Board through December 31, 2012.
Each New Nominee elected and each Director Nominee re-elected to the Board at the Meeting will serve until his or her successor has been elected and qualified, or until he or she dies, resigns or is removed. Each Nominee has indicated a willingness to serve if elected.
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Each of the New Nominees was originally recommended to serve on the Fund’s Board by the Manager or a predecessor company.
Qualifications of Nominees and Current Directors
The following provides an overview of the considerations that led the Board to conclude that each individual serving as a Director of the Fund should so serve, and in the case of the Nominees, that each Director Nominee and New Nominee should be proposed for re-election or election, respectively, to the Board. The current members of the Board have joined the Board at different points in time since 1985. Generally, no one factor was decisive in the original selection of an individual to join the Board. Among the factors the Board considers when concluding that an individual should serve on the Board are the following: (i) the individual’s business and professional
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experience and accomplishments, including prior experience in the financial services and investment management fields or on other boards; (ii) the individual’s ability to work effectively with the other members of the Board; (iii) experience, if any, on boards of other investment companies that were merged into the Fund; and (iv) how the individual’s skills, experiences and attributes would contribute to an appropriate mix of relevant skills and experience on the Board.
In respect of each current Director and Nominee, the individual’s substantial professional accomplishments and prior experience, including, in some cases, in fields related to the operations of the Fund, were a significant factor in the determination that the individual should serve as a Director of the Fund. Each current Director’s and Nominee’s recent prior professional experience is summarized in the table above.
In certain cases, additional considerations contributed to the Board’s conclusion that an individual should serve on the Board. For example, the Board considered each of the following in concluding that the individual should serve as a current Director of the Fund: Mr. Ludes’ and Ms. Hawthorne’s prior experience serving on the Board of Directors of New England Zenith Fund, which combined its operations with those of the Fund in 2003, and the continuity of oversight of the acquired operations that they would provide as Directors of the Fund; Ms. Vroegop’s experience serving as a trustee of MIST; Ms. Forget’s leadership roles with the Manager and the Fund; Mr. Typermass’ professional experience as Senior Vice President and Treasurer of the Fund’s sponsoring insurance company; Mr. Garban’s extensive experience in audit, finance and investments as well as service on other boards; Ms. Strumpf’s extensive investment experience; Dr. Scott Morton’s distinguished career in the teaching of business administration, related research and service on corporate boards; Mr. Ludes’ substantial general management experience; Ms. Hawthorne’s experience in leadership positions with publicly traded companies; and Ms. Vroegop’s and Mr. Schappert’s substantial experience as executives in the investment management industry with entities unaffiliated with the Manager.
In respect of the New Nominees, the Board also considered their years of service as trustees of MIST, including any service on a committee of the MIST Board, as well as their knowledge of the operations and business of MIST. In certain cases, additional considerations contributed to the Board’s conclusion that an individual should serve on the Board. For example, Mr. Alderman’s five years of experience serving as the lead Independent Trustee of MIST and his professional experience as a practicing attorney; Mr. Boulware’s significant experience in leadership positions in the financial services industry; Mr. Doyle’s significant public accounting experience; and Ms. Gause’s significant experience in the investment management and financial services industry.
The Fund’s Directors review actions of the Fund’s investment adviser and subadvisers, and decide upon matters of general policy. The Fund’s officers supervise the daily business operations of the Fund. Each Director is, and each New Nominee if elected will be, responsible for overseeing all 34 Portfolios of the Fund. There is no
15
limit to the term a Director may serve; however, the Fund has adopted a retirement policy which generally requires Directors to retire as of December 31 of the year in which such Director attains the age of 75. Each Director serves until his or her successor has been elected and qualified, or until he or she dies, resigns or is removed.
Board Leadership Structure and Risk Oversight
The following describes the current Board leadership structure. If Proposal I is approved, the leadership structure of the Board and the structure, composition, types and/or number of the Fund’s standing Committees may change.
The Board consists of nine Directors, seven of whom are Independent Directors. The Chair of the Board, Ms. Elizabeth M. Forget, also serves as President and Chief Executive Officer of the Fund, and President, Chief Executive Officer and Chair of the Board of Managers of the Manager, and as such she participates in the oversight of the Fund’s day-to-day business affairs. Ms. Forget is an “interested person” of the Fund.
The Independent Directors have elected Mr. Steve A. Garban to serve as the lead Independent Director of the Board. Ms. Forget communicates and consults with Mr. Garban regularly on various issues involving the management and operations of the Fund. A portion of each regular meeting of the Board is devoted to an executive session of the Independent Directors at which no members of management are present. At those meetings, the Independent Directors consider a variety of matters that are required by law to be considered by the Independent Directors, as well as matters that are scheduled to come before the full Board, including fund governance and leadership issues, and are advised by separate, independent legal counsel. Mr. Garban serves as Chair for those meetings.
As describedreasons discussed below, the Board, conducts much of its work through certain standing Committees, each of which is chaired by an Independent Director. The Board has not established a formal risk oversight committee. However, much of the regular work of the Board and its standing Committees addresses aspects of risk oversight. The Board had four regularly scheduled meetings in 2010. Each Director attended at least 75% of the aggregate number of all meetings of the Board and at least 75% of the aggregate number of all Board committee meetings on which the Director served.
The Board has delegated certain authority to an Audit Committee, which consists of Messrs. Garban, Ludes and Schappert, Dr. Scott Morton and Mses. Hawthorne, Strumpf and Vroegop, all of whom are Independent Directors. The Board has determined that three of the Audit Committee members qualify as Audit Committee Financial Experts. The Audit Committee reviews the Fund’s financial and accounting controls and procedures, recommends the selection of the Fund’s independent registered public accounting firm, reviews the scope of the Fund’s audit, reviews the Fund’s financial statements and audit reports, reviews the independence of the Fund’s independent registered public accounting firm and approves fees and assignments
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relating to both audit and non-audit activities of the independent registered public accounting firm. Ms. Strumpf serves as Chair of the Audit Committee.
The Board has established two Contract Review Committees of the Board, each of which has responsibilities relating to designated Portfolios of the Fund. One Contract Review Committee is comprised of Messrs. Garban, Ludes and Schappert and Ms. Strumpf. Mr. Ludes currently serves as Chair of that Contract Review Committee. The other Contract Review Committee is comprised of Dr. Scott Morton, Mr. Typermass and Mses. Hawthorne and Vroegop. Ms. Hawthorne currently serves as Chair of that Contract Review Committee. Each Contract Review Committee from time to time reviews and makes recommendations to the Board as to contracts that require approval ofincluding a majority of the Independent Directors, which are assigned to such Contract Review Committee by the Board, and any other contracts that may be referred to it by the Board. The Board generally considers each Portfolio’s advisory and principal underwriting agreements at least annually.
The Board has establishedTrustees, approved a Governance Committee, which consists of Messrs. Garban, Ludes, Schappert and Typermass, Dr. Scott Morton and Mses. Hawthorne, Strumpf and Vroegop. Dr. Scott Morton currently serves as Chair of the Governance Committee. The Governance Committee reviews periodically Board governance practices, procedures and operations, the size and composition of the Board of Directors, Director compensation and other matters relating to the governance of the Fund.
The Board has established a Nominating Committee of the Board, which consists of Messrs. Garban, Ludes and Schappert, Dr. Scott Morton and Mses. Hawthorne, Strumpf and Vroegop, all of whom are Independent Directors. Dr. Scott Morton currently serves as Chair of the Nominating Committee. The Nominating Committee evaluates the qualifications of the Fund’s candidates for Independent Director positions and makes recommendations to the Independent DirectorsNew Advisory Agreement with respect to nominationseach Portfolio and recommended its approval by the shareholders of such Portfolio.
Each Current Subadvisory Agreement provides for Independent Director membership on the Fund’s Board. The Nominating Committee considers Independent Director candidates in connection with Board vacancies and newly created Board positions. The Nominating Committee requires that Independent Director candidates have a college degree or equivalent business experience.
The Nominating Committee may take into account a wide variety of factors in considering Independent Director candidates, including (but not limited to): (i) availability and commitment of a candidate to attend meetings and perform his or her responsibilities on the Fund’s Board, (ii) relevant industry and related experience, (iii) educational background, (iv) ability, judgment and expertise and (v) overall diversityits automatic termination upon termination of the Board’s composition. The Nominating Committee takesapplicable Current Advisory Agreement, and accordingly, will automatically terminate along with the overall diversitycorresponding Current Advisory Agreement upon the change in control of the Board into account when considering and evaluating Independent Director candidates. While the Nominating Committee has not adopted a specific policy on diversity or a particular definition of diversity, when considering candidates,
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the Nominating Committee generally considers the manner in which each candidate’s professional experience, background, skills in matters that are relevant to the oversight of the Portfolios (e.g., investment management, distribution, accounting, trading, compliance, legal), and general leadership experience are complementary to the existing Directors’ attributes. The Nominating Committee Charter is attached asAppendix A to this Proxy Statement.
The Nominating Committee will consider candidates for Independent Directors recommended by owners (“Contract Owners”) of a variable life insurance policy or variable annuity contract (a “Contract”) issued by separate accounts of Metropolitan Life Insurance Company (“Metropolitan Life”) or other affiliated insurance companies (each an “Insurance Company” and, collectively, the “Insurance Companies”), and evaluate such candidates in the same manner as it considers and evaluates candidates recommended by other sources. The Board has adopted procedures that a Contract Owner must follow to submit properly a recommendation to the Nominating Committee. Recommendations must be in a writing submitted to the Fund’s Secretary, c/o MetLife Advisers, LLC, 501 Boylston Street, Boston, MA 02116, and must include: (i) a statement in writing setting forth (A) the name, age, date of birth, business address, residence address and nationality of the person recommended by the Contract Owner (the “candidate”); (B) the number of units that relate to shares of each Portfolio (and class) of the Fund attributable to any annuity or life insurance contract of the candidate, as reported to such Contract Owner by the candidate; (C) any other information regarding the candidate called for with respect to director nominees by paragraphs (a), (d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of Rule 14a-101 (Schedule 14A) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (D) any other information regarding the candidate that would be required to be disclosed if the candidate were a nominee in a proxy statement or other filing required to be madeManager in connection with the election of Independent Directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (E) information regarding the candidate that will be sufficient for the Fund to make a determination as to whether the candidate is or will be an “interested person” of the Fund (as defined in the 1940 Act); (ii) the written and signed consent of the candidate to be named as a nominee and to serve as an Independent Director if elected; (iii) the name of the recommending Contract Owner as it appears on the books of the relevant Insurance Company separate account; (iv) the number of units that relate to shares of each Portfolio (and class) of the Fund attributable to any annuity or life insurance contract of such recommending Contract Owner; and (v) a description of all arrangements or understandings between the recommending Contract Owner and the candidate and any other person or persons (including their names) pursuant to which the recommendation is being made by the recommending Contract Owner. In addition, the Nominating Committee may require the candidate to furnish such other information as it may reasonably require or deem necessary to determine the eligibility of such candidate to serve on the Board or to satisfy applicable law. The Nominating Committee accepts recommendations on a continuous basis.
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During 2010, the Audit Committee met three times, each Contract Review Committee met one time and the Governance Committee met five times. The Nominating Committee did not meet.
The Fund has retained the Manager as the Fund’s investment adviser and administrator. The Manager is responsible for the day-to-day administration of the Fund and, except in the cases of the Zenith Equity Portfolio and the MetLife Conservative Allocation Portfolio, the MetLife Conservative to Moderate Allocation Portfolio, the MetLife Moderate Allocation Portfolio and the MetLife Moderate to Aggressive Allocation Portfolio (collectively, the “Asset Allocation Portfolios”), has delegated the day-to-day management of the investment activities of each Portfolio of the Fund to that Portfolio’s subadviser. Each subadviser is primarily responsible for the management of the risks that arise from the Portfolio’s investments. The Manager is primarily responsible for the rest of the Fund’s operations and for supervising the services provided to the Fund by each subadviser, including risk management. The Board provides oversight of the services provided by the Manager and each subadviser, including the risk management and oversight services provided by the Manager. In the course of providing that oversight, the Board receives a wide range of reports on the Fund’s activities from the Manager and the subadvisers, including regarding each Portfolio’s investment portfolio, the compliance of the Portfolio with applicable laws, and the Portfolio’s financial accounting and reporting. The Board also meets periodically with the Fund’s Chief Compliance Officer to receive reports regarding the compliance of each Portfolio with the federal securities laws and the Fund’s internal compliance policies and procedures. The Board also meets with the Fund’s Chief Compliance Officer at least annually to review the Chief Compliance Officer’s annual report, including the Chief Compliance Officer’s risk-based analysis for the Fund. The Board also meets periodically with the portfolio managers of each Portfolio to receive reports regarding the management of the Portfolio, including its investment risks. The Board reviews this risk oversight approach as a part of its annual self-evaluation.
The Board periodically reviews its leadership structure, including the role of the Chair and the lead Independent Director. The Board also completes an annual self-assessment during which it reviews its leadership and Committee structure and considers whether its structure remains appropriate in light of the Fund’s current operations. The Board believes that its leadership structure, including the Chair of the Board who is an “interested person” (as defined in the 1940 Act) of the Fund, the Lead Independent Director and the current percentage of the Board who are Independent Directors is appropriate given its specific characteristics. These characteristics include: (i) the extensive oversight provided by the Fund’s adviser, the Manager, over the unaffiliated subadvisers that conduct the day-to-day management of most Portfolios of the Fund; (ii) the extent to which the work of the Board is conducted through the standing Committees, each of which is chaired by an Independent Director; (iii) the extent to which the Independent Directors meet as needed, together with their independent legal counsel, in the absence of members of management and members of the Board who are “interested persons” of the Fund; and (iv) Ms. Forget’s additional
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roles as Chief Executive Officer of the Manager and a senior executive at MetLife with responsibility for the fund selection in MetLife’s variable insurance products, which enhance the Board’s understanding of the operations of the Manager and the role played by the Fund in MetLife’s variable products.
Other Board Considerations
The Board considered the nomination and election of persons to serve as Board members as part of an overall plan to coordinate and enhance the efficiency of the governance of the Fund with other mutual funds in the MetLife Funds Complex. In its deliberations, the Board examined various matters related to the management and long-term welfare of each Portfolio and the Fund overall, including the following:
The potential for more effective oversight that may result from generally having substantially similar boards responsible for the oversight of all of the mutual funds in the MetLife Funds Complex.
The opportunity to fill vacancies in the Board that are expected to result from the retirement of Directors in upcoming months with capable, experienced New Nominees who are familiar with the operations of the MetLife Funds Complex and the mutual fund industry generally.
The expected independent status of the New Nominees. If elected, all New Nominees are expected to qualify as Independent Directors of the Fund.
The diversity and experience of the Nominees that would comprise the expanded board. The Board noted that the Nominees have distinguished careers in law, finance and accounting and would bring a wide range of expertise to the Board. In addition, all Nominees have experience as board members overseeing the Fund and/or other portfolios in the MetLife Funds Complex.
Portfolio manager, chief compliance officer and other management resources committed to Board meetings. Many officers for the Portfolios also act as officers for the MIST Portfolios. A substantially similar board would eliminate the need for the officers and key personnel of the Manager to prepare for and attend duplicative meetings, allowing such personnel more time to focus on overseeing the Fund’s operations.
Directors Fees
The officers and Directors of the Fund who are officers or employees of MetLife and/or its affiliates (including the Manager and MetLife Investors Distribution Company (the “Distributor”) but not affiliates of MetLife that are registered investment companies) or any subadviser of the Fund receive no compensation from the Fund for their services as officers or Directors of the Fund, although they may receive compensation from MetLife or any affiliate thereof for services rendered in those or other capacities.
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Each Director who is not currently an active employee of MetLife or its affiliates for serving in all capacities receives, an aggregate retainer fee at the annual rate of $110,000, plus attendance fees of $15,000 for each Directors’ meeting attended. The chair of the Audit Committee, the chair of the Governance Committee and the Nominating Committee, and the chair of each of the Contract Review Committees each receives an aggregate fee of $5,000 for each full calendar year during which he/she serves as such chair. The lead Independent Director of the Fund, Mr. Garban, who was appointed to such position on February 5, 2004, receives an additional aggregate annual retainer fee of $10,000. These fees are allocated among the Portfolios based on a formula that takes into account, among other factors, the net assets of each Portfolio.
The Fund provides no pension or retirement benefits to Directors.
The following table sets forth information regarding compensation received by the Directors of the Fund who are not currently employees of MetLife or its affiliates for the year ended December 31, 2010.
Name of Director | Aggregate Compensation From Fund(1) | Total Compensation From Fund and Fund Complex Paid to Directors | ||||||
Independent Directors | ||||||||
Steve A. Garban | $ | 181,000 | $ | 181,000 | ||||
Nancy Hawthorne | $ | 177,250 | $ | 177,250 | ||||
John T. Ludes | $ | 177,250 | $ | 177,250 | ||||
Keith M. Schappert | $ | 173,500 | $ | 173,500 | ||||
Michael S. Scott Morton | $ | 177,250 | $ | 177,250 | ||||
Linda B. Strumpf | $ | 177,250 | $ | 177,250 | ||||
Dawn M. Vroegop | $ | 173,500 | $ | 378,500 | ||||
Interested Director | ||||||||
Arthur G. Typermass | $ | 161,500 | $ | 161,500 |
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Nominee and Director Beneficial Ownership
The following table states the dollar range of equity securities beneficially owned by each Nominee and Director in the Portfolios of the Fund and the MetLife Funds Complex.
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Except for insurance products issued by affiliates of the Manager that may be held by family members of Nominees, to the knowledge of the Fund, as of September 30, 2011, neither the Independent Directors, the New Nominees, or their immediate family members owned beneficially or of record securities of the Manager, a subadviser, a principal underwriter or sponsoring insurance company of the Fund or a person (other than a registered investment company) directly or indirectly controlling, controlled by, or under common control with an investment adviser, subadviser, principal underwriter or sponsoring insurance company of the Fund.
Shareholder Communication with the Board of Directors
The Fund has adopted procedures by which Contract Owners may send communications to the Board. These communications should be sent to the attention of the Board or the specific Director to whom the communication is directed at Metropolitan Series Fund, Inc., c/o Secretary, 501 Boylston Street, Boston, MA 02116.
A communication must (i) be in writing and be signed by the Contract Owner, (ii) identify the specific Portfolio, if any, of the Fund to which it relates and (iii) identify the number of units held by the Contract Owner that relate to shares of a Portfolio of the Fund.
These procedures do not apply to (i) any communication from an officer or Director of the Fund, (ii) any communication from an employee or agent of the Fund, unless such communication is made solely in such employee’s or agent’s capacity as a Contract Owner or (iii) any shareholder proposal submitted pursuant to Rule 14a-8Separation. However, under the Exchange Act or any communication made in connection with such a proposal.
Vote RequiredManager-of-Managers
Shareholders of all Portfolios of the Fund vote together as a single class on the election of Directors. The Nominees receiving the affirmative vote of a plurality of the votes cast in person or by proxy at the Meeting, if a quorum is present, shall be elected.
Recommendation of the Board
The Board of Directors believes that the election of each Nominee is in the best interests of shareholders of the Fund. Accordingly, the Board unanimously recommends that shareholders vote FOR the election of each Nominee as set forth in Proposal I.
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PROPOSAL II – APPROVAL OF AMENDED AND RESTATED ADVISORY AGREEMENT
Introduction
The Board recommends that Order, shareholders of each Portfolio approve an Amended Advisory Agreement with the Manager, the terms of which reflect that each Portfolio may retain, at its expense, a third-party administrator to provide administrative services to the Portfolio and that the Manager’s role in respect of those administrative services will be limited to supervising and overseeing them (such amendments, the “Administration-Related Amendments”). Under each Portfolio’s existing advisory agreement or investment management agreement with the Manager (each, an “Existing Advisory Agreement”), the Manager provides both advisory and administrative services to the Fund. In connection with a recent review of the operations of the MetLife Funds Complex, the Manager reviewed the administrative services required by the Fund and evaluated whether those services could be provided in a more efficient and effective manner, including, potentially, by parties other than the Manager. Due to the increasing complexity of the operations of mutual funds, including the increased and evolving regulatory burdens placed on mutual funds, a number of similarly situated fund families have retained the services of third-party service providers that specialize in providing administrative services to mutual fund complexes. Service providers that focus on providing administrative services to a number of different mutual fund families have certain advantages that generally allow them to provide administrative services more efficiently than others, like the Manager, who provide administrative services to a limited group of proprietary funds. This is because of, among other things, the significant ongoing capital investments required to provide high-quality administrative services and the scalability of a business that provides such services to a number of different mutual fund families (as opposed to a limited number of proprietary funds). After the completion of its review of the Fund’s need for administrative services, the Manager concluded that the Fund could benefit over the long term from the retention of a third-party administrator dedicated to the business of providing administrative services to mutual fund families.
The Manager previously considered a range of service providers engaged in the business of providing administrative services to mutual funds in connection with the retention of a third-party administrative service provider on behalf of the MIST Portfolios in 2001. Based on, among other things, (i) the Manager’s past review of the capabilities of those service providers, including, among other things, the quality of their respective services, the depth of their experience, expertise and available resources, their investment in the systems and technology required to provide modern administrative services efficiently and their proposed fees and (ii) the Manager’s experience working with the third-party administrator to the MIST Portfolios, the Manager determined to recommend that the Board approve the Amended Advisory Agreement and, at a future date, retain a third-party administrator (the “Administrator”) to provide administrative services to the Portfolios pursuant to an administrative services agreement (the “Administrative Services Agreement”).
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At the November Meeting, the Manager proposed to the Board that each Portfolio’s Existing Advisory Agreement be amended to revise the terms of that Agreement to reflect, among other things, that the Fund may retain a third party to perform administrative services for each Portfolio at the Portfolio’s expense, and to limit the Manager’s role in respect of those administrative services to supervising and overseeing them. The tasks the Administrator would be expected to perform under the proposed arrangements, include, among other things, preparing annual and semi-annual reports and other periodic filings with the Securities and Exchange Commission (“SEC”), calculating portfolio performance, informing Fund officers of any new accounting pronouncements and regulatory updates, preparing financial reports for quarterly Board meetings, performing certain portfolio compliance tasks, such as monitoring leverage and preparing Fund tax returns, and maintaining Fund records.
In addition, with respect to the Barclays CapitalMetLife Aggregate Bond Index Portfolio, Loomis Sayles Small Cap GrowthMetLife Multi-Index Targeted Risk Portfolio, MetLife Stock Index Portfolio, MetLife Mid Cap Stock Index Portfolio MetLife Stock(the “MLIA Subadvised Portfolios”), Russell 2000® Index Portfolio MFS Value Portfolio, Morgan Stanleyand MSCI EAFE® Index Portfolio, Neuberger Berman Mid Cap Value Portfolio, Oppenheimer Global Equity Portfolio, Russell 2000 Index Portfolio, T. Rowe Price Large Cap Growth Portfolio and T. Rowe Price Small Cap Growth Portfolio only (collectively, the “Group A Portfolios”), the Amended Advisory Agreement includes amendments to the Group A Portfolios’ Existing Advisory Agreements designed to (i) modernize the termseach of the Group A Portfolios’ Existing Advisory Agreements and (ii) align the terms of the Group A Portfolios’ Existing Advisory Agreements with those of the advisory agreements of the remaining twenty-three Portfolios of the Fund (the “Group B Portfolios”).
The Group A Portfolios’ Existing Advisory Agreements were established before the Manager began to employ a manager-of-managers structure, on behalf of the Portfolios, to retain leaders in the investment advisory field to provide investment advice to the Portfolios. As a result, the Group A Portfolios’ Existing Advisory Agreements do not expressly address certain issues relevant to the manager-of-managers structure that the Group B Portfolios’ Existing Advisory Agreements do address. For example, the Group B Portfolios’ Existing Advisory Agreements explicitly require the Manager to perform certain duties that are integral to the manager-of-managers structure, such as supervising and overseeing the services provided to a Portfoliowhich is subadvised by a subadviser. The Group A Portfolios’ Existing Advisory Agreements do not have a similar provision. Accordingly, at the November Meeting, the Manager proposed that, in addition to the Administration-Related Amendments, the Group A Portfolios’ Existing Advisory Agreements be amended and restated to modernize and align their terms with those of the Group B Portfolios’ Existing Advisory Agreements. A summary description of differences between the Group A Portfolios’ Existing Advisory Agreements and the Amended Advisory Agreement may be found below.
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Proposal II, if approved, may affect the profitabilityMLIA, an affiliate of the Manager because the Manager will no longer provide certain administrative services(see Proposal II), do not need to the Portfolios and incur related expenses. The Manager estimates that it may experience annual savings of approximately $300,000 if Proposal II is approved and a third-party administrator is retained.
Certain Directors and certain officers of the Fund may be owners of shares of MetLife or its affiliates and may indirectly benefit if a Portfolio’s shareholders approve the Amended Advisory Agreement. Similarly, the Insurance Companies may also benefit indirectly from such change.
Although the Fund anticipates retaining a third-party administrator at a future date, the Fund may not retain a third-party administrator until some time after the Amended Advisory Agreement, if approved, goes into effect. If the Fund has not retained a third-party administrator when the Amended Advisory Agreement goes into effect, the Fund expects to enter into an interim administrative services agreement with the Manager until the Fund retains a third-party administrator. Under any interim administrative services agreement with the Manager, it is not expected that the Manager would be paid any additional compensation.
The Board reserves the right not to implement the Amended Advisory Agreement in respect of any Portfolio or all Portfolios or not to retain a third-party administrator in respect of any Portfolio or all Portfolios if it determines doing so is not in a Portfolio’s or the Portfolios’ best interests, including if not all of the Portfolios approve Proposal II.
Board ConsiderationsNew Subadvisory Agreements.
At the November Meeting, the Directors, including allBoard approved New Subadvisory Agreements with each Portfolio’s current subadviser(s). If the New Advisory Agreement is approved by the shareholders of a Portfolio (other than the MLIA Subadvised Portfolios, which are the subject of Proposal II below), a New Subadvisory Agreement with the Portfolio’s current subadviser will take effect at the same time as the New Advisory Agreement with respect to the Portfolio, or at the same time as the Interim Advisory Agreement (as defined below) with respect to the Portfolio in the event that the New Advisory Agreement has not been approved by the shareholders of the Independent Directors, determinedPortfolio prior to the consummation of the Separation. As with the New Advisory Agreement, the terms of the New Subadvisory Agreement for each Portfolio will be substantially identical to the terms of the corresponding Current Subadvisory Agreement, including with respect to the fee rates.
In the event that shareholder approval of the New Advisory Agreements has not been obtained before the termination of the Current Advisory Agreements, which is currently expected to occur during the first half of 2017, the Board has approved interim advisory agreements (each an “Interim Advisory Agreement” and collectively, the “Interim Advisory Agreements) with the Manager for the Portfolios that will go into effect upon the termination of the Current Advisory Agreements. The Interim Advisory Agreements have the same terms and conditions as the corresponding New Advisory Agreements, except for the dates, the names of the Manager, the Trusts and each Portfolio, and certain provisions required byRule 15a-4 under the 1940 Act.
Rule15a-4 allows an investment company to enter into an advisory agreement that has not been approved by a majority of the Portfolio’s outstanding voting
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securities under certain circumstances, including when previous advisory agreements terminate by assignment because of a change in control of an investment adviser. In accordance with the requirements of Rule15a-4, the Interim Advisory Agreements:
Have a duration no greater than 150 days following the date on which the Current Advisory Agreement terminates;
Provide for compensation to the Manager no greater than the compensation under the Current Advisory Agreement;
Provide that the Board or a majority of the Portfolio’s outstanding voting securities may terminate the agreement at any time, without the payment of penalty, on not more than 10 calendar days’ written notice to the Manager; and
Contain the same terms and conditions as the Current Advisory Agreements, with the exception of effective and termination dates; the termination provision noted above; provisions requiring that the compensation earned under the agreement be held in an interest-bearing escrow account with the Trust’s custodian or a bank; and provisions relating to how the Manager may be paid out of that interest-bearing escrow account.
Shareholders of the Portfolios are not being asked to approve the AmendedInterim Advisory Agreements, which will go into effect only in the event that a Portfolio’s shareholders have not approved the Portfolio’s New Advisory Agreement before the change in control of the Manager and the resulting termination of the Current Advisory Agreements in connection with the Separation.
Comparison of Current Advisory Agreement and New Advisory Agreement
The terms of the New Advisory Agreement for each Portfolio are identical to those of the Current Advisory Agreement for such Portfolio, except for the date of effectiveness, the initial term, and the names of the Manager and the Trusts (MetLife Advisers, LLC is changing its name to Brighthouse Investment Advisers, LLC and MIST and MSF will change their names to Brighthouse Funds Trust I and Brighthouse Funds Trust II, respectively, effective on or about March 6, 2017). There is no change in the advisory fee rate payable by any Portfolio. In addition, no contractual expense limitation or reimbursement currently in effect for a Portfolio will be affected by the replacement of the Current Advisory Agreement with the New Advisory Agreement. If approved by shareholders and assuming the Separation is completed, each New Advisory Agreement is expected to be effective as of the effective date of the Separation and will have an initial term of one year from the date of its effectiveness. Each New Advisory Agreement will continue in effect from year to year thereafter if its continuance is approved, on behalf of each Portfolio, at least annually in the manner required by the 1940 Act and to callthe rules thereunder. Below is a meeting of shareholderssummary of the Portfolios so shareholdersprincipal terms of each Portfolio’s Current Advisory Agreement, which are substantially identical
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to those of the Portfolios could consider approving the AmendedNew Advisory Agreement on behalf of their respectivefor each Portfolio. Prior to making these conclusions, the Board of Directors considered a wide range of informationThe form of the type they regularly consider when determining whether to continue the Portfolios’ advisory agreements. In doing so, the Directors did not identify any single factor as determinative but took into account a number of factors.
The Directors considered the nature, extent and quality of the services expected to be provided toNew Advisory Agreement for the Portfolios by the Manager and the Administrator. In this regard, the Directors considered presentations by Fund officers and representatives of the Manager.is attached hereto as Appendix B.
Services. The Directors notedCurrent Advisory Agreements provide that the investment advisory services provided by the Manager and the fees payable to the Manager were not proposed to change. The Directors considered the Manager’s continuing obligation to provide certain non-advisory services, including the supervision and oversight of the services provided by the Administrator, and the substantial costs it would incur in doing so.
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The Directors noted representations from the Manager that its staffing requirements would not materially decrease if the Amended Advisory Agreement were approved and that, with limited exceptions, the Manager’s staff currently dedicated to providing the Fund with administrative services would generally be repurposed and would supervise and oversee the administrative services provided by the Administrator to the Fund. The Directors considered that the repurposing of the Manager’s staff may enhance the supervision of the administrative services provided by the Administrator to the Portfolios.
The Directors also considered information provided to them regarding services the Administrator would likely provide (collectively, the “Administrator Information”). The Administrator Information provided information that assisted the Directors in assessing the likely quality of the administrative services that were expected to be provided by the Administrator and the Manager’s ability to oversee and supervise the provision of services by the Administrator.
The Directors considered that, other than changes relating to the provision of administrative services and certain other provisions, the Amended Advisory Agreement is substantially identical to the Existing Advisory Agreements of the Group B Portfolios. The Directors also considered in respect of approving the Amended Advisory Agreement on behalf of the Group A Portfolios that they were familiar with substantially all of the terms of the Amended Advisory Agreement because of its substantial similarity to the Existing Advisory Agreements for the Group B Portfolios. The Directors also considered that the modernization of the Group A Portfolios’ Existing Advisory Agreements would clarify the Manager’s responsibilities to the Group A Portfolios, especially with respect to the Manager’s role in overseeing any subadvisers. The Board considered that clarifying certain ambiguities, including the Manager’s role with respect to the Group A Portfolios’ sub-advisory arrangements, represented important enhancements to the Group A Portfolios’ Existing Advisory Agreements. In considering the Amended Advisory Agreement on behalf of the Group A Portfolios, the Directors also considered representations from the Manager that the Manager did not expect any changes in the type or quality of investment management services the Manager currently provides to the Group A Portfolios.
The Directors considered information regarding the proposed effect of Proposal II on each Portfolio’s total operating expenses. The Directors considered that the retention of the Administrator, and its greater potential for achieving economies of scale in the future, as a result of its broader client base and otherwise, potentially could limit future increases in the fees paid by the Fund in respect of administrative services.
The Directors also considered that any proposed arrangements with respect to administrative services would likely be similar to those currently in place in respect of the MIST Portfolios, and the Board considered reports from the Manager regarding its experience with the MIST Portfolios.
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In approving the Amended Advisory Agreement, the Directors recognized that the effect of the removal of certain of the Manager’s obligations under the Existing Advisory Agreements could be to reduce the Manager’s expenses and consequently increase the Manager’s profitability. The Directors noted that the Manager had estimated its annual savings if Proposal II were approved by all of the Portfolios at $300,000 and that the Directors had received information from the Manager regarding the Manager’s profitability under the Existing Advisory Agreements in connection with their review of those agreements generally. The Directors concluded that the Manager’s profitability under the Amended Advisory Agreement would continue to be reasonable in light of the services provided.
The Directors considered whether economies of scale may be realized under the Amended Advisory Agreement and the Administrative Services Agreement in connection with their consideration of the Amended Advisory Agreement. They noted specifically that the fee schedule in the Administrative Services Agreement was expected to include breakpoints (i.e., a reduction in the fee rate charged to a Portfolio at specified asset levels) and that those breakpoints were expected to be applied in respect of all of the assets in the Portfolios that retained the Administrator and, potentially, the MIST Portfolios.
The Directors considered their right not to implement the Amended Advisory Agreement in respect of any Portfolio or all Portfolios and not to retain a third-party administrator in respect of any Portfolio or all Portfolios if they determine exercising that right is in a Portfolio’s or the Portfolios’ best interests based on their evaluation of, among other things, (a) the actual administrative services proposed to be provided by the Administrator; (b) the expected quality of such services; and (c) the actual fees proposed to be charged by the Administrator and the proposed effect of such fees on each Portfolio’s total annual operating expenses.
Based on their evaluation of the factors they deemed relevant, including those described above, the Directors, including the Independent Directors, approved the Amended Advisory Agreement and determined to recommend that shareholders of each Portfolio provide voting instructions to approve Proposal II. In their consideration and evaluation of Proposal II, the Directors were advised by counsel to the Fund, and the Independent Directors were advised by counsel to the Independent Directors.
Description of the Existing Advisory Agreements
The following description of the Existing Advisory Agreements is qualified in its entirety by reference to, and made subject to, the complete text ofAppendix D-2(without the proposed modifications) and Appendix D-3with respect to the Group B Portfolios and the Group A Portfolios, respectively, to this Proxy Statement.
The Manager currently serves as investment adviser to each Portfolio pursuant to an Existing Advisory Agreement.
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Pursuant to the Existing Advisory Agreements, the Manager has agreed toshall manage the investment and reinvestment of each Portfolio’s assets of each Portfolio. The Manager has delegated for each Portfolio (other thanin accordance with the Asset Allocation PortfoliosPortfolio’s investment objectives and the Zenith Equity Portfolio) certain of these responsibilities, including responsibility for determining what investments such Portfolio should purchase, hold or sell and directing all tradingpolicies.
Compensation. In return for the Portfolio’s account, to subadvisersservices provided under subadvisory agreements. The Portfolios do not pay any fees directly to any of the subadvisers.
For the Asset Allocation Portfolios,Current Advisory Agreement, a Portfolio pays the Manager provides certain asset allocation services specific to those Portfolios, including, among other things, re-evaluating and adjusting asset allocation targets, rebalancing on a periodic basis such Portfolios’ assets, and monitoring the performance and subadvisers of the underlying portfolios in which the Asset Allocation Portfolios invest (collectively, the “Asset Allocation Services”).
In respect of each Portfolio, advisory services are provided subject to the supervision and control of the Fund’s Directors. Each Existing Advisory Agreement provides that the Manager shall pay the expenses of the Fund relating to maintaining the staff and personnel, and providing the equipment, office space and facilities, necessary to perform its obligations under the Existing Advisory Agreement. The Fund assumes and shall pay (or cause to be paid) all other Fund expenses.
Appendix B to this Proxy Statement sets forth thean advisory fee based on average daily net assets, which is payable bymonthly. The advisory fee rates for each Portfolio under the ExistingCurrent Advisory AgreementsAgreement and the advisory fees paid forby each Portfolio to the Manager during each Portfolio’s most recent fiscal year ended December 31, 2010. Pursuant to an expense agreement, the Manager has agreed, for the period May 1, 2011 through April 30, 2012, to reduce its advisory fees for each class of certain Portfolios as describedare set forth inAppendix BC to this Proxy Statement.
ForLimitation on Liability. Under the Group B Portfolios, each ExistingCurrent Advisory Agreement provides thatfor each Portfolio, except in the absencecase of willful misfeasance, bad faith, or gross negligence on the part of the Manager, or reckless disregard of its obligations and duties thereunder,under the agreement, the Manager shallwill not be subject to any liabilityliable to the Fund,Trust, to any shareholder of the FundTrust or to any other person, firm or organization, for any act or omission in the course of, or connected with, rendering services thereunder. For the Group A Portfolios, each Existing
Continuance. The Current Advisory Agreement provides that,for each Portfolio originally was in the performanceeffect for an initial term of advisory services under the Existing Advisory Agreement, the Manager shall not be liable for any error of judgmentone or mistake of law or for any loss suffered by the Fund in connection with any investment policy or the purchase, sale or redemption of any securities on the recommendation of the Manager, except that nothing in the Agreement shall be construed to protect the Manager against any liability to the Fund or its shareholders to which the Manager would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence in the performance of the Manager’s duties on behalf of the Fund, reckless disregard of the Manager’s obligationstwo years and duties under the Existing Advisory Agreement or the violation of any applicable law. In addition, for the
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Group A Portfolios and the Artio International Stock Portfolio, the Existing Advisory Agreements provide that, with respect to certain administrative services provided by the Manager, the Manager shall be liable to the Fund or its shareholders for any willful or negligent act or omission in the performance of such administrative services.
For the Group B Portfolios each Existing Advisory Agreement provides that if the total ordinary business expenses of a particular Portfolio for any fiscal year exceed the lowest applicable limitations (based on a percentage of average net assets or income) prescribed by any state in which shares of that Portfolio are qualified for sale, the Manager shall pay such excess. The term “ordinary business expenses” for this purpose includes investment advisory fees but excludes taxes and portfolio brokerage commissions. This provision (the “State Law Expense Provision”), when adopted by the Group B Portfolios, was intended to address certain state law limitations that no longer apply to the Portfolios because the state laws intendedis eligible to be addressed by the State Law Expense Provision have been preempted by federal law.
Each Existing Advisory Agreement provides that it will continue in effect after two years from the date of its execution onlycontinued thereafter for successiveone-year periods if itsuch continuance is specifically approved at least annually thereafter (i)in the manner required by the 1940 Act. As described above, if the shareholders of each Portfolio approve the New Advisory Agreement and the Separation is consummated, the New Advisory Agreement with respect to each Portfolio will be effective as of the effective date of the Separation and will have an initial term of one year from the consummation of the Separation. Thereafter, the New Advisory Agreement for each Portfolio may be continued for successiveone-year periods if approved at least annually in the manner required by the 1940 Act.
Termination. The Current Advisory Agreement for each Portfolio may at any time be terminated by the Board of Directors of the Fund, or by the vote of a majority of the outstanding shares of the applicable Portfolio, and (ii) by vote of a majority of those directors who are not interested persons of the Fund or the applicable Portfolio’s investment adviser or subadviser, cast in person at a meeting called for the purpose of voting on such approval. If required by law, any amendment to any Existing Advisory Agreement or any new advisory agreement must be approved by vote of a majority of the outstanding voting securities of the applicable Portfolio and by vote of a majority ofon sixty (60) days’ written notice to the Directors who are not interested persons of (i) the Fund or (ii) the applicable Portfolio’s investment adviser or subadviser.
Each Existing Advisory Agreement may be terminated without penalty by the DirectorsManager, or by the shareholders of the applicable Portfolio, upon sixtyManager on ninety (90) days’ written notice or byto the applicable Portfolio’s investment adviser, upon at least sixty days’ written notice (forTrust, in each case without the Group A Portfolios) or on ninety days’ written notice (for the Group B Portfolios), andpayment of any penalty. The Current Advisory Agreement for each Portfolio also terminates automatically in the event of its assignment.
Board Considerations
As described above, the Separation is expected to result in a change in control of the Manager, and therefore an “assignment” of each Portfolio’s Current Advisory Agreement. At the November Meeting, the Board, including a majority of the Independent Trustees, approved the New Advisory Agreements and recommended that
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the shareholders of the Trusts approve the New Advisory Agreements. The Board took those actions after consideration of and deliberation over information concerning the Separation, including with respect to the degree to which the Separation would affect the provision of investment advisory services to the Trusts. Information about the Board’s considerations and process is set forth below.
In determining whether to approve the New Advisory Agreements and in considering the Separation, the Board considered the nature, quality and extent of the services that are currently provided by the Manager under the Current Advisory Agreements as definedwell as the services to be provided under the New Advisory Agreements. The Board’s review was conducted as part of, and in conjunction with, the 1940 Act.
The Artio International Stock Portfolio’sBoard’s annual review of the Current Advisory Agreements, which culminated at the November Meeting. In approving the New Advisory Agreements, the Board considered its conclusions with respect to its approvals of the Current Advisory Agreements, including the Board’s general satisfaction with the nature, extent and quality of services being provided by the Manager to each Portfolio. Appendix H contains a further description of the process followed, information reviewed and the Group A Portfolios’ Existing Advisory Agreements provide that they shall be construed and interpreted in accordance with the laws of the State of New York as at the time in effect and the applicable provisions of the 1940 Act.
Appendix C to this Proxy Statement sets forth the date of each Existing Advisory Agreement, the date it was last approvedmaterial factors considered by the Board in approving the datecontinuation of the Current Advisory Agreements.
A substantial portion of the Board’s review of the New Advisory Agreements focused on which it was last submitted to a votethe Separation, including the potential effect of shareholdersthe implementation of the Separation on the operations, personnel, organizational structure, capitalization, and financial and other resources of the Manager. After being informed by the Manager in January 2016 of the possibility of the Separation, the Board and its Committees discussed the Separation and its possible effects on the Trusts with personnel of the Manager and the purposeanticipated senior management at Brighthouse during the course of the Board’s or Committee’s regularly scheduled,in-person, quarterly meetings.
Between August and November 2016, the Board and the Independent Trustees engaged in an extensive review and analysis of the Separation and how the Separation related to the Manager and the Trusts and how it could affect the services provided to the Trusts. This analysis focused on, among other matters, the assurances from Brighthouse’s anticipated leadership as to its expectations for the continuity and stability of the Manager’s personnel throughout implementation of the Separation and for the foreseeable future thereafter. The Board considered that the Separation is being implemented as a result of MetLife’s determination to divest itself of a substantial portion of its U.S. retail business (of which the Manager forms a portion). The Board also considered that it has been satisfied as a general matter with the nature and quality of the services that the Manager provides to the Portfolios, including investment advisory, administrative, legal, compliance, and support services, and that it would be in the Portfolios’ best interests to maintain continuity and stability in the services that are currently being provided. The Board carefully considered the anticipated future plans of Brighthouse related to capitalization and operational matters for Brighthouse
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and the Manager, as well as the importance of the Manager to the businesses of Brighthouse after the Separation.
Among other steps in its review process, which accelerated on October 5, 2016 when Brighthouse filed its Form 10 with the SEC, the following actions were taken and considered by or on behalf of the Board:
1. The Independent Trustees solicited and received ongoing advice regarding the legal duties of the Independent Trustees from Stradley Ronon Stevens & Young LLP (“Stradley Ronon”), legal counsel for the Independent Trustees, which law firm has extensive experience regarding such submission.matters.
2. Following the August16-17, 2016 Board and Committee quarterly meetings, the Independent Trustees established an ad hoc group of Independent Trustees (the “Working Group”) to help oversee, coordinate, and conduct due diligence activities with respect to the Separation. The Working Group regularly reported on the due diligence activities to the other Independent Trustees.
3. Since January 2016, the Board posed ongoing inquiries to, and received regular updates from, the Manager and anticipated senior management at Brighthouse at eitherin-person meetings dedicated to the status of the Separation or during the course of the Board or Committee’s regular quarterly meetings. The Board considered, among other matters, relevant legal guidance and the processes followed by certain other investment company boards of directors or trustees when they approved contracts in connection with change in control events, while recognizing the unique circumstances of the Separation.
4. The Board received and reviewed the Form 10 of Brighthouse that contained extensive information relating to, among other matters, Brighthouse’s anticipated business plans and financial structure. The Board also received and reviewed reports from rating agencies with respect to Brighthouse.
5. Stradley Ronon retained Barrington Partners (“Barrington”), an independent consulting firm with a specific focus on the asset management industry and experience relating to business operations such as those to be conducted by Brighthouse, including its proposed subsidiary, the Manager, in order to help Stradley Ronon evaluate the Separation based on the Form 10 and other materials and related information provided by the Manager and its affiliates. Barrington conducted a series ofin-person and telephonic meetings with anticipated senior management at Brighthouse (i.e., the aforementioned anticipated officers of Brighthouse and others) and with personnel of the Manager who provide services to the Trusts. Stradley Ronon, with the assistance of Barrington, evaluated the information and advised the Independent Trustees with respect to, among other matters, details of Brighthouse’s anticipated business plan to understand the implications of the Separation to the Manager and its personnel. The Independent Trustees and the Working Group attended certainin-person and telephonic conference call meetings at which Barrington rendered advice to Stradley Ronon regarding these matters and responded to questions.
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Description6. The Independent Trustees requested and participated inin-person meetings with anticipated senior management personnel at Brighthouse, including its President and Chief Executive Officer, Chief Financial Officer, General Counsel and Corporate Secretary, Chief Operating Officer, and Chief Investment Officer. The Independent Trustees also met with personnel of the Amended Advisory AgreementManager.
7. The Independent Trustees, with the assistance of Stradley Ronon, prepared written inquiries to the Manager and Certain Differences Fromits affiliates regarding the Existing Advisory Agreements
The following descriptionSeparation, and received written assurances from the Manager and its affiliates that they have no plans to make any material changes affecting the personnel of the AmendedManager (including those personnel who provide investment, administrative, legal and compliance services) and the Manager and its affiliates will not initiate such changes without prior notice to and discussion with the Board.
8. The Board considered representations by the Manager and its affiliates that approval of the New Advisory AgreementAgreements would be necessary for the Portfolios to continue receiving investment advisory services from the Manager following the change in control.
9. The Board considered representations by the Manager, as well as related supporting documentation, indicating that the New Advisory Agreements, including the fees payable thereunder, are substantially identical to the terms of the corresponding Current Advisory Agreements.
10. The Board considered representations by the Manager and its affiliates, as well as related supporting documentation, indicating that: (1) the Manager can be expected to provide services of the same nature, extent, and quality under the New Advisory Agreements and as are provided thereby under the Current Advisory Agreements; and (2) the Separation is qualifiednot expected to result in any changes to (i) the management of the Portfolios, or (ii) the investment objective of or the principal investment strategies used to manage any of the Portfolios.
11. The Board considered the ability of the Manager and its affiliates to retain the employment of key personnel, as well as the overall positive indications by many such personnel regarding the opportunities presented by the Separation.
12. The Board considered that the Manager and its affiliates have agreed to bear all expenses associated with obtaining shareholder approval of the New Advisory Agreements.
13. The Board considered Brighthouse’s preliminary “branding” plans regarding the future name of its operations.
14. The Board considered the advice provided by Ropes & Gray, LLP, legal counsel to the Trusts and the Manager, with respect to the New Advisory Agreements
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(including advice relating to the process and timing of seeking shareholder approval of the New Advisory Agreements, and whether shareholder approvals would be required in connection with any future aspects of the Separation) and regarding the Board’s role and responsibilities with respect to the Separation.
15. The Board considered MetLife’s stated intention of divesting its ownership interest in the Manager through the Separation, including the potential advantages and disadvantages of this divestiture to shareholders of the Portfolios. The Board considered the likelihood that the Manager would retain its key personnel after the Separation. The Board considered that the garnering of new assets into the Trusts is based on sales of variable annuity and variable life insurance products, which sales have declined in prior years as a result of, among other things, the capital requirements of MetLife. The Board considered the representations of the anticipated senior management of Brighthouse that the Separation provides the Trusts with an opportunity for the garnering of new assets as Brighthouse will likely sell such products going forward. The Board considered also that the divestiture would result in a change in the manner in which the Trusts access certain services and resources of MetLife (after the Separation those services will be provided through a transition services agreement), the loss of affiliation with the MetLife name brand, and the possible going forward need of the Trusts to hire a transfer agent, as such transfer agency services are currently provided to the Trusts for no fee.
16. The Board considered that, if shareholders approve the New Advisory Agreements, the Board and the Manager will conduct their annual contract review process in November 2017. Thus, the Board emphasized that it would be able to, and intends to, monitor on a regular basis the ability of the Manager and its affiliates to comply with their undertakings to the Board and to monitor on an ongoing basis the quality of services to, and expenses of, the Portfolios. In addition, the Board considered that, under the New Advisory Agreements, it will continue to have the authority, should the need arise in its entirety by referenceview, to and made subject to, the complete text ofAppendix D-1 to this Proxy Statement.
The proposed formterminate any of the AmendedNew Advisory Agreement for each Portfolio appears inAppendix D-1 to this Proxy Statement. Attached asAppendix D-2 isAgreements without penalty upon 60 days’ notice.
Based on the foregoing and other relevant considerations, at the November Meeting, the Board, including a formmajority of the ExistingIndependent Trustees, voted to approve the New Advisory Agreement for each Group B Portfolio markedAgreements and to showrecommend approval of the proposed amendments that would be made if the AmendedNew Advisory Agreement is approvedAgreements by shareholders of the Portfolio. Attached asAppendix D-3 is a form ofPortfolios. In this connection, the Existing Advisory Agreement for the Group A Portfolios. The next several paragraphs briefly summarize some important provisions of the Amended Advisory Agreement, but for a complete understanding you should readAppendix D-1, Appendix D-2(if you are a shareholder of a Group B Portfolio) andAppendix D-3 (if you are a shareholder of a Group A Portfolio).
Similar to the Existing Advisory Agreements, under the Amended Advisory Agreement the Manager will manage the investment and reinvestment of assets of each Portfolio. The Manager will continue to delegate for each Portfolio (other than the Zenith Equity Portfolio and the Asset Allocation Portfolios) certain of these responsibilities, including responsibility for determining what investments such Portfolio should purchase, hold or sell and directing all trading for the Portfolio’s account, to the current subadvisers under existing subadvisory agreements. The Manager (and not the Portfolios) will continue to pay any direct fees of the subadvisers. In addition, the Manager will continue to provide the Asset Allocation Services to the Asset Allocation Portfolios.
Each Existing Advisory Agreement also provides that the Manager will furnish or pay the expenses of the applicable Portfolio for office space, facilities and equipment, and the services of executive and other personnel of the Fund and certain other administrative services. In contrast to the Existing Advisory Agreements, the Amended Advisory Agreement does not require the Manager to provide administrative services. However, similar to the Existing Advisory Agreements, the Manager will furnish or pay the expenses of the applicable Portfolio for office space, facilities and equipment, and the services of executive and other personnel of the Fund, other than the expenses associated with services covered under the Administrative Services Agreement. In addition, under the Amended Advisory Agreement, the Manager will provide supervision and oversight of administrative services provided by a third party. It is expected that the Fund, at a future date, will enter into an administration agreement in respect of each Portfolio under which a third-party administrator would provide each Portfolio with the administrative services necessary to operate such Portfolio.
The Existing Advisory Agreements of the Group B Portfolios permit the Manager to engage a sub-administrator to provide administrative services at the Manager’s
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expense. Because the Amended Advisory Agreement limits the Manager’s responsibility in respect of administrative services to supervising and overseeing them, no provision is made in the Amended Advisory Agreement expressly permitting the Manager to engage a sub-administrator. Under the Amended Advisory Agreement, any third-party administrator would be engaged by the Fund at the Fund’s expense.
In respect of the Group B Portfolios, the Amended Advisory Agreement does not contain a provision substantially similar to the State Law Expense Provision because the state laws intended to be addressed by that provision no longer apply to the Portfolios.
Although the provisions relating to which expenses shall be borne by the Fund in the Existing Advisory Agreements differ from those in the Amended Advisory Agreement, it is expected that the Fund will continue to bear all of the expenses under the Amended Advisory Agreement that it currently bears under the Existing Advisory Agreements. The only additional types of expenses the Fund is expected to bear if Proposal II is approved are the fees and expenses it would pay for the services of a third-party administrator.
Like the Existing Advisory Agreements of the Group B Portfolios, the Amended Advisory Agreement providesBoard concluded that, in the absencelight of willful misfeasance, bad faith or gross negligence on the part of the Manager, or reckless disregard of its obligations and duties thereunder, the Manager shall not be subject to any liability to the Fund, to any shareholder of the Fund or to any other person, firm or organization, for any act or omission in the course of, or connected with, rendering services thereunder. The Manager’s limitation of liability under the Amended Advisory Agreement differs from that provided in the Group A Portfolios’ Existing Advisory Agreements. The Group A Portfolios’ Existing Advisory Agreement provides that the Manager shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with any investment policy or the purchase, sale or redemption of any securities on the recommendation of the Manager, except that nothing in the Agreement shall be construed to protect the Manager against any liability to the Fund or its shareholders to which the Manager shall otherwise be subject by reason of willful misfeasance, bad faith, gross negligence in the performance of its duties on behalf of the Fund, reckless disregard of the Manager’s obligations and duties under the Agreement or the violation of any applicable law. In respect of the performance of administrative services, the Existing Advisory Agreements for the Group A Portfolios and the Artio International Stock Portfolio specify that the Manager shall be liable to the Fund or its shareholders for any willful or negligent act or omission in the performance of such administrative services. Because the limitations of liability provisions differ between the Amended Advisory Agreement and the Existing Advisory Agreements for the Group A Portfolios and the Artio International Stock Portfolio, it is possible that the Manager may not have any liability to the Fund or its shareholders under the Amended Advisory Agreement for certain acts or omissions for which it would have been liable to the Fund or its shareholders underall factors considered, the terms of the Existing Advisory Agreements for the Group A Portfolios and the Artio International Stock Portfolio.
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Similar to the Existing Advisory Agreements, the AmendedNew Advisory Agreement, providesincluding fee rates, were fair and reasonable, and that it will continue only if it is approved at least annually (i) by the Board of Directors of the Fund, or by the vote of a majority of the outstanding shares of the applicable Portfolio, and (ii) by vote of a majority of those directors who are not interested persons of the Fund or the applicable Portfolio’s investment adviser or subadviser, cast in person at a meeting called for the purpose of voting on such approval. In addition, if required by law any amendment to the Amended Advisory Agreement or any new advisory agreement mustwould be approved by vote of a majority of the outstanding voting securities of the applicable Portfolio and by vote of a majority of the Directors who are not interested persons of (i) the Fund or (ii) the applicable Portfolio’s investment adviser or subadviser.
The Amended Advisory Agreement may be terminated without penalty by the Directors or by the shareholders of a Portfolio, on sixty days’ written notice, or by the Manager, on sixty days’ written notice, and terminates automatically in the eventbest interests of its “assignment” as defined in the 1940 Act.
Unlike the Existing Advisory Agreements of the Group A Portfolios and the Artio International Stock Portfolio, which are governed by the laws of the State of New York, the Amended Advisory Agreement does not contain a provision specifying what state’s law governs.
The advisory fee schedule for each Portfolio will remain the same under the Amended Advisory Agreement. However, as explained above, under the Amended Advisory Agreement, each Portfolio would be obligated to pay the fees of any third-party administrator, for providing services that the Manager is obligated to provide or pay for under the Existing Advisory Agreements.
Comparison of Fees Under the Existing Advisory Agreements and Amended Advisory Agreement
The fees payable by each of the Portfolios under the Amended Advisory Agreement are identical to those currently payable by those Portfolios, respectively, under the Existing Advisory Agreements. Accordingly, no change in any Portfolio’s advisory fees will result if shareholders of a Portfolio approve Proposal II.
If shareholders of a Portfolio approve Proposal II, the Fund expects, at a future date, to retain a third-party administrator to provide administrative services to that Portfolio at the expense of the Portfolio. If a third-party administrator is retained on behalf of a Portfolio, the Manager estimates, based on a preliminary review of the market, that the Portfolio’s total annual operating expenses would increase by less than 0.005% of the Portfolio’s average daily net assets, assuming current assets levels for both the Fund and MIST and that the entire MetLife Funds Complex retains the same third-party administrator. The fees payable to the third-party administrator under the Administrative Services Agreement are expected to be based, in significant part, on the
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total assets in respect of which the third-party administrator provides administrative services for both the Fund and MIST. There can be no assurances that a Portfolio’s total annual operating expenses will not increase by more than the amount shown above.
Information Regarding the Administrative Services Agreement
The Administrative Services Agreement, including any fees paid by each Portfolio to a third-party administrator and any amendments to such Agreement, would not be subject to shareholder approval. Although amendments can be made toapprove the Administrative Services Agreement without shareholder approval, the Fund’s Board will retain control over the administrative services provided to the Fund pursuant to the Administrative Services Agreement. This is because the Administrative Services Agreement is expected to provide that any amendment to the Administrative Services Agreement, including one that has the effect of increasing the fees paid under the Agreement, would have to be approved by a majority of the Board.New Advisory Agreements.
Information Regarding the Manager
The Manager is a Delaware limited liability company. MetLife Investors Group, Inc. (“Met Investors Group”) owns all of the voting interest in the Manager. Met Investors Group is a wholly owned subsidiary of MetLife, a publicly traded company. The members of the Manager include each insurance company the separate accounts of which invest in registered investment companies to which the Manager serves as investment adviser.Portfolios. Each member’s
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interest in the Manager entitles the member to share in the profit and loss of the Manager in proportion to the profit and loss of the Manager attributable to customers of that insurance company. The Chairman of the Board and President of the Manager is Elizabeth M. Forget. Ms. Forget, Paul G. Cellupica and Alan C. Leland, Jr. are the Manager’s directors. Ms. ForgetKristi Slavin is the President and Chief Executive Officer of the Fund,Manager and herthe Trusts and is also the Chairman of the Manager’s Board of Managers. Peter H. Duffy, Andrew L. Gangolf, Steven Hartstein, and Alan C. Leland, Jr. are the Manager’s officers. Mr. Duffy is the Chief Financial Officer and Treasurer of the Trusts, and his principal occupation is Senior Vice President of MetLife.the Manager. Mr. Cellupica does not have a position withGangolf is the Fund,Secretary of the Trusts, and his principal occupation is Senior Vice President and Chief CounselLegal Officer of MetLife.the Manager. Mr. Hartstein is the Chief Compliance Officer of the Trusts and the Manager, and is also the Senior Vice President and Code of Ethics Officer of the Manager. Mr. Leland is a Seniorthe Vice President of the Fund and Vice President of MetLife,Trusts, and his principal occupation is Treasurer and Chief Financial Officer of the Manager.
The address of Ms. ForgetSlavin and Mr. Cellupica is 1095 Avenue of the Americas, New York, New York 10036. The address of the Manager and Mr. Leland is 501 Boylston Street,One Financial Center, Boston, Massachusetts 02116. The address of Met Investors Group is 5 Park Plaza, Irvine, CA 92614.02111. The address of MetLife is 200 Park Avenue, New York, NY 10166.
Additional Information
Similar Portfolios Advised by the Manager
Appendix Econtains information regarding other portfolios for which the Manager acts as investment adviser with investment objectives and policies similar to those of a particular Portfolio.
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Affiliated Brokerage
The Portfolios did not pay any commissions to Affiliated Brokers (as defined in the 1940 Act) during the fiscal year ended December 31, 2010.
Distributor
The Distributor, an affiliate of the Manager, located at 5 Park Plaza, Irvine, CA 92614, is the Fund’s distributor. The table below shows the amount paid by each Portfolio to the Distributor pursuant to the Portfolio’s Distribution and Services Plan adopted pursuant to Rule 12b-1 under the 1940 Act (each, a “Distribution Plan”) for the year ended December 31, 2010. If Proposal II is adopted, the Distributor is expected to continue to provide distribution services to the Portfolios pursuant to distribution and services plans substantially similar to the Distribution Plans currently in place.
Portfolio | Total Fees Paid to Distributor | |||
Artio International Stock Portfolio | $ | 317,634 | ||
Barclays Capital Aggregate Bond Index Portfolio | $ | 2,133,318 | ||
BlackRock Aggressive Growth Portfolio | $ | 345,589 | ||
BlackRock Bond Income Portfolio | $ | 1,370,477 | ||
BlackRock Diversified Portfolio | $ | 237,914 | ||
BlackRock Large Cap Value Portfolio | $ | 526,780 | ||
BlackRock Legacy Large Cap Growth Portfolio | $ | 362,903 | ||
BlackRock Money Market Portfolio | $ | 2,700,248 | ||
Davis Venture Value Portfolio | $ | 2,649,042 | ||
FI Value Leaders Portfolio | $ | 314,739 | ||
Jennison Growth Portfolio | $ | 933,464 | ||
Loomis Sayles Small Cap Core Portfolio | $ | 353,686 | ||
Loomis Sayles Small Cap Growth Portfolio | $ | 154,949 | ||
Met/Artisan Mid Cap Value Portfolio | $ | 1,061,591 | ||
Met/Dimensional International Small Company Portfolio | $ | 72,865 | ||
MetLife Conservative Allocation Portfolio | $ | 1,207,076 | ||
MetLife Conservative/Moderate Allocation Portfolio | $ | 2,902,119 | ||
MetLife Mid Cap Stock Index Portfolio | $ | 698,035 | ||
MetLife Moderate Allocation Portfolio | $ | 8,746,725 | ||
MetLife Moderate/Aggressive Allocation Portfolio | $ | 6,205,556 | ||
MetLife Stock Index Portfolio | $ | 3,677,960 | ||
MFS Total Return Portfolio | $ | 2,110,121 | ||
MFS Value Portfolio | $ | 514,675 | ||
Morgan Stanley EAFE Index Portfolio | $ | 891,638 | ||
Neuberger Berman Genesis Portfolio | $ | 431,288 | ||
Neuberger Berman Mid Cap Value Portfolio | $ | 842,669 | ||
Oppenheimer Global Equity Portfolio | $ | 613,698 | ||
Russell 2000 Index Portfolio | $ | 485,888 |
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Portfolio | Total Fees Paid to Distributor | |||
T. Rowe Price Large Cap Growth Portfolio | $ | 572,431 | ||
T. Rowe Price Small Cap Growth Portfolio | $ | 549,430 | ||
Van Eck Global Natural Resources Portfolio | $ | 139,152 | ||
Western Asset Management Strategic Bond Opportunities Portfolio | $ | 687,209 | ||
Western Asset Management U.S. Government Portfolio | $ | 1,134,673 | ||
Zenith Equity Portfolio* | N/A |
The information set forth in this Proxy Statement concerning the Existing Advisory Agreements and the Amended Advisory Agreement has been provided to the Fund by the Manager.
Vote Required
The shareholders of each Portfolio vote separately on Proposal II.I. All shares of a Portfolio vote together as a single class on Proposal II.I. The approval of Proposal I by any Portfolio is not contingent on the approval of Proposal II relating to it, as applicable.
The vote required to approve the Amended Advisory Agreement with respect to a Portfolio is the lesser of (i) 67% of the shares of athe Portfolio that are present at the Meeting, if the holders of more than 50% of the shares of such Portfolio outstanding as of the Record Date are present or represented by proxy at the Meeting, or (ii) more than 50% of the shares of a Portfolio outstanding on the Record Date. If the required vote is not obtained for a Portfolio, the DirectorsTrustees will consider what other actions to take in the best interests of the Portfolio.
Recommendation of the Board
The Board of DirectorsTrustees believes that the AmendedNew Advisory Agreement with respect to each Portfolio is in the best interests of shareholders of eachsuch Portfolio. Accordingly, the Board unanimously recommends that shareholders of each Portfolio vote to APPROVE the AmendedNew Advisory Agreement with respect to such Portfolio as set forth in Proposal II.I.
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PROPOSAL III: FUND REORGANIZING AS DELAWARE STATUTORY TRUSTII—APPROVAL OF NEW MLIA SUBADVISORY AGREEMENTS WITH AFFILIATED SUBADVISER
Introduction and Board Considerations
AtMLIA currently serves as the Meeting, it is proposed that the shareholdersinvestment subadviser to each of the Fund approve the reorganization of the Fund as a Delaware statutory trust. The reorganization would be effected pursuant to an Agreement and Plan of Reorganization (the “Reorganization Agreement”), which provides for (i) the transfer of all of the assets of eachMetLife Aggregate Bond Index Portfolio, of the Fund to a corresponding new series (the “New Portfolio”) of Metropolitan Series Fund, a newly formed Delaware statutory trust (the “New Trust”), in exchange for shares of such NewMetLife Stock Index Portfolio, MetLife Mid Cap Stock Index Portfolio, Russell 2000® Index Portfolio and the assumption by such NewMSCI EAFE® Index Portfolio, each a series of all of the liabilities, including any unstated liabilities, of the corresponding Portfolio; (ii) the distribution of such sharesMSF, and to the shareholders of each Portfolio in complete liquidation of each Portfolio; and (iii) the dissolution of the Fund under Maryland law (with respect to eachMetLife Multi-Index Targeted Risk Portfolio, a “Portfolio Reorganization” and, collectively, the “Reorganization”). The Reorganization is proposed to occur on or about April 30, 2012, although the date may be adjusted in accordance with the Reorganization Agreement.
The Boardseries of Directors of the Fund andMIST (the “MLIA Subadvised Portfolios”) under a Current Subadvisory Agreement between the Manager the investment manager for each Portfolio, believe that reorganizing the Portfolios as series of the New Trust potentially may allow the Portfolios to benefit from a more flexible organizational structure and potentially reduce the administrative burden of maintaining two separate legal entities, organized in two different jurisdictions, in the MetLife Funds Complex. In determining to recommend the proposed Reorganization to shareholders for approval, the Board considered that, among other things, the proposed Reorganization provides the Fund and its shareholders with four principal potential benefits.
First, reorganizing the Fund as a Delaware statutory trust eliminates the need to obtain Board approval, file documents with the State of Maryland and incur the related costs, potentially multiple times a year, to increase the aggregate number of shares of stock or the number of shares of stock of any series or class that the Fund has authority to issue in response to subscription activity. Failure to handle these administrative matters under Maryland law correctly could lead to adverse consequences, including the issuance of shares which exceed the authorized capital of the Fund. By contrast, each series of the New Trust may issue an unlimited number of shares, which eliminates the need for the Fund’s current practice of periodically reallocating shares and limits the potential for the inadvertent issuance of unauthorized shares.
Second, Delaware law provides a board greater flexibility to modify a trust’s governance documents in those instances where shareholder voting rights would not be affected. This provides the trustees of a Delaware statutory trust with greater flexibility to respond to changing market and legal conditions without causing a Portfolio and its shareholders to incur the delay and expense of a proxy solicitation (which can be substantial), though it limits the matters on which shareholders will be entitled to vote.
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Third, Delaware provides a well-established system of jurisprudence relating to the operation of business entities and a specialized court system for handling business controversies.
Fourth, potential cost savings may result if the Reorganization is consummated because both the Fund and MIST would then be Delaware statutory trusts subject to Delaware law and have substantially identical organizational documents. Having common organizational documents and applicable state law allows certain fixed costs incurred by MIST and the Fund (e.g., the cost of fund counsel reviewing non-routine legal issues) to be applied against MIST’s and the Fund’s aggregate assets, causing each of these entities to bear smaller amounts of those expenses than they would if the entities did not have those commonalities. The Manager expects any cost savings achieved as a result of Proposal III to be modest and potentially immaterial.
For a comparison of certain attributes of the Fund and the New Trust that may affect the shareholders of the Fund, please see the discussion below under “Comparative Information on Shareholders’ Rights and Governance Issues.” As described in more detail below, the New Trust is a statutory trust governed by Delaware law and an agreement and declaration of trust. The New Trust has separate series representing different beneficial interests in the assets and liabilities belonging to that series, and shares of each series may be further divided into separate classes. If the Reorganization is consummated, the New Trust will adopt, pursuant to Rule 414 under the Securities Act of 1933, as amended, the registration statement of the Fund. Accordingly, no investment objectives or investment policies of any Portfolio are expected to change as a result of the Reorganization. In addition, no changes in any Portfolio’s investment adviser, subadviser (if applicable) and portfolio managers are expected to result from the Reorganization, if consummated, and no changes in the Portfolios’ expense structures are expected to result from the Reorganization. All of the Nominees for Directors of the Fund identified in Proposal I that are elected are expected to serve as trustees of the New Trust.
If Proposal III is approved, the Board reserves the right not to implement Proposal III if it determines Proposal III is no longer in the Portfolios’ best interests.
Summary of Reorganization Agreement
The terms of the Reorganization Agreement are summarized below. This summary is qualified in its entirety by reference to the Reorganization Agreement itself, which is set forth inAppendix F to this Proxy Statement.
The Reorganization Agreement provides that each New Portfolio will acquire all of the assets and assume all of the liabilities, including any unstated liabilities, of the corresponding Portfolio in exchange for shares of the New Portfolio with a total net asset value equal to the net assets of the corresponding Portfolio at the time of the Valuation Time (as defined in the Reorganization Agreement). Subject to the satisfaction of the
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conditions described below, such acquisition is scheduled to occur on or about April 30, 2012 (the “Closing Date”), or such other date as may be agreed upon by the parties.
As part of the closing of the Reorganization, each Portfolio will liquidate and distribute pro rata to its shareholders of record, as calculated on the business day prior to the Closing Date at the close of regularly scheduled trading on the New York Stock Exchange, the shares of the corresponding New Portfolio received in the Reorganization. The liquidation and distributionMLIA with respect to each classMLIA Subadvised Portfolio (each a “Current MLIA Subadvisory Agreement” and collectively, the “Current MLIA Subadvisory Agreements”). The date of a Portfolio’s shares will be accomplishedeach Current MLIA Subadvisory Agreement and the date on which it was last approved by shareholders and last approved or continued by the transferBoard are provided in Appendix A.
As described in Proposal I, the Separation is expected to result in a change in control of the Manager, and therefore an “assignment” of each Portfolio’s Current Advisory Agreement for purposes of the 1940 Act, resulting in the automatic termination of the Current Advisory Agreement. In addition, as described in Proposal I, each Current Subadvisory Agreement (including each Current MLIA Subadvisory Agreement) provides for its automatic termination upon termination of the applicable Current Advisory Agreement, and accordingly, will automatically terminate along with the corresponding Current Advisory Agreement upon the change in control of the Manager in connection with the Separation.
Because theManager-of-Managers Order does not permit the Manager to enter into new subadvisory agreements with MLIA, an affiliate of the Manager, without shareholder approval, the New Subadvisory Agreements on behalf of the MLIA Subadvised Portfolios (each a “New MLIA Subadvisory Agreement” and collectively, the “New MLIA Subadvisory Agreements”) cannot become effective without shareholder approval.
In anticipation of the Separation, shareholders of each MLIA Subadvised Portfolio shares then creditedare being asked to the accountapprove a New MLIA Subadvisory Agreement on behalf of the Portfolio, onto be effective upon the booksconsummation of the correspondingSeparation. The form of New MLIA Subadvisory Agreement for each MLIA Subadvised Portfolio is attached hereto as Appendix D. The New MLIA Subadvisory Agreement for each MLIA Subadvised Portfolio will have an initial term of one year and will be substantially identical to newly-created accounts on the books of the corresponding Current MLIA Subadvisory Agreement, including with respect to the services MLIA is required to provide to the Portfolio and the fee rates paid to MLIA by the Manager. The New Portfolio inMLIA Subadvisory Agreement will differ from the corresponding Current MLIA Subadvisory Agreement only with respect to dates and the names of the Portfolio shareholders. All issuedManager and outstanding shares of each Portfoliothe Trusts (MetLife Advisers, LLC is changing its name to Brighthouse Investment Advisers, LLC and MIST and MSF will be canceledchange their names to Brighthouse Funds Trust I and Brighthouse Funds Trust II, respectively, effective on or about March 6, 2017).
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As with the booksNew Advisory Agreements, in anticipation of the Portfolio simultaneously. The New Portfolios will not issue certificates representingSeparation, the New Portfolio shares issuedBoard met in connection with such exchange.
After such distribution,person at the Fund will take all necessary steps under applicable state law, its governing instrumentsNovember Meeting and any other applicable law to complete the dissolution of the Portfolios and the Fund, to the extent that the Fund has no outstanding shares following the closing of the Reorganization. The Board has determined, with respect to each Portfolio, that the interests of shareholders of a Portfolio will notconsidered whether it would be diluted as a result of the Reorganization and that participation in the Reorganization is in the best interests of each Portfolio.
PriorMLIA Subadvised Portfolio to approve a New MLIA Subadvisory Agreement with respect to such Portfolio. At the Reorganization,November Meeting, and for the reasons discussed below, the Board, including a majority of the Independent Trustees, approved a New MLIA Subadvisory Agreement with respect to each Portfolio will purchase one or more shares (“Initial Shares”) of its corresponding NewMLIA Subadvised Portfolio and recommended its approval by written consent approve certain issues regarding the organizationshareholders of such Portfolio.
In the event that approval of the New Portfolio. The Fund, as the sole shareholderMLIA Subadvisory Agreements by shareholders of the New Trust by virtueMLIA Subadvised Portfolios has not been obtained before the termination of the Initial Shares held byCurrent MLIA Subadvisory Agreements, the Portfolios, will by written consent approve certain issues regarding the organizationBoard has approved interim subadvisory agreements with MLIA (the “Interim Subadvisory Agreements”) on behalf of the New Trust.MLIA Subadvised Portfolios that will go into effect upon the termination of the Current MLIA Subadvisory Agreements. The PortfoliosInterim Subadvisory Agreements have the same terms and the Fund will vote in favor of such matters regarding the organization ofconditions as the corresponding New PortfoliosMLIA Subadvisory Agreements, except for the dates, the names of the Manager and the New Trust, respectively, only ifTrusts and certain provisions required by Rule15a-4 under the shareholders1940 Act, summarized below.
As noted in Proposal I above, Rule15a-4 allows an investment company to enter into a subadvisory agreement that has not been approved by a majority of the Fund vote to approvePortfolio’s outstanding voting securities under certain circumstances, including when previous subadvisory agreements terminate by assignment because of a change in control of an investment adviser or subadviser. In accordance with the Reorganization Agreement. Thus shareholdersrequirements of Rule15a-4,the Fund, in approving the proposed Reorganization, will also, in effect be approving the following matters:Interim Subadvisory Agreements:
Election ofHave a duration no greater than 150 days following the New Trust’s Trustees, who are expected to bedate on which the same individuals as those serving as the Directors of the Fund immediately before the Reorganization;Current MLIA Subadvisory Agreement terminates;
Approval ofProvide for compensation to MLIA no greater than the advisory and subadvisory agreements for each New Series, which will be substantially identical tocompensation received under the agreements in place for the corresponding Portfolio immediately before the Reorganization;Current MLIA Subadvisory Agreement;
ApprovalProvide that the Board or a majority of distribution and services plans for each classthe Portfolio’s outstanding voting securities may terminate the agreement at any time, without the payment of shares of each New Series, which will be substantially identicalpenalty, on not more than 10 calendar days’ written notice to MLIA or the Distribution Plans in place for the corresponding Portfolio immediately before the Reorganization;Manager; and
ApprovalContain the same terms and conditions as the Current MLIA Subadvisory Agreements, with the exception of effective and termination dates; the termination provision noted above; provisions requiring that the compensation earned under the agreement be held in an interest-bearing escrow account with the Trust’s custodian or a bank; and provisions relating to how MLIA may be paid out of that interest-bearing escrow account.
Shareholders of the liquidation of each Portfolio and dissolution of the Fund.
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ShareholdersMLIA Subadvised Portfolios are not being asked to vote separately on these issues.approve the Interim Subadvisory Agreements, which will go into effect only in the event that a
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MLIA Subadvised Portfolio’s shareholders have not approved that Portfolio’s New MLIA Subadvisory Agreement before the change in control of the Manager and the resulting termination of the Current MLIA Subadvisory Agreements in connection with the Separation.
Comparison of Current MLIA Subadvisory Agreement and New MLIA Subadvisory Agreement
The Reorganizationterms of the New MLIA Subadvisory Agreement may be terminatedfor each MLIA Subadvised Portfolio are identical to those of the Current MLIA Subadvisory Agreement for such MLIA Subadvised Portfolio, except for the date of effectiveness, the initial term, and the Reorganization abandoned at any time prior to the consummationnames of the Reorganization, beforeManager and the Trusts (MetLife Advisers, LLC is changing its name to Brighthouse Investment Advisers, LLC and MIST and MSF will change their names to Brighthouse Funds Trust I and Brighthouse Funds Trust II, respectively, effective on or after approvalabout March 6, 2017). There is no change in the subadvisory fee rate payable by the shareholdersManager to MLIA. In addition, no contractual expense limitation or reimbursement currently in effect for an MLIA Subadvised Portfolio will be affected by the replacement of the Fund, if circumstances should develop that, in the Board’s opinion, make proceedingCurrent MLIA Subadvisory Agreement with the Reorganization inadvisable with respect to the Fund. The Reorganization Agreement provides that the Fund or the New Trust may waive compliance with any of the covenants or conditions made therein for the benefit of the Portfolios or the New Portfolios, as applicable, other than the requirement that the Reorganization Agreement beMLIA Subadvisory Agreement. If approved by shareholders and assuming the Separation is completed, each New MLIA Subadvisory Agreement is expected to be effective as of the Fund.
Comparative Information on Shareholders’ Rights and Governance Issues
As a Maryland corporation, the operationseffective date of the Fund are governedSeparation and will have an initial term of one year from the date of its effectiveness. Each New MLIA Subadvisory Agreement will continue in effect from year to year thereafter if its continuance is approved, on behalf of each MLIA Subadvised Portfolio, at least annually in the manner required by its Articles of Incorporation (the “Articles”), its Bylaws and applicable Maryland and federal law. The operations of the New Trust, as a Delaware statutory trust, will be governed by its Agreement and Declaration of Trust (the “Declaration of Trust”), its Bylaws and applicable Delaware and federal law. As discussed below, certain shareholder rights and governance issues differ between the Fund and the New Trust.
Form of Organization
The Fund is organized as a Maryland corporation, and the New Trust is organized as a Delaware statutory trust. Like the Fund, the New Trust will be registered as an open-end management investment company under the 1940 Act and organized asthe rules thereunder. Below is a “series company” as that term is used in Rule 18f-2 under the 1940 Act. Like the Fund, the New Trust will offer shares of its series to insurance company separate accounts to serve as an investment vehicle for variable annuity contracts and variable life insurance policies issued by certain insurance companies.
The businesssummary of the Fund is overseen by a Boardprincipal terms of Directors and the business of the Trust will be overseen by a Board of Trustees. The duties and responsibilities of the Directors in respect of the Fund and the Trustees in respecteachCurrent MLIA Subadvisory Agreement, which are substantially identical to those of the New Trust are substantially similar.
Capitalization
MLIA Subadvisory Agreement for each MLIA Subadvised Portfolio. The beneficial interests in the Fund are represented by 4.75 billion common shares with a par value of $0.01 each. The beneficial interests in the New Trust are expected to be represented by an unlimited number of transferable shares of beneficial interest, $.001 par value per share. Both the Declaration of Trustform of the New TrustMLIA Subadvisory Agreement for the Portfolios is attached hereto as Appendix D.
Services. The Current MLIA Subdvisory Agreement for each MLIA Subadvised Portfolio provides that MLIA shall manage the investment and the Articles of Incorporation of the Fund permit the Trustees and Directors, respectively, to allocate shares into one or more series, and classes thereof, with rights determined by the Trustees and Directors, respectively, all without shareholder approval. Fractional shares may be issued by the Fund and the New Trust.
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Because the New Trust is intended to carry on the business of the Fund, it will initially have 34 separate series, each corresponding to a current Portfolio of the Fund, with the same investment objective and principal investment strategies of the corresponding Portfolio. The New Trust will offer Class A, Class B, Class D, Class E, Class F and Class G shares, with each New Series offering the same classes of shares as are offered by its corresponding Portfolio.
Sharesreinvestment of each class of a Portfolio of the Fund and each class of a series of the New Trust represent an equal pro rata interest in the Portfolio or series, respectively, with each other share of that class. Shareholders of each Portfolio or series are entitled to receive dividends and other amounts as determined by the Directors or Trustees, as applicable.
Shareholder Liability
Under Delaware law, shareholders of a Delaware statutory trust are entitled to the same limitation of personal liability extended to stockholders of Delaware corporations. To the extent that the New Trust or a shareholder isMLIA Subadvised Portfolio’s assets, subject to the jurisdiction of courts in other states, it is possible that a court may not apply Delaware law and may thereby subject shareholderssupervision of the New Trust to liability. To guard against this risk,Manager, in accordance with the Declaration of Trust ofMLIA Subadvised Portfolio’s investment objectives and policies.
Compensation. In return for the New Trust (a) provides that any written obligation ofservices provided under each Current MLIA Subadvisory Agreement, the New Trust may containManager pays MLIA a statement that such obligation may only be enforced against thefee based on average daily net assets of the New Trust orMLIA Subadvised Portfolio allocated to MLIA by the particular series in questionManager, which is payable monthly. The fee rates for each MLIA Subadvised Portfolio under the Current MLIA Subadvisory Agreement and the obligation is not binding uponfees paid by the shareholders ofManager to MLIA during each MLIA Subadvised Portfolio’s most recent fiscal year are set forth in Appendix C to this Proxy Statement.
Limitation on Liability. Under the New Trust; however, the omission of such a disclaimer will not operate to create personal liabilityCurrent MLIA Subadvisory Agreement for any shareholder; and (b) provides for indemnification out of the New Trust’s property of any shareholder held personally liable for the obligations of the New Trust as a shareholder. Accordingly, the risk of a shareholder of the New Trust incurring financial loss beyond that shareholder’s investmenteach MLIA Subadvised Portfolio, except in the New Trust solely because of his or her status as a shareholder of the New Trust is limited to circumstances in which: (1) the court refuses to apply Delaware law; (2) no contractual limitation of liability was in effect; and (3) the New Trust itself is unable to meet its obligations. In light of Delaware law, the nature of the New Trust’s business, and the nature of its assets, the risk of personal liability to a shareholder of the New Trust solely because of his or her status as a shareholder is remote.
Under Maryland law, shareholders of the Fund have no personal liability as such for the acts or obligations of a Portfolio or the Fund.
Shareholder Meetings and Voting Rights
As an owner of a Contract issued by separate accounts of the Insurance Companies, you generally have the right to instruct your Insurance Company how to vote at shareholder meetings. Although you are not directly a shareholder of the Fund and will not be a direct shareholder of the New Trust, you have this right because some or all of your Contract value is invested, as provided by your Contract, in one or more
43
Portfolios and, if Proposal III is approved, will be invested in one or more New Portfolios. Accordingly, for purposes of this section, the term “shareholder” refers to you in your capacity as a Contract Owner who is able to instruct your Insurance Company how to vote its shares.
Neither the Fund nor the New Trust is required to hold annual meetings of shareholders and neither expects to do so. Both the Fund and the New Trust would be required to call a meeting of shareholders for the purpose of electing Directors and Trustees, respectively, if, at any time, less than a majority of the Directors or Trustees, respectively, then holding office were elected by shareholders. Shareholders of each Portfolio of the Fund or series of the New Trust generally vote separately, by Portfolio or series, as to matters, such as changes in fundamental investment restrictions, that affect only their particular Portfolio or series. Shareholders of each Portfolio of the Fund or series of the New Trust generally vote by class as to matters, such as approval of, or amendments to, a Rule 12b-1 distribution plan, that affects only their particular class.
Until and unless amended by the Board, the Bylaws of the Fund provide that the holders of a majority of the shares outstanding and entitled to vote shall constitute a quorum for the transaction of business at any regular or special meeting of the Fund. Except when a larger quorum is required by applicable law or the applicable governing documents, with respect to the New Trust, 33 1/3% of the shares issued and outstanding constitutes a quorum for consideration of a matter at a shareholders’ meeting but any lesser number is sufficient for adjourned sessions. Like the Fund, when a quorum of shareholders of the New Trust is present at a meeting, a majority of the shares voted would be sufficient to act on a matter and a plurality of the shares voted would be required to elect a Trustee. Neither the Fund nor the New Trust permits the use of cumulative voting in the election of Directors or Trustees, respectively. A Director of the Fund may be removed with or without cause by a vote of the shareholders holding a majority of the shares entitled to vote for the election of directors at any meeting of shareholders at which a quorum is present. A Trustee of the New Trust may be removed at a meeting of shareholders by a vote of two-thirds of the outstanding shares of the New Trust. Under the Declaration of Trust and Articles of Incorporation of the New Trust and the Fund, respectively, each whole share of beneficial interest or common stock is entitled to one vote, and each fractional share is entitled to a proportionate vote.
Liquidation
In the event of the liquidation of the Fund or the New Trust, or a series, or a class of shares of a series, shareholders of the Fund and the New Trust, or the series, or the class of shares of the series, would be entitled to receive, when and as declared by the Directors or Trustees, the excess of the assets belonging to the Fund or New Trust, the series, or attributable to the class of the series, over the liabilities belonging to the Fund or New Trust, the series, or attributable to the class of the series, as applicable. The
44
assets so distributable to shareholders will be distributed among the shareholders in proportion to the number of shares of the Fund or New Trust, the series, or the class of shares of the series owned by them on the date of distribution. The Trustees of the New Trust may vote to liquidate the New Trust or any series thereof without shareholder approval; liquidation of the Fund at a time when shares of the Fund remain outstanding would generally require the approval of shareholders of a majority of the shares of the Fund entitled to vote on the issue. However, under Maryland law applicable to the Fund, if the Directors find that the continuation of the offering of the shares of any one or more series or classes is no longer in the best interests of the Fund, the Fund may elect to exercise its involuntary redemption right and force the redemption of such series’ or class’s shares so that there are no outstanding shares, in which case a shareholder vote would not be required to liquidate the series or class.
Liability and Indemnification of Trustees/Directors
The Bylaws of the Fund provide that a present or former Director or officer is entitled to indemnification to the full extent permissible under the laws of the State of Maryland against liabilities and expenses with respect to claims related to his or her position with the Fund; provided that, except as specifically required by the laws of the State of Maryland, the Fund is only required to indemnify persons other than Directors to the extent specifically approved by resolution adopted by the Board of Directors, provided that no indemnification shall be provided to a Director or officer against any liability to the Fund or any shareholder by reasons of willful misfeasance, bad faith, gross negligence or reckless disregard of its duties under the duties involved inagreement, MLIA will not
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be liable for any error of judgment or mistake of law or for any loss suffered by the conduct of his or her office.
Under the Declaration of Trust of the New Trust, a Trustee or officer is liable to any person in connection with the assetsmatters to which the Current MLIA Subadvisory Agreement relates.
Continuance. The Current MLIA Subadvisory Agreement for each MLIA Subadvised Portfolio originally was in effect for an initial term of one or affairstwo years and is eligible to be continued thereafter for successive one-year periods if such continuance is specifically approved at least annually in the manner required by the 1940 Act. As described above, if the shareholders of each MLIA Subadvised Portfolio approve the New MLIA Subadvisory Agreement and the Separation is consummated, the New MLIA Subadvisory Agreement with respect to each MLIA Subadvised Portfolio will be effective as of the effective date of the Separation and will have an initial term of one year from the consummation of the Separation. Thereafter, the New MLIA Subadvisory Agreement for each MLIA Subadvised Portfolio may be continued for successive one-year periods if approved at least annually in the manner required by the 1940 Act.
Termination. The Current MLIA Subadvisory Agreement for MetLife Multi-Index Targeted Risk Portfolio may at any time be terminated by the Board, by the Manager, or by a vote of a majority of the outstanding voting securities of the Portfolio on sixty (60) days’ written notice to MLIA, or by MLIA on ninety (90) days’ written notice to the Manager, in each case without the payment of any penalty. The Current MLIA Subadvisory Agreement for each of MetLife Aggregate Bond Index Portfolio, MetLife Stock Index Portfolio, MetLife Mid Cap Stock Index Portfolio, Russell 2000® Index Portfolio and MSCI EAFE® Index Portfolio may at any time be terminated by the Board or by a vote of a majority of the outstanding voting securities of the Portfolio on sixty (60) days’ written notice to the Manager and MLIA, by the Manager on thirty (30) days’ written notice to MLIA and the Trust, or by MLIA on sixty (60) days’ written notice to the Manager and the Trust, in each case without the payment of any penalty. The Current MLIA Subadvisory Agreement for each MLIA Subadvised Portfolio also terminates automatically in the event of its assignment or upon termination of the corresponding Current Advisory Agreement.
Board Considerations
As described above, the Separation is expected to result in the automatic termination of each Portfolio’s Current Advisory Agreement and, as a result, the automatic termination of the Current MLIA Subadvisory Agreements. At the November Meeting, the Board, including a majority of the Independent Trustees, approved the New MLIA Subadvisory Agreements and recommended that the shareholders of the Trusts approve the New MLIA Subadvisory Agreements. Information about the Board’s considerations and process is set forth below.
In determining whether to approve the New MLIA Subadvisory Agreements, the Board considered the nature, quality and extent of the services that are currently provided by MLIA under the Current MLIA Subadvisory Agreements as well as the
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services to be provided under the New MLIA Subadvisory Agreements. The Board’s review was conducted as part of, and in conjunction with, the Board’s annual review of the Current MLIA Subadvisory Agreements, which culminated at the November Meeting. In approving the New MLIA Subadvisory Agreements, the Board considered its conclusions with respect to its approvals of the Current MLIA Subadvisory Agreements, including the Board’s general satisfaction with the nature, extent and quality of services being provided by MLIA to the MLIA Subadvised Portfolios. Appendix H contains a further description of the process followed, information reviewed and the material factors considered by the Board in approving the continuation of the Current MLIA Subadvisory Agreements.
In addition, the following actions were taken and considered by or on behalf of the Board:
1. The Independent Trustees of the Board solicited and received ongoing advice regarding the legal duties of the Independent Trustees from Stradley Ronon, legal counsel for the Independent Trustees, which law firm has extensive experience regarding such matters.
2. The Board considered representations by the Manager and its affiliates, including MLIA, that the Separation will not have any impact on the level, nature and quality of services currently provided by MLIA to the MLIA Subadvised Portfolios.
3. The Board considered representations by the Manager and its affiliates that approval of the New Trust or any series onlyMLIA Subadvisory Agreements would be necessary for such Trustee’s or officer’s own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved inMLIA Subadvised Portfolios to continue receiving subadvisory services from MLIA following the conduct of the person’s office. As provided in the Declaration of Trust, each Trustee and officer of the New Trust is entitled to be indemnified against all liabilities against him or her, including the costs of litigation, unless it is determined that the Trustee or officer (1) did not act in good faith in the reasonable belief that his or her action was in or not opposed to the best interests of the New Trust; (2) had acted with willful misfeasance, bad faith, gross negligence or reckless disregard of his or her duties; and (3) in a criminal proceeding, had reasonable cause to believe that his or her conduct was unlawful.
* * * * *
The foregoing is only a summary of certain terms of the New Trust’s Declaration of Trust and the Fund’s Articles, the New Trust’s and the Fund’s Bylaws, and Delaware, Maryland and federal law. It is not intended as a complete description of those documents or laws. Shareholders should refer to the provisions of the Declaration of Trust, the Articles and the Bylaws, and to Delaware, Maryland or federal law
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directly, for more complete information. Shareholders entitled to instruct the Insurance Companies to vote at the Meeting may obtain a copy of the New Trust’s Declaration of Trust and Bylaws, without charge, upon written or oral request to the Fund at the address and telephone number set forth on the cover of this Proxy Statement. The Fund’s Articles and Bylaws have been filed as exhibits to the Fund’s registration statement on file with the SEC atwww.sec.gov.
Subadvisers
Like the Fund, the New Trust will rely on an exemptive order from the Securities and Exchange Commission that permits the Manager, subject to certain conditions, and without the approval of shareholders to: (a) employ a new investment subadviser for a New Portfolio pursuant to the terms of a new investment subadvisory agreement, in each case either as a replacement for an existing subadviser or as an additional subadviser; (b) change the terms of any investment subadvisory agreement in a way that would otherwise require the approval of shareholders; and (c) continue the employment of an existing subadviser on the same subadvisory contract terms where a contract has been terminated because of an assignment of the contract, including, potentially, a change in control of the subadviser. In such circumstances, shareholders would receive noticeManager.
4. The Board considered representations by the Manager, as well as related supporting documentation, indicating that the New MLIA Subadvisory Agreements, including the fees payable thereunder, are the same as the terms of such action, including information concerning the new subadviser. Generally,corresponding Current MLIA Subadvisory Agreements.
5. The Board considered that the Board of TrusteesManager and its affiliates have agreed to bear all expenses associated with obtaining shareholder approval of the New Trust must approve any new subadvisory agreements implemented in reliance onMLIA Subadvisory Agreements.
6. The Board considered the exemptive order. A New Portfolio may not rely on the exemptive order with respect to subadvisers that are affiliated with the Manager.
Federal Income Tax Consequences of the Portfolio Reorganizations
The reorganization of each Portfolio into its corresponding New Portfolio is expected to qualify for U.S. federal income tax purposes as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and thus is not expected to result in the recognition of gain or lossadvice provided by either the Portfolio, the New Portfolio, or their shareholders, the insurance company separate accounts. Provided that the variable life insurance policies or variable annuity contracts funded by a Portfolio qualify as life insurance or annuity contracts under Section 72 of the Code, the Portfolio Reorganization will not be a taxable event for owners of such contracts, regardless of whether the Reorganization is taxable or tax-free. It is accordingly expected that such contract owners will not recognize taxable gain or loss as a result of a Portfolio Reorganization.
As a condition to the closing of the Reorganization, each Portfolio and its corresponding New Portfolio will receive a legal opinion from Ropes & Gray, LLP, (which opinion will be subject to certain qualifications satisfactorylegal counsel to the PortfolioTrusts and the New Portfolio),Manager, with respect to the effect that, onNew MLIA Subadvisory Agreements (including advice relating to the basisnecessity for shareholder approval for the New MLIA Subadvisory Agreements, the process and timing of seeking shareholder approval of the existing provisionsNew MLIA Subadvisory Agreements, and whether shareholder approvals would be required in connection with any future aspects of the Separation) and regarding the Board’s role and responsibilities with respect to the Separation.
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Code,7. The Board considered that, if shareholders approve the Treasury Regulations promulgated thereunder, current administrative rules, pronouncementsNew MLIA Subadvisory Agreements, the Board, the Manager, and court decisions, for federal income tax purposes:
The Portfolio ReorganizationMLIA will constituteconduct their annual contract review process in November 2017. Thus, the Board emphasized that it would be able to, and intends to, monitor on a reorganization withinregular basis the meaningability of Section 368(a)MLIA to comply with its undertakings to the Board and the Manager and to monitor on an ongoing basis the quality of services to, and expenses of, the Code, andMLIA Subadvised Portfolios. In addition, the Board considered that, under the New Portfolio andMLIA Subadvisory Agreements, it will continue to have the corresponding Portfolio each will be a “partyauthority, should the need arise in its view, to a reorganization” within the meaning of Section 368(b) of the Code;
Under Section 1032 of the Code, no gain or loss will be recognized by the New Portfolio upon the receipt of the assets of the corresponding Portfolio in exchange for New Portfolio shares and the assumption by such New Portfolio of the liabilities of the corresponding Portfolio;
Under Section 362(b) of the Code, the basis in the handsterminate any of the New PortfolioMLIA Subadvisory Agreements without penalty upon no more than 60 days’ notice.
Based on the foregoing and other relevant considerations, at the November Meeting, the Board, including a majority of the assetsIndependent Trustees, voted to approve the New MLIA Subadvisory Agreements and to recommend approval of the corresponding Portfolio transferred to such New Portfolio in the Reorganization will be the same as the basis of such assets in the handsMLIA Subadvisory Agreements by shareholders of the corresponding Portfolio immediately prior toMLIA Subadvised Portfolios. In this connection, the transfer;
Under Section 1223(2) of the Code, the holding periods of the assets of the Portfolio in the hands of the corresponding New Portfolio will include the periods during which such assets were held by such Portfolio;
Under Section 361 of the Code, no gain or loss will be recognized by the Portfolio upon the transfer of its assets to the corresponding New Portfolio in exchange for New Portfolio shares and the assumption by the corresponding New Portfolio of the liabilities of such Portfolio, or upon the distribution of New Portfolio shares by such Portfolio to its shareholders in liquidation;
Under Section 354 of the Code, no gain or loss will be recognized by Portfolio shareholders upon the exchange of their shares of such Portfolio for New Portfolio shares;
Under Section 358 of the Code, the aggregate basis of New Portfolio shares a shareholder of the corresponding Portfolio receives in connection with the Reorganization will be the same as the aggregate basis of such shareholder’s Portfolio shares exchanged therefor;
Under Section 1223(1) of the Code, a Portfolio shareholder’s holding period for his, her, or its New Portfolio shares will include the period for which such shareholder held the Portfolio shares exchanged therefor, providedBoard concluded that, the shareholder held such Portfolio shares as capital assets; and
The New Portfolio will succeed to and take into account the items of the corresponding Portfolio described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381, 382, 383 and 384 of the Code and the Regulations thereunder.
Each opinion will be based on factual certifications made by officers of the applicable Portfolio and the corresponding New Portfolio, and on customary
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assumptions. No opinion is a guarantee that the tax consequences of a Portfolio Reorganization will be as described above. There is no assurance that the Internal Revenue Service (“IRS”) or a court would agree with any opinion. Opinions of counsel are not binding upon the IRS or the courts.
If the IRS or a court were to disagree with an opinion, it could subject one or both Portfolios to a Portfolio-level tax or affect the qualification of one or both Portfolios as “a regulated investment company” under the Code. The above description of the U.S. federal income tax consequences of the Portfolio Reorganizations is made without regard to the particular facts and circumstances of any shareholder or Contract Owner. Shareholders of each Portfolio and owners of contracts funded by each Portfolio should consult their tax advisors regarding the effect, if any, of a Portfolio Reorganization in light of their individual circumstances. Sinceall factors considered, the foregoing discussion relates onlyterms of the New MLIA Subadvisory Agreements, including fee rates, were fair and reasonable, and that it would be in the best interests of shareholders of each MLIA Subadvised Portfolio to certain U.S. federal income tax consequencesapprove the New MLIA Subadvisory Agreements.
Information Regarding the Affiliated Subadviser
MLIA is a Delaware limited liability company. MetLife owns all of a Portfolio Reorganization, each shareholderthe voting interests in and is the sole member of a PortfolioMLIA. The member’s interest in MLIA entitles the member to all profits and ownerlosses attributable to MLIA. Steven J. Goulart is the President of one or more contracts funded by a Portfolio should also consult their tax advisors as toMLIA. Richard Leist, Robert Merck, Joseph Pollaro and Bradley Rhoads are members of MLIA’s Board of Managers. Hugh McCrory, Michael Yick and John McCallion are officers of MLIA. Mr. McCrory is the state, localSecretary of MLIA and non-U.S. tax consequences, if any,his principal occupation is Senior Vice President and Chief Legal Officer of a Portfolio Reorganization based upon their particular circumstances.MLIA. Mr. Yick is Chief Financial Officer of MLIA and Mr. McCallion is Treasurer of MLIA.
The address of Mr. Goulart is One MetLife Way, Whippany, NJ 07981. The address of MLIA is One MetLife Way, Whippany, NJ 07981.
Vote Required
The shareholders of the Fundeach MLIA Subadvised Portfolio vote separately on Proposal II. All shares of a MLIA Subadvised Portfolio vote together as a single class on Proposal III.II. The approval of Proposal II by any MLIA Subadvised Portfolio is not contingent on the approval of Proposal I relating to it.
The vote required to approve Proposal IIIthe New MLIA Subadvisory Agreement with respect to a MLIA Subadvised Portfolio is the lesser of (i) 67% of the shares of the FundPortfolio that are present at the Meeting, if the holders of more than 50% of the shares of the Fundsuch Portfolio outstanding as of the Record Date are present or represented by proxy at the Meeting, or (ii) more than 50% of the shares of the FundPortfolio outstanding on the
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Record Date. If the required vote is not obtained for a MLIA Subadvised Portfolio, the DirectorsTrustees will consider what other actions to take in the best interests of the Fund.Portfolio.
Recommendation of the Board
The Board of DirectorsTrustees believes that the ReorganizationNew MLIA Subadvisory Agreement is in the best interests of shareholders of each MLIA Subadvised Portfolio. Accordingly, the Fund.Board unanimously recommends that shareholders of each MLIA Subadvised Portfolio vote to APPROVE the New MLIA Subadvisory Agreement as set forth in Proposal II.
PROPOSAL III—ELECTION OF BOARD MEMBERS
The purpose of this Proposal is to elect the eight (8) individuals listed below (each a “Nominee” and collectively, the “Nominees”) as Trustees of the Trusts. The persons named as proxies intend, in the absence of contrary instructions, to vote all proxies for the election of the Nominees. If elected, each Nominee will serve until his or her successor has been elected and qualified, or until he or she dies, resigns, is removed or becomes disqualified. If, prior to the Meeting, any Nominee becomes unable to serve for any reason, the persons named as proxies reserve the right to substitute another person or persons of their choice as Nominee(s). All of the Nominees have consented to being named in this Proxy Statement and to serve if elected, and the Trusts know of no reason why any Nominee would be unable or unwilling to serve if elected.
All of the Nominees currently serve as Trustees of the Trusts and have served in that capacity continuously since their original election or appointment to the Board. Mses. Susan C. Gause, Nancy Hawthorne, Linda B. Strumpf and Dawn M. Vroegop and Messrs. Stephen M. Alderman and Robert J. Boulware were elected as Trustees by shareholders of the Trusts at special meetings held on February 24, 2012. Ms. Barbara A. Nugent and Mr. John Rosenthal were appointed to the Board on January 1, 2014 and May 25, 2016, respectively. Ms. Nugent and Mr. Rosenthal have not previously been elected by shareholders of the Trusts. If elected, each Nominee, except Mr. Rosenthal, is expected to qualify as a Board member who is not an “interested person,” as that term is used in the 1940 Act, of the Trusts (each an “Independent Trustee”). Mr. Rosenthal is an “interested person” of the Trusts (as that term is used in the 1940 Act) because of his position with MetLife, the ultimate parent company of the Manager.
Section 16 of the 1940 Act provides that vacancies on the Board may be filled only by a meeting of shareholders duly called for that purpose, unless at leasttwo-thirds of the Trustees holding office immediately after the appointment of a Trustee to fill such vacancy have been elected by shareholders of the Trusts. Because Ms. Nugent and Mr. Rosenthal were appointed by the Trustees rather than elected by shareholders, the operation of this provision could potentially restrict the ability of the Trustees to appoint new Trustees in the future unless the Nominees are elected by shareholders. The Board believes that it is in the best interests of the Trusts to elect all of the Nominees as Trustees of the Trusts at this time, to avoid the potential expense to
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shareholders of calling a special meeting for the purpose of filling vacancies on the Board at a future time. The Board believes that the Nominees’ professional experience, skills, and their relative tenures as Trustees of the Trusts are appropriate and that their election by shareholders is in the best interests of the Trusts.
Certain biographical and other information relating to the Nominees, including each Nominee’s experience, qualifications, attributes and skills, is set forth below.
Information Concerning Nominees and Executive Officers
The following table provides information concerning the Nominees for election by shareholders and the executive officers of the Trusts. Unless otherwise noted, the address of the current Trustees and officers of the Trusts are c/o Metropolitan Series Fund and Met Investors Series Trust, One Financial Center, Boston, Massachusetts 02111.
Each Nominee elected at the Meeting will serve until his or her death, resignation, retirement or removal in accordance with the Trusts’ respective organizational documents and policies adopted by the Board from time to time. Officers hold office at the pleasure of the Board and serve until their removal or resignation in accordance with the Trusts’ respective organizational documents and policies adopted by the Board from time to time.
Name and Age | Current | Term of Office | Principal | Number of Portfolios in MetLife Funds Complex(2) Overseen by Trustee | Other | |||||||
Interested Trustee | ||||||||||||
John Rosenthal* (56) | Trustee | Indefinite; From May 2016 (MIST and MSF) to present | Senior Managing Director and Head of Global Portfolio Management, MetLife, Inc. | 75 | None | |||||||
Independent Trustees | ||||||||||||
Dawn M. Vroegop (49) | Trustee and Chairman of the Board | Indefinite; From December 2000 (MIST)/May 2009 (MSF) to present as Trustee; From May 2016 (MIST and MSF) until present as Chairman | Private Investor. | 75 | Trustee, Driehaus Mutual Funds.** |
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Name and Age | Current | Term of Office | Principal | Number of Portfolios in MetLife Funds Complex(2) Overseen by Trustee | Other | |||||
Stephen M. Alderman (57) | Trustee | Indefinite; From December 2000 (MIST)/ April 2012 (MSF) to present | Shareholder in the law firm of Garfield and Merel, Ltd. | 75 | None | |||||
Robert J. Boulware (60) | Trustee | Indefinite; From March 2008 (MIST)/ April 2012 (MSF) to present | Managing Director, Pilgrim Funds, LLC (private equity fund). | 75 | Trustee, Vertical Capital Income Fund(closed-end fund);** Director, Gainsco, Inc. (auto insurance);** Trustee, SharesPost 100 Fund(closed-end fund).** | |||||
Susan C. Gause (64) | Trustee | Indefinite; From March 2008 (MIST)/ April 2012 (MSF) to present | Private Investor. | 75 | Trustee, HSBC Funds.** | |||||
Nancy Hawthorne (65) | Trustee | Indefinite; From May 2003 (MSF)/ April 2012 (MIST) to present | Partner, Hawthorne Financial Advisors, LLC (registered investment advisor); until June 2014, Chief Executive Officer, Clerestory LLC (corporate advisor). | 75 | Director and Chairman of the Board of Directors, THL Credit, Inc.;** Lead Director, Avid Technology, Inc.;** Director, CRA International, Inc.** | |||||
Barbara A. Nugent (60) | Trustee | Indefinite; From January 2014 (MIST and MSF) to present | President, True North Board Governance, LLC (consulting); until December 2013, partner in the law firm of Stradley Ronon Stevens & Young, LLP. | 75 | None | |||||
Linda B. Strumpf (69) | Trustee | Indefinite; From May 2000 (MSF)/ April 2012 (MIST) to present | Chair of the Investment Committee, Leona M. and Harry B. Helmsley Charitable Trust; until June 2011, Chief Investment Officer, Leona M. and Harry B. Helmsley Charitable Trust. | 75 | None |
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Name and Age | Position(s) Held | Length of Time | Principal Occupation(s) During the | |||
Executive Officers | ||||||
Kristi Slavin (43) | President and Chief Executive Officer, of MIST and MSF | From May 2016 (MIST and MSF) to present | President, MetLife Advisers, LLC (May 2016-present); Senior Vice President, MetLife Advisers, LLC; Vice President, MetLife, Inc.; Vice President, MIST and MSF (2015-2016). | |||
Peter H. Duffy (61) | Chief Financial Officer and Treasurer, of MIST and MSF | From November 2000 (MSF)/ May 2012 (MIST) to present | Senior Vice President, MetLife Advisers, LLC; Vice President, MetLife, Inc. | |||
Andrew L. Gangolf (62) | Secretary, of MIST and MSF | From May 2011 (MIST and MSF) to present | Senior Vice President, MetLife Advisers, LLC; until 2011, Senior Vice President & Assistant General Counsel, AllianceBernstein Investments, Inc. | |||
Steven E. Hartstein (53) | Chief Compliance Officer (“CCO”), of MIST and MSF | From February 2014 (MIST and MSF) to present | Vice President, MetLife, Inc. (2013- present); Senior Vice President and CCO, MetLife Advisers, LLC; Executive Director, Morgan Stanley (2009-2013); CCO, Consulting Group Capital Markets Funds(2006-2013). | |||
Alan C. Leland (64) | Vice President, of MIST and MSF | From February 2005 (MSF)/ May 2012 (MIST) to present | Treasurer and Chief Financial Officer, MetLife Advisers, LLC; Vice President, MetLife, Inc. |
* | Mr. Rosenthal is an “interested person” of the Trusts because of his position with MetLife, Inc., the current parent company of MetLife Advisers, LLC. |
** | Indicates a directorship with a registered investment company or a company subject to the reporting requirements of the Securities Exchange Act of 1934, as amended. |
(1) | Previous positions during the past five years with the Trusts, MetLife, Inc. or the Manager are omitted if not materially different. |
(2) | As of May 1, 2016, the Fund Complex includes 45 MIST Portfolios and 30 MSF Portfolios. |
Qualifications of the Trustee Nominees
The following provides an overview of the considerations that led the Board to conclude that each Nominee should be proposed for election. The current members of the Board have joined the Board at different points in time since 2000. Generally, no one factor was decisive in the original selection of an individual to join the Board. Among the factors the Board considers when concluding that an individual should serve on the Board are the following: (i) the individual’s business and professional experience and accomplishments, including prior experience in the financial services and investment management fields or on other boards; (ii) the individual’s ability to work effectively with the other members of the Board; (iii) experience on boards of
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other investment companies that were merged into the Trusts (as applicable); and (iv) how the individual’s skills, experiences and attributes would contribute to an appropriate mix of relevant skills and experience on the Board.
Each Nominee’s substantial professional accomplishments and prior experience, including, in some cases, in fields related to the operations of the Trusts, were a significant factor in the determination that the individual should serve as a Trustee of the Trusts. Each Nominee’s most recent five years of prior professional experience is summarized in the table above. In certain cases, additional professional experience and accomplishments not reflected in the table above contributed to the Board’s conclusion that an individual should serve on the Board. For example, Ms. Gause and Mr. Boulware each served as chief executive officer of a financial services company; Ms. Hawthorne served as interim chief executive officer and chairman of the board of a technology-related company; and Ms. Vroegop has served as a managing director of a financial services company. Ms. Nugent’s prior legal and professional careers focused on the mutual fund industry and its operations. Mr. Alderman served as lead Independent Trustee of the MIST Trust. Ms. Strumpf has served as the chairperson and investment officer of charitable foundations.
With respect to the Trustee of the Trusts who is an Interested Trustee, the following additional considerations contributed to the Board’s conclusion that Mr. Rosenthal should serve on the Board: Mr. Rosenthal’s experience as an executive of MetLife, the current parent company of the Manager, and his expected leadership position with Brighthouse, the new separate retail business organized under a holding company, following the Separation.
Leadership Structure of the Trusts
The following describes the current Board leadership structure. If Proposal III is approved, the leadership structure of the Board and the structure, composition, types and/or number of the Trusts’ standing committees (the “Committees”) is not expected to change.
The Board currently consists of eight Trustees, seven of whom are not “interested persons” (as defined in the 1940 Act) of the Trusts. The Board is responsible for the overall management of each Trust, including general supervision and review of each Trust’s investment activities. The Board, in turn, elects the officers of the Trusts who are responsible for administering the Trusts’day-to-day operations.
The Board has appointed an Independent Trustee, Ms. Vroegop, to serve as Chairman of the Board. Ms. Vroegop presides at meetings of the Board and assists management in the development of the agendas for Board meetings. A portion of each regular meeting of the Board is devoted to an executive session of the Independent Trustees at which no members of management are present. At those meetings, the Independent Trustees consider a variety of matters, including those that are required by law to be considered by the Independent Trustees, and those that are scheduled to come
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before the full Board, including fund governance and leadership issues. Ms. Vroegop leads those meetings and reports to the Board and management on the matters discussed at those meetings. The Independent Trustees, including the Chairman, are advised by independent counsel.
Based on, among other factors, each Trustee’s professional experience and skills and their relative tenures as Trustees of the Trusts, the Board believes that having a super-majority of Independent Trustees on the Board, an Independent Chairman and an Interested Trustee who provides insights based on his experience and responsibilities as an executive of MetLife, Inc., the current parent company of the Manager, and his expected leadership position with Brighthouse Financial, Inc., is appropriate and in the best interests of each Trust.
Standing Committees of the Board
The Board conducts much of its work through certain standing Committees, each of which is chaired by an Independent Trustee. Each Trust has established a standing Audit Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended, consisting of all of the Independent Trustees. The Audit Committee of the Board has identical members and the same Chairman, Ms. Gause, and meets as a single committee. The Audit Committee’s function is to, among other things: recommend to the Board independent accountants to conduct the annual audit of the Trusts’ financial statements; review with the independent accountants the outline, scope and results of the annual audit; and review the performance and fees charged by the independent accountants for their professional services. In addition, the Board’s Audit Committee meets with the independent accountants and representatives of management to review accounting activities and areas of financial reporting and control. The Audit Committee of the Board also focuses on the valuation of the assets of the Portfolios of each Trust. The Board’s Audit Committee held four meetings during the fiscal year ended December 31, 2015.
Each Trust has a Nominating, Governance and Compensation Committee (“NGC Committee”) consisting of all of the Independent Trustees. The NGC Committee of the Board has identical members and the same Chairman, Ms. Hawthorne, and meets as a single committee. The NGC Committee’s function is to: recommend, evaluate, and nominate Independent Trustee candidates to the full Board; evaluate the Independent Trustee candidates’ independence from a Trust’s Manager and other principal service providers and consider the effect of any relationships beyond those delineated in the 1940 Act that might impair independence (e.g., business, financial, or family relationships with the Manager or affiliates); review the size and composition of the Board; review and evaluate the Committee structure of the Board and make recommendations to the Board with respect to changes to existing Committees (including Committee membership) or for additional Committees (including membership); periodically review the Board’s governance practices, policies, procedures and operations, and ongoing Trustee education on current industry matters,
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and as applicable orientation for new Trustees; lead and manage the Board’s annual self-assessment process; review, monitor and supervise service providers that the Independent Trustees have engaged to assist them, including the performance of, and independence of, legal counsel to the Independent Trustees; review and recommend, as appropriate, changes to Independent Trustee compensation; and on an annual basis review and report findings to the full Board regarding the Trusts’ and Independent Trustees’ insurance coverage. While the NGC Committee has not adopted a specific policy on diversity or a particular definition of diversity when considering candidates, the NGC Committee generally considers the manner in which each candidate’s professional experience, background, skills in matters that are relevant to the oversight of the Portfolios (e.g., investment management, distribution, accounting, trading, compliance, legal), and general leadership experience complement the attributes of the existing Independent Trustees.
The NGC Committee evaluates the qualifications of the Trusts’ candidates for Independent Trustee positions and makes recommendations to the Independent Trustees with respect to nominations for Independent Trustee membership on the Board. The NGC Committee generally considers the potential candidate’s educational background, business or professional experience, and reputation. In addition, all candidates as members of the Board must demonstrate an ability and willingness to make the considerable time commitment, including personal attendance at Board meetings, believed necessary to his or her function as an effective Board member. The NGC Committee may adopt from time to time specific, minimum qualifications that the NGC Committee believes a candidate must meet before being considered as a candidate for Board membership, subject to approval by the full Board. In so doing, the NGC Committee shall comply with any rules adopted from time to time by the SEC regarding investment company nominating committees and the nomination of persons to be considered as candidates for Board membership. The Nominating Committee Charter is attached as Appendix E to this Proxy Statement. The Board’s NGC Committee held four meetings during the fiscal year ended December 31, 2015.
Each Trust has two Investment Performance Oversight Committees (A and B, which meet as single committees). Investment Performance Oversight Committee A of the Board is comprised of Mr. Boulware, Ms. Gause and Ms. Nugent and Mr. Boulware currently serves as Chairman. Investment Performance Oversight Committee B of the Board is comprised of Mr. Alderman, Ms. Hawthorne, Ms. Strumpf and Ms. Vroegop, and Ms. Strumpf currently serves as Chairman. Each Investment Performance Oversight Committee reviews investment performance matters relating to a particular group of Portfolios and the subadvisers to those Portfolios. Each Investment Performance Oversight Committee reports to the full Board regarding the activities and findings of the Committee. The Board’s Investment Performance Oversight Committees A and B each held five meetings during the fiscal year ended December 31, 2015. Prior to August 18, 2015, each Trust had an Investment Performance Oversight Committee C that was comprised of all of the Independent Trustees. This Committee held two meetings during the fiscal year ended December 31, 2015.
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Board Oversight of Trust Risk
The Board, as a whole, considers risk management issues as part of its general oversight responsibilities throughout the year at regular Board meetings, through regular reports that have been developed by management, in consultation with the Board and its counsel. These reports address certain investment, valuation and compliance-related matters. The Board also may receive special written reports or presentations on a variety of risk issues, either upon the Board’s request or upon the Manager’s initiative. Such reports have addressed cybersecurity relating to the Trusts and Portfolios, operational matters relating to Trust service providers and other topics. In addition, the Audit Committee of the Board meets regularly with the Manager’s personnel who are responsible for each Trust’s accounting and financial reports to review information on their examinations of functions and processes within the Manager that affect the Trusts.
Under the multi-manager structure used by the Trusts, the Manager is responsible for overall oversight, including risk management oversight, of the services provided by the various subadvisers. Each subadviser is responsible for the management of risks that may arise from its Portfolio investments. The Board requires the Manager, and the subadvisers, as appropriate, to report to the full Board, on a regular andas-needed basis, on actual and potential risks to each Portfolio and the Trusts as a whole.
With respect to investment risk, the Board receives regular written reports describing and analyzing the investment performance of the Trusts. In addition, officers of the Trusts meet regularly with the Board to discuss portfolio performance, including investment risk. To the extent that the Trusts change a particular investment strategy that could have a material impact on the Trusts’ risk profiles, the Board is consulted with respect to such a change. To the extent that the Trusts invest in certain complex securities, including derivatives, the Board receives periodic reports containing information about exposure of the Trusts to such instruments.
With respect to valuation, the Board receives regular written reports that enable the Board to monitor any fair valuations of securities in a particular Portfolio, the reasons for the fair valuation and the methodology used to arrive at the fair value. The Board has directed its Audit Committee to review the quarterly valuation reports (including with respect to fair valuations), periodically review the Trusts’ valuation policies and procedures, and consult with the Trusts’ auditors about valuation matters in connection with the Audit Committee’s review of the results of the audit of each Trust’syear-end financial statements.
With respect to compliance, the Board has appointed a Chief Compliance Officer (“CCO”) who reports directly to the Board’s Independent Trustees, and who provides presentations to the Board at its quarterly meetings and an annual report to the Board concerning compliance matters. The CCO oversees the development and implementation of compliance policies and procedures that are reasonably designed to detect, prevent and correct violations of federal securities laws (“Compliance
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Policies”). The Board has approved the Compliance Policies, which seek to reduce risks relating to the possibility ofnon-compliance with the federal securities laws.
Compensation of the Trustees
The Trustees and Officers of the Trusts who are officers or employees of MetLife and/or its affiliates (including the Manager and MetLife Investors Distribution Company but not affiliates of MetLife that are registered investment companies) receive no compensation from the Trusts for their services as Officers or Trustees of the Trusts, although they may receive compensation from MetLife or any affiliate thereof for services rendered in those or other capacities. Each Trustee who is not an employee of the Manager or any of its affiliates currently receives compensation from the Trusts. The compensation paid to each of the Trustees affiliated with the Manager and all other Trustees during the fiscal year ended December 31, 2015 is set forth in Appendix F.
As of December 31, 2008, each Trust adopted a Deferred Fee Agreement to allow each Independent Trustee to align his or her interests with those of the Portfolios and the Portfolios’ shareholders without purchasing one of the variable life insurance policies or variable annuity contracts through which the Portfolios of the Trusts are solely offered. All of the Independent Trustees participate in the Deferred Fee Agreement to align their interests with those of the shareholders. Under each Deferred Fee Agreement, each Independent Trustee defers payment of all or part of the fees payable for such Trustee’s services and thereby shares in the experience alongside the Portfolios’ shareholders as the compensation deferred increases or decreases depending on the investment performance of the Portfolios on which such Trustee’s deferral account is based. Deferred amounts remain in a Trust until distributed in accordance with the provisions of the Trust’s Deferred Fee Agreement. The value of a participating Trustee’s deferral account is based on notional investments of deferred amounts, on the normal payment dates, in the Portfolios of the Trusts, that are designated by the participating Trustee. Pursuant to the Deferred Fee Agreement of each Trust, payments due under the Deferred Fee Agreement are unsecured obligations of the Trust. The compensation paid to each of the Trustees during the fiscal year ended December 31, 2015 is set forth in Appendix F.
Trustee Beneficial Ownership
The dollar range of equity securities beneficially owned by each Trustee in the Trusts’ Portfolios and in the MetLife Funds Complex as of September 30, 2016 is set forth in Appendix G. As of September 30, 2016, the Trustees of MIST and MSF as a group owned less than 1% of the outstanding shares of each Trust or any Portfolio of the Trusts.
Shareholder Communication with the Board of Trustees
Each Trust has adopted procedures by which Contract Holders may send communications to the Board. These communications should be sent to the attention
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of the Board or the specific Trustee to whom the communication is directed at Met Investors Series Trust and Metropolitan Series Fund, c/o Secretary, One Financial Center, Boston, MA 02111.
A communication must (i) be in writing and be signed by the Contract Holder, (ii) identify the specific Portfolio, if any, of the Trusts to which it relates and (iii) identify the number of units held by the Contract Holder that relate to shares of a Portfolio of the Trusts.
These procedures do not apply to (i) any communication from an officer or Trustee of the Trusts, (ii) any communication from an employee or agent of the Trusts, unless such communication is made solely in such employee’s or agent’s capacity as a Contract Holder or (iii) any shareholder proposal submitted pursuant to Rule14a-8 under the Exchange Act of 1934, as amended or any communication made in connection with such a proposal.
Vote Required
Shareholders of all Portfolios of the Trusts vote together as a single class on the election of Trustees. The Nominees receiving the affirmative vote of a plurality of the votes cast in person or by proxy at the Meeting, if a quorum is present, shall be elected. If the required vote for a Nominee is not obtained for a Trust, the Trustees will consider what other actions, if any, to take in the best interests of the Trust.
Recommendation of the Board
The Board of Trustees believes that the election of each Nominee is in the best interests of shareholders of the Trusts. Accordingly, the Board unanimously recommends that shareholders vote to APPROVEFOR the Reorganization Agreementelection of each Nominee as set forth in Proposal III.
OTHER INFORMATION
Information about Voting Instructions and the Conduct of the Meeting
Solicitation of Voting Instructions
Voting instructions will be solicited primarily by mailing this Proxy Statement and its enclosures, but voting instructions may also be solicited through further mailings, telephone calls, personal interviews ore-mail by officers of the FundTrusts, the Insurance Companies or by
48
its their agents. In addition, Computershare Fund Services has been engaged to assist in the solicitation of proxies for a fee of approximately $710,000,$4,000,896, although the actual costs of the solicitation may be higher. The FundManager will bear subject to any expense limitation agreement in place, all of the costs of the Meeting, including the costs of printing and mailing this proxy statement
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Proxy Statement and soliciting voting instructions, other than thoseexcept that a portion of the printing and mailing costs relating to Proposal II, whichIII (estimated to be approximately $325,000) will be borne by the Manager.Trusts, subject to any expense limitation agreement in place. In addition, the Manager has agreed to reimburse the Trusts for their expenses relating to the Separation, including the costs of Trustee meetings, legal counsel, and independent consultants.
Voting Process
The shares of theeach Portfolio are currently sold to the separate accounts of Metropolitan Life Insurance CompaniesCompany and its insurance company affiliates (each an “Insurance Company” and collectively, the “Insurance Companies”) as the record owners for allocation to the corresponding investment divisions orsub-accounts of certain of their separate accounts that are registered as investment companies with the SEC.U.S. Securities and Exchange Commission. Most of the shares of the PortfolioPortfolios are attributable to Contractscontracts issued by the Insurance Companies. Other outstanding Portfolio shares are not attributable to Contracts, because such shares are (a) held in a separate account that is not registered as an investment company, or (b) held in the Insurance Company’s general account rather than in a separate account.
Record owners of the shares of theeach Portfolio as of the Record Date will be entitled to vote and may cast one vote for each share held and a fractional vote for each fractional share held. A majority of the shares of a Portfolio or the FundTrust outstanding as of the Record Date, present in person or represented by proxy, constitutes a quorum for the transaction of business by the shareholders of such Portfolio or the Fund,Trust, respectively, at the Meeting.
In determining whether a quorum is present, the tellers (persons appointed by the FundTrusts to receive, count and report all ballots cast at the Meeting) will count shares represented by proxies that reflect abstentions or votes withheld as shares that are present and entitled to vote. Since these shares will be counted as present, but not as voting in favor of any Proposal, these shares will have the same effect as if they cast votes against Proposals III and III.II. With respect to Proposal I,III, so long as a quorum is present, abstentions or votes withheld (unless all votes with respect to a Nominee are withheld) will have no effect on the outcome of Proposal I.III.
In accordance with their understanding of presently applicable law, the Insurance Companies will vote the shares of a Portfolio that are attributable to the Contractscontracts based on voting instructions received from owners of such Contractscontracts that participate in the corresponding investment divisions in the separate accounts. The number of Portfolio shares held in the corresponding investment division of a separate account deemed attributable to each Contract ownerHolder is determined by dividing a variable life insurance policy’s or variable benefit option’s cash value or a variable annuity contract’s accumulation units (or if variable annuity payments are currently being made, the amount of the Insurance Company’s reserves attributable to that variable annuity contract), as the case may be, in that division by the net asset value of one share in the Portfolio.
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Each Portfolio currently issues one or more of the following share classes: Class A shares, Class B shares, Class D shares, Class E shares, Class F shares and Class G shares, which, among other things, have different net asset values. Whether Class A shares, Class B shares, Class D shares, Class E shares, Class F shares or Class G shares are offered in connection with a given Contractcontract depends on the particular Contract.contract. Each Class A share, Class B share, Class D share, Class E share, Class F share and Class G share has one vote. For purposes of determining the number of Portfolio shares for which a Contract ownerHolder is entitled to give voting instructions, the Insurance Companies use the per share net asset value for such class of Portfolio shares that are offered under that Contract.contract. Fractional votes will be counted. The number of shares for which a Contract ownerHolder has a right to give voting instructions is determined as of the Record Date.
Portfolio shares held in an investment division attributable to Contractscontracts for which no timely instructions are received or that are not attributable to Contractscontracts will be represented at the Meeting by the record owners and voted in the same proportion as the shares for which voting instructions are received for all Contractscontracts participating in that investment division. The Fund has been advised that Portfolio shares held in the general account or unregistered separate accounts of the Insurance Companies will be represented at the Meeting by the record owners and voted in the same proportion as the aggregate of (i) the shares for which voting instructions are received and (ii) the other shares that are voted in proportion to such voting instructions. Because the FundTrusts and the Portfolios use proportional voting, a small number of shareholders may determine the outcome of a vote, including the vote on the Proposals.
With respect to Proposal I and II, if you are a Contract OwnerHolder of units that relate to shares of more than one Portfolio, your voting instruction card will ask you to provide separate voting instructions for each such Portfolio.
If an enclosed voting instruction card is completed, executed and returned, it may nevertheless be revoked at any time before the Meeting by a written revocation or later voting instruction card mailed to the Fundeach Trust at 501 Boylston Street,One Financial Center, Boston, Massachusetts 02116,02111, or by calling toll free (800) 638-7732. The Fund(866)941-7346. Each Trust must receive the revocation or later voting instruction card prior to the Meeting for the revocation to be effective. You may attend the Meeting in person to revoke previously provided voting instructions and to provide new voting instructions.
If you simply sign the voting instruction card without specifying an instruction, the voting instruction card will be voted in accordance with the recommendation of the Fund’s Board with respect to each Proposal considered at the Meeting.
For instructions on how to attend the meeting and vote in person, please call (800) 638-7732.(866) 941-7346.
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Adjournments; Other Business
With respect to Proposals I and III, an adjournment of the Meeting requires the vote of a majority of the total number of shares of the Fund that are present in person or by proxy and entitled to vote. With respect to Proposal II, an adjournment of the Meeting as to any Portfolio requires the vote of a majority of the total number of shares of the relevant
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Portfolio that are present in person or by proxy and entitled to vote. With respect to Proposal III, an adjournment of the Meeting requires the vote of a majority of the total number of shares of the Trust that are present in person or by proxy and entitled to vote. The Meeting has been called to transact any business that properly comes before it. The only business that management of the FundTrusts intends to present or knows that others will present are the Proposals. If any other matters properly come before the Meeting, and on all matters incidental to the conduct of the Meeting, the persons named as proxies intend to vote the proxies in their discretion, unless the Secretary of the FundTrusts has previously received written contrary instructions from the shareholder entitled to vote the shares. Shares represented by properly executed proxy cards that constitute abstentions will have the effect of a vote against any adjournment.
Shareholder Proposals at Future Meetings
Under each Trust’s Amended and RestatedBy-laws,the Bylaws, the Fund isTrusts are not required to hold an annual meeting of shareholders in any year in which the election of directorsTrustees is not required to be acted upon under the 1940 Act. Shareholder proposals to be presented at any future meeting of shareholders of a Portfolio or the FundTrusts must be received by the FundTrusts in writing a reasonable amount of time before the Fund solicitsTrusts solicit proxies for that meeting in order to be considered for inclusion in the proxy materials for that meeting.
Independent Registered Public Accounting Firm
Deloitte & Touche LLP (the “Independent Registered Public Accounting Firm”), 200 Berkeley Street, Boston, Massachusetts 02166, serves as the independent registered public accounting firm for the Portfolios. Deloitte & Touche LLP provides audit services, tax return review and assistance and consultation in connection with review of SEC filings. Representatives of the Independent Registered Public Accounting Firm will not be available at the Meeting.
The following tables set forth, for the Fund’sTrusts’ two most recent fiscal years, the fees billed by the Independent Registered Public Accounting Firm for (a) all audit andnon-audit services provided directly to the FundTrusts and (b) thosenon-audit services provided to the Manager and subadvisers (other than subadvisers not affiliated with the Manager) and any entity controlling, controlled by or under common control with the Manager that provides ongoing services to the FundTrusts (collectively, “Service Entities”) that relate directly to the Portfolios’ operations and financial reports:
Met Investors Series Trust
Fiscal Year | Audit Fees | Audit-Related | Tax Fees | All Other Fees | ||||
2009 | $941,400 | $0 | $301,000 | $0 | ||||
2010 | $961,000 | $0 | $305,260 | $0 |
Fiscal Year Ended | Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees | ||||||||||||||
2015 | $ | 2,533,199 | $ | 35,412 | $ | 314,315 | $ | 0 | ||||||||||
2014 | $ | 2,412,623 | $ | 16,500 | $ | 329,920 | $ | 0 |
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Metropolitan Series Fund
Fiscal Year Ended | Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees | ||||||||||||||
2015 | $ | 1,292,323 | $ | 11,538 | $ | 185,920 | $ | 0 | ||||||||||
2014 | $ | 1,282,887 | $ | 0 | $ | 167,895 | $ | 0 |
“Audit Fees” represent fees billed for each of the last two fiscal years or professional services rendered for the audit of the Fund’sTrusts’ annual financial statements for those fiscal years or services that are normally provided by the accountant in connection with statutory or regulatory filings or engagements for those fiscal years. “Audit-Related Fees,” if any, represent fees for assurance and related services by the Independent Registered Public Accounting Firm that are reasonably related to the performance of the audit or review of the Fund’s financial statements and that are not included in “Audit Fees.” “Tax Fees” represent fees for services rendered to the Fund for tax return preparation and review of and participation in determining required income and capital gains distributions. “All Other Fees” represents fees, if any, billed for other products and services rendered by the Independent Registered Public Accounting Firm to the FundTrusts for the last two fiscal years.
The Fund’s Audit Committee has establishedpre-approval procedures pursuant to paragraph (c)(7)(i)(B) of Rule2-01 of RegulationS-X, which include regularpre-approval procedures and interimpre-approval procedures. Under the regularpre-approval procedures, the Audit Committeepre-approves at its regularly scheduled meetings audit andnon-audit services that are required to bepre-approved under paragraph (c)(7) of Rule2-01 of RegulationS-X. Under the interimpre-approval procedures, any member of the Audit Committee who is an Independent DirectorTrustee is authorized topre-approve proposed services that arise between regularly scheduled Audit Committee meetings and that need to commence prior to the next regularly scheduled Audit Committee meeting. Such Audit Committee member must report to the Audit Committee at its next regularly scheduled meeting on thepre-approval decision. There were no fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule2-01 of RegulationS-X, which requires the audit committee of a registered investment company topre-approve certainnon-audit services provided to the registered investment company’s investment adviser or its affiliates.
For the Fund’sTrusts’ two most recent fiscal years, the aggregatenon-audit fees billed by the Independent Registered Public Accounting Firm for services rendered to the Fund and the Service Entities were as follows:
Fiscal Year | Aggregate Non-audit Fees | |||
2009 | $ | 7,600,000 | ||
2010 | $ | 7,200,000 |
Fiscal Year | Aggregate Non-audit Fees for the Trusts | |
2015 | $0 | |
2014 | $0 |
The amounts set out above represent the aggregatenon-audit fees billed by the Independent Registered Public Accounting Firm to MetLife and its subsidiaries, and
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include, among othernon-audit fees,non-audit fees for services rendered to the FundTrusts and rendered to the Manager and any entity controlling, controlled by or under common control with the Manager that provides ongoing services to the Fund.Trusts.
The Fund’s Audit Committee considered the provision ofnon-audit services that were rendered to the Manager, and any entity controlling, controlled by or under
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common control with the Manager that provides ongoing services to the FundTrusts that were notpre-approved pursuant to paragraph (c)(7)(ii) of Rule2-01 of RegulationS-X and concluded that such services are compatible with maintaining the Independent Registered Public Accounting Firm’s independence.
Information about the FundTrusts
Copies of the most recent annual report and the most recent semiannual report succeeding the most recent annual report of the Fund,each Trusts, if any, may be obtained without charge by calling (800) 638-7732(866)941-7346 or by writing to Michael P. Lawlor, Met Investors Series Trust and Metropolitan Series Fund Inc., c/oand MetLife Advisers, LLC at 501 Boylston Street,One Financial Center, Boston, Massachusetts 02116.02111. This Proxy Statement, the most recent annual report and semiannual report to shareholders, and any amendments or supplements to the foregoing material that are required to be furnished to shareholders, are available on the Internet atwww.metlife.com/msf.
Ownership of Shares
As of the Record Date, the following number of shares of each Portfolio were outstanding and entitled to vote:
MIST Portfolio | Class | Shares Outstanding on Record | ||||
| Class B | 443,441,852.562 | ||||
Allianz Global Investors Dynamic Multi-Asset Plus Portfolio | Class B | 15,260,908.952 | ||||
American Funds® Balanced Allocation Portfolio | Class B | 859,482.532 | ||||
Class C | 477,224,364.567 | |||||
American Funds® Growth Allocation Portfolio | Class B | 2,161,155.659 | ||||
Class C | 310,956,475.202 | |||||
American Funds® Growth Portfolio | Class C | 112,959,702.612 | ||||
American Funds® Moderate Allocation Portfolio | Class B | 1,036,749.881 | ||||
Class C | 299,142,909.232 | |||||
AQR Global Risk Balanced Portfolio | Class B | 421,304,988.344 | ||||
BlackRock Global Tactical Strategies Portfolio | Class B | 759,482,626.200 | ||||
BlackRock High Yield Portfolio | Class A | 57,138,728.962 | ||||
Class B | 33,064,275.345 |
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MIST Portfolio | Class | Shares Outstanding on Record Date | ||||
Clarion Global Real Estate Portfolio | Class A | 69,894,212.178 | ||||
Class B | 47,738,313.432 | |||||
Class E | 3,132,545.755 | |||||
ClearBridge Aggressive Growth Portfolio | Class A | 128,891,298.356 | ||||
Class B | 71,354,436.532 | |||||
Class E | 2,533,640.074 | |||||
Goldman Sachs Mid Cap Value Portfolio | Class A | 31,452,110.680 | ||||
Class B | 15,509,554.582 | |||||
Harris Oakmark International Portfolio | Class A | 144,861,933.080 | ||||
Class B | 89,517,611.799 | |||||
Class E | 8,350,111.429 | |||||
Invesco Balanced-Risk Allocation Portfolio | Class B | 145,465,630.049 | ||||
Invesco Comstock Portfolio | Class A | 99,421,535.319 | ||||
Class B | 74,969,268.768 | |||||
Invesco Mid Cap Value Portfolio | Class A | 16,538,929.235 | ||||
Class B | 42,536,187.791 | |||||
Class E | 1,661,463.138 | |||||
Invesco Small Cap Growth Portfolio | Class A | 56,657,215.317 | ||||
Class B | 30,811,598.792 | |||||
Class E | 1,095,422.614 | |||||
JPMorgan Core Bond Portfolio | Class A | 185,614,849.426 | ||||
Class B | 47,132,597.582 | |||||
JPMorgan Global Active Allocation Portfolio | Class B | 178,702,847.757 | ||||
JPMorgan Small Cap Value Portfolio | Class A | 29,737,833.290 | ||||
Class B | 2,163,404.959 | |||||
Loomis Sayles Global Markets Portfolio | Class A | 9,793,230.735 | ||||
Class B | 20,533,976.998 | |||||
Met/Aberdeen Emerging Markets Equity Portfolio | Class A | 88,896,966.344 | ||||
Class B | 57,913,104.633 | |||||
Met/Artisan International Portfolio | Class A | 110,953,986.178 | ||||
Class B | 27,022.867 | |||||
Met/Eaton Vance Floating Rate Portfolio | Class A | 69,391,948.156 | ||||
Class B | 9,936,602.250 | |||||
Met/Franklin Low Duration Total Return Portfolio | Class A | 83,523,504.010 | ||||
Class B | 29,679,232.633 | |||||
Met/Templeton International Bond Portfolio | Class A | 123,578,342.903 | ||||
Class B | 5,620,734.814 | |||||
Met/Wellington Large Cap Research Portfolio | Class A | 158,069,704.328 | ||||
Class B | 9,265,788.013 | |||||
Class E | 5,466,179.258 | |||||
MetLife Asset Allocation 100 Portfolio | Class A | 51,012,128.651 | ||||
Class B | 89,842,955.901 | |||||
MetLife Balanced Plus Portfolio | Class B | 1,015,651,995.269 |
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MIST Portfolio | Class | Shares Outstanding on Record Date | ||||
MetLife Multi-Index Targeted Risk Portfolio | Class B | 150,970,613.181 | ||||
MetLife Small Cap Value Portfolio | Class A | 37,076,539.319 | ||||
Class B | 31,583,336.544 | |||||
MFS® Research International Portfolio | Class A | 118,730,564.015 | ||||
Class B | 59,921,763.753 | |||||
Class E | 768,567.665 | |||||
Morgan Stanley Mid Cap Growth Portfolio | Class A | 37,973,517.425 | ||||
Class B | 23,307,168.385 | |||||
Class E | 782,570.376 | |||||
Oppenheimer Global Equity Portfolio | Class A | 48,331,406.609 | ||||
Class B | 18,650,248.352 | |||||
Class E | 1,098,477.327 | |||||
PanAgora Global Diversified Risk Portfolio | Class B | 15,806,983.354 | ||||
PIMCO Inflation Protected Bond Portfolio | Class A | 141,607,484.881 | ||||
Class B | 125,676,891.499 | |||||
Class E | 3,300,180.110 | |||||
PIMCO Total Return Portfolio | Class A | 243,148,328.399 | ||||
Class B | 277,291,079.624 | |||||
Class E | 4,022,335.237 | |||||
Pyramis® Government Income Portfolio | Class B | 119,016,864.409 | ||||
Pyramis® Managed Risk Portfolio | Class B | 73,518,944.275 | ||||
Schroders Global Multi-Asset Portfolio | Class B | 99,904,674.104 | ||||
SSGA Growth and Income ETF Portfolio | Class A | 2,606,415.660 | ||||
Class B | 232,040,838.133 | |||||
Class E | 893,590.322 | |||||
SSGA Growth ETF Portfolio | Class A | 2,601,537.823 | ||||
Class B | 78,991,905.574 | |||||
Class E | 687,103.591 | |||||
TCW Core Fixed Income Portfolio | Class A | 217,996,326.547 | ||||
Class B | 60,787.960 | |||||
T. Rowe Price Large Cap Value Portfolio | Class A | 56,789,111.577 | ||||
Class B | 28,911,839.278 | |||||
Class E | 12,481,925.408 | |||||
T. Rowe Price Mid Cap Growth Portfolio | Class A | 57,466,765.213 | ||||
Class B | 104,066,586.846 | |||||
Class E | 2,134,970.515 |
MSF Portfolio | Class | Shares Outstanding on Record Date | ||||
Baillie Gifford International Stock Portfolio | Class A | 130,709,143.061 | ||||
Class B | 32,029,965.535 | |||||
Class E | 1,874,349.380 |
-34-
| Class | |||||
| Date | |||||
BlackRock Bond Income Portfolio | Class A | 29,997,854.875 | ||||
Class B | 4,965,291.602 | |||||
Class E | ||||||
1,126,580.316 | ||||||
BlackRock | Class A | 45,431,938.901 | ||||
Class B | 5,062,329.472 | |||||
Class E | ||||||
1,059,617.648 | ||||||
BlackRock Large Cap Value Portfolio | Class A | 134,210,310.404 | ||||
Class B | 29,666,208.194 | |||||
Class E | 6,064,725.989 | |||||
BlackRock | Class A | 3,529,132.424 | ||||
Class B | 5,021,021.807 | |||||
Class E | 1,413,216.621 | |||||
Frontier Mid Cap Growth Portfolio | Class A | 27,657,820.276 | ||||
Class B | 5,924,750.280 | |||||
Class D | 2,691,939.835 | |||||
Class E |
53
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Jennison Growth Portfolio | Class A | 135,219,619.814 | ||||
Class B | 60,155,505.183 | |||||
Class E | 830,843.925 | |||||
Loomis Sayles Small Cap Core Portfolio | Class A | 972,417.351 | ||||
Class B | 658,580.994 | |||||
Class E | 118,024.306 | |||||
Loomis Sayles Small Cap Growth Portfolio | Class A | 22,975,436.792 | ||||
Class B | 5,236,237.848 | |||||
Class E | 540,188.772 | |||||
Met/Artisan Mid Cap Value Portfolio | Class A | 2,866,268.723 | ||||
Class B | 1,819,052.847 | |||||
Class E | 367,179.145 | |||||
Met/Dimensional International Small Company Portfolio | Class A
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Class B | 6,212,801.879 | |||||
| Class A | 61,997,924.744 | ||||
Class B | 3,659,438.865 | |||||
Class E | 1,688,014.838 | |||||
Met/Wellington Core Equity Opportunities Portfolio | Class A | 89,369,090.132 | ||||
Class B | 24,829,517.108 | |||||
Class E | 27,693,035.473 | |||||
MetLife Aggregate Bond Index Portfolio | Class A | 119,134,002.925 | ||||
Class B | 91,497,417.041 | |||||
Class E | 5,712,106.334 | |||||
Class G | 31,113,456.489 | |||||
MetLife Asset Allocation 20 Portfolio | Class A | 3,901,193.422 | ||||
Class B | 60,193,711.013 |
-35-
MSF Portfolio | Class | Shares Outstanding on Record Date | ||||
MetLife | Class A
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Class B | 606,179,042.003 | |||||
MetLife Asset Allocation 60 Portfolio | Class A | 28,555,413.235 | ||||
Class B | 1,200,055,787.732 | |||||
MetLife Asset Allocation 80 Portfolio | Class A | 31,202,391.732 | ||||
Class B | 823,983,247.947 | |||||
MetLife Mid Cap Stock Index Portfolio | Class A | 26,470,899.446 | ||||
Class B | 22,295,646.345 | |||||
Class E | 2,128,830.331 | |||||
Class G | ||||||
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MetLife Stock Index Portfolio | Class A | 95,249,380.267 | ||||
Class B | 44,871,363.167 | |||||
Class D | 1,434,279.328 | |||||
Class E |
54
3,200,278.303 | ||||||
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| 306,223.262 |
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MFS® Total Return Portfolio | Class A | 1,057,357.583 | ||||
Class B | 1,360,032.822 | |||||
Class E | 157,046.902 | |||||
Class F | 2,570,294.059 | |||||
MFS® Value Portfolio | Class A | 147,588,855.192 | ||||
Class B | 53,762,135.564 | |||||
Class D | 953,746.584 | |||||
Class E | 4,443,739.757 | |||||
| Class A | 41,489,767.724 | ||||
Class B | 33,186,544.947 | |||||
Class E | 2,488,898.798 | |||||
Class G | 8,442,638.462 | |||||
Neuberger Berman Genesis Portfolio | Class A | 36,511,521.604 | ||||
Class B | 16,140,896.298 | |||||
Class E | 4,483,464.765 | |||||
| Class A | 25,479,197.123 | ||||
Class B | 12,618,662.542 | |||||
Class E | ||||||
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Class G | 7,238,803.355 | |||||
T. Rowe Price Large Cap Growth Portfolio | Class A | 73,250,492.928 | ||||
Class B | 36,479,934.609 | |||||
Class E | 1,797,779.437 | |||||
T. Rowe Price Small Cap Growth Portfolio | Class A | 41,753,101.950 | ||||
Class B | 19,302,643.604 | |||||
Class E | 777,470.445 | |||||
Class G | 145,225.715 | |||||
Van Eck Global Natural Resources Portfolio | Class A | 86,204,470.229 | ||||
Class B | 12,615,661.043 |
-36-
MSF Portfolio | Class | Shares Outstanding on Record Date | ||||
Western Asset Management Strategic Bond Opportunities Portfolio | Class A | 167,850,309.467 | ||||
Class B | 68,377,536.414 | |||||
Class E | 21,996,355.406 | |||||
Western Asset Management U.S. Government Portfolio | Class A | 147,503,862.155 | ||||
Class B | 37,219,023.055 | |||||
Class E | ||||||
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55
All of the shares of the Portfolios are held of record by the Insurance Companies for allocation to the corresponding investment divisions orsub-accounts of certain of their separate accounts. Because the Insurance Companies own 100% of the Shares of the Fund,each Trust, they may be deemed to be in control (as defined in the 1940 Act) of the Fund.Trusts. Shares of the Portfolios are not offered for direct purchase by the investing public.
The Insurance Companies have informed the FundTrusts that, as of the Record Date, there were no persons owning Contractscontracts which would entitle them to instruct the Insurance Companies with respect to 5% or more of the voting securities of any share class of a Portfolio. The Fund hasTrusts have been informed that, as of the Record Date, the officers and DirectorsTrustees as a group owned less than 1% of the outstanding shares of anyeach Portfolio.
Administrator
The Manager provides administrative services to the Portfolios under the Existing Advisory Agreements.Appendix B to this Proxy Statement sets forth the advisory fees paid for the fiscal year ended December 31, 2010, which include fees paid for administrative services.
56-37-
INSTRUCTIONS FOR EXECUTING VOTING INSTRUCTIONS
The following general rules for signing voting instructions may be of assistance to you and may help to avoid the time and expense involved in validating your vote if you fail to sign your voting instructions properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the Registration on the voting instructions.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party signing should conform exactly to a name shown in the Registration on the voting instructions.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the voting instructions should be indicated unless it is reflected in the form of Registration. For example:
REGISTRATION | VALID SIGNATURE | |||
CORPORATE ACCOUNTS | ||||
(1) ABC Corp. | ABC Corp. | |||
(2) ABC Corp. | John Doe, Treasurer | |||
(3) ABC Corp. c/o John Doe, Treasurer | John Doe | |||
(4) ABC Corp. Profit Sharing Plan | John Doe, Trustee | |||
TRUST | ||||
(1) ABC Trust | Jane B. Doe, Trustee | |||
(2) Jane B. Doe, Trustee u/t/d 12/28/78 | Jane B. Doe | |||
CUSTODIAL OR ESTATE ACCOUNTS | ||||
(1) John B. Smith, Cust. f/b/o | John B. Smith | |||
(2) John B. Smith | | John B. Smith, Jr., Executor | |
After completing your voting instructions, return it in the enclosed postage paid envelope.
If you have any questions about the voting instructions, please call Computersharethe Fund Services at (800) 638-7732.(866) 941-7346.
57-38-
Appendix A
METROPOLITAN SERIES FUND, INC.
NOMINATING COMMITTEE CHARTER
A-1
Adopted: August 4, 2004
A-2
Appendix A
Procedures for Contract Owners to Submit
Independent Director Nominee Candidates
(As of August 4, 2004)
A Contract Owner of Metropolitan Series Fund, Inc. must follow the following procedures in order to submit properly a nominee recommendation for the consideration of the Fund’s Nominating Committee.
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A-3
A-4
Appendix B
Advisory Fee Payable
Under the Existing Advisory Agreements, an advisory fee is payable by each Portfolio to the Manager at the annual rate as set forth in the table below.
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B-3
Advisory Fee Waivers
Pursuant to an expense agreement, the Manager has agreed, for the period May 1, 2011 through April 30, 2012, to reduce its advisory fees set out above under “Advisory Fees” for each class of the Portfolios listed below as follows:
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B-5
Advisory Fees Paid
For the fiscal year ended December 31, 2010, each Portfolio paid the following amounts in advisory fees to the Manager. The amounts shown reflect fee waivers or expense reimbursements in place, if any, during the fiscal year ended December 31, 2010.
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Appendix C
The table below sets forth the date of each ExistingCurrent Advisory Agreement, the date on which it was last approved by the Board, the date on which it was last submitted to a vote of shareholders, and the purpose of such submission.
MET INVESTORS SERIES TRUST
Portfolio | Date of Advisory Agreement | Date Agreement was Last Approved by Board | Date Advisory Agreement was Last Submitted Shareholders | Purpose of | ||||
Allianz Global Investors DynamicMulti-Asset Plus Portfolio | ||||||||
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American Funds® Growth Allocation Portfolio | 4/28/08 | 11/16/16 | 4/25/08 | Initial Approval | ||||
American Funds® Growth Portfolio | 12/1/03 | 11/16/16 | 11/20/03 | Initial Approval | ||||
American Funds® Moderate Allocation Portfolio | 4/28/08 | 11/16/16 | 4/25/08 | Initial Approval | ||||
AQR Global Risk Balanced Portfolio | 4/18/11 | 11/16/16 | 4/15/11 | Initial Approval | ||||
BlackRock | ||||||||
BlackRock High Yield Portfolio | 5/1/06 | 11/16/16 | 4/28/06 | Initial Approval | ||||
Clarion Global Real Estate Portfolio | 4/30/04 | 11/16/16 | 4/20/04 | Initial Approval | ||||
ClearBridge Aggressive Growth Portfolio | 2/12/01 | 11/16/16 | 1/25/01 | Initial Approval | ||||
Goldman Sachs Mid Cap Value Portfolio | 4/30/04 | 11/16/16 | 4/20/04 | Initial Approval | ||||
Harris Oakmark International Portfolio | 10/1/01 | 11/16/16 | 9/20/01 | Initial Approval | ||||
Invesco Balanced-Risk Allocation Portfolio | 4/30/12 | 11/16/16 | 4/23/12 | Initial Approval | ||||
Invesco Comstock Portfolio | 4/30/05 | 11/16/16 | 4/20/05 | Initial Approval | ||||
Invesco Mid Cap Value Portfolio | 12/8/00 | 11/16/16 | 12/8/00 | Initial Approval | ||||
Invesco Small Cap Growth Portfolio | 10/1/01 | 11/16/16 | 9/20/01 | Initial Approval | ||||
JPMorgan Core Bond Portfolio | 12/1/03 | 11/16/16 | 11/20/03 | Initial Approval | ||||
JPMorgan Global Active Allocation Portfolio | 4/30/12 | 11/16/16 | 4/23/12 | Initial Approval | ||||
JPMorgan Small Cap Value Portfolio | 5/1/06 | 11/16/16 | 4/28/06 | Initial Approval | ||||
Loomis Sayles Global Markets Portfolio | 5/1/06 | 11/16/16 | 4/28/06 | Initial Approval |
C-1A-1
Portfolio | Date of Advisory Agreement | Date Agreement was Last Approved by Board | Date Advisory Agreement was Last Submitted Shareholders | Purpose of | ||||
Met/Aberdeen Emerging Markets Equity Portfolio | ||||||||
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5/1/09 | 11/16/16 | 4/29/09 | Initial Approval | |||||
Met/Wellington Large Cap Research Portfolio | 5/1/06 | 11/16/16 | 4/28/06 | Initial Approval | ||||
MetLife Asset Allocation 100 Portfolio | 11/1/04 | 11/16/16 | 10/29/04 | Initial Approval | ||||
MetLife Balanced Plus Portfolio | 5/1/11 | 11/16/16 | 4/28/11 | Initial Approval | ||||
MetLife Multi-Index Targeted Risk Portfolio | 11/2/12 | 11/16/16 | 11/2/12 | Initial Approval (the sub-advisory agreement was also approved on this same date) | ||||
MetLife Small Cap Value Portfolio | Initial | |||||||
MFS® Research International Portfolio | 2/12/01 | 11/16/16 | 1/25/01 | Initial Approval | ||||
Morgan Stanley Mid Cap Growth Portfolio | 2/12/01 | 11/16/16 | 1/25/01 | Initial Approval | ||||
Oppenheimer Global Equity Portfolio | 4/28/08 | 11/16/16 | 4/25/08 | Initial Approval | ||||
PanAgora Global Diversified Risk Portfolio | 4/8/14 | 11/16/16 | 4/8/14 | Initial Approval | ||||
PIMCO Inflation Protected Bond Portfolio | 5/1/03 | 11/16/16 | 2/19/03 | Initial Approval | ||||
PIMCO Total Return Portfolio | 2/12/01 | 11/16/16 | 1/25/01 | Initial Approval | ||||
Pyramis® Government Income Portfolio | 5/1/11 | 11/16/16 | 4/28/11 | Initial Approval | ||||
Pyramis® Managed Risk Portfolio | 4/19/13 | 11/16/16 | 4/19/13 | Initial Approval | ||||
Schroders Global Multi-Asset Portfolio | 4/30/12 | 11/16/16 | 4/23/12 | Initial Approval | ||||
SSGA Growth and Income ETF Portfolio | 9/30/05 | 11/16/16 | 9/28/05 | Initial Approval | ||||
SSGA Growth ETF Portfolio | 9/30/05 | 11/16/16 | 9/28/05 | Initial Approval | ||||
TCW Core Fixed Income Portfolio | 5/1/15 | 11/16/16 | 4/30/15 | Initial Approval | ||||
T. Rowe Price Large Cap Value Portfolio | 12/8/00 | 11/16/16 | 12/8/00 | Initial Approval | ||||
T. Rowe Price Mid Cap Growth Portfolio | 2/12/01 | 11/16/16 | 1/25/01 | Initial Approval |
C-2A-2
METROPOLITAN SERIES FUND
Portfolio | Date of Advisory Agreement | Date Agreement was Last Approved by Board | Date Advisory Agreement was Last Submitted Shareholders | Purpose of | ||||
BlackRock Bond Income Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
BlackRock Capital Appreciation Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
BlackRock Large Cap Value Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
BlackRock Ultra-Short Term Bond Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
Frontier Mid Cap Growth Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
Jennison Growth Portfolio | ||||||||
Loomis Sayles Small Cap Core Portfolio | ||||||||
C-3A-3
Portfolio | Date of Advisory Agreement | Date Agreement was Last Approved by Board | Date Advisory Agreement was Last Submitted Shareholders | Purpose of | ||||
Met/Artisan Mid Cap Value Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
Met/Dimensional International Small Company Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
Met/Wellington Balanced Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
Met/Wellington Core Equity Opportunities Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
MetLife | ||||||||
MetLife | ||||||||
C-4A-4
Portfolio | Date of Advisory Agreement | Date Agreement was Last Approved by Board | Date Advisory Agreement was Last Submitted Shareholders | Purpose of | ||||
MetLife Stock Index Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
MFS® Total Return Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
MFS® Value Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
MSCI EAFE® Index Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
Neuberger Berman Genesis Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
Russell 2000® Index Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
T. Rowe Price Large Cap Growth Portfolio | Revised terms of Agreement to allow the third party to perform administrative services at the Portfolio’s | |||||||
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C-5A-5
Portfolio | Date of Advisory Agreement | Date Agreement was Last Approved by Board | Date Advisory Agreement was Last Submitted Shareholders | Purpose of | ||||
T. Rowe Price Small Cap Growth Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
Van Eck Global Natural Resources Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
Western Asset Management Strategic Bond Opportunities Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense | ||||
Western Asset Management U.S. Government Portfolio | 4/30/12 | 11/16/16 | 2/24/12 | Revised terms of Agreement to allow the Fund to retain a third party to perform administrative services at the Portfolio’s expense |
MLIASUB-ADVISED PORTFOLIO
Portfolio | Date of Current Subdvisory Agreement | Date Agreement was Last Approved by Board | Date Current Subadvisory Agreement was Last Submitted to Shareholders | Purpose of Submitting Current Advisory Agreement to Shareholders | ||||
MetLife Aggregate Bond Index Portfolio | 4/30/07 | 11/16/16 | 11/9/98 | Initial Approval | ||||
MetLife Multi-Index Targeted Risk Portfolio | 11/2/12 | 11/16/16 | 11/2/12 | Initial Approval | ||||
MetLife Stock Index Portfolio | 4/30/07 | 11/16/16 | 5/1/90 | Initial Approval | ||||
MetLife Mid Cap Stock Index Portfolio | 4/30/07 | 11/16/16 | 7/5/00 | Initial Approval | ||||
Russell 2000® Index Portfolio | 4/30/07 | 11/16/16 | 11/9/98 | Initial Approval | ||||
MSCI EAFE® Index Portfolio | 4/30/07 | 11/16/16 | 11/9/98 | Initial Approval |
A-6
Appendix B
FORMS OF ADVISORY AGREEMENTS
For thefund-of-funds Portfolios of Brighthouse Funds Trust I: the American Funds Balanced Allocation Portfolio, American Funds Growth Allocation Portfolio, American Funds Moderate Allocation Portfolio, Brighthouse Asset Allocation 100 Portfolio, Brighthouse Balanced Plus Portfolio, and MetLife Multi-Index Targeted Risk Portfolio.
FORM OF MANAGEMENT AGREEMENT
(BRIGHTHOUSE FUNDS TRUST I)
MANAGEMENT AGREEMENT
,
Brighthouse Investment Advisers, LLC
One Financial Center
Boston, Massachusetts 02111
Ladies and Gentlemen:
Brighthouse Funds Trust I (the “Trust”), a Delaware trust created pursuant to an Agreement and Declaration of Trust, herewith confirms its agreement with Brighthouse Investment Advisers, LLC, a Delaware limited liability company (the “Manager”), as follows:
1. | Investment Description; Appointment |
The Trust desires to employ its capital by investing and reinvesting in investments of the kind and in accordance with the limitations specified in its Agreement and Declaration of Trust, as amended from time to time, and in its registration statement filed with the Securities and Exchange Commission (“SEC”) on FormN-1A, as amended from time to time (the “Registration Statement”), and in such manner and to such extent as may from time to time be approved by the Board of Trustees. The Trust has designated certain separate investment portfolios set forth in Schedule A. The Trust may in the future designate additional separate investment portfolios. Such existing and future portfolios are hereinafter referred to as the “Portfolios.” Copies of the Registration Statement and the Trust’s Agreement and Declaration of Trust, as amended, have been or will be submitted to the Manager. The Manager is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (“1940 Act”) and is engaged in the business of rendering investment advisory services to registered investment companies. The Trust desires to employ the Manager to act as its investment manager and adviser on behalf of the Portfolios specified in Schedule A.
B-1
The Manager accepts this appointment and agrees to furnish the services described herein for the compensation set forth below. The Manager will be an independent contractor and will have no authority to act for or represent the Trust in any way or otherwise be deemed an agent unless expressly authorized by this Agreement or another writing signed by the Trust and the Manager.
2. | Duties of Manager |
a. | Subject to the general supervision and control of the Trustees of the Trust and under the terms and conditions set forth in this Agreement, the Manager will manage the investment operations and composition of each Portfolio and render investment advice for each Portfolio, including the purchase, retention, and disposition of the investments, securities and cash contained in each Portfolio, in accordance with each Portfolio’s investment objectives, policies and restrictions as stated in the Trust’s Agreement and Declaration of Trust,By-Laws, and such Trust’s Prospectus, Statement of Additional Information (“SAI”) and Compliance Manual, as is from time to time in effect. |
b. | As part of the advisory services it will provide hereunder, the Manager will: |
(i) | obtain and evaluate, to the extent deemed necessary and advisable by the Manager in its discretion, pertinent economic, statistical, financial, and other information affecting the economy generally and individual companies or industries, the securities of which are directly or indirectly included in the Portfolios or are under consideration for inclusion in the Portfolios; |
(ii) | formulate and implement a continuous investment program for the Portfolios, which may consist of investing the assets of one or more of the Portfolios in other registered investment companies; |
(iii) | take whatever steps are necessary to implement the investment program for the Portfolios by arranging for the purchase and sale of securities and other investments, including issuing directives to the administrator of the Trust as necessary for the appropriate implementation of the investment program of the Portfolios; |
(iv) | keep the Trustees of the Trust fully informed in writing on an ongoing basis of all material facts concerning the investment and reinvestment of the assets in the Portfolios, its key investment personnel and operations, make regular and periodic special written reports of such additional information concerning the same as may reasonably be requested from time to time by the Trustees of the Trust; |
(v) | in accordance with procedures and methods established by the Trustee of the Trust, which may be amended from time to time, |
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provide assistance in determining the fair value of all securities and other investments/assets in the Portfolios, as necessary, and use reasonable efforts to arrange for the provision of valuation information or a price(s) from a party(ies) independent of the Manager for each security or other investment/asset in the Portfolios for which market prices are not readily available; |
(vi) | cooperate with and provide reasonable assistance to the Trust’s administrator, the Trust’s custodian and foreign custodians, the Trust’s transfer agent and pricing agents and all other agents and representatives of the Trust, keep all such persons fully informed as to such matters as they may reasonably deem necessary to the performance of their obligations to the Trust, provide prompt response to reasonable requests made by such persons and maintain any appropriate interfaces with each so as to promote the efficient exchange of information. |
b. | The Manager will furnish to the Trust such statistical information, with respect to the investments that a Portfolio may hold or contemplate purchasing, as the Trust may reasonably request. The Manager also agrees to furnish to third-party data reporting services all currently available standardized performance information and other customary data. |
c. | Subject to the supervision and direction of the Board of Trustees of the Trust, the Manager, at its own expense, will also supply the Trust with (i) office facilities (which may be in the Manager’s own offices), and (ii) necessary executive and other personnel, including personnel for the performance of clerical and other office functions, exclusive of those functions: (a) related to and to be performed under the Trust’s contract or contracts for administration, custodial, accounting, bookkeeping, transfer, and dividend disbursing agency or similar services by any entity, including the Manager or its affiliates, selected to perform such services under such contracts; and (b) related to the services to be provided by any investment adviser pursuant to a contract with such investment adviser; and (iii) other information and services required in connection with the preparation of all registration statements and prospectuses, prospectus supplements, statements of additional information, all annual, semiannual, and periodic reports to shareholders of the Trust, regulatory authorities, or others, and all notices and proxy solicitation materials, furnished to shareholders of the Trust or regulatory authorities, and all tax returns, except for (a) services of outside counsel or independent accountants or (b) services to be provided by any investment adviser under any contract with such investment adviser. |
d. | Subject to the appropriate policies and procedures approved by the Board of Trustees, the Manager may, to the extent authorized by Section 28(e) of the Securities Exchange Act of 1934, cause a Portfolio to pay a broker or |
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dealer that provides brokerage or research services to the Manager, an investment adviser, the Trust and the Portfolio an amount of commission for effecting a Portfolio transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if the Manager determines, in good faith, that such amount of commission is reasonable in relationship to the value of such brokerage or research services provided in terms of that particular transaction or the Manager’s overall responsibilities to the Portfolio, the Trust or its other investment advisory clients. To the extent authorized by said Section 28(e) and the Board of Trustees, the Manager shall not be deemed to have acted unlawfully or to have breached any duty created by this Agreement or otherwise solely by reason of such action. In addition, subject to seeking “best execution” and in compliance with the Conduct Rules of the National Association of Securities Dealers, Inc., the Manager may also consider sales of shares of the Trust as a factor in the selection of brokers and dealers. |
e. | Subject to the requirement to seek best price and execution, and to the appropriate policies and procedures approved by the Board of Trustees, the Trust reserves the right to direct the Manager effect transactions in a Portfolio’s securities through broker-dealers in a manner that will help generate resources to pay the cost of certain expenses which the Trust is required to pay or for which the Trust is required to arrange payment pursuant to this Agreement. |
f. | The services of the Manager to the Trust hereunder are not to be deemed exclusive, and the Manager shall be free to render similar services to others and to engage in other activities, so long as the services rendered to the Trust are not impaired. |
3. | Delegation of Manager’s Duties as Investment Adviser |
With respect to any or all of the Portfolios, the Manager may contract with one or more investment advisers (“Advisers”) to carry out any and all of its duties specified in Paragraph 2 of this Agreement, provided that any contract with an Adviser (an “Advisory Agreement”) imposes on the Adviser all the duties and conditions to which Manager is subject by Paragraph 2 of this Agreement, and further provided that each Advisory Agreement meets all requirements of the 1940 Act and rules thereunder.
4. | Compensation |
In consideration of services rendered pursuant to this Agreement, the Trust will pay the Manager a fee at the respective annual rates of the value of each Portfolio’s average daily net assets set forth in Schedule A hereto as such schedule may be amended from time to time. Such fees shall be accrued daily and paid monthly as soon as practicable after the end of each month. If the Manager shall serve for less than the whole of any month, the foregoing compensation shall be prorated. For the purpose of
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determining fees payable to the Manager, the value of the Portfolios’ net assets shall be computed at the times and in the manner specified from time to time in the Registration Statement.
5. | Expenses |
The Trust shall pay all expenses other than those expressly assumed by the Manager herein, which expenses payable by the Trust shall include, but are not limited to:
a. | Fees to the Manager; |
b. | Charges to the services and expenses of the independent accountants and legal counsel retained by the Trust, for itself and its independent trustees; |
c. | Fees and expenses related to the registration and qualification of the Trust and its shares for distribution under federal and state securities laws; |
d. | Expenses of the Trust’s administrator, transfer agent, registrar, custodian, dividend disbursing agent, and shareholder servicing agent; |
e. | Salaries, fees and expenses of Trustees and executive officers of the Trust who are not “affiliated persons” of the Manager or the Advisers within the meaning of the 1940 Act; |
f. | Taxes (including the expenses related to preparation of tax returns) and corporate or other fees levied against the Trust; |
g. | Brokerage commissions and other expenses associated with the purchase and sale of portfolio securities for the Trust; |
h. | Expenses, including interest, of borrowing money; |
i. | Expenses incidental to meetings of the Trust’s shareholders, Board of Trustees and the maintenance of the Trust’s organizational existence; |
j. | Expenses of printing certificates representing shares of the Trust and expenses of preparing, printing and mailing notices, proxy material, reports to regulatory bodies, and reports to shareholders of the Trust; |
k. | Expenses of preparing and typesetting of prospectuses of the Trust; |
l. | Expenses of printing and distributing prospectuses to direct or beneficial shareholders of the Trust; |
m. | Association membership dues; |
n. | Premiums for fidelity insurance, directors and officers liability insurance and other insurance coverage; |
o. | Charges of an independent pricing service to value the Portfolios’ assets; |
p. | Expenses related to the purchase or redemption of the Trust’s shares; and |
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q. | Such nonrecurring expenses as may arise, including those associated with actions, suits, or proceedings to which the Trust is a party and arising from any legal obligation which the Trust may have to indemnify its officers and Trustees with respect thereto. |
6. | Use of Name |
The Manager hereby consents to the Trust being named the Brighthouse Funds Trust I. The Trust shall not use the name “Brighthouse Funds Trust I”, “Brighthouse”, and any of the other names of the Manager or its affiliated companies and any derivative or logo or trade or service mark thereof, or disclose information related to the business of the Manager or any of its affiliates in any prospectus, sales literature or other material relating to the Trust in any manner not approved prior thereto by the Manager; provided, however, that the Manager shall approve all uses of its name and that of its affiliates which merely refer in accurate terms to its appointment hereunder or which are required by the SEC or a state securities commission; and provided, further, that in no event shall such approval be unreasonably withheld. The Manager shall not use the name of the Trust or any of its affiliates in any material relating to the Manager in any manner not approved prior thereto by the Trust; provided, however, that the Trust shall approve all uses of its name which merely refer in accurate terms to the appointment of the Manager hereunder or which are required by the SEC or a state securities commission; and, provided, further, that in no event shall such approval be unreasonably withheld.
The Trust recognizes that from time to time directors, officers and employees of the Manager may serve as directors, trustees, partners, officers and employees of other corporations, business trusts, partnerships or other entities (including other investment companies) and that such other entities may include the name “Brighthouse”, or any derivative or abbreviation thereof as part of their name, and that the Manager or its affiliates may enter into investment advisory, administration or other agreements with such other entities.
Unless provided in any other agreement between the Trust and the Manager, upon termination of this Agreement for any reason, the Trust shall cease within 30 days all use of the name and mark “Brighthouse Funds Trust I.”
7. | Records |
The records relating to the services provided under this Agreement shall be the property of the Trust and shall be under its control; however, the Trust shall furnish to the Manager such records and permit it to retain such records (either in original or in duplicate form) as it shall reasonably require in order to carry out its duties. In the event of the termination of this Agreement, such records shall promptly be returned to the Trust by the Manager free from any claim or retention of rights therein. The Manager shall keep confidential any information obtained in connection with its duties hereunder and disclose such information only if the Trust has authorized such
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disclosure or if such disclosure is expressly required or lawfully requested by applicable federal or state regulatory authorities.
8. | Standard of Care |
The Manager shall exercise its best judgment in rendering the services hereunder. The Manager shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with the matters to which this Agreement relates, provided that nothing herein shall be deemed to protect or purport to protect the Manager against liability to the Trust or to the shareholders of the Trust to which the Manager would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or by reason of the Manager’s reckless disregard of its obligations and duties under this Agreement.
9. | Term |
This Agreement shall continue in effect, unless sooner terminated as hereinafter provided, for a period of one year from the date hereof and indefinitely thereafter provided that its continuance after such one year period as to each Portfolio shall be specifically approved at least annually by vote of a majority of the outstanding voting securities of such Portfolio or by vote of a majority of the Trust’s Board of Trustees; and further provided that such continuance is also approved annually by the vote of a majority of the Trustees who are not parties to this Agreement or interested persons of the Trust or the Manager. This Agreement may be terminated as to any Portfolio at any time, without payment of any penalty, by the Trust’s Board of Trustees or by a vote of majority of the outstanding voting securities of such Portfolio upon 60 days’ prior written notice to the Manager, or by the Manager upon 90 days’ prior written notice to the Trust, or upon such shorter notice as may be mutually agreed upon. This Agreement may be amended at any time by the Manager and the Trust, subject to approval by the Trust’s Board of Trustees and, if required by applicable SEC rules and regulations, a vote of a majority of the Trust’s outstanding voting securities. This Agreement shall terminate automatically and immediately in the event of its assignment. The terms “assignment” and “vote of a majority of the outstanding voting securities” shall have the meaning set forth for such terms in the 1940 Act.
10. | Limitation of Trust’s Liability |
The Manager acknowledges that it has received notice of and accepts the limitations upon the Trust’s liability set forth in its Agreement and Declaration of Trust. The Manager agrees that the Trust’s obligations hereunder in any case shall be limited to the Trust and to its assets and that the Manager shall not seek satisfaction of any such obligation from the shareholders of the Trust nor from any Trustee, officer, employee or agent of the Trust.
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11. | Force Majeure |
The Manager shall not be liable for delays or errors occurring by reason of circumstances beyond its control, including but not limited to acts of civil or military authority, national emergencies, work stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or failure of communication or power supply. In the event of equipment breakdowns beyond its control, the Manager shall take reasonable steps to minimize service interruptions but shall have no liability with respect thereto.
12. | Severability |
If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
13. | Interpretation |
Nothing herein contained shall be deemed to require the Trust to take any action contrary to its Declaration of Trust orBy-Laws as the same may from time to time be amended, or any applicable statutory or regulatory requirements to which it is subject or by which it is bound, or to relieve or deprive the Trustees of their responsibility for and control of the conduct of the affairs of the Trust.
14. | Miscellaneous |
This Agreement constitutes the full and complete agreement of the parties hereto with respect to the subject matter hereof. Each party agrees to perform such further actions and execute such further documents as are necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Delaware and the applicable provisions of the 1940 Act. The captions in this Agreement are included for convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed in several counterparts, all of which together shall for all purposes constitute one Agreement, binding on all the parties.
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If the foregoing is in accordance with your understanding, kindly indicate your acceptance hereof by signing and returning to us the enclosed copy hereof.
Very truly yours, | ||
BRIGHTHOUSE FUNDS TRUST I | ||
By: | ||
Kristi Slavin | ||
President and Chief Executive Officer |
Accepted:
BRIGHTHOUSE INVESTMENT ADVISERS, LLC
By: | ||
Alan C. Leland | ||
Chief Financial Officer and Treasurer |
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SCHEDULE A
Portfolio | Percentage of average daily net assets | |
American Funds Balanced Allocation Portfolio | 0.10% of first $500 million of such assets plus 0.075% of such assets over $500 million up to $1 billion plus 0.05% of such assets over $1 billion | |
American Funds Growth Allocation Portfolio | 0.10% of first $500 million of such assets plus 0.075% of such assets over $500 million up to $1 billion plus 0.05% of such assets over $1 billion | |
American Funds Moderate Allocation Portfolio | 0.10% of first $500 million of such assets plus 0.075% of such assets over $500 million up to $1 billion plus 0.05% of such assets over $1 billion | |
Brighthouse Asset Allocation 100 Portfolio | 0.10% of first $500 million of such assets plus 0.075% of such assets over $500 million up to $1 billion plus 0.05% of such assets over $1 billion | |
Brighthouse Balanced Plus Portfolio | Base Portion* 0.10% on first $500 million of such assets plus 0.075% on such assets over $500 million up to $1 billion plus 0.05% on such assets over $1 billion Overlay Portion* 0.725% of the first $250 million of such assets plus 0.700% on such assets over $250 million up to $750 million plus 0.675% on such assets over $750 million up to $1 billion plus 0.650% on such assets over $1 billion *These terms have the definition given to them in the Portfolio’s prospectus. |
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Portfolio | Percentage of average daily net assets | |
MetLife Multi-Index Targeted Risk Portfolio | Base Portion* 0.070% of the first $500 million of such assets, plus 0.060% of such assets over $500 million up to $1 billion, plus 0.050% of such assets over $1 billion Overlay Portion* 0.500% of the first $250 million of such assets, plus 0.485% of such assets over $250 million up to $500 million, plus 0.470% of such assets over $500 million up to $1 billion, plus 0.450% of such assets over $1 billion *These terms have the definitions given to them in the Portfolio’s prospectus. |
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For all Portfolios except thefund-of-fund Portfolios of Brighthouse Funds Trust I: the American Funds Balanced Allocation Portfolio, American Funds Growth Allocation Portfolio, American Funds Moderate Allocation Portfolio, Brighthouse Asset Allocation 100 Portfolio, Brighthouse Balanced Plus Portfolio, and MetLife Multi-Index Targeted Risk Portfolio.
FORM OF MANAGEMENT AGREEMENT
(BRIGHTHOUSE FUNDS TRUST I)
MANAGEMENT AGREEMENT
,
Brighthouse Investment Advisers, LLC
One Financial Center
Boston, Massachusetts 02111
Ladies and Gentlemen:
Brighthouse Funds Trust I (the “Trust”), a Delaware trust created pursuant to an Agreement and Declaration of Trust, herewith confirms its agreement with Brighthouse Investment Advisers, LLC, a Delaware limited liability company (the “Manager”), as follows:
1. | Investment Description; Appointment |
The Trust desires to employ its capital by investing and reinvesting in investments of the kind and in accordance with the limitations specified in its Agreement and Declaration of Trust, as amended from time to time, and in its registration statement filed with the Securities and Exchange Commission (“SEC”) on FormN-1A, as amended from time to time (the “Registration Statement”), and in such manner and to such extent as may from time to time be approved by the Board of Trustees. The Trust has designated the separate investment portfolios set forth in Schedule A. The Trust may in the future designate additional separate investment portfolios. Such existing and future portfolios are hereinafter referred to as the “Portfolios.” Copies of the Registration Statement and the Trust’s Agreement and Declaration of Trust, as amended, have been or will be submitted to the Manager. The Manager is registered as an investment adviser under the Investment Advisers Act of 1940, as amended, (“1940 Act”) and is engaged in the business of rendering investment advisory services to registered investment companies. The Trust desires to employ the Manager to act as its investment manager. The Manager accepts this appointment and agrees to furnish the services described herein for the compensation set forth below. The Manager will be an independent contractor and will have no authority to act for or represent the Trust in any way or otherwise be deemed an agent unless expressly authorized by this Agreement or another writing signed by the Trust and the Manager.
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2. | Services as Manager |
a. | Subject to the supervision and direction of the Board of Trustees of the Trust, the Trust acknowledges and agrees that the Manager may, at its own expense, select a person or persons to act as investment adviser (an “Adviser”) to render investment advice to each of the Portfolios. Each such Adviser shall make all determinations with respect to the Portfolio’s assets for which it has responsibility in accordance with the Portfolio’s investment objectives, policies, and restrictions as stated in the Trust’s Agreement and Declaration of Trust,By-Laws, and the Registration Statement as from time to time in effect; provided, that any contract with an Adviser (an “Advisory Agreement”) shall be in compliance with and approved as required by the Investment Company Act of 1940, as amended (the “1940 Act”) or as otherwise permitted by the SEC. |
b. | Subject to the supervision and direction of the Trustees of the Trust, the Manager will have (i) overall supervisory responsibility for the general management and investment of each Portfolio’s assets; (ii) full discretion to select new or additional Advisers for each Portfolio; (iii) full discretion to enter into and materially modify existing Advisory Agreements with Advisers; (iv) full discretion to terminate and replace any Adviser; and (v) full investment discretion to make all determinations with respect to the investment of a Portfolio’s assets not then managed by an Adviser. In connection with the Manager’s responsibilities herein, the Manager will assess each Portfolio’s investment focus and will seek to implement decisions with respect to the allocation and reallocation of each Portfolio’s assets among one or more current or additional Advisers from time to time, as the Manager deems appropriate, to enable each Portfolio to achieve its investment goals. In addition, the Manager will monitor compliance of each Adviser with the investment objectives, policies, and restrictions of any Portfolio or Portfolios (or portions of any Portfolio) under the management of such Adviser, and review and report to the Trustees of the Trust on the performance of each Adviser. The Manager will furnish, or cause the appropriate Adviser(s) to furnish, to the Trust such statistical information, with respect to the investments that a Portfolio (or portions of any Portfolio) may hold or contemplate purchasing, as the Trust may reasonably request. On the Manager’s own initiative, the Manager will apprise, or cause the appropriate Adviser(s) to apprise, the Trust of important developments materially affecting each Portfolio (or any portions of a Portfolio that they advise) and will furnish the Trust, from time to time, with such information as may be appropriate for this purpose. Further, the Manager agrees to furnish, or cause the appropriate Adviser(s) to furnish, to the Trustees of the Trust such periodic and special reports as the Trustees of the Trust may reasonably request. In addition, the Manager agrees to cause the appropriate Adviser(s) to furnish to |
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third-party data reporting services all currently available standardized performance information and other customary data. |
c. | Subject to the supervision and direction of the Board of Trustees of the Trust, the Manager, at its own expense, will also supply the Trust with (i) office facilities (which may be in the Manager’s own offices), and (ii) necessary executive and other personnel, including personnel for the performance of clerical and other office functions, exclusive of those functions: (a) related to and to be performed under the Trust’s contract or contracts for administration, custodial, accounting, bookkeeping, transfer, and dividend disbursing agency or similar services by any entity, including the Manager or its affiliates, selected to perform such services under such contracts; and (b) related to the services to be provided by any Adviser pursuant to an Advisory Agreement; and (iii) other information and services required in connection with the preparation of all registration statements and prospectuses, prospectus supplements, statements of additional information, all annual, semiannual, and periodic reports to shareholders of the Trust, regulatory authorities, or others, and all notices and proxy solicitation materials, furnished to shareholders of the Trust or regulatory authorities, and all tax returns, except for (a) services of outside counsel or independent accountants or (b) services to be provided by any Adviser under any Advisory Agreement. |
d. | Subject to the requirement to seek best price and execution, and to the appropriate policies and procedures approved by the Board of Trustees, the Trust reserves the right to direct the Manager to cause Advisers to effect transactions in portfolio securities through broker-dealers in a manner that will help generate resources to: (i) pay the cost of certain expenses which the Trust is required to pay or for which the Trust is required to arrange payment pursuant to this Agreement; or (ii) finance activities that are primarily intended to result in the sale of Trust shares. At the discretion of the Board of Trustees, such resources may be used to pay or cause the payment of Trust expenses or may be used to finance activities that are primarily intended to result in the sale of Trust shares. |
e. | The services of the Manager to the Trust hereunder are not to be deemed exclusive, and the Manager shall be free to render similar services to others and to engage in other activities, so long as the services rendered to the Trust are not impaired. |
3. | Compensation |
In consideration of services rendered pursuant to this Agreement, the Trust will pay the Manager a fee at the respective annual rates of the value of each Portfolio’s average daily net assets set forth in Schedule A hereto as such schedule may be amended from time to time. Such fees shall be accrued daily and paid monthly as soon as practicable after the end of each month. If the Manager shall serve for less than the
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whole of any month, the foregoing compensation shall be prorated. For the purpose of determining fees payable to the Manager, the value of the Portfolios’ net assets shall be computed at the times and in the manner specified from time to time in the Registration Statement.
4. | Expenses |
The Trust shall pay all expenses other than those expressly assumed by the Manager herein, which expenses payable by the Trust shall include, but are not limited to:
a. | Fees to the Manager; |
b. | Charges for the services and expenses of the independent accountants and legal counsel retained by the Trust, for itself and its independent trustees; |
c. | Fees and expenses related to the registration and qualification of the Trust and its shares for distribution under federal and state securities laws; |
d. | Expenses of the Trust’s administrator, transfer agent, registrar, custodian, dividend disbursing agent, and shareholder servicing agent; |
e. | Salaries, fees and expenses of Trustees and executive officers of the Trust who are not “affiliated persons” of the Manager or the Advisers within the meaning of the 1940 Act; |
f. | Taxes (including the expenses related to preparation of tax returns) and corporate or other fees levied against the Trust; |
g. | Brokerage commissions and other expenses associated with the purchase and sale of portfolio securities for the Trust; |
h. | Expenses, including interest, of borrowing money; |
i. | Expenses incidental to meetings of the Trust’s shareholders, Board of Trustees and the maintenance of the Trust’s organizational existence; |
j. | Expenses of printing certificates representing shares of the Trust and expenses of preparing, printing and mailing notices, proxy material, reports to regulatory bodies, and reports to shareholders of the Trust; |
k. | Expenses of preparing and typesetting of prospectuses of the Trust; |
l. | Expenses of printing and distributing prospectuses to direct or beneficial shareholders of the Trust; |
m. | Association membership dues; |
n. | Premiums for fidelity insurance, directors and officers liability insurance and other insurance coverage; |
o. | Charges of an independent pricing service to value the Portfolios’ assets; |
p. | Expenses related to the purchase or redemption of the Trust’s shares; and |
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q. | Such nonrecurring expenses as may arise, including those associated with actions, suits, or proceedings to which the Trust is a party and arising from any legal obligation which the Trust may have to indemnify its officers and Trustees with respect thereto. |
5. | Use of Name |
The Manager hereby consents to the Trust being named the Brighthouse Funds Trust I. The Trust shall not use the name “Brighthouse Funds Trust I”, “Brighthouse”, and any of the other names of the Manager or its affiliated companies and any derivative or logo or trade or service mark thereof, or disclose information related to the business of the Manager or any of its affiliates in any prospectus, sales literature or other material relating to the Trust in any manner not approved prior thereto by the Manager; provided, however, that the Manager shall approve all uses of its name and that of its affiliates which merely refer in accurate terms to its appointment hereunder or which are required by the SEC or a state securities commission; and provided, further, that in no event shall such approval be unreasonably withheld. The Manager shall not use the name of the Trust or any of its affiliates in any material relating to the Manager in any manner not approved prior thereto by the Trust; provided, however, that the Trust shall approve all uses of its name which merely refer in accurate terms to the appointment of the Manager hereunder or which are required by the SEC or a state securities commission; and, provided, further, that in no event shall such approval be unreasonably withheld.
The Trust recognizes that from time to time directors, officers and employees of the Manager may serve as directors, trustees, partners, officers and employees of other corporations, business trusts, partnerships or other entities (including other investment companies) and that such other entities may include the name “Brighthouse”, or any derivative or abbreviation thereof as part of their name, and that the Manager or its affiliates may enter into investment advisory, administration or other agreements with such other entities.
Upon termination of this Agreement for any reason, the Trust shall cease within 30 days all use of the name and mark “Brighthouse Funds Trust I.”
6. | Records |
The records relating to the services provided under this Agreement shall be the property of the Trust and shall be under its control; however, the Trust shall furnish to the Manager such records and permit it to retain such records (either in original or in duplicate form) as it shall reasonably require in order to carry out its duties. In the event of the termination of this Agreement, such records shall promptly be returned to the Trust by the Manager free from any claim or retention of rights therein. The Manager shall keep confidential any information obtained in connection with its duties hereunder and disclose such information only if the Trust has authorized such disclosure or if such disclosure is expressly required or lawfully requested by applicable federal or state regulatory authorities.
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7. | Standard of Care |
The Manager shall exercise its best judgment in rendering the services hereunder. The Manager shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with the matters to which this Agreement relates, provided that nothing herein shall be deemed to protect or purport to protect the Manager against liability to the Trust or to the shareholders of the Trust to which the Manager would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or by reason of the Manager’s reckless disregard of its obligations and duties under this Agreement.
8. | Term |
This Agreement shall continue in effect, unless sooner terminated as hereinafter provided, for a period of one year from the date hereof and indefinitely thereafter provided that its continuance after such one year period as to each Portfolio shall be specifically approved at least annually by vote of a majority of the outstanding voting securities of such Portfolio or by vote of a majority of the Trust’s Board of Trustees; and further provided that such continuance is also approved annually by the vote of a majority of the Trustees who are not parties to this Agreement or interested persons of the Trust or the Manager. This Agreement may be terminated as to any Portfolio at any time, without payment of any penalty, by the Trust’s Board of Trustees or by a vote of a majority of the outstanding voting securities of such Portfolio upon 60 days’ prior written notice to the Manager, or by the Manager upon 90 days’ prior written notice to the Trust, or upon such shorter notice as may be mutually agreed upon. This Agreement may be amended at any time by the Manager and the Trust, subject to approval by the Trust’s Board of Trustees and, if required by applicable SEC rules and regulations, a vote of a majority of the Trust’s outstanding voting securities. This Agreement shall terminate automatically and immediately in the event of its assignment. The terms “assignment” and “vote of a majority of the outstanding voting securities” shall have the meaning set forth for such terms in the 1940 Act.
9. | Limitation of Trust’s Liability |
The Manager acknowledges that it has received notice of and accepts the limitations upon the Trust’s liability set forth in its Agreement and Declaration of Trust. The Manager agrees that the Trust’s obligations hereunder in any case shall be limited to the Trust and to its assets and that the Manager shall not seek satisfaction of any such obligation from the shareholders of the Trust nor from any Trustee, officer, employee or agent of the Trust.
10. | Force Majeure |
The Manager shall not be liable for delays or errors occurring by reason of circumstances beyond its control, including but not limited to acts of civil or military authority, national emergencies, work stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or failure of communication or power supply. In the event of
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equipment breakdowns beyond its control, the Manager shall take reasonable steps to minimize service interruptions but shall have no liability with respect thereto.
11. | Severability |
If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
12. | Miscellaneous |
This Agreement constitutes the full and complete agreement of the parties hereto with respect to the subject matter hereof. Each party agrees to perform such further actions and execute such further documents as are necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Delaware and the applicable provisions of the 1940 Act. The captions in this Agreement are included for convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed in several counterparts, all of which together shall for all purposes constitute one Agreement, binding on all the parties.
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If the foregoing is in accordance with your understanding, kindly indicate your acceptance hereof by signing and returning to us the enclosed copy hereof.
Very truly yours, | ||
BRIGHTHOUSE FUNDS TRUST I | ||
By: | ||
Kristi Slavin | ||
President and Chief Executive Officer |
Accepted:
BRIGHTHOUSE INVESTMENT ADVISERS, LLC
By: | ||
Alan C. Leland | ||
Chief Financial Officer and Treasurer |
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SCHEDULE A
Portfolio | Percentage of average daily net assets | |
AB Global Dynamic Allocation Portfolio | 0.700% of the first $250 million of such assets, plus 0.650% of such assets over $250 million up to $500 million, plus 0.625% of such assets over $500 million up to $1 billion, plus 0.600% of such assets over $1 billion | |
Allianz Global Investors DynamicMulti-Asset Plus Portfolio | 0.675% on the first $250 million of such assets plus 0.650% of such assets over $250 million up to $1 billion plus 0.600% of such assets over $1 billion | |
American Funds Growth Portfolio | 0.75% To the extent that a Portfolio invests all of its investable assets (i.e., securities and cash) in another registered investment company, the Trust will not pay the Manager any fee pursuant to Section 3 of the Agreement. | |
AQR Global Risk Balanced Portfolio | 0.675% on the first $250 million of such assets plus 0.650% of such assets over $250 million up to $750 million plus 0.625% of such assets over $750 million up to $1 billion plus 0.600% of such assets over $1 billion | |
BlackRock Global Tactical Strategies Portfolio | 0.800% of the first $100 million of such assets, plus 0.750% of such assets over $100 million up to $300 million, plus 0.700% of such assets over $300 million up to $600 million, plus 0.675% of such assets over $600 million up to $1 billion, plus 0.650% of such assets over $1 billion | |
BlackRock High Yield Portfolio | 0.60% | |
Brighthouse Small Cap Value Portfolio | 0.75% of the first $1 billion of such assets plus 0.70% of such assets over $1 billion |
B-20
Portfolio | Percentage of average daily net assets | |
Brighthouse/Aberdeen Emerging Markets Equity Portfolio | ||
Brighthouse/Artisan International Portfolio | ||
Brighthouse/Eaton Vance Floating Rate Portfolio | ||
Brighthouse/Franklin Low Duration Total Return Portfolio | ||
Brighthouse/Templeton International Bond Portfolio | 0.60% | |
Brighthouse/Wellington Large Cap Research Portfolio | 0.625% of the | |
Clarion Global Real Estate Portfolio | 0.70% of the first $200 million of such assets plus 0.65% of such assets over $200 million up to $750 million plus 0.55% of such assets over $750 million | |
ClearBridge Aggressive Growth Portfolio | 0.65% of the first $500 million of such assets plus 0.60% of such assets over $500 million up to $1 billion plus 0.55% of such assets over $1 billion up to $2 billion plus 0.50% of such assets over $2 billion |
C-6B-21
Portfolio | Percentage of average daily net assets | |
Goldman SachsMid-Cap Value Portfolio | 0.75% of the first $200 million of such assets plus 0.70% of such assets over $200 million | |
Harris Oakmark International Portfolio | 0.85% of the first $100 million of such assets plus 0.80% of such assets over $100 million up to $1 billion plus 0.75% of such assets over $1 billion | |
Invesco Balanced-Risk Allocation Portfolio | 0.675% on the first $250 million of such assets plus 0.650% of such assets over $250 million up to $750 million plus 0.625% of such assets over $750 million up to $1 billion plus 0.600% of such assets over $1 billion | |
Invesco Comstock Portfolio | 0.65% of the first $500 million of such assets plus 0.60% of such assets over $500 million up to $1 billion plus 0.525% of such assets over $1 billion | |
Invesco Mid Cap Value Portfolio | 0.70% of the first $200 million of such assets plus 0.65% of such assets over $200 million up to $500 million plus 0.625% of such assets over $500 million | |
Invesco Small Cap Growth Portfolio | 0.88% of the first $500 million of such assets plus 0.83% of such assets over $500 million | |
JPMorgan Core Bond Portfolio | 0.55% | |
JPMorgan Global Active Allocation Portfolio | 0.80% on the first $250 million of such assets, plus 0.75% of such assets over $250 million up to $500 million, plus 0.72% of such assets over $500 million up to $750 million, plus 0.70% of such assets over $750 million | |
JPMorgan Small Cap Value Portfolio | 0.80% of the first $100 million of such assets plus 0.775% of such assets over $100 million up to $500 million plus 0.75% of such assets over $500 million up to $1 billion plus 0.725% of such assets over $1 billion |
B-22
Portfolio | Percentage of average daily net assets | |
Loomis Sayles Global Markets Portfolio | 0.70% of the first $500 million of such assets plus 0.65% of such assets over $500 million up to $1 billion plus 0.60% of such assets over $1 billion | |
MFS Research International Portfolio | 0.80% of the first $200 million of such assets plus 0.75% of such assets over $200 million up to $500 million plus 0.70% of such assets over $500 million up to $1 billion plus 0.65% of such assets over $1 billion | |
Morgan Stanley Mid Cap Growth Portfolio | 0.70% of the first $200 million of such assets plus 0.65% of such assets over $200 million up to $500 million plus 0.625% of such assets over $500 million | |
Oppenheimer Global Equity Portfolio | 0.70% of the first $100 million of such assets plus 0.68% of such assets over $100 million up to $250 million plus 0.67% of such assets over $250 million up to $500 million plus 0.66% of such assets over $500 million up to $750 million plus 0.65% of such assets over $750 million | |
PanAgora Global Diversified Risk Portfolio | 0.650% of the first $250 million of such assets, plus 0.640% of such assets over $250 million up to $750 million, plus 0.630% of such assets over $750 million up to $1 billion, plus 0.600% of such assets over $1 billion | |
PIMCO Inflation Protected Bond Portfolio | 0.50% of the first $1.2 billion of such assets plus 0.45% of such assets over $1.2 billion | |
PIMCO Total Return Portfolio | 0.50% of the first $1.2 billion of such assets plus 0.475% of such assets over $1.2 billion | |
Pyramis® Government Income Portfolio | 0.52% on the first $100 million of such assets plus 0.44% of such assets over $100 million up to $500 million plus 0.40% of such assets over $500 million |
B-23
Portfolio | Percentage of average daily net assets | |
Pyramis® Managed Risk Portfolio | 0.45%; provided, however, that if the Portfolio primarily invests its assets directly in investment securities or in shares of registered investment companies other than those offered by Fidelity Investments, then the fee payable to Brighthouse Investment Advisers, LLC shall be 0.80% | |
Schroders Global Multi-Asset Portfolio | 0.68% of the first $100 million of such assets, plus 0.66% of such assets over $100 million up to $250 million, plus 0.64% of such assets over $250 million up to $750 million, plus 0.62% of such assets over $750 million up to $1.5 billion, plus 0.60% of such assets over $1.5 billion | |
SSGA Growth and Income ETF Portfolio | 0.33% of the first $500 million of such assets plus 0.30% of such assets over $500 million | |
SSGA Growth ETF Portfolio | 0.33% of the first $500 million of such assets plus 0.30% of such assets over $500 million | |
TCW Core Fixed Income Portfolio | 0.55% | |
T. Rowe Price Large Cap Value Portfolio | 0.750% of the first $50 million of such assets plus 0.700% of such assets over $50 million up to $100 million; provided that if such assets are over $100 million up to $200 million, then 0.650% of the first $200 million of such assets; provided that if such assets are over $200 million up to $500 million, then 0.620% of the first $500 million of such assets; provided that if such assets are over $500 million up to $1 billion, then 0.595% of the first $500 million of such assets plus 0.570% of such assets over $500 million up to $1 billion; provided that if such assets are over $1 billion, then 0.570% of all such assets. |
B-24
Portfolio | Percentage of average daily net assets | |
If the assets of the Portfolio cross a threshold in reverse (i.e., decline below a threshold), then the absolute dollar fee payable by the Portfolio to the Adviser shall not be more than the minimum fee payable at the immediately higher threshold. When the Portfolio’s assets cross a threshold in reverse, the fee payable to the Adviser shall be calculated as follows: When the Portfolio’s net assets decline below $100 million, the fee payable to the Adviser shall be the lower of (1) the fee on the Portfolio’s daily net assets calculated at 0.750% of the first $50 million of such assets plus 0.700% of such assets over $50 million up to $100 million and (2) the fee on $100 million calculated at a flat rate of 0.650%. When the Portfolio’s net assets decline below $200 million but are over $100 million, the fee payable to the Adviser shall be the lower of (1) the fee on the Portfolio’s daily net assets calculated at a flat rate of 0.650% and (2) the fee on $200 million calculated at a flat rate of 0.620%. When the Portfolio’s net assets decline below $500 million but are over $200 million, the fee payable to the Adviser shall be the lower of (1) the fee on the Portfolio’s daily net assets calculated at a flat rate of 0.620% and (2) the fee on $500 million calculated at a flat rate of 0.595%. |
B-25
Portfolio | Percentage of average daily net assets | |
When the Portfolio’s net assets decline below $1 billion but are over $500 million, the fee payable to the Adviser shall be the lower of (1) the fee on the Portfolio’s daily net assets calculated at 0.595% of the first $500 million of such assets plus 0.570% of such assets over $500 million up to $1 billion and (2) the fee on $1 billion calculated at a flat rate of 0.570%. | ||
T. Rowe PriceMid-Cap Growth Portfolio | 0.75% |
B-26
Appendix D-1For all Portfolios of Brighthouse Funds Trust II:
Form of Amended Advisory Agreement
METROPOLITAN SERIES FUND, INC.FORM OF ADVISORY AGREEMENT
AMENDED AND RESTATED (BRIGHTHOUSE FUNDS TRUST II)
ADVISORY AGREEMENT
( Portfolio)
AMENDED AND RESTATED AGREEMENT made as of this ___ day of , 2012______________, ____ by and between METROPOLITAN SERIES FUND, INC.,BRIGHTHOUSE FUNDS TRUST II, a Maryland corporationDelaware trust (the “Fund”), with respect to its Portfolio[ ] PORTFOLIO (the “Portfolio”), and METLIFEBRIGHTHOUSE INVESTMENT ADVISERS, LLC, a Delaware limited liability company (the “Manager”).
WITNESSETH:
WHEREAS, the Fund and the Manager previously enteredwish to enter into an agreement (the “Original Agreement”) on behalf of its Portfolio setting forth the terms upon which the Manager (or certain other parties acting pursuant to delegation from the Manager) wouldwill perform certain services for the Portfolio;
WHEREAS, the Fund and the Manager wish to amend and restate the Original Agreement to modify the services the Manager will perform for the Portfolio;
NOW THEREFORE, in consideration of the premises and covenants hereinafter contained, the parties agree as follows:
1. (a) The Fund hereby employs the Manager to furnish the Fund with Portfolio Management Services (as defined in Section 2 hereof) and Other Services (as defined in Section 3 hereof), subject to the authority of the Manager to delegate any or all of its responsibilities hereunder to other parties as provided in Sections 1(b) and (c) hereof. The Manager hereby accepts such employment and agrees, at its own expense, to furnish such services (either directly or pursuant to delegation to other parties as permitted by Sections 1(b) and (c) hereof) and to assume the obligations herein set forth, for the compensation herein provided. The Manager shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Fund in any way or otherwise be deemed an agent of the Fund.
(b) The Manager may delegate any or all of its responsibilities hereunder with respect to the provision of Portfolio Management Services (and assumption of related expenses) to one or more other parties (each such party, a “Sub-Adviser”), pursuant in each case to a written agreement with such Sub-Adviser that meets the requirements of Section 15 of the Investment Company Act of 1940 and the rules thereunder (the “1940 Act”) applicable to contracts for service as investment adviser of a registered investment company (including without
(b) | The Manager may delegate any or all of its responsibilities hereunder with respect to the provision of Portfolio Management Services (and assumption of related expenses) to one or more other parties (each such party, a“Sub-Adviser”), pursuant in each case to a written agreement with suchSub-Adviser that meets the requirements of Section 15 of the Investment Company Act of 1940 and the rules thereunder (the “1940 Act”) applicable to contracts for service as investment adviser of a registered investment company (including without limitation the requirements for approval by the directors of the Fund and the shareholders of the Portfolio), subject, however, to such exemptions as may be granted by the Securities and Exchange Commission. Any |
D-1B-27
Sub-Adviser may (but need not) be affiliated with the Manager. If differentSub-Advisers are engaged to provide Portfolio Management Services with respect to different segments of the Portfolio, the Manager shall determine, in the manner described in the prospectus of the Portfolio from time to time in effect, what portion of the assets belonging to the Portfolio shall be managed by eachSub-Adviser. |
limitation the requirements for approval by the directors of the Fund and the shareholders of the Portfolio), subject, however, to such exemptions as may be granted by the Securities and Exchange Commission. Any Sub-Adviser may (but need not) be affiliated with the Manager. If different Sub-Advisers are engaged to provide Portfolio Management Services with respect to different segments of the Portfolio, the Manager shall determine, in the manner described in the prospectus of the Portfolio from time to time in effect, what portion of the assets belonging to the Portfolio shall be managed by each Sub-Adviser.
(c) The Manager may delegate any or all of its responsibilities hereunder with respect to the provision of Other Services to one or more other parties (each such party, a “Delegatee”) selected by the Manager. Any Delegatee may (but need not) be affiliated with the Manager.
(d) [[For the Asset Allocation Portfolios only: The Manager agrees that all books and records which it maintains for the Fund are the Fund’s property. The Manager also agrees upon request of the Fund, promptly to surrender the books and records to the requester or make the books and records available for inspection by representatives of regulatory authorities. The Manager shall permit all books and records with respect to the Portfolio to be inspected and audited by the Fund and the Administrator at all reasonable times during normal business hours, upon reasonable notice. Except with respect to books and records of the Fund that are contractually required to be maintained by a Delegatee or a service provider to the Fund, the Manager further agrees to maintain and preserve the Fund’s books and records in accordance with the 1940 Act and rules thereunder.]]
(c) | The Manager may delegate any or all of its responsibilities hereunder with respect to the provision of Other Services to one or more other parties (each such party, a “Delegatee”) selected by the Manager. Any Delegatee may (but need not) be affiliated with the Manager. |
2. As used in this Agreement, “Portfolio Management Services” means management of the investment and reinvestment of the assets belonging to the Portfolio, consisting specifically of the following:
(a) obtaining and evaluating such economic, statistical and financial data and information and undertaking such additional investment research as shall be necessary or advisable for the management of the investment and reinvestment of the assets belonging to the Portfolio in accordance with the Portfolio’s investment objectives and policies;
(b) [[For the Asset Allocation Portfolios only: formulating and implementing a continuous investment program for the Portfolio, which may consist of investing the assets of the Portfolio in other registered investment companies;]]
(c) taking such steps as are necessary to implement the investment policies of the Portfolio by purchasing and selling of securities, including the placing of orders for such purchase and sale; and
(d) regularly reporting to the Board of Directors of the Fund with respect to the implementation of the investment policies of the Portfolio.
(a) | obtaining and evaluating such economic, statistical and financial data and information and undertaking such additional investment research as shall be necessary or advisable for the management of the investment and reinvestment of the assets belonging to the Portfolio in accordance with the Portfolio’s investment objectives and policies; |
(b) | taking such steps as are necessary to implement the investment policies of the Portfolio by purchasing and selling of securities, including the placing of orders for such purchase and sale; and |
D-2
[[For the Asset Allocation Portfolios only: For so long as the Portfolio is an asset allocation portfolio and a fund of funds under Section 12(d)(1)(G) of the 1940 Act, the Manager shall be responsible for the following:
(a) at least annually, in conjunction with the publication of the Portfolio’s annual prospectus update and at such other dates as shall be determined by the Manager, set the annual asset allocation targets and select the underlying portfolios in which the Portfolio shall invest to approximate such targets (“Portfolio Targets”);
(b) re-evaluating and adjusting, as appropriate, such targets and underlying portfolios;
(c) re-balancing on a quarterly basis or such other basis as shall be determined by the Manager the assets of the Portfolio based on the Portfolio’s then-current Portfolio Targets;
(d) monitoring the performance of the Portfolio and the performance of the underlying portfolios throughout the year;
(e) monitoring the subadvisers of the underlying portfolios throughout the year; and
(f) determining whether an underlying portfolio change, or a Portfolio Target change is appropriate in the event of a change in the subadviser of an underlying portfolio.]]
(c) | regularly reporting to the Board of Directors of the Fund with respect to the implementation of the investment policies of the Portfolio. |
3. As used in this Agreement, “Other Services” means the provision to the Fund, by or at the expense of the Manager, of the following:
(a) office space in such place or places as may be agreed upon from time to time by the Fund and the Manager, and all necessary office supplies, facilities and equipment;
(a) | office space in such place or places as may be agreed upon from time to time by the Fund and the Manager, and all necessary office supplies, facilities and equipment; |
(b) necessary executive and other personnel for managing and overseeing the affairs of the Portfolio, including personnel to perform clerical, bookkeeping, accounting, stenographic and other office functions (exclusive of those related to and to be performed under contract for administration, accounting, custodial, transfer, dividend and plan agency services by the entity or entities selected to perform such services);
(b) | necessary executive and other personnel for managing and overseeing the affairs of the Portfolio, including personnel to perform clerical, bookkeeping, accounting, stenographic and other office functions (exclusive of those related to and to be performed under contract for administration, accounting, custodial, transfer, dividend and plan agency services by the entity or entities selected to perform such services); |
(c) compensation, if any, of directors of the Fund who are directors, officers or employees of the Manager, any Sub-Adviser or any Delegatee or of any affiliated person (other than a registered investment company) of the Manager, any Sub-Adviser or any Delegatee;
(d) all services, other than services of counsel, required in connection with the preparation of registration statements and prospectuses, including amendments and revisions thereto;
(e) supervision and oversight of the Portfolio Management Services provided by each Sub-Adviser and Other Services provided by any Delegatee; and
(c) | compensation, if any, of directors of the Fund who are directors, officers or employees of the Manager, anySub-Adviser or any Delegatee or of any affiliated person (other than a registered investment company) of the Manager, anySub-Adviser or any Delegatee; |
D-3B-28
(d) | all services, other than services of counsel, required in connection with the preparation of registration statements and prospectuses, including amendments and revisions thereto; |
(f) oversight of all matters relating to compliance by the Fund with applicable laws and with the Fund’s investment policies, restrictions and guidelines.
(e) | supervision and oversight of the Portfolio Management Services provided by eachSub-Adviser and Other Services provided by any Delegatee; and |
(f) | oversight of all matters relating to compliance by the Fund with applicable laws and with the Fund’s investment policies, restrictions and guidelines. |
4. Nothing in section 3 hereof shall require the Manager to bear, or to reimburse the Fund for:
(a) any of the costs of printing and mailing the items referred to in sub-section (d) of this section 3;
(a) | any of the costs of printing and mailing the items referred to insub-section (d) of this section 3; |
(b) any of the costs of preparing, printing and distributing sales literature;
(b) | any of the costs of preparing, printing and distributing sales literature; |
(c) compensation of directors of the Fund who are not directors, officers or employees of the Manager, any Sub-Adviser or any Delegatee or of any affiliated person (other than a registered investment company) of the Manager, any Sub-Adviser or any Delegatee;
(c) | compensation of directors of the Fund who are not directors, officers or employees of the Manager, anySub-Adviser or any Delegatee or of any affiliated person (other than a registered investment company) of the Manager, anySub-Adviser or any Delegatee; |
(d) registration, filing and other fees in connection with requirements of regulatory authorities;
(d) | registration, filing and other fees in connection with requirements of regulatory authorities; |
(e) the charges and expenses of any entity appointed by the Fund for administration, accounting, custodial, paying agent, shareholder servicing and plan agent services;
(e) | the charges and expenses of any entity appointed by the Fund for administration, accounting, custodial, paying agent, shareholder servicing and plan agent services; |
(f) charges and expenses of independent accountants retained by the Fund;
(f) | charges and expenses of independent accountants retained by the Fund; |
(g) charges and expenses of any transfer agents and registrars appointed by the Fund;
(g) | charges and expenses of any transfer agents and registrars appointed by the Fund; |
(h) brokers’ commissions and issue and transfer taxes chargeable to the Fund in connection with securities transactions to which the Fund is a party;
(h) | brokers’ commissions and issue and transfer taxes chargeable to the Fund in connection with securities transactions to which the Fund is a party; |
(i) taxes and fees payable by the Fund to federal, state or other governmental agencies;
(i) | taxes and fees payable by the Fund to federal, state or other governmental agencies; |
(j) any cost of certificates representing shares of the Fund;
(j) | any cost of certificates representing shares of the Fund; |
(k) legal fees and expenses in connection with the affairs of the Fund including registering and qualifying its shares with Federal and State regulatory authorities;
(k) | legal fees and expenses in connection with the affairs of the Fund including registering and qualifying its shares with Federal and State regulatory authorities; |
(l) expenses of meetings of shareholders and directors of the Fund; and
(l) | expenses of meetings of shareholders and directors of the Fund; and |
(m) interest, including interest on borrowings by the Fund.
(m) | interest, including interest on borrowings by the Fund. |
5. All activities undertaken by the Manager or anySub-Adviser or Delegatee pursuant to this Agreement shall at all times be subject to the supervision and control
B-29
of the Board of Directors of the Fund, any duly constituted committee thereof or any officer of the Fund acting pursuant to like authority.
6. The services to be provided by the Manager and anySub-Adviser or Delegatee hereunder are not to be deemed exclusive and the Manager and anySub-Adviser or Delegatee shall be free to render similar services to others, so long as its services hereunder are not impaired thereby.
D-4
7. As full compensation for all services rendered, facilities furnished and expenses borne by the Manager hereunder, the Fund shall pay the Manager compensation at the annual rate of [See Appendix B of the Proxy Statement for each Portfolio’s fee schedule].[ ]. Such compensation shall be payable monthly in arrears or at such other intervals, not less frequently than quarterly, as the Board of Directors of the Fund may from time to time determine and specify in writing to the Manager. The Manager hereby acknowledges that the Fund’s obligation to pay such compensation is binding only on the assets and property belonging to the Portfolio.
8. Reserved.
9. It is understood that any of the shareholders, directors, officers, employees and agents of the Fund may be a shareholder, director, officer, employee or agent of, or be otherwise interested in, the Manager, any affiliated person of the Manager, any organization in which the Manager may have an interest or any organization which may have an interest in the Manager; that the Manager, any such affiliated person or any such organization may have an interest in the Fund; and that the existence of any such dual interest shall not affect the validity hereof or of any transactions hereunder except as otherwise provided in the articlesDeclaration of incorporationTrust of the Fund, the limited liability company agreement of the Manager or specific provisions of applicable law.
10. This Agreement shall become effective as of the date of its execution, and
(a) unless otherwise terminated, this Agreement shall continue in effect for a period of one year, and from year to year thereafter so long as such continuance is specifically approved at least annually (i) by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Portfolio, and (ii) by vote of a majority of the directors of the Fund who are not interested persons of the Fund or the Manager, cast in person at a meeting called for the purpose of voting on, such approval;
(a) | unless otherwise terminated, this Agreement shall continue in effect for a period of one year, and from year to year thereafter so long as such continuance is specifically approved at least annually (i) by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Portfolio, and (ii) by vote of a majority of the directors of the Fund who are not interested persons of the Fund or the Manager, cast in person at a meeting called for the purpose of voting on, such approval; |
(b) this Agreement may at any time be terminated on sixty days’ written notice to the Manager either by vote of the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Portfolio;
(b) | this Agreement may at any time be terminated on sixty days’ written notice to the Manager either by vote of the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Portfolio; |
(c)
(c) | this Agreement shall automatically terminate in the event of its assignment; and
Termination of this Agreement pursuant to this section 10 shall be without the payment of any penalty. 11. This Agreement may be amended at any time by mutual consent of the parties, provided that, if required by law (as may be modified by any exemptions received by the Manager), such consent on the part of the Fund shall have been approved by vote of a majority of the outstanding voting securities of the Portfolio and by vote of a majority of the directors of the Fund who are not interested persons of the Fund or the Manager, cast in person at a meeting called for the purpose of voting on such approval. 12. For the purpose of this Agreement, the terms “vote of a majority of the outstanding voting securities,” “interested person,” “affiliated person” and “assignment” shall have their respective meanings defined in the 1940 Act, subject, however, to such exemptions as may be granted by the Securities and Exchange Commission under the 1940 Act. References in this Agreement to any assets, property or liabilities “belonging to” the Portfolio shall have the meaning defined in the Fund’s 13. In the absence of willful misfeasance, bad faith or gross negligence on the part of the Manager, or reckless disregard of its obligations and duties hereunder, the Manager shall not be subject to any liability to the Fund, to any shareholder of the Fund or to any other person, firm or organization, for any act or omission in the course of, or connected with, rendering services hereunder. B-31 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.
B-32 SCHEDULE A
B-33
B-34
B-35 Appendix C The table below sets forth the annual advisory fee rates for each Portfolio and the fees paid to the Manager by each Portfolio during the most recent fiscal year ended December 31, 2015. MET INVESTORS SERIES TRUST
C-1
C-2
C-3
C-4
METROPOLITAN SERIES FUND
C-5
C-6
C-7 The table below sets forth the fees paid to MLIA by the Manager for the MLIA Subadvised Portfolios during the most recent fiscal year ended December 31, 2015. MLIA SUBADVISED PORTFOLIOS
C-8 Appendix D FORMS OF MLIA SUBADVISORY AGREEMENTS For the FORM OF MLIA IMVESTMENT SUBADVISORY AGREEMENT AGREEMENT made as of thisday of,, by and between MetLife Investment Advisors, LLC, Delaware limited liability company (the “Subadviser”), and Brighthouse Investment Advisers, LLC, a Delaware limited liability company (the “Adviser”). WHEREAS, the Adviser serves as investment manager of Brighthouse Funds Trust I (the “Trust”), a Delaware statutory trust which has filed a registration statement (the “Registration Statement”) under the Investment Company Act of 1940, as amended (the “1940 Act”) and the Securities Act of 1933, as amended (the “1933 Act”) pursuant to a management agreement of even date herewith, as amended from time to time (the “Management Agreement”); and WHEREAS, the Trust is comprised of several separate investment portfolios, one of which is the MetLife Multi-Index Targeted Risk Portfolio (the “Portfolio”); and WHEREAS, the Adviser desires to avail itself of the services, information, advice, assistance and facilities of an investment adviser to assist the Adviser in performing investment advisory services for the portion of the Portfolio’s assets allocated to the Subadviser, as determined from time to time by the Adviser, and the Subadviser is willing to render such services; and WHEREAS, the Subadviser is registered with the Securities and Exchange Commission (“SEC”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and is engaged in the business of rendering investment advisory services to investment companies and other institutional clients and desires to provide such services to the Adviser. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1.Employment of the Subadviser. The Adviser hereby employs the Subadviser, subject to the supervision of the Adviser to manage the investment and reinvestment of the assets of the Portfolio, subject to the control and direction of the Board of Trustees, for the period and on the terms hereinafter set forth. The Subadviser hereby accepts such employment and agrees during such period to render the services and to assume the obligations herein set forth for the compensation herein provided. The Subadviser acknowledges that such appointment as investment subadviser to the Trust may be limited to those Portfolio assets allocated to the Subadviser by the Adviser, which may D-1 be changed from time to time at the sole discretion of the Adviser. References to “the Portfolio” in this Agreement shall refer to those Trust assets allocated to the Subadviser by the Adviser. The Subadviser shall for all purposes herein be deemed to be an independent contractor and shall, except as expressly provided or authorized (whether herein or otherwise), have no authority to act for or represent the Adviser, the Portfolio or the Trust in any way. The Subadviser may execute account documentation, agreements, contracts and other documents requested by brokers, dealers, counterparties and other persons in connection with its management of the assets of the Portfolio and in such instances shall do so only for this limited purpose as Adviser’s and the Trust’s agent andattorney-in-fact. Subadviser shall negotiate all futures agreements, options agreements, ISDA Master Agreements, Credit Support Annexes, and other contracts and agreements related to derivatives transactions and holdings in the Portfolio (“Derivatives Related Agreements”). Copies of the Trust’s Registration Statement, Declaration of Trust, and Bylaws (collectively, the “Charter Documents”), each as currently in effect, have been or will be delivered to the Subadviser. The Adviser agrees, on an ongoing basis, to notify the Subadviser of each change in the fundamental andnon-fundamental investment policies and restrictions of the Portfolio as promptly as practicable and to provide to the Subadviser as promptly as practicable copies of all amendments and supplements to the Registration Statement and amendments to the Charter Documents. The Adviser will promptly provide the Subadviser with any procedures applicable to the Subadviser adopted from time to time by the Trust’s Board of Trustees and agrees to promptly provide the Subadviser copies of all amendments thereto. The Adviser shall timely furnish the Subadviser with such additional information as may be reasonably requested by the Subadviser to perform its responsibilities pursuant to this Agreement. The Adviser shall reasonably cooperate with the Subadviser in setting up and maintaining brokerage accounts, futures accounts, and other accounts the Subadviser deems advisable to allow for the purchase or sale of various forms of securities and other financial instruments pursuant to this Agreement. The Adviser shall notify the Subadviser as soon as reasonably practicable if the Portfolio is out of compliance with Subchapter M or Section 817(h) of the Code. 2.Obligations of and Services to be Provided by the Subadviser. The Subadviser undertakes to provide the following services to the Portfolio and to assume the following obligations:
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i. Comply with the Trust’s written compliance policies and procedures pursuant to Rule38a-1 under the 1940 Act; ii. Promptly provide to the Adviser copies of its annual compliance review report (or a summary of the process and findings), as well as copies of such items as third-party compliance audits; iii. Notify the Adviser promptly of any contact from the SEC or other regulators or a Self-Regulatory Organization (“SRO”) (such as an examination, inquiry, investigation, institution of a proceeding, etc.) relating directly or indirectly to the Portfolio or that would have a material impact on the Subadviser; and iv. Notify the Adviser promptly of any material compliance matters (as defined in Rule38a-1 under the 1940 Act) relating directly or indirectly to the Portfolio, the Trust, the Adviser or the Subadviser of which it is aware and actions taken in response to issues or items raised by the SEC, an SRO or other regulators.
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3.Compensation of the Subadviser. In consideration of services rendered pursuant to this Agreement, the Adviser will pay the Subadviser a fee at the annual rate set forth in Schedule A hereto. Such compensation shall be payable monthly in arrears or at such other intervals, not less frequently than quarterly, as the Adviser is paid by the Portfolio pursuant to the Management Agreement. If the Subadviser shall serve for less than the whole of any month, the foregoing compensation shall be prorated. For the purpose of determining fees payable to the Subadviser, the value of the Portfolio’s net assets allocated to the Subadviser by the Adviser shall be computed at the times and in the manner specified in the Trust’s Registration Statement. 4.Activities of the Subadviser. The services of the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others and to engage in other activities, so long as the services rendered hereunder are not impaired and except as the Subadviser and the Adviser may otherwise agree from time to time in writing before or after the date hereof. The Subadviser shall be subject to a written code of ethics adopted by it that conforms to the requirements of Rule204A-1 of the Advisers Act and Rule17j-1(b) of the 1940 Act. 5.Use of Names. The Subadviser hereby consents to the Portfolio being named the MetLife Multi-Index Targeted Risk Portfolio. The Adviser shall not use the name “MetLife Investment Advisors, LLC” and any of the other names of the Subadviser or its affiliated companies and any derivative or logo or trade or service mark thereof, or disclose information related to the business of the Subadviser or any of its affiliates in any prospectus, sales literature or other material relating to the Trust in any manner not approved prior thereto by the Subadviser; provided, however, that the Subadviser shall D-7 approve all uses of its name and that of its affiliates which merely refer in accurate terms to its appointment hereunder or which are required by the SEC or a state securities commission; and provided, further, that in no event shall such approval be unreasonably withheld. The Subadviser shall not use the name of the Trust, the Adviser or any of their affiliates in any material relating to the Subadviser in any manner not approved prior thereto by the Adviser; provided, however, that the Adviser shall approve the uses of its or the Trust’s name which merely refer in accurate terms to the appointment of the Subadviser hereunder or which are required by the SEC, a state securities commission or any other regulatory body to which it is subject; and, provided, further, that in no event shall such approval be unreasonably withheld. The Adviser recognizes that from time to time trustees, officers and employees of the Subadviser may serve as directors, trustees, partners, officers and employees of other corporations, business trusts, partnerships or other entities (including other investment companies) and that such other entities may include the name “MetLife Investment Advisors, LLC” or any derivative or abbreviation thereof as part of their name, and that the Subadviser or its affiliates may enter into investment advisory, administration or other agreements with such other entities. 6.Liability and Indemnification.
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7.Limitation of Trust’s Liability. The Subadviser acknowledges that it has received notice of and accepts the limitations upon the Trust’s liability set forth in the Trust’s Charter Documents. The Subadviser agrees that any of the Trust’s obligations shall be limited to the assets of the Portfolio and that the Subadviser shall not seek satisfaction of any such obligation from the shareholders of the Trust nor from any Trustee, officer, employee or agent of or other series of the Trust. 8.Renewal, Termination and Amendment. This Agreement shall continue in effect, unless sooner terminated as hereinafter provided, for a period of one year and shall continue in full force and effect for successive periods of one year thereafter, but only so long as each such continuance as to the Portfolio is specifically approved at least annually by vote of the holders of a majority of the outstanding voting securities of the Portfolio or by vote of a majority of the Trust’s Board of Trustees; and further provided that such continuance is also approved annually by the vote of a majority of the Trustees who are not parties to this Agreement or interested persons of any such D-9 party. This Agreement may be terminated as to the Portfolio at any time, without payment of any penalty, by the Trust’s Board of Trustees, by the Adviser, or by a vote of the majority of the outstanding voting securities of the Portfolio upon 60 days’ prior written notice to the Subadviser, or by the Subadviser upon 90 days’ prior written notice to the Adviser, or upon such shorter notice as may be mutually agreed upon. This Agreement shall terminate automatically and immediately upon termination of the Management Agreement between the Adviser and the Trust. This Agreement shall terminate automatically and immediately in the event of its assignment, except as otherwise provided by any rule of, or action by, the SEC. The terms “assignment” and “vote of a majority of the outstanding voting securities” shall have the meaning set forth for such terms in the 1940 Act and the rules, regulations and interpretations thereunder. This Agreement may be amended by written instrument at any time by the Subadviser and the Adviser, subject to approval by the Trust’s Board of Trustees and, if required by applicable SEC rules, regulations, or orders, a vote of a majority of the Portfolio’s outstanding voting securities. 9.Confidential Relationship. Any information and advice furnished by any party to this Agreement to the other party or parties shall be treated as confidential and shall not be disclosed to third parties without the consent of the other party hereto except as required by law, rule or regulation. All information disclosed as required by law, rule or regulation shall nonetheless continue to be deemed confidential. The Adviser and Subadviser hereby consents to the disclosure to third parties of (i) investment results and other data of the Adviser, the Subadviser or the Portfolio in connection with providing composite investment results of the Subadviser and (ii) investments and transactions of the Adviser, the Subadviser or the Portfolio in connection with providing composite information of clients of the Subadviser. 10.Cooperation with Regulatory Authorities. The parties to this Agreement each agree to cooperate in a reasonable manner with each other in the event that any of them should become involved in a legal, administrative, judicial or regulatory action, claim, or suit as a result of performing its obligations under this Agreement. 11.Severability. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 12.Custodian. The Portfolio assets shall be maintained in the custody of its custodian. Any assets added to the Portfolio shall be delivered directly to such custodian. The Subadviser shall provide timely instructions directly to the custodian, in the manner and form as required by the agreement between the Trust and the custodian in effect from time to time (including with respect to exchange offerings and other corporate actions) necessary to effect the investment and reinvestment of the Portfolio’s assets. Any assets added to the Portfolio shall be delivered directly to the custodian. The Subadviser shall provide to the Adviser a list of the persons whom the Subadviser wishes to have authorized to give written and/or oral instructions to custodians of assets of the Portfolio. D-10 13.Notices. All notices hereunder shall be provided in writing, by facsimile or bye-mail. Notices shall be deemed given if delivered in person or by messenger, certified mail with return receipt, or by a reputable overnight delivery service that provides evidence of receipt to the parties; upon receipt if sent by facsimile; or upon read receipt or reply if delivered bye-mail, at the following addresses:
14.Information. The Adviser hereby acknowledges that it and the Trustees of the Trust have been provided with a copy of Part II of the Subadviser’s Form ADV. 15.Miscellaneous. The Trust is an intended third-party beneficiary of this Agreement. This Agreement constitutes the full and complete agreement of the parties hereto with respect to the subject matter hereof. Each party agrees to perform such further actions and execute such further documents as are necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Delaware and the applicable provisions of the 1940 Act. The captions in this Agreement are included for convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed in several counterparts, all of which together shall for all purposes constitute one Agreement, binding on all the parties. D-11 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.
D-12 SCHEDULE A Percentage of average daily net assets of the Portfolio assets allocated to the Subadviser by the Adviser:
D-13 For the MLIA Subadvised Portfolios of Brighthouse Funds Trust II: MetLife Aggregate Bond Index Portfolio, MetLife Stock Index Portfolio, FORM OF MLIASUB-INVESTMENT MANAGEMENT AGREEMENT [PORTFOLIO] SUB-INVESTMENT MANAGEMENT AGREEMENT AGREEMENT made as of thisday of,, among Brighthouse Funds Trust II, a Delaware trust (the “Fund”), Brighthouse Investment Advisers, LLC (the “Investment Manager”), a Delaware limited liability company, and MetLife Investment Advisors, LLC, a Delaware limited liability company (the“Sub-Investment Manager”); W I T N E S S E T H : WHEREAS, the Fund is engaged in business as a diversifiedopen-end management investment company and is registered as such under the Investment Company Act of 1940 (the “Investment Company Act”); WHEREAS, the Fund, a series type of investment company, issues separate classes (or series) of stock, each of which represents a separate portfolio of investments; WHEREAS, the Fund is currently comprised of various portfolios, each of which pursues its investment objectives through separate investment policies, and the Fund may add or delete portfolios from time to time; WHEREAS, theSub-Investment Manager is engaged principally in the business of rendering advisory services and is registered as an investment adviser under the Investment Advisers Act of 1940; and WHEREAS, the Fund has employed the Investment Manager to act as investment manager of the [PORTFOLIO] as set forth in the [PORTFOLIO] Investment Management Agreement of even date herewith between the Fund and the Investment Manager (the “[PORTFOLIO] Investment Management Agreement”); and the Fund and the Investment Manager desire to enter into a separatesub-investment management agreement with respect to the [PORTFOLIO] of the Fund with theSub-Investment Manager; D-14 NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained, the Fund, the Investment Manager and theSub-Investment Manager hereby agree as follows: ARTICLE 1. Duties of theSub-Investment Manager Subject to the supervision and approval of the Investment Manager and the Fund’s Board of Directors, theSub-Investment Manager will manage the investment and reinvestment of the assets of the Fund’s [PORTFOLIO] (the “Portfolio”) for the period and on the terms and conditions set forth in this Agreement. In acting asSub-Investment Manager to the Fund with respect to the Portfolio, theSub-Investment Manager shall determine which securities shall be purchased, sold or exchanged and what portion of the assets of the Portfolio shall be held in the various securities or other assets in which it may invest, subject always to any restrictions of the Fund’s Declaration of Trust andBy-Laws, as amended or supplemented from time to time, the provisions of applicable laws and regulations including the Investment Company Act, and the statements relating to the Portfolio’s investment objectives, policies and restrictions as the same are set forth in the prospectus and statement of additional information of the Fund then currently effective under the Securities Act of 1933 (the “Prospectus”). Should the Board of Directors of the Fund or the Investment Manager at any time, however, make any definite determination as to investment policy and notify in writing theSub-Investment Manager thereof, theSub-Investment Manager shall be bound by such determination for the period, if any, specified in such notice or until similarly notified in writing that such determination has been revoked. TheSub-Investment Manager shall take, on behalf of the Fund, all actions which it deems necessary to implement the investment policies of the Portfolio, determined as provided above, and in particular to place all orders for the purchase or sale of portfolio securities for the Portfolio with brokers or dealers selected by it. In connection with the selection of such brokers or dealers and the placing of such orders, theSub-Investment Manager is directed at all times to follow the policies of the Fund set forth in the Prospectus. Nothing herein shall preclude the “bunching” of orders for the sale or purchase of portfolio securities with other Fund portfolios or with other accounts managed by theSub-Investment Manager. TheSub-Investment Manager shall not favor any account over any other and any purchase or sale orders executed contemporaneously shall be allocated in a manner it deems equitable among the accounts involved and at a price which is approximately averaged. In connection with these services theSub-Investment Manager will provide investment research as to the Portfolio’s investments and conduct a continuous program of evaluation of its assets. TheSub-Investment Manager will have the responsibility to monitor the investments of the Portfolio to the extent necessary for theSub-Investment Manager to manage the Portfolio in a manner that is consistent with the investment D-15 objective and policies of the Portfolio set forth in the Prospectus, as from time to time amended, and communicated in writing to theSub-Investment Manager, and consistent with applicable law, including, but not limited to, the Investment Company Act and the rules and regulations thereunder and the applicable provisions of the Internal Revenue Code and the rules and regulations thereunder (including, without limitation, subchapter M of the Code and the investment diversification aspects of Section 817(h) of the Code). TheSub-Investment Manager will furnish the Investment Manager and the Fund such statistical information, including prices of securities in situations where a fair valuation determination is required or when a security cannot be priced by the Fund’s accountants, including prices of securities in situations where a fair valuation determination is required or when a security cannot be priced by the Fund’s accountants, with respect to the investments it makes for the Portfolio as the Investment Manager and the Fund may reasonably request. On its own initiative, theSub-Investment Manager will apprise the Investment Manager and the Fund of important developments materially affecting the Portfolio, including but not limited to any change in the personnel of theSub-Investment Manager responsible for the day to day investment decisions made by theSub-Investment Manager for the Portfolio and any material legal proceedings against theSub-Investment Manager by the Securities and Exchange Commission relating to violations of the federal securities laws by theSub-Investment Manager, and will furnish the Investment Manager and the Fund from time to time with similar material information that is believed appropriate for this purpose. In addition, theSub-Investment Manager will furnish the Investment Manager and the Fund’s Board of Directors such periodic and special reports as either of them may reasonably request. TheSub-Investment Manager will exercise its best judgment in rendering the services provided for in this Article 1, and the Fund and the Investment Manager agree, as an inducement to theSub-Investment Manager’s undertaking so to do, that theSub-Investment Manager will not be liable under this Agreement for any mistake of judgment or in any other event whatsoever, except as hereinafter provided. TheSub-Investment Manager shall for all purposes herein be deemed to be an independent contractor and shall, unless otherwise provided or authorized, have no authority to act for or represent the Fund or the Investment Manager in any way or otherwise be deemed an agent of the Fund or the Investment Manager other than in furtherance of its duties and responsibilities as set forth in this Agreement. Notwithstanding any other provision of this Agreement, the Fund, the Investment Manager and theSub-Investment Manager may agree to the employment of aSub-Sub-Investment Manager to the Fund for the purpose of providing investment management services with respect to the Portfolio, provided that the compensation to be paid to suchSub-Sub-Investment Manager shall be the sole responsibility of theSub-Investment Manager and the duties and responsibilities of theSub-Sub-Investment D-16 Manager shall be as set forth in asub-sub-investment management agreement among the Investment Manager, theSub-Investment Manager, theSub-Sub-Investment Manager and the Fund on behalf of the Portfolio. ARTICLE 2. Sub-Investment Management Fee The payment of advisory fees and the allocation of charges and expenses between the Fund and the Investment Manager with respect to the Portfolio are set forth in the [PORTFOLIO] Investment Management Agreement. Nothing in this [PORTFOLIO]Sub-Investment Management Agreement shall change or affect that arrangement. The payment of advisory fees and the apportionment of any expenses related to the services of theSub-Investment Manager under this Agreement shall be the sole concern of the Investment Manager and the Sub-Investment Manager and shall not be the responsibility of the Fund. In consideration of services rendered pursuant to this Agreement, the Investment Manager will pay theSub-Investment Manager on the first business day of each month the fee at the annual rate specified by the schedule of fees in the Appendix to this Agreement. The fee for any period from the date the Portfolio commences operations to the end of the month will be prorated according to the proportion which the period bears to the full month, and, upon any termination of this Agreement before the end of any month, the fee for the part of the month during which theSub-Investment Manager acted under this Agreement will be prorated according to the proportion which the period bears to the full month and will be payable upon the date of termination of this Agreement. For the purpose of determining the fees payable to theSub-Investment Manager, the value of the Portfolio’s net assets will be computed in the manner specified in the Fund’s Prospectus. TheSub-Investment Manager will bear all of its own expenses (such as research costs) in connection with the performance of TheSub-Investment Manager agrees to notify promptly, upon written request, the Investment Manager Other Matters. TheSub-Investment Manager may from time to time employ or associate with itself any person or persons believed to be D-17 The Fund and the Investment Manager understand that theSub-Investment Manager now acts and will continue to act as investment manager to various investment companies and fiduciary or
TheSub-Investment Manager will not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with the matters to which this Agreement relates, except for a loss resulting from willful misfeasance, bad faith or gross negligence of the Sub-Investment Manager in the performance of its duties or from reckless disregard of its obligations and duties under this Agreement. The Investment Manager has herewith furnished theSub-Investment Manager copies of the Fund’s Prospectus, Declaration of Trust andBy-Laws as currently in effect and agrees during the continuance of this Agreement to furnish theSub-Investment Manager copies of any amendments or supplements thereto before or at the time the amendments or supplements become effective. TheSub-Investment Manager will be entitled to rely on all documents furnished to it by the Investment Manager or the Fund. ARTICLE 3. Duration and Termination of this Agreement This Agreement shall become effective as of the date first above written and shall remain in force for a period of one year and thereafter shall continue in effect, but only so long as such continuance is specifically approved at least annually by (i) the Board of Directors of the Fund, or by the vote of a majority of the outstanding shares of the Portfolio, and (ii) a majority of those directors who are not parties to this Agreement or interested persons of any such party cast in person at a meeting called for the purpose of voting on such approval. D-18 This Agreement may be terminated with respect to the Portfolio at any time, without the payment of any penalty, by the Board of Directors of the Fund, or by vote of a majority of the outstanding shares of the Portfolio, on sixty days’ written notice to the Investment Manager andSub-Investment Manager, or by the Investment Manager on thirty days’ written notice to theSub-Investment Manager and the Fund, or by theSub-Investment Manager on sixty days’ written notice to the Investment Manager and the Fund. This Agreement shall automatically terminate in the event of its assignment or in the event of the termination of the [PORTFOLIO] Investment Management Agreement. ARTICLE 4. Definitions The terms “assignment,” “interested person,” and “majority of the outstanding shares,” when used in this Agreement, shall have the respective meanings specified under the Investment Company Act. ARTICLE 5. Amendments of this Agreement This Agreement may be amended by the parties only ARTICLE 6. Governing Law The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of New York as at the time in effect and the applicable provisions of the Investment
ARTICLE 7. Notices D-19 Notices to be given hereunder shall be addressed to:
Changes in the foregoing notice provisions may be made by notice in writing to the other parties at the addresses set forth above. Notice shall be effective upon delivery. D-20
Attest:
Attest:
Attest: D-21 Appendix METLIFE INVESTMENT ADVISORS, LLC Brighthouse Funds Trust II [PORTFOLIO] Fee Schedule
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MetLife Aggregate Bond Index
| 0.040% on the first $500 million 0.030% on the next $500 million 0.015% over $1 billion of the Portfolio’s average net assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MetLife Mid Cap Stock Index Portfolio | 0.030% on the first $500 million 0.020% on the next $500 million 0.010% over $1 billion of the Portfolio’s average net assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MetLife Stock Index Portfolio | 0.020% on the first $500 million 0.015% on the next $500 million 0.010% on the next $1 billion 0.005% over $2 billion of the Portfolio’s average net assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MSCI EAFE Index Portfolio | 0.050% on the first $500 million 0.040% on the next $500 million 0.020% over $1 billion of the Portfolio’s average net assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Russell 2000 Index Portfolio | 0.040% on the first $500 million 0.030% on the next $500 million 0.015% over $1 billion of the Portfolio’s average net assets |
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Appendix E
NOMINATING, GOVERNANCE AND COMPENSATION COMMITTEE CHARTER OF THE BOARDS OF
MET INVESTORS SERIES TRUST
&
METROPOLITAN SERIES FUND
(each a “Trust”)
Nominating, Governance and Compensation Committee Membership
The Nominating, Governance and Compensation Committee (the “Committee”) of each Trust is a Committee of, and established by, the Board of Trustees of each Trust (the “Board”). The Committee shall be composed entirely of persons who are not “interested persons” of a Trust as that term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (“Independent Trustees”) and may be comprised of one or more of such Independent Trustees.
Board Nominations
1. | The Committee shall make recommendations for nominations of Trustee candidates for the Board to the Independent Trustees and to the full Board. Independent Trustees for a Trust are nominated by the Independent Trustees of that Trust. The Committee shall evaluate candidates’ qualifications for Board membership, and Independent Trustee candidates’ independence from a Trust’s investment adviser and other principal service providers. Persons selected as Independent Trustee candidates must be independent in terms of both the letter and spirit of the 1940 Act. The Committee shall also consider the effect of any relationships beyond those delineated in the 1940 Act that might impair independence, e.g. business, financial or family relationships with the investment adviser or its affiliates. In determining nominees’ qualifications for Board membership, the Committee may consider such other factors as it may determine to be relevant to fulfilling the role of being a member of the Board. While the Committee is alone responsible for the nomination of Board candidates the President, and other officers of each Trust, may nonetheless recommend candidates to the Committee. Consistent with the policies and purposes of the 1940 Act, the Committee shall give such recommendations no greater consideration than any other candidate. |
2. | In considering a candidate’s qualifications, the Committee shall generally consider the potential candidate’s educational background, business or professional experience, and reputation. In addition, all candidates as members of the Board must demonstrate an ability and willingness to make the considerable time commitment, including personal attendance at Board meetings, believed |
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necessary to his or her function as an effective Board member. The Committee may adopt from time to time specific, minimum qualifications that the Committee believes a candidate must meet before being considered as a candidate for Board membership, subject to approval by the full Board. In so doing, the Committee shall comply with any rules adopted from time to time by the U.S. Securities and Exchange Commission regarding investment company nominating committees and the nomination of persons to be considered as candidates for Board membership. |
Review of Board Committees
1. | The Committee shall annually review and make recommendations for membership on all committees of a Trust and shall review Board committee assignments as necessary, and make recommendations to the Board. The Committee shall also review the continued appropriateness of existing Committee structure and consider addition of any new committees. The Committee shall make recommendations for membership of any new committees established by the Board. |
2. | The Committee shall monitor and at least annually assess the effectiveness of the Board’s committee structure and the number of Portfolios overseen by each Trustee. The Committee and shall have authority to review as necessary the responsibilities of any committee of the Board, whether there is a continuing need for each committee, whether there is a need for additional committees, and whether committees should be combined or reorganized. The Committee shall make recommendations for any such action to the full Board. |
Board Governance
1. | The Committee shall periodically review the size and composition of the Board to determine whether it may be appropriate to add to or change the membership of the Board. |
2. | The Committee shall periodically review Board governance practices, policies, procedures and operations and recommend appropriate changes to the Board. |
3. | The Committee shall periodically review and make recommendations regarding ongoing Trustee education on current industry matters and as applicable orientation for new Trustees. |
4. | The Committee shall lead and manage the annual self-assessment process (which includes the full Board) and make recommendations regarding any self-assessment conducted by the Board. |
5. | The Committee shall review and oversee the quality of service providers engaged by the Independent Trustees. |
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6. | The Committee (i) shall monitor and supervise the performance of legal counsel employed by the Independent Trustees, and (ii) shall monitor the independence of legal counsel employed by the Independent Trustees in accordance with requirements of 1940 Act rules. The Committee (or its delegate) shall review and approve the compensation paid to legal counsel employed by the Independent Trustees. |
7. | The Committee shall review as necessary any similar matters relating to the governance of the Board at the request of any Trustee or on its own initiative. |
Trustee Compensation
1. | The Committee shall annually conduct a review of Independent Trustee compensation and shall make appropriate recommendations with respect thereto to the full Board. |
Other Powers and Responsibilities
1. | The Committee shall annually review the Independent Trustees’ and the Trusts’ insurance program and report findings to the full Board. |
General Operations
1. | The Committee shall meet at least once yearly or more frequently, in open or executive sessions prior to the meeting of the full Board, and is empowered to hold special meetings as circumstances require. The Committee may invite members of management, counsel, advisers and others to attend its meetings as it deems appropriate. The Committee shall have separate sessions with management and others as and when it deems appropriate. |
2. | The Committee shall have the resources and authority appropriate to discharge its responsibilities, including authority to utilize Independent Trustee or Trust counsel and to retain other experts and consultants at the expense of a Trust. |
3. | The Committee shall report its activities to the full Board and make such recommendations as the Committee may deem necessary or appropriate. |
4. | A majority of the members of the Committee shall constitute a quorum for the transaction of business at any meeting of the Committee. The action of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the action of the Committee. The Committee may, upon due notice (including electronic or telephonic) to the Committee members, meet in person or by telephone, and the Committee may act by written consent, to the extent permitted by law and by a Trust’s governing instrument. In the event of any inconsistency between this Charter and a Trust’s governing instrument, the provisions of the Trust’s governing instrument shall be given precedence. |
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5. | The Committee shall review this Charter at least annually and recommend any changes to the full Board. |
6. | The Committee may select one of its members to be the Chair and may select a Vice Chair. |
Adopted by the Met Investors Series Trust Committee: December 7, 2000
Amended by the Met Investors Series Trust Committee: September 21, 2004, November 8, 2005, February 9, 2010, August 9, 2011 and May 23, 2012
Adopted by the Metropolitan Series Fund Committee: May 23, 2012
Amended by the Met Series Fund and Met Investors Series Fund Committee: May 22, 2013
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Appendix F
The following table set forth the compensation received by each Trustee during the fiscal year ended December 31, 2015.
Compensation Paid to the Trustees of the Trusts
Name, Position | Aggregate Compensation from MIST Trust(1) | Aggregate Compensation from MSF Trust(1) | Pension or Retirement Benefits Accrued as Part of the Trusts’ Expenses | Total Compensation from Fund and Fund Complex* Paid to Trustees | ||||||||||||
Interested Trustee | ||||||||||||||||
John Rosenthal, Trustee(2) | None | None | None | None | ||||||||||||
Independent Trustees |
| |||||||||||||||
Dawn M. Vroegop, Trustee | $278,396 | $175,104 | None | $453,500 | ||||||||||||
Stephen M. Alderman, Trustee | $198,595 | $124,905 | None | $323,500 | ||||||||||||
Robert J. Boulware, Trustee | $217,007 | $136,493 | None | $353,500 | ||||||||||||
Susan C. Gause, Trustee | $241,564 | $151,936 | None | $393,500 | ||||||||||||
Nancy Hawthorne, Trustee | $229,298 | $144,202 | None | $373,500 | ||||||||||||
Barbara A. Nugent, Trustee | $201,672 | $126,828 | None | $328,500 | ||||||||||||
Linda B. Strumpf, Trustee | $212,408 | $133,592 | None | $346,000 |
* | The MetLife Fund Complex includes MIST (48 portfolios as of December 31, 2015) and MSF (30 portfolios as of December 31, 2015). |
(1) | Certain Trustees have elected to defer all or part of their total compensation for the year ended December 31, 2015, under the Trusts’ Deferred Fee Agreements. Amounts deferred under MIST’s Deferred Fee Agreement for the fiscal year ended December 31, 2015 by Mr. Alderman, Mr. Boulware, Ms. Gause, Ms. Hawthorne, Ms. Nugent, and Ms. Strumpf, and Ms. Vroegop were $49,649, $167,096, $241,564, $45,860, $67,157, $84,963 and $55,679, respectively. Amounts deferred under MSF’s Deferred Fee Agreement for the fiscal year ended December 31, 2015 by Mr. Alderman, Mr. Boulware, Ms. Gause, Ms. Hawthorne, Ms. Nugent, Ms. Strumpf, and Ms. Vroegop were $31,226, $105,099, $151,936, $28,840, $42,234, $53,437 and $35,021, respectively. |
(2) | Mr. Rosenthal is an “interested person,” as defined in the 1940 Act of the Trusts because of his position with MetLife, the current parent company of the Manager. A Trustee who is an interested person does not receive any compensation from the Trusts. |
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Appendix G
The following table sets forth the dollar range of equity securities beneficially owned by each Trustee in the Trusts’ Portfolios and in the MetLife Funds Complex as of September 30, 2016. Unless otherwise noted, the dollar range of equity securities beneficially owned by a Trustee in a specified Portfolio represents an interest in that Portfolio, as of September 30, 2016, that is held through a Trust’s Deferred Fee Agreement and does not represent actual ownership of the specified Portfolio’s shares. As of September 30, 2016, the Trustees of MIST and MSF as a group owned less than 1% of the outstanding shares of each Trust or any Portfolio of the Trusts.
Share Ownership of the Trustees of the Trusts
Name of Trustee | Name of Portfolio | Dollar Range of | Aggregate Dollar Range of | |||
Interested Trustee and Nominee | ||||||
John Rosenthal | None | None | None | |||
Independent Trustees and Nominees | ||||||
Dawn M. Vroegop (49) | ClearBridge Aggressive Growth (MIST) | $1-$10,000(2) | Over $100,000(2) | |||
Harris Oakmark International (MIST) | $50,001-$100,000(2) | |||||
Loomis Sayles Global Markets (MIST) | Over $100,000(2) | |||||
Met/Aberdeen Emerging Markets Equity (MIST) | $10,001-$50,000(2) | |||||
Met/Eaton Vance Floating Rate (MIST) | $10,001-$50,000(2) | |||||
Met/Wellington Large Cap Research (MIST) | Over $100,000(2) | |||||
Morgan Stanley Mid Cap Growth (MIST) | $1-$10,000(2) | |||||
Neuberger Berman Genesis (MSF) | $1-$10,000(2) | |||||
T. Rowe Price Mid Cap Growth (MIST) | $1-$10,000(2) | |||||
Van Eck Global Natural Resources (MSF) | $10,001-$50,000(2) | |||||
Stephen M. Alderman (56) | AB Global Dynamic Allocation (MIST) | $50,001-$100,000(2) | Over $100,000(2) | |||
AQR Global Risk Balanced (MIST) | $50,001-$100,000(2) | |||||
MetLife Aggregate Bond Index Portfolio (MSF) | $10,001-$50,000(1) | |||||
BlackRock Global Tactical Strategies (MIST) | $50,001-$100,000(2) |
G-1
Name of Trustee | Name of Portfolio | Dollar Range of | Aggregate Dollar Range of | |||
Goldman Sachs Mid Cap Value (MIST) | $10,001-$50,000(1) | |||||
Invesco Balanced-Risk Allocation (MIST) | $50,001-$100,000(2) | |||||
JPMorgan Global Active Allocation (MIST) | $10,001-$50,000(2) | |||||
Loomis Sayles Global Markets (MIST) | $10,001-$50,000(2) | |||||
MetLife Balanced Plus (MIST) | $50,001-$100,000(2) | |||||
MetLife Multi-Index Targeted Risk (MIST) | $10,001-$50,000(2) | |||||
Pyramis® Managed Risk (MIST) | $10,001-$50,000(2) | |||||
Russel 2000® Index (MSF) | $10,001-$50,000(1) | |||||
Schroders GlobalMulti-Asset (MIST) | $10,001-$50,000(2) | |||||
T. Rowe Price Large Cap Growth | $50,001-$100,000(1) | |||||
T. Rowe Price Large Cap Value (MIST) | $50,001-$100,000(1) | |||||
T. Rowe Price Mid Cap Growth (MIST) | $10,001-$50,000(1) | |||||
Robert Boulware (59) | AQR Global Risk Balanced (MIST) | Over $100,000(2) | Over $100,000(2) | |||
ClearBridge Aggressive Growth (MIST) | $50,001-$100,000(2) | |||||
Harris Oakmark International (MIST) | Over $100,000(2) | |||||
Met/Aberdeen Emerging Markets Equity (MIST) | $50,001-$100,000(2) | |||||
Met/Eaton Vance Floating Rate (MIST) | Over $100,000(2) | |||||
Met/Templeton International Bond (MIST) | $50,001-$100,000(2) | |||||
Susan C. Gause (63) | ClearBridge Aggressive Growth (MIST) | $50,001-$100,000(2) | Over $100,000(2) | |||
Harris Oakmark International (MIST) | Over $100,000(1)(2) | |||||
Loomis Sayles Global Markets (MIST) | $50,001-$100,000(2) | |||||
Met/Eaton Vance Floating Rate (MIST) | Over $100,000(2) | |||||
Met/Franklin Low Duration Total Return (MIST) | Over $100,000(2) |
G-2
Name of Trustee | Name of Portfolio | Dollar Range of | Aggregate Dollar Range of | |||
Met/Templeton International Bond Fund (MIST) | $50,001-$100,000(2) | |||||
PIMCO Inflation Protected Bond (MIST) | Over $100,000(1)(2) | |||||
Schroders GlobalMulti-Asset (MIST) | Over $100,000(2) | |||||
T. Rowe Price Mid Cap Growth (MIST) | $50,001-$100,000(1)(2) | |||||
T. Rowe Price Small Cap Growth | $50,001-$100,000(1)(2) | |||||
Van Eck Global Natural Resources (MSF) | $1-$10,000(1) | |||||
Nancy Hawthorne (65) | ClearBridge Aggressive Growth (MIST) | $50,001-$100,000(2) | Over $100,000(2) | |||
Harris Oakmark International (MIST) | $10,001-$50,000(2) | |||||
MFS® Total Return (MSF) | $10,001-$50,000(2) | |||||
T. Rowe Price Large Cap Growth (MSF) | Over $100,000(2) | |||||
T. Rowe Price Small Cap Growth (MSF) | Over $100,000(2) | |||||
Barbara A. Nugent (59) | AB Global Dynamic Allocation (MIST) | Over $100,000(1) | Over $100,000(1)(2) | |||
BlackRock Global Tactical Strategies (MIST) | Over $100,000(1) | |||||
Met/Templeton International Bond (MIST) | $10,001-$50,000(2) | |||||
MSCI EAFE® Index (MSF) | $10,001-$50,000(2) | |||||
Russell 2000® Index (MSF) | $10,001-$50,000(2) | |||||
T. Rowe Price Large Cap Value (MIST) | $10,001-$50,000(2) | |||||
T. Rowe Price Mid Cap Growth (MIST) | $10,001-$50,000(2) | |||||
T. Rowe Price Small Cap Growth (MSF) | $10,001-$50,000(2) | |||||
Linda B. Strumpf (68)
| AB Global Dynamic Allocation (MIST) | $50,001-$100,000(2) | Over $100,000(2) | |||
Clarion Global Real Estate (MIST) | $10,001-$50,000(2) | |||||
ClearBridge Aggressive Growth (MIST) | $10,001-$50,000(2) | |||||
Invesco Comstock (MIST) | Over $100,000(2) |
G-3
| Name of Portfolio | Dollar Range of | Aggregate Dollar Range of
|